OFF BUDGET BORROWINGS
Off-budget borrowings refer to loans taken by government entities, such as public sector undertakings (PSUs) or special purpose vehicles (SPVs), on behalf of the government, but are not reflected in the official budget documents. This means the debt incurred through these borrowings doesn't directly impact the fiscal deficit or debt-to-GDP ratio reported by the government.
Reasons for using them
- Governments sometimes use off-budget borrowings to avoid exceeding their pre-set fiscal deficit or debt-to-GDP targets. This can be seen as a way to mask true public debt levels.
- Off-budget entities can raise funds for specific projects without competing with other government priorities for budget allocations.
- Some argue that off-budget borrowings allow the government to bypass public scrutiny and parliamentary oversight.
Limit of Off-Budget Borrowing
There is no specific legal limit on the amount of off-budget borrowing in India. However, the central government has laid out guidelines and mechanisms to monitor and manage these borrowings. These include:
- Off-budget entities are required to disclose their borrowings to the Ministry of Finance and the central bank periodically.
- The Finance Commission, which reviews the fiscal health of the central and state governments, periodically analyses off-budget borrowings and provides recommendations for improving transparency and accountability.
- The Fiscal Responsibility and Budget Management (FRBM) Act sets broad targets for fiscal deficit and debt-to-GDP ratio but does not specifically address off-budget borrowings. However, the overall fiscal position of the government, including off-budget borrowings, is considered when assessing compliance with the FRBM Act.
Reasons for Off-Budget Borrowing Limit
While there is no codified limit, the above mechanisms serve as indirect controls and aim to discourage excessive use of off-budget borrowings. The rationale for controlling these borrowings includes:
- Lack of clear limits or monitoring can lead to hidden debt and reduced transparency in public finances.
- Unchecked off-budget borrowing can increase the overall government debt burden and pose risks to fiscal sustainability.
- Excessive off-budget debt can burden future generations with the repayment obligations.
- Uncoordinated borrowing by off-budget entities can conflict with overall fiscal and monetary policy objectives.
Article 293 (3) of the Indian Constitution deals with the borrowing powers of states and imposes a specific restriction on their ability to raise loans under certain conditions. Here's a breakdown:
The Key Provisions
- There is still any outstanding part of a loan made to the state by the Government of India or its predecessors.
- The Government of India has given a guarantee for a loan to the state or its predecessors.
4. How Indian States Borrow Money
Indian states, like any other government entity, require funds for various purposes like infrastructure development, social welfare programs, and administrative costs. To bridge the gap between their income and expenditure, they resort to borrowing money.
- Market borrowings are the most common way for states to raise funds. They issue State Development Loans (SDLs), which are essentially bonds that investors can purchase. The bonds have different maturities, ranging from a few months to several years. Investors are attracted to SDLs because they offer a relatively safe and secure way to invest, backed by the state government's guarantee. The interest rate on SDLs varies depending on the creditworthiness of the state and the maturity of the bond. States with strong finances and good track records can borrow at lower interest rates than those with weaker finances.
- Ways and Means Advances (WMA) are short-term loans that states take from the Reserve Bank of India (RBI) to meet temporary cash flow mismatches.WMAs are typically repaid within a few months, and the interest rate is lower than what states pay on SDLs. However, states are discouraged from relying heavily on WMAs, as excessive use can lead to fiscal indiscipline.
- In some cases, the central government may provide loans to states to meet specific needs, such as funding for natural disasters or infrastructure projects. These loans are typically provided at concessional interest rates compared to market borrowings.
- Some states also raise funds through other means, such as issuing tax-free bonds or selling off assets. However, these are relatively less common methods compared to market borrowings and WMAs.
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States can also leverage Public-private partnerships (PPPs) to attract private investment in infrastructure projects, which can reduce their reliance on debt financing.
- The difference between a state's income and expenditure is called the fiscal deficit. A higher fiscal deficit means the state needs to borrow more money.
- A state's credit rating reflects its financial health and ability to repay debt. A higher credit rating allows the state to borrow at lower interest rates.
- The overall interest rates in the market also affect the cost of borrowing for states. When interest rates are high, it becomes more expensive for states to borrow.
- Some Indian states have accumulated high levels of debt, which can be a burden on their finances and make it difficult to borrow more in the future.
- If states borrow excessively without taking steps to improve their finances, it can lead to fiscal instability.
- Some states are heavily reliant on loans from the central government, which can limit their autonomy and flexibility in managing their finances.
