UPSC NEWS DIARY FOR TODAY (06 August, 2022) | DAY LONG CURRENT AFFAIRS DIGEST FOR UPSC

”UPSC News Diary For Today” is every day published in the evening between 6-7 PM and contains all current affairs articles from the day on a single platform. ”UPSC News Diary For Today” covers various topics from UPSC Syllabus and is very helpful and time managing for UPSC Aspirants. The framing of this daily current affairs compilation article is easy to read and understandable also.

In the ”UPSC News Diary For Today” article, we focus on both UPSC Preliminary and Mains exam-oriented current affairs & prepare a gist of daily important news articles from leading National Newspapers, PIB, and other various official sources.

Bond vs G-Sec

What is a Bond?

• A bond is a debt instrument in which an investor loans money to an entity (typically corporate or government) which borrows the funds for a defined period of time at a variable or fixed interest rate.
• Bonds are used by companies, municipalities, states and sovereign governments to raise money to finance a variety of projects and activities. Owners of bonds are debt holders, or creditors, of the issuer.

What is a Government Security (G-Sec)?

• A Government Security (G-Sec) is a tradeable instrument issued by the Central Government or the State Governments.
• It acknowledges the Government’s debt obligation. Such securities are short term (usually called treasury bills, with original maturities of less than one year) or long term (usually called Government bonds or dated securities with original maturity of one year or more).
• In India, the Central Government issues both, treasury bills and bonds or dated securities while the State Governments issue only bonds or dated securities, which are called the State Development Loans (SDLs).
• G-Secs carry practically no risk of default and, hence, are called risk-free gilt-edged instruments.

”Parliamentary Privilege of MPs”

What are parliamentary Privileges?

Each House of Parliament collectively and the Members individually, enjoy certain powers and privileges without which they may not be able to discharge their functions, efficiently and effectively. Article 105 of the Constitution deals with such powers, privileges and immunities of Members of Parliament.

What is the difference between the ‘Breach of Privilege’ and ‘Contempt of the House’?

When any of the privileges either of the Members individually or of the House in its collective capacity are disregarded or attacked by any individual or authority, the offence is called a breach of privilege.
Any obstruction or impediment put before Houses or its Members in due discharge of their duties, or which have a tendency of producing such result, may amount to contempt of the House.

”Panel Of Vice-Chairmen Of Rajya Sabha”

• The Vice-President holds office for a term of five years from the date on which he enters upon his office.
• Under Rule 8 of the of Procedure and Conduct of Business in the Council of States (Rajya Sabha), the Chairman, Rajya Sabha nominates six members on the panel of Vice-Chairmen, one of whom presides over the House in the absence of both the Chairman and the Deputy Chairman.
• When neither the Chairman nor the Deputy Chairman and none of the Vice Chairmen is present to preside, the House may decide about any other member present to preside.

The Editorial Analysis- Sticking to Commitments, Balancing Energy Use and Climate Change

The Editorial Analysis- Sticking to Commitments, Balancing Energy Use and Climate Change- Relevance for UPSC Exam

General Studies II- Government policies and interventions for development in various sectors and issues arising out of their design and implementation.

In News

Ahead of the 27th Conference of the Parties of the UNFCCC (COP 27), in Sharm El-Sheikh, Egypt, in November, the Union Cabinet has approved India’s Nationally Determined Contributions (NDC), a formal statement detailing its action plan to address climate change.

2015 Paris Agreement

Historical Background

• In 1992, Earth Summit was held in Brazilwhere the countries entered into an international treaty known as the United Nations Framework Convention on Climate Change (UNFCCC).
• In 1997,the Kyoto Protocol was adopted and legally bounded the developed countries to reduce the emission targets. However, this agreement didn’t work out as the top two polluter countries in the world, China and the US didn’t participate. 
• At the COP17, negotiations for the Paris Agreement started in Durban, South Africa to create a new, comprehensive, and legally binding climate treaty by 2015. The treaty wasto include major Carbon emitters to limit and reduce their emissions of Carbon and gases leading to global warming. 

