• Relatively free trade enjoyed a heyday in the late 19th and early 20th centuries when the idea took hold that international commerce had made large-scale wars between nations so expensive and counterproductive that they were obsolete.
• World War I proved that idea wrong, and nationalist approaches to trade, including high tariffs, dominated until the end of World War II.
• From that point on, free trade enjoyed a 50-year resurgence, culminating in the creation in 1995 of the World Trade Organisation  (WTO), which acts as an international forum for settling disputes and laying down ground rules.
• Free trade agreements, such as the North American Free Trade Agreement (NAFTA) now known as the United States-Mexico-Canada Agreement (USMCA) and the European Union (EU), also proliferated.

4.3 In the 21st Century

The composition of the National Human Rights Commission (NHRC) includes a chairperson and several members appointed by the President of India. According to the Protection of Human Rights Act, 1993, the NHRC consists of:

• Chairperson: The chairperson is appointed by the President of India and must be a retired Chief Justice of the Supreme Court or a serving or retired Judge of the Supreme Court.

• Members: The NHRC can have up to four members, including a member who is or has been a Judge of the Supreme Court, a member who is or has been the Chief Justice of a High Court, and two other members who have knowledge or practical experience in matters relating to human rights.

These appointments aim to ensure the independence, expertise, and credibility of the NHRC in addressing human rights issues effectively. The members serve fixed terms as specified by the Act, and they collectively contribute to the commission's efforts to protect and promote human rights across the country

5.Appointment of NHRC Members

The appointment of members to the National Human Rights Commission (NHRC) follows a process outlined in the Protection of Human Rights Act, 1993. Here's an overview of the appointment procedure:

• Selection Committee: A Selection Committee is constituted to recommend candidates for appointment as Chairperson and members of the NHRC. The Selection Committee is chaired by the Prime Minister of India and includes the following members:

  • The Speaker of the Lok Sabha (House of the People) or the Deputy Speaker, in case the Speaker is unable to attend.
  • The Minister in charge of the Ministry of Home Affairs in the Government of India.
  • The Leader of the Opposition in the Lok Sabha.
  • The Leader of the Opposition in the Rajya Sabha (Council of States) in the absence of the Leader of the Opposition in the Lok Sabha

• The NHRC is authorized to inquire into complaints of human rights violations received from individuals or groups. It can investigate violations committed by public servants or by any authority or person acting under the government's authority
• The Commission has the power to monitor human rights violations, including through suo moto action, where it can initiate an inquiry based on media reports, complaints, or its own knowledge
• Following investigations or inquiries, the NHRC can make recommendations to the concerned authorities for remedial action, prosecution, or compensation to victims of human rights violations
• The NHRC engages in activities to raise awareness about human rights issues through seminars, workshops, publications, and other educational programs
• It advises the government on policies and measures to promote and protect human rights effectively
• The NHRC can intervene in court proceedings related to human rights violations, either as a party or as amicus curiae (friend of the court)
• The Commission conducts research and studies on human rights issues to better understand the challenges and formulate appropriate responses
• Based on its findings and experiences, the NHRC can recommend legislative reforms to strengthen human rights protection in the country
• The NHRC collaborates with international human rights organizations and participates in international forums to promote human rights globally
• The NHRC has the authority to visit and monitor places of detention, such as prisons and juvenile homes, to ensure that inmates' human rights are respected

• The NHRC lacks direct enforcement authority. It can investigate human rights violations, make recommendations, and issue guidelines, but it cannot enforce its decisions or ensure their implementation. Its recommendations are non-binding, and compliance by government agencies or other authorities is voluntary.
• The process of investigation and resolution of complaints by the NHRC can be lengthy and time-consuming, leading to delays in providing justice to victims of human rights violations. This delay can undermine the effectiveness of the NHRC in addressing urgent and serious violations
• The NHRC operates with limited resources, including budgetary allocations and staffing. This constraint can affect its capacity to handle a large number of complaints effectively and conduct thorough investigations into human rights violations
• The NHRC's jurisdiction is limited to investigating human rights violations committed by public servants or authorities acting under the government's authority. It may not have jurisdiction over violations by non-state actors or in certain areas like the armed forces, where separate mechanisms exist
• There have been instances where political pressures or interference have affected the independence and impartiality of the NHRC. Political influence can hinder its ability to address human rights violations objectively and without bias
• Many people, especially in rural areas and marginalized communities, may not be aware of the NHRC's existence or how to access its services. This lack of awareness and accessibility can prevent victims of human rights violations from seeking redress through the commission
• Even when the NHRC makes recommendations for remedial action or compensation, there may be instances where these recommendations are not implemented fully or effectively by the concerned authorities

BIMSTEC

 

1. Context

Prime Minister Modi is visiting Thailand  to  attend the 6th Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) summit. This is the first physical meeting of the BIMSTEC leaders since the 4th BIMSTEC Summit in Kathmandu, Nepal, in 2018. The last summit was held in Colombo in March 2022 in virtual format.