5. What is the net borrowing ceiling for states?
The net borrowing ceiling for states in India is 3.5% of their Gross State Domestic Product (GSDP), as per the recommendations of the Fifteenth Finance Commission. This means that states cannot borrow more than 3.5% of the value of all goods and services produced within their borders in a given year.
However, there are some additional borrowing avenues available to states under specific conditions:
- States can borrow an additional 0.5% of their GSDP if they undertake and achieve specific reforms in the power sector.
- States can borrow an amount equivalent to their contributions to the National Pension System (NPS) for government employees.
- In exceptional circumstances, the central government may provide special assistance to states in the form of additional borrowing space.
6. What is Article 131 of the constitution is all about?
Article 131 of the Indian Constitution deals with the original jurisdiction of the Supreme Court, meaning the cases it can hear directly without going through lower courts. This article establishes the Supreme Court as the ultimate arbiter of disputes between different units of the Indian federation.
Scope of Disputes
- Between the Government of India and one or more States includes disputes about the interpretation of the Constitution, sharing of resources, or any other issue arising from the relationship between the central government and state governments.
- Between two or more States covers disputes between states regarding their boundaries, water sharing, or other inter-state issues.
- Disputes involving the Union of India and any State or States on one side and one or more other States encompass situations where a state or group of states disagrees with the central government and another state or group of states on a particular issue.
Exceptions
- Disputes arising from pre-Constitution treaties or agreements are not covered under Article 131 unless the treaty specifically allows it.
- If another agreement between states or the Centre and states excludes Supreme Court jurisdiction for a specific type of dispute, Article 131 won't apply.
Significance of Article 131
- By providing a final platform for resolving disputes between the Centre and states, Article 131 helps maintain a balance of power and prevents conflicts from escalating.
- States can directly approach the Supreme Court to defend their interests and rights against the Centre's actions.
- The Supreme Court's rulings on inter-state disputes set precedents and ensure consistent interpretation of the Constitution across the country.
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For Prelims: Off Budget Borrowings, Article 131, Article 293 (3), fiscal Deficit, Fiscal Responsibility and Budget Management (FRBM) Act, Gross State Domestic Product, Market borrowings, State Development Loans, National Pension System, Reserve Bank of India,
For Mains:
Off-budget borrowings have become a controversial issue in Indian public finances. Discuss the pros and cons of this practice. What measures can be taken to ensure responsible use of off-budget borrowings? (250 words)
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Previous Year Questions
1. Which of the following are included in the original jurisdiction of the Supreme Court? (UPSC 2012)
1. A dispute between the Government of India and one or more States
2. A dispute regarding elections to either House of the Parliament or that of Legislature of a State
3. A dispute between the Government of India and a Union Territory
4. A dispute between two or more States
Select the correct answer using the codes given below:
A. 1 and 2 B. 2 and 3 C. 1 and 4 D. 3 and 4
2. Which of the following articles of the Constitution of India was invoked by the Kerala government to file a petition against the Citizenship (Amendment) Act (CAA) in the Supreme Court on 14 January 2020? (SSC CHSL 2020)
A. Article 131 B. Article 368 C. Article 23 D. Article 17
3. Which Article of the Indian Constitution deals with borrowing by the Government of India? (DSSSB TGT Computer Science 2021)
A. 326 B. 218 C. 246 D. 292
4. Consider the following statements: (UPSC 2018)
1. The Fiscal Responsibility and Budget Management (FRBM) Review Committee Report has recommended a debt to GDP ratio of 60% for the general (combined) government by 2023, comprising 40% for the Central Government and 20% for the State Governments.
2. The Central Government has domestic liabilities of 21% of GDP as compared to that of 49% of GDP of the State Governments.
3. As per the Constitution of India, it is mandatory for a State to take the Central Government's consent for raising any loan if the former owes any outstanding liabilities to the latter.
Which of the statements given above is/are correct?
A. 1 only B. 2 and 3 only C. 1 and 3 only D. 1, 2 and 3
5. Fiscal Deficit is (WBCS Prelims 2018)
A. Revenue Receipts + Capital Receipts (only recoveries of loans and other receipts) - Total expenditure
B. Budget Deficit + Government's market borrowings and liabilities.
C. Primary Deficit + Interest Payments
D. All of the above
6. There has been a persistent deficit budget year after year. Which action/actions of the following can be taken by the Government to reduce the deficit? (UPSC 2016)
1. Reducing revenue expenditure
2. Introducing new welfare schemes
3. Rationalizing subsidies
4. Reducing import duty
Select the correct answer using the code given below.