The Paris agreement was open for signatures from April 22, 2016, to April 21, 2017, came into force on November 4, 2016.

The Paris Agreement (also known as Conference of Parties 21 or COP 21) is a multilateral agreement under the United Nations Framework Convention on Climate Change (UNFCCC) to combat climate change and its adverse effects.

• India had signed the agreement in New York in April 2016.
• So far, 191 countries have signed the agreement.
• It officially entered into force after 55 parties to the convention accounting for at least 55% of total GHG (greenhouse gas) emissions ratified it
• India was 62nd country to ratify it

AIM

• To keep the increasein global temperature in this century below 2°C above pre-industrial levels while making efforts to limit the increase to 1.5°C by 2100.
• To help and support the countries that are vulnerable to the adverse impacts of climate change.
• To provide financial and technological support to the developing countriesto adapt to climate change and transition to clean energy.

The 20/20/20 targets of the Paris Agreement-The Paris Agreement aims to reduce Carbon Dioxide emissions by 20% and targets to increase the renewable energy market share and energy efficiency by 20% each.

 Adoption of the Agreement

The Agreement was adopted in Paris, France on 12 December 2015, and the agreement was signed on April 22, 2016, to reduce the emission of gasses contributing to global warming. At present, 195 UNFCCC members have signed the Paris Agreement. The agreement replaced the Kyoto Protocol, a similar agreement to combat climate change.

Financial Support Pledge during COP 21

1- During the Paris Agreement, the developed countries committed $100 Billion a year.

2- For the launch of CREWS (Climate Risk and Early Warning Systems) initiative and Climate Risk Insurance, the G7 countries announced USD 420 Million. 

(G7 countries-It includes 7 countries, namely, Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States. These countries meet annually to discuss several issues including global economic governance, international security, and energy policy.)

Difference between the Kyoto Protocol and the Paris Agreement

India at the COP 21

1- India stated that rapid growth is required to meet the requirements of the 1.25 billion population of the globe. Out of this, 300 million people still do not have access to energy. 

2- Despite the increasing demands, India pledged to limit the emissions intensity per unit GDP by 33-35% of 2005 levels. 

3- India also aims to reach 40% of the installed capacity via non-fossil fuels. 

4- By the year 2022, India targets 175 GW of renewable energy generation. 

5- India set a goal to increase forest cover to absorb 2.5 billion tonnes worth of carbon dioxide.

Sticking to Commitments

• India’s first NDC, in 2015, specified eight targets, the most salient of them being reducing the emissions intensity of GDP by 33%-35% (of 2005 levels) by 2030, having 40% of its installed electricity capacity sourced from renewable energy, and creating an additional carbon sink of 2.5-3 billion tonnes of CO2 equivalent through forest and tree cover by 2030.
• At COP 26 in Glasgow in 2021, Prime Minister Narendra Modi laid out five commitments, or ‘Panchamrit’, as the Government references it, which included India increasing its non-fossil energy capacity to 500 GW by 2030 and achieving “Net Zero” by 2070, or no net carbon dioxide emitted from energy sources.
• India is on way to achieve its existing targets well ahead of the 2030 timeline.
• 5 per cent of India’s current installed electricity capacity of 403 GW is now powered by non-fossil fuels. With most of the new capacity additions happening in the renewable energy sector, a 10 per cent rise in the share of non-fossil fuels in electricity generation is not an unrealistic target.

Way Forward

• While India is within its right to specify its emissions pathway, it should not — at any forum — promise more than what it can deliver as this undermines the moral authority that India brings to future negotiations.
• India has expressed its intent, via several legislations, to use energy efficiently and many of its biggest corporations have committed to shifting away from polluting energy sources.
• Going ahead, these should be grounds for India, at its pace, to be an exemplar for balancing energy use, development and meeting climate goals.