2. About BIMSTEC

• BIMSTEC is the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation, is a regional organization comprising seven member states in South Asia and Southeast Asia.
• The organization aims to foster cooperation and strengthen ties among its member countries in various sectors, including trade, economy, technology, tourism, and people-to-people contact.
• BIMSTEC was established on June 6, 1997, through the Bangkok Declaration.
• The member countries of BIMSTEC are Bangladesh, Bhutan, India, Myanmar, Nepal, Sri Lanka, and Thailand.
• BIMSTEC brings together countries from two contiguous regions- South Asia and Southeast Asia- connected by the Bay of Bengal.
• The organization represents a diverse and vibrant mix of cultures, languages, and economies.
• Around 22% of the world’s population lives in the seven countries around the Bay of
  Bengal, with a combined GDP close to $2.7 trillion.
• All seven countries have sustained average annual rates of growth between 3.4% and 7.5% from 2012 to 2016. A fourth of the world’s traded goods cross the bay every year.

3. Objectives of BIMSTEC:

• Enhancing Economic Cooperation: BIMSTEC aims to promote economic cooperation among member countries by facilitating trade, investment, and the development of infrastructure. It seeks to create a seamless flow of goods and services within the region, fostering economic growth and development.
• Strengthening Connectivity: Improving physical and digital connectivity is a crucial aspect of BIMSTEC's objectives. By enhancing transport and communication links, the organization seeks to facilitate easier movement of people and goods, encouraging regional integration.
• Promoting People-to-People Contact: BIMSTEC strives to promote cultural, educational, and tourism exchanges among member countries. This approach helps in fostering mutual understanding, friendship, and trust among the people of the region.
• Addressing Common Challenges: BIMSTEC provides a platform for member countries to address common challenges such as climate change, natural disasters, terrorism, and transnational crime. Cooperation in these areas is vital to ensuring the security and well-being of the region.
• Facilitating Technical Cooperation: The organization promotes technical cooperation in various sectors, such as agriculture, fisheries, technology, energy, and the environment. Sharing knowledge and expertise helps member countries address their developmental needs more effectively.

4. How BIMSTEC is important for India?

• It provides a new platform for India to engage with its neighbors with the South Asian Association for Regional Cooperation (SAARC) becoming dysfunctional because of differences between India and Pakistan.
• BIMSTEC allows India to pursue three core policies:

• Neighborhood First – primacy to the country’s immediate periphery;
• Act East – connect India with Southeast Asia; and
• Economic development of India’s northeastern states – by linking them to the Bay of Bengal region via Bangladesh and Myanmar.

• Allow India to counter China's creeping influence in countries around the Bay of Bengal due to the spread of its One Belt and One Road initiative.

5. India's Renewed Push for BIMSTEC and Isolating Pakistan

• Trigger Event: Terror attack in Uri
• India held an outreach summit with BIMSTEC leaders alongside the BRICS summit in Goa.
• Some BIMSTEC countries backed India's call for boycotting the SAARC summit in Islamabad (November 2016).
• India declared victory in isolating Pakistan after the SAARC summit was postponed.
• India believed SAARC's potential was under-utilized due to Pakistan's lack of response and obstructionist approach.
• At the 2014 SAARC summit in Kathmandu, Modi emphasized realizing opportunities through SAARC or outside it, among all or some member countries.

6. Challenges faced by BIMSTEC

• Neglect by member states: It seems that India has used BIMSTEC only when it fails to work through SAARC in the regional setting and other major members like Thailand and Myanmar are focused more towards ASEAN than BIMSTEC.
• Inconsistent Meetings: BIMSTEC planned to hold summits every two years, and ministerial meetings every year, but only four summits have taken place in 20 years up to 2018.
• Broad Focus Areas: The focus of BIMSTEC is very wide, including 14 areas of cooperation like connectivity, public health, agriculture, etc. It is suggested that BIMSTEC should remain committed to small focus areas and cooperate in them efficiently.
• No FTA: BIMSTEC FTA was negotiated in 2004, talks on it are yet to be concluded.
• Bilateral Issues between Member Nations: Bangladesh is facing one of the worst refugee crisis of Rohingyas from Myanmar who are fleeing prosecution in the state of Rakhine in Myanmar. There is a border conflict between Myanmar and Thailand.
• BCIM: The formation of another sub-regional initiative, the Bangladesh-China-India-Myanmar (BCIM) Forum, with the proactive membership of China, has created more doubts about the exclusive potential of BIMSTEC.