A. 1 only B. 2 and 3 only C. 1 and 3 only D. 1, 2, 3 and 4
7. With reference to Indian economy, consider the following statements: (UPSC 2015)
Which of the statements given above is/are correct? (a) 1 only (b) 2 only (c) Both 1 and 2 (d) Neither 1 nor 2
8. With reference to the Indian economy, consider the following statements: (UPSC 2022)
1. A share of the household financial savings goes towards government borrowings.
2. Dated securities issued at market-related rates in auctions form a large component of internal debt.
Which of the above statements is/are correct ?
A. 1 only B. 2 only C. Both 1 and 2 D. Neither 1 nor 2
Answers: 1-C, 2-A, 3-D, 4-C, 5-D, 6-C, 7-B, 8-C
Mains
1. Do you agree with the view that steady GDP growth and low inflation have left the Indian economy in good shape? Give reasons in support of your arguments. (2019)
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NEW DELHI DECLARATION
1. Context
2. The New Delhi Declaration
- The big takeaway is the New Delhi Declaration that forged a consensus between the G-20 nations, bitterly divided between the G7-EU and Russia-China, on the issue of Ukraine.
- The final language is a shift from the ‘Bali Paragraphs’, with language critical of Russia erased, on a firm proposal from G-20 hosts of past and future years Indonesia, India, Brazil, and South Africa.
- The final 83-paragraph declaration, with eight paragraphs on “geopolitical issues”, on which consensus was reached included language on everything from climate action, financing, and fossil fuel phaseout, to debt restructuring, the biofuel alliance, health, digital infrastructure, regulating cryptocurrency, and other issues.
3. Expanding G-20 Horizons
- India's presidency aimed to bring the "Voice of the Global South" into the G-20 fold, resulting in the inclusion of more than 125 developing countries' concerns in the declaration.
- Additionally, India successfully advocated for the African Union's induction, reshaping the G-20's balance of power.
- India's meticulous preparations for the G-20 summit, including two postponements in 2021 and 2022, set it apart.
- The nation's commitment to hosting the event transcended previous host countries' efforts.
- India's efforts to "democratize" the G-20 within its borders involved inviting over 1,00,000 delegates from 125 countries to participate in numerous meetings across 60 Indian cities.
- This initiative held political significance, coinciding with India's 2024 general elections and featuring a G-20 symbol resembling that of the ruling party.
4. Distinguished Attendees and Notable Absences
- The summit attracted leaders from 17 of the 20 original G-20 members.
- Special attention was given to U.S. President Joseph Biden and Saudi Arabian Crown Prince and PM Mohammed Bin Salman.
- Notably absent were leaders from Russia and China, with Chinese President Xi Jinping's absence attributed to strained India-China relations and a potential message of disapproval for the G-20's evolving focus.
5. Conclusion
- The G-20 summit in Delhi was a historic event marked by India's exceptional leadership, consensus on critical issues, and the inclusion of developing countries' voices.
- While notable leaders were absent, the summit achieved its goals and set the stage for future G-20 meetings under Brazil and South Africa's presidencies.
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For Prelims: G-20, European Union, COVID-19, Russia-Ukraine War, New Delhi Declaration,
For Mains:
1. Evaluate India's role in expanding the G-20 by bringing in the "Voice of the Global South" and advocating for the inclusion of the African Union. How has this reshaped the dynamics within the G-20? (250 Words)
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Previous Year Questions
1. With reference to the “G20 Common Framework”, consider the following statements: (UPSC 2022)
1. It is an initiative endorsed by the G20 together with the Paris Club. 2. It is an initiative to support Low Income Countries with unsustainable debt. Which of the statements given above is/are correct? (a) 1 only (b) 2 only (c) Both 1 and 2 (d) Neither 1 nor 2 Answer: C
2. In which one of the following groups are all the four countries members of G20?
(UPSC 2020)
A. Argentina, Mexico, South Africa and Turkey
B. Australia, Canada, Malaysia and New Zealand
C. Brazil, Iran, Saudi Arabia and Vietnam
D. Indonesia, Japan, Singapore and South Korea
Answer: A
3. In the context of bilateral trade negotiations between India and the European Union, what is the difference between European Commission and European Council? (UPSC 2010)
1. European Commission represents the EU in trade negotiations whereas the European Council participates in the legislation of matters pertaining to economic policies of the European Union.
2. European Commission comprises of the Heads of State or government of member countries whereas the European Council comprises of the persons nominated by European Parliament. Which of the statements given above is/are correct?