India-Mauritius CECPA

India-Mauritius CECPA- Relevance for UPSC Exam

• GS Paper 2: International Relations- Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests.

India-Mauritius CECPA in News

• India and Mauritius held the 1st session of India-Mauritius High-Powered Joint Trade Committee in New Delhi.
• India-Mauritius High-Powered Joint Trade Committee had been constituted as per the mandate of the India-Mauritius Comprehensive Economic Cooperation and Partnership agreement (CECPA).
• India-Mauritius High Powered JTC was set up to review the general functioning and implementation of the India-Mauritius CECPA.
• Both sides agreed to hold the next session of India- Mauritius High Powered JTC meeting in 2023.

India gets Highest FDI Inflow in FY 2021-22

India-Mauritius CECPA

• About: The India-Mauritius CECPA provides for an institutional mechanism to encourage and improve trade between the two countries.
  • India-Mauritius CECPA entered into force on 1st April, 2021.
  • CECPA is the first trade Agreement signed by India with a country in Africa.
• Scope of Agreement: The India-Mauritius CECPA Agreement is a limited agreement, which will cover-
  • Trade in Goods,
  • Rules of Origin,
  • Trade in Services,
  • Technical Barriers to Trade (TBT),
  • Sanitary and Phytosanitary (SPS) measures,
  • Dispute Settlement,
  • Movement of Natural Persons,
  • Telecom,
  • Financial services,
  • Customs Procedures and
  • Cooperation in other Areas.
• Certificate of Origin (CoO): Indian exporters have to obtain a Certificate of Origin (CoO) from the authorised Indian agencies to avail the preferential benefits under the CECPA.
  • The online application for CoO for the India-Mauritius CECPA can be made from 01 April 2021 through the common digital platform for issuance of certificate of origin of the Directorate General of Foreign Trade (DGFT).

India-Mauritius CECPA- Trade in Goods

• From India: The CECPA between India and Mauritius covers 310 export items for India, including-
  • Food stuff and beverages (80 lines),
  • Agricultural products (25 lines),
  • Textile and textile articles (27 lines),
  • Base metals and articles thereof (32lines),
  • Electricals and electronic item (13 lines),
  • Plastics and chemicals (20 lines),
  • Wood and articles thereof (15 lines), and others.
• From Mauritius: Mauritius will benefit from preferential market access into India for its 615 products, including-
  • Frozen fish,
  • Speciality sugar,
  • Biscuits,
  • Fresh fruits,
  • Juices,
  • Mineral water,
  • Beer,
  • Alcoholic drinks,
  • Soaps,
  • Bags,
  • Medical and surgical equipment, and
  • Apparel

India-Mauritius CECPA- Trade in Services

• Export from India: As regards trade in services, Indian service providers will have access to around 115 sub-sectors from the 11 broad service sectors such as-
  • Professional services,
  • Computer related services,
  • Research & development,
  • Other business services,
  • Telecommunication,
  • Construction,
  • Distribution,
  • Education,
  • Environmental,
  • Financial,
  • Tourism & travel related,
  • Recreational,
  • Yoga,
  • Audio-visual services, and
  • Transport services.
• Exports from Mauritius: India has offered around 95 sub-sectors from the 11 broad services sectors, including-
  • Professional services,
  • R&D,
  • Other business services,
  • Telecommunication,
  • Financial,
  • Distribution,
  • Higher education,
  • Environmental,
  • Health,
  • Tourism and travel related services,
  • Recreational services and
  • Transport services.

India-Mauritius Relations

Tight Monetary Policy

Tight Monetary Policy- Relevance for UPSC

Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment.

In News

Eye on inflation, RBI goes for 3rd rate hike this year

What is Monetary policy?

• Monetary policy refers to the policy of the central bank in using monetary instruments to achieve the goals specified in the RBI Act, 1934.
• The objective of the RBI’s monetary policy is to maintain price stability while keeping in mind the objective of growth which is a necessary precondition to sustainable growth.
• The amended RBI Act, 1934 sets the inflation target (4% +-2%) for Government of India in consultation with the Reserve Bank.