For Prelims: BIMSTEC, Free Trade Agreement (FTA), Bangladesh-China-India-Myanmar (BCIM) Forum, ASEAN, South Asian Association for Regional Cooperation (SAARC), Act East Policy, Neighbourhood First Policy, and Uri Attack. For Mains: 1. Discuss the significance and challenges of the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) in promoting regional cooperation and integration among its member countries. (250 words)

 

Previous year Questions 1. With reference to the BIMSTEC, which of the following statements is/are true? (UPPSC 2022) 1. P. M. Narendra Modi addressed the 5th BIMSTEC Summit on 30th March 2022. 2. 5th Summit of BIMSTEC had been chaired by India. Select the correct answer from the code given below: A. Neither 1 nor 2 B. Both 1 and 2 C. Only 2 D. Only 1 Answer: D   2. Which of the following statement/s is/are true about the three-day international Seminar on 'Climate Smart Farming System' for BIMSTEC countries held during December 11-13, 2019? (UPPSC 2020) 1. It was held at Katmandu, Nepal. 2. It was aimed to have experience sharing for more resilience to climate change through an ecological approach to enable the improvement of tropical small-holding farming systems. Select the correct answer from the codes given below: A. Only 1 B. Only 2 C. Both 1 and 2 D. Neither 1 nor 2 Answer: B

Source: The Indian Express

 

WAQF ACT

 

 

1. Context

 

The contentious Waqf (Amendment) Bill, which proposes sweeping changes in regulation of Waqf properties and settlement of disputes, sailed through Lok Sabha after a midnight vote Wednesday, capping a marathon 12-hour debate in which the Opposition accused the BJP-led NDA government of interference in Muslim religious affairs in contravention of the Constitution

 

2. India's Waqf Law

 

• In Islamic law, a waqf refers to property dedicated to God for religious or charitable purposes. This can include any type of property, either movable or immovable, that is set aside for the benefit of the public, serving as an act of piety that enables Muslims to continue their charitable contributions even after death.
• A waqf can be created through a formal document, or property may be recognized as waqf if it has been consistently used for religious or charitable purposes over time. The income generated from such properties is usually directed towards the upkeep of mosques, funding educational institutions, or aiding the needy.
• Once a property is designated as waqf, it cannot be inherited, sold, or given away. Non-Muslims are also permitted to establish a waqf, provided the purpose aligns with Islamic values.
• In India, waqfs are governed by the 1995 Act. The identification and delineation of waqf properties are carried out by a survey conducted by the State government.
• A survey commissioner, appointed under this Act, identifies these properties through local inquiries, witness statements, and examination of public records. Once identified, the properties are listed in the State’s official gazette, and a record is maintained by the State Waqf Board.
• Each waqf is managed by a mutawalli (caretaker) responsible for its administration. While waqfs are similar to trusts under the Indian Trusts Act of 1882, unlike trusts, waqfs cannot be dissolved by a Board

3. Functions and role of Waqf board

 

• The 1995 Act creates Waqf Boards in each State, responsible for overseeing the management of waqf properties within their respective areas. These Boards are legally recognized entities, enabling them to initiate or face legal action.
• Each State Waqf Board is led by a chairperson and includes one or two representatives from the State government, Muslim legislators, acknowledged Islamic scholars, and mutawallis (caretakers) of the waqfs.
• The Act also requires the appointment of a full-time Chief Executive Officer for each Board, who must be a practicing Muslim and hold a rank equivalent to at least a Deputy Secretary in the State government.
• The Waqf Board is empowered to manage waqf properties and undertake actions to reclaim lost assets. It also has the authority to approve the transfer of immovable waqf properties through sale, gift, mortgage, exchange, or lease, but such transactions require the consent of at least two-thirds of the Board members.
• The 2013 amendments to the 1995 Act further enhanced the Board's powers, making it almost impossible to sell waqf properties, as neither the mutawalli nor the Board is permitted to sell such property.
• In addition to the State Waqf Boards, the legislation also establishes the Central Waqf Council, a national advisory body under the Ministry of Minority Affairs.
• This Council ensures consistent administration of waqf properties across the country and is chaired by the Union Minister of Minority Affairs.
• The Council also advises the Union government on waqf-related matters, including policy formulation, implementation of waqf laws, and the resolution of inter-state disputes

4. Proposed Changes in the bill

 

• The definition of ‘waqf’ has been revised under the new Bill. Now, only lawful property owners who have practiced Islam for at least five years are permitted to establish waqf properties through formal deeds.
• This change eliminates the concept of ‘waqf by use,’ which allowed a property to be considered waqf based on its usage, even if the original deed was contested. Historically, waqf properties were often designated orally until formal documentation became more common.
• To prevent fraudulent claims of waqf status, the Bill stipulates that any government property identified or declared as waqf, either before or after the enactment of this Act, will not be recognized as waqf property. The law also allows widows, divorced women, and orphans to benefit from waqf proceeds.
• The responsibility for surveying waqf properties, previously handled by survey commissioners under the 1995 Act, will now be transferred to district collectors or officers of equivalent rank under the new Bill.
• To enhance the accuracy of waqf property