A. 1 only B. 2 only C. Both 1 and 2 D. Neither 1 nor 2
Answer: D
4. In the context of vaccines manufactured to prevent COVID-19 pandemic, consider the following statements: (UPSC 2022)
1. The Serum Institute of India produced COVID-19 vaccine named Covishield using mRNA platform.
2. Sputnik V vaccine is manufactured using vector based platform.
3. COVAXIN is an inactivated pathogen based vaccine.
Which of the statements given above are correct?
A. 1 and 2 only B. 2 and 3 only C. 1 and 3 only D. 1, 2 and 3
Answer: B
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OPEN MARKET SALE SCHEME (OMSS)
1. Context
2. About Open Market Sale Scheme
- The Open Market Sale Scheme (OMSS) Domestic is a scheme by the Food Corporation of India (FCI) to sell surplus wheat and rice from its central pool to traders, bulk consumers, retail chains and other entities in the open market.
- The scheme is intended to regulate the prices of wheat and rice in the market and to ensure adequate availability of food grains to consumers.
- The OMSS Domestic is conducted through e-auctions. The FCI announces the quantity of wheat and rice to be sold under the scheme and the minimum bid price. Bidders can submit their bids online and the FCI will accept the highest bids.
- The successful bidders will be notified and they will be required to make the payment within a specified period.
- The OMSS Domestic is an important tool for the FCI to manage its surplus stocks of wheat and rice.
- The scheme helps to ensure that the FCI does not have to resort to selling its stocks at a loss.
- The scheme also helps to regulate the prices of wheat and rice in the market and to ensure adequate availability of food grains to consumers.
3. Objectives of the Open Market Sale Scheme
- To regulate the prices of wheat and rice in the market
- To ensure adequate availability of food grains to consumers
- To manage the surplus stocks of wheat and rice held by the FCI
- To generate revenue for the FCI
- To promote competition in the wheat and rice market
4. Wheat Production in India-Rabi and Kharif crop
- Wheat is a rabi crop in India. It is grown during the winter season, from October to March.
- The Rabi season is considered to be the best time to grow wheat in India because the weather is cool and dry, which is ideal for wheat cultivation.
- Kharif crops are grown during the summer season, from June to September. The Kharif season is generally hot and humid, which is not ideal for wheat cultivation.
- However, some wheat is grown in the Kharif season in areas with irrigation facilities.
- In 2022-23, India is expected to produce a record 111.3 million tonnes of wheat. This is an increase of 2. 6 per cent from the previous year.
- The increase in production is due to favourable weather conditions and the government's efforts to increase wheat acreage.
5. About Food Corporation of India
- The Food Corporation of India (FCI) is a government-owned agency in India responsible for the procurement, storage, distribution, and management of food grains, mainly wheat and rice, to ensure food security and stabilize food prices in the country.
- Established in 1965 under the Food Corporations Act, the FCI plays a crucial role in the Indian agriculture and food supply chain system.
5.1. Role and Functions of the Food Corporation of India (FCI)
Procurement and Purchase: FCI is responsible for procuring food grains, mainly wheat and rice, from farmers at government-set minimum support prices (MSPs). This procurement is aimed at ensuring that farmers receive fair prices for their crops and also to build up buffer stocks for food security.
Storage and Maintenance: FCI manages and maintains large storage facilities across the country to store the procured food grains. These storage facilities help prevent spoilage, pests, and losses due to weather conditions, ensuring a stable supply of food grains.
Buffer Stock Management: FCI maintains buffer stocks of food grains to meet emergency requirements, stabilize market prices, and ensure food security during times of drought, crop failure, or other supply disruptions.
Distribution: FCI is involved in the distribution of food grains through the Public Distribution System (PDS), a government initiative to provide essential commodities at subsidized rates to the economically disadvantaged population. It ensures that food reaches the intended beneficiaries through a network of fair-price shops.
Welfare Schemes: FCI supports various welfare schemes initiated by the government, such as the Mid-Day Meal Scheme and the National Food Security Act. It provides food grains for these schemes to ensure adequate nutrition for school children and vulnerable populations.
Export and Import: FCI sometimes participates in the export and import of food grains based on the government's policy objectives. This helps in maintaining domestic prices and managing excess stocks.
Market Intervention: In situations where market prices of food grains rise significantly, FCI may intervene by releasing its buffer stocks to stabilize prices and prevent inflation.
Price Support: FCI's procurement at MSPs acts as a price support mechanism for farmers. This encourages farmers to produce more food grains and ensures their economic viability.