Instruments of Monetary Policy

• Liquidity Adjustment Facility (LAF)- The LAF consists of overnight as well as term repo auctions.
• Bank Rate– The rate at which the RBI is ready to buy bills of exchange or other commercial papers. The Bank Rate is published under Section 49 of the RBI Act, 1934.
• Repo Rate-The interest rate at which the Reserve Bank provides liquidity to banks against the collateral of government and other approved securities under the liquidity adjustment facility (LAF).
• Reverse Repo Rate- The interest rate at which the Reserve Bank absorbs liquidity, on an overnight basis, from banks against the collateral of eligible government securities under the LAF.
• Statutory Liquidity Ratio (SLR)– The share of NDTL that a bank is required to maintain in safe and liquid assets, such as, unencumbered government securities, cash and gold changes in which often influence the availability of resources in the banking system for lending to the private sector.
• Cash Reserve Ratio (CRR)- The average daily balance that a bank is required to maintain with the Reserve Bank as a share of such per cent of its Net demand and time liabilities (NDTL) that the Reserve Bank may notify from time to time in the Gazette of India.
• Marginal Standing Facility (MSF)- A facility under which scheduled commercial banks can borrow additional amount of overnight money from the Reserve Bank by dipping into their Statutory Liquidity Ratio (SLR)portfolio up to a limit at a penal rate of interest.
• Open Market Operations (OMOs)- These include both, outright purchase and sale of government securities, for injection and absorption of durable liquidity, respectively.

What is Tight Monetary Policy?

• Central banks engage in tight monetary policy when an economy is accelerating too quickly or inflation—overall prices—is rising too fast.

• The central bank tightens policy or makes money tight by raising short-term interest rates which increases the cost of borrowing and effectively reduces its attractiveness.

Monetary Policy in India

• RBI controls inflation in the country through Monetary policy in India.
• The Reserve Bank of India (RBI) is vested with the responsibility of conducting monetary policy, mandated under the Reserve Bank of India Act, 1934.
• To maintain price stability, inflation needs to be controlled and for this the government of India sets an inflation target for every five years in which RBI has an important role in the consultation process regarding inflation targeting.
• The current inflation-targeting framework in India is flexible in nature.
• Who sets the inflation target in India: The amended RBI Act provides for the inflation target to be set by the Government of India, in consultation with the Reserve Bank, once every five years.

Role of RBI

• Reserve Bank of India (RBI) operates the Monetary Policy Framework of the country.
• The amended RBI Act provides the legislative mandate to the Reserve Bank to operate the monetary policy framework of the country which aims at setting the policy (repo) ratebased on an assessment of the current and evolving macroeconomic situation, and modulation of liquidity conditions to anchor money market rates at or around the repo rate.
• Change in Repo rate affects the entire financial system, which, in turn, influences aggregate demand – a key determinant of inflation and growth.
• Once the repo rate is announced, the operating framework designed by the Reserve Bank envisages liquidity management on a day-to-day basis through appropriate actions.

Inflation in India

• Capacity utilization in the manufacturing sector in Q4 2021-22 went up to 75.3 per cent as against its long-term average of 73.7 per cent.
• RBI has also projected inflation at 6.7 per cent for the year 2022-23.
• While the consumer price inflation has eased from its surge in April, the RBI said it remains uncomfortably high and above the upper threshold of the target.
• While RBI projected an inflation of 7.1 per cent for Q2, it expects it to come down to 6.4 per cent in Q3; and 5.8 per cent in Q4. It has further projected inflation in Q1 2023-24 to be at 5 per cent.

Summary

Monetary policy refers to the use of monetary instruments by the central bank to regulate monetary tools such as interest rates, money supply and availability of credit with a view to achieving the ultimate objective of economic policy.

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