Research and Development: FCI engages in research and development activities to improve storage techniques, reduce post-harvest losses, and enhance the overall efficiency of the food supply chain.
Logistics and Transportation: FCI manages the logistics and transportation of food grains from procurement centres to storage facilities and distribution points.
7. Conclusion
The interplay of the OMSS-D, the FCI's multifunctional role and the success of wheat cultivation in India reflect the nation's commitment to ensuring food security, stabilizing prices and fostering agricultural growth.
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For Prelims: OMSS-D, Food Corporation of India, Wheat, Rice, Rabi crops, Kharif Crops, Food Corporations Act,
For Mains:
1. Elaborate on the objectives of the Open Market Sale Scheme (OMSS) in the context of regulating wheat and rice prices. How does this scheme promote competition and ensure adequate availability of food grains to consumers? (250 Words)
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Previous Year Questions 1. The economic cost of food grains to the Food Corporation of India is Minimum Support Price and bonus (if any) paid to the farmers plus (UPSC 2019) A. transportation cost only
B. interest cost only
C. procurement incidentals and distribution cost
D. procurement incidentals and charges for godowns
Answer: C
2. The Food Corporation of India was set up in ______ under the Food Corporations Act, 1964 with the primary objective of purchasing, storing, moving / transporting, distributing and selling foodgrains and other foodstuffs. (SSC JE ME 2021)
A. 1972 B. 1969 C.1965 D. 1970
Answer: C
3. Which of the following conditions is/are essential of wheat cultivation? (UPSC CAPF 2019)
1. The optimum temperature during the growing period is around 30°C
2. A frost-free period of about 100 days
3. Light clay or heavy loam soil
Select the correct answer using the code given below:
A. 1, 2 and 3 B. 1 and 2 only C. 2 an 3 only D. 1 only
Answer: C
4. What is/are the advantage/advantages of zero tillage in agriculture? (UPSC 2020)
1. Sowing of wheat is possible without burning the residue of previous crop.
2. Without the need for nursery of rice saplings, direct planting of paddy seeds in the wet soil is possible.
3. Carbon sequestration in the soil is possible.
Select the correct answer using the code given below:
A. 1 and 2 only B. 2 and 3 only C. 3 only D. 1, 2 and 3
Answer: D
5. "System of Rice Intensification" of cultivation, in which alternate wetting and drying of rice fields is practised, results in: (UPSC 2022)
1. Reduced seed requirement
2. Reduced methane production
3. Reduced electricity consumption
Select the correct answer using the code given below:
A. 1 and 2 only B. 2 and 3 only C. 1 and 3 only D. 1, 2 and 3
Answer: D
6. Which of the following factors/policies were affecting the price of rice in India in the recent past? (UPSC 2020)
1. Minimum Support Price
2. Government's trading
3. Government's stockpiling
4. Consumer subsidies
Select the correct answer using the code given below:
A.1, 2 and 4 only B. 1, 3 and 4 only C. 2 and 3 only D. 1, 2, 3 and 4
Answer: D
7. With reference to the cultivation of Kharif crops in India in the last five years, consider the following statements: (UPSC 2019)
1. Area under rice cultivation is the highest.
2. Area under the cultivation of jowar is more than that of oilseeds.
3. Area of cotton cultivation is more than that of sugarcane.
4. Area under sugarcane cultivation has steadily decreased.
Which of the statements given above are correct?
A. 1 and 3 only B. 2, 3 and 4 only C. 2 and 4 only D. 1, 2, 3 and 4
Answer: A
8. Consider the following crops: (UPSC 2013)
1. Cotton
2. Groundnut
3. Rice
4. Wheat
Which of these are Kharif crops?
A.1 and 4 B. 2 and 3 only C. 1, 2 and 3 D. 2, 3 and 4
Answer: C
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MONETARY POLICY COMMITTEE (MPC)
Monetary policy refers to the actions and strategies undertaken by a country's central bank to control and regulate the supply of money, credit availability, and interest rates in an economy. Its primary goal is to achieve specific economic objectives, such as price stability, full employment, and sustainable economic growth.
Central banks use various tools to implement monetary policy, including:
Interest Rates: Adjusting the interest rates at which banks lend to each other (known as the federal funds rate in the United States) influences borrowing and spending in the economy.
Open Market Operations: Buying or selling government securities in the open market to regulate the money supply. When a central bank buys securities, it injects money into the system, and when it sells them, it reduces the money supply.
Reserve Requirements: Mandating the amount of reserves banks must hold, affecting their ability to lend money.
By influencing the availability and cost of money, central banks aim to stabilize prices, control inflation, encourage or discourage borrowing and spending, and promote economic growth. However, the effectiveness of monetary policy can be influenced by various factors such as global economic conditions, fiscal policies, and market expectations.
3.What is the primary objective of the monetary policy?
The primary objective of monetary policy typically revolves around maintaining price stability or controlling inflation within an economy. Central banks often set an inflation target, aiming to keep it at a moderate and steady level. Stable prices help in fostering confidence in the economy, encouraging investment, and ensuring that the value of money remains relatively constant over time.
However, while controlling inflation is often the primary goal, central banks might also consider other objectives, such as:
Full Employment: Some central banks have a secondary objective of supporting maximum employment or reducing unemployment rates.
Economic Growth: Encouraging sustainable economic growth by managing interest rates and credit availability to stimulate or cool down economic activity.
Exchange Rate Stability: In some cases, maintaining stable exchange rates might be an important consideration, especially for countries with open economies heavily reliant on international trade.
These additional objectives can vary depending on the economic conditions, priorities of the government, and the central bank's mandate. Nonetheless, ensuring price stability is typically the fundamental goal of most monetary policies, as it forms the basis for a healthy and growing economy.
4. Monetary Policy Committee (MPC)
- In line with the amended RBI Act, 1934, Section 45ZB grants authority to the central government to establish a six-member Monetary Policy Committee (MPC) responsible for determining the policy interest rate aimed at achieving the inflation target.
- The inaugural MPC was formed on September 29, 2016. Section 45ZB stipulates that "the Monetary Policy Committee will ascertain the Policy Rate necessary to meet the inflation target" and that "the decisions made by the Monetary Policy Committee will be obligatory for the Bank."
- According to Section 45ZB, the MPC comprises the RBI Governor as the ex officio chairperson, the Deputy Governor overseeing monetary policy, a Bank official nominated by the Central Board, and three individuals appointed by the central government.
- The individuals chosen by the central government must possess "capabilities, ethical standing, expertise, and experience in economics, banking, finance, or monetary policy" (Section 45ZC)
- The Monetary Policy Committee (MPC) plays a crucial role in managing inflation through its decisions on the policy interest rate.
- When inflation is too high, the MPC might decide to increase the policy interest rate. This action aims to make borrowing more expensive, which can reduce spending and investment in the economy.
- As a result, it could help decrease demand for goods and services, potentially curbing inflation.
- Conversely, when inflation is too low or the economy needs a boost, the MPC might decrease the policy interest rate.
- This move makes borrowing cheaper, encouraging businesses and individuals to spend and invest more, thus stimulating economic activity and potentially raising inflation closer to the target level.
- The MPC's goal is to use the policy interest rate as a tool to steer inflation toward a target set by the government or central bank.
- By monitoring economic indicators and assessing the current and expected inflation levels, the MPC makes informed decisions to maintain price stability within the economy
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For Prelims: Economic and Social Development
For Mains: General Studies III: Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment.
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Previous Year Questions
1. Consider the following statements: (UPSC 2021)
1. The Governor of the Reserve Bank of India (RBI) is appointed by the Central Government.
2. Certain provisions in the Constitution of India give the Central Government the right to issue directions to the RBI in the public interest.
3. The Governor of the RBI draws his natural power from the RBI Act.
Which of the above statements is/are correct?
A. 1 and 2 only B. 2 and 3 only C. 1 and 3 only D. 1, 2 and 3
Answer: C
2. Concerning the Indian economy, consider the following: (UPSC 2015)
Which of the above is/are component(s) of Monetary Policy? (a) 1 only (b) 2, 3 and 4 (c) 1 and 2 (d) 1, 3 and 4 Answer: C 3. An increase in Bank Rate generally indicates: (UPSC 2013) (a) Market rate of interest is likely to fall. (b) Central bank is no longer making loans to commercial banks. (c) Central bank is following an easy money policy. (d) Central bank is following a tight money policy. Answer: (d) 4. Which of the following statements is/are correct regarding the Monetary Policy Committee (MPC)? (UPSC 2017) 1. It decides the RBI's benchmark interest rates. 2. It is a 12-member body including the Governor of RBI and is reconstituted every year. 3. It functions under the chairmanship of the Union Finance Minister. Select the correct answer using the code given below: A. 1 only B. 1 and 2 only C. 3 only D. 2 and 3 only Answer: A |
NATIONAL TIGER CONSERVATION AUTHORITY (NTCA)
The National Tiger Conservation Authority (NTCA) is a statutory body of the Government of India, established in 2005 to oversee the implementation of the Project Tiger initiative and ensure the conservation and protection of tigers and their habitats across the country. The NTCA operates under the Ministry of Environment, Forests and Climate Change, and its organizational structure includes a Governing Body, a Standing Committee, and a small Secretariat to facilitate day-to-day operations.
Key Objectives
- The primary objective of NTCA is to formulate policies and implement programs for the conservation of tigers, their prey species, and the ecosystems they inhabit.
- NTCA plays a central role in the implementation of Project Tiger, which was launched in 1973 to conserve India's national animal and its habitats.
- NTCA is responsible for monitoring and assessing the status of tigers in India, including conducting tiger censuses, assessing the effectiveness of conservation measures, and collecting data on tiger populations.
- NTCA ensures compliance with the Wildlife Protection Act, 1972, and other relevant laws to combat wildlife crimes, including poaching and illegal trade of tiger parts.
Key Functions
- NTCA oversees the management of tiger reserves across the country, coordinating with state governments and relevant authorities to ensure effective conservation practices.
- NTCA provides financial and technical support to tiger reserves for habitat management, anti-poaching efforts, community involvement, and other conservation initiatives.
- While the primary focus is on tigers, NTCA also contributes to the conservation of biodiversity within tiger reserves, recognizing the interconnectedness of species and ecosystems.
- NTCA promotes research activities related to tiger conservation and wildlife ecology. It also emphasizes capacity building for forest officials, field staff, and local communities involved in tiger conservation efforts.
Challenges and Initiatives
- NTCA addresses challenges related to human-wildlife conflict by developing strategies for coexistence, compensating affected communities, and implementing mitigation measures.
- Conservation initiatives involve addressing habitat degradation issues, afforestation programs, and sustainable development practices to maintain viable tiger habitats.
- NTCA works on strengthening anti-poaching measures and collaborating with law enforcement agencies to combat illegal wildlife trade and activities threatening tiger populations.
- The Canopy Walk Tourism Project, funded by the Karnataka Tourism Department, was executed in the vicinity of Kuveshi within the Castlerock Wildlife Range, a component of the Dandeli Wildlife Reserve.
- To enhance protection and administration, the jurisdiction over this region has been entrusted to the Director of the Kali Tiger Project.
- Spanning a distance of 240 meters and elevated approximately 30 feet above the ground, the canopy walkway offers a unique experience.
- Opened to the public in 2021, the project aims to promote tourism and environmental appreciation in the area.
- Residents argue that the project violates the 1980 Act by diverting forest land for eco-tourism without being part of the management plan or tiger conservatory plan.
- Karnataka Tourism Policy prohibiting new tourist facilities in wildlife-protected areas, aligning with the Wildlife Protection Act and Supreme Court directives.
- Residents point out that the project contradicts section 38(O)(1)(c) of the Wildlife Protection Act by introducing new tourism infrastructure (except for minor homestay alterations) in and around tiger reserves.
- The constructions allowed by the Court within tiger reserves are limited to those essential for protection or within approved management plans, neither of which applies to the Canopy Walk.
- While the area falls in the approved tourism zone of the Kali Tiger Project plan, details regarding the Canopy Walk and its permissibility for tourism are absent.
- The project, along with the Jungle Safari, has significantly increased tourism pressure in the Castlerock region, exceeding allowed activities like trekking and bird watching.
Dandeli Wildlife Reserve, located in the Uttara Kannada district of Karnataka, India, stands as a testament to the region's rich biodiversity and ecological significance. Nestled along the Western Ghats, this sanctuary is renowned for its diverse flora and fauna, pristine landscapes, and the Kali River that meanders through its expanse.
- Geographical Features: Situated in the Western Ghats, Dandeli Wildlife Reserve is part of the larger Dandeli-Anshi Tiger Reserve and spans an area of approximately 834.16 square kilometres. The reserve is traversed by the Kali River, enhancing its ecological diversity and serving as a lifeline for numerous species of flora and fauna.
- Flora: The reserve boasts a lush and varied vegetation cover, including dense deciduous and evergreen forests. The diverse plant life supports a range of wildlife habitats, contributing to the overall ecological balance.
- Fauna: Dandeli Wildlife Reserve is home to a diverse array of wildlife, including elephants, tigers, leopards, black panthers, deer species like sambar and spotted deer, Indian bison, and various species of primates. The sanctuary is a haven for birdwatchers, with over 200 avian species, including the Malabar pied hornbill, great hornbill, Indian grey hornbill, and several species of eagles, making it an ornithologist's paradise.
- Activities: The reserve offers visitors an opportunity to explore its natural beauty through wildlife safaris, providing a chance to observe the resident fauna in their natural habitats. The Kali River also offers thrilling opportunities for river rafting, attracting adventure enthusiasts. Nature trails and trekking routes lead visitors through the heart of the reserve, offering a more immersive experience amid the wilderness.
- Conservation Efforts: Dandeli Wildlife Reserve plays a crucial role in conservation efforts, contributing to the protection of endangered species and maintaining the ecological balance of the Western Ghats. The reserve is part of the Dandeli-Anshi Tiger Reserve, reflecting its commitment to preserving the region's flagship species.
- Challenges and Conservation Initiatives: While the reserve thrives with biodiversity, it faces challenges such as habitat degradation and human-wildlife conflicts. Conservation initiatives, including community involvement, habitat restoration, and sustainable tourism practices, are crucial for addressing these challenges and ensuring the long-term health of the ecosystem.
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For Prelims: National Tiger Conservation Authority, Dandeli Wildlife Reserve, Western Ghats, Kali River, Wildlife Protection Act, 1972, Project Tiger, Karnataka Tourism Policy, flora, fauna
For Mains:
1. Discuss the challenges and potential solutions for balancing tourism development with wildlife conservation in protected areas. (250 Words)
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Previous Year Questions
1. The term ‘M-STRIPES’ is sometimes seen in the news in the context of (UPSC 2017) (a) Captive breeding of Wild Fauna (b) Maintenance of Tiger Reserves (c) Indigenous Satellite Navigation System (d) Security of National Highways
2. Consider the following statements: (UPSC 2014) 1. Animal Welfare Board of India is established under the Environment (Protection) Act, of 1986.
2. National Tiger Conservation Authority is a statutory body.
3. National Ganga River Basin Authority is chaired by the Prime Minister.
Which of the statements given above is/are correct? (a) 1 only (b) 2 and 3 only (c) 2 only (d) 1, 2 and 3
3. Which one of the following is the well-publicized wildlife campaign in the world launched in 1973? (BPSC 2023) A. Sunderbans B. Project Project C. Tiger Lion Project D. More than one of the above E. None of the above
4. Which one of the following tiger reserves of India has ‘Bhoorsingh the Barasingha’ as its official mascot? (UPSC CAPF 2017)
A. Nameri tiger reserve
B. Ranthambhore tiger reserve
C. Panna tiger reserve
D. Kanha tiger reserve
5. From the ecological point of view, which one of the following assumes importance in being a good link between the Eastern Ghats and the Western Ghats?(UPSC CSE 2017)
(a) Sathyamangalam Tiger Reserve (b) Nallamala Forest (c) Nagarhole National Park (d) Seshachalam Biosphere Reserve
6. Dandeli Wildlife Sanctuary is located in which of the following states? (SSC CHSL2021)
A. Kerala B. Karnataka C. Jharkhand D. Sikkim
7. Which of the following Protected Areas are located in Cauvery basin? (upsc 2020)
Select the correct answer using the code given below: (a) 1 and 2 only (b) 3 and 4 only (c) 1, 3 and 4 only (d) 1, 2, 3 and 4
8. According to the Wildlife (Protection) Act, 1972, which of the following animals cannot be hunted by any person except under some provisions provided by law? (UPSC 2017)
1. Gharial
2. Indian wild ass
3. Wild buffalo
Select the correct answer using the code given below:
A. 1 only B. 2 and 3 only C. 1 and 3 only D. 1, 2 and 3
9. With reference to Indian laws about wildlife protection, consider the following statements: (UPSC 2022)
1. Wild animals are the sole property of the government.
2. When a wild animal is declared protected, such animal is entitled for equal protection whether it is found in protected areas or outside.
3. Apprehension of a protected wild animal becoming a danger to human life is sufficient ground for its capture or killing.
Which of the statements given above is/are correct?
A.1 and 2 B. 2 only C.1 and 3 D. 3 only
10. In the field of tourism, which one of the following Indian States is described as 'One State Many Worlds'? (CDS GK 2020)
A. Assam B. West Bengal C. Karnataka D. Rajasthan
Answers: 1-B, 2-B, 3-B, 4-D, 5-A, 6-B, 7-C, 8-D, 9-A, 10-C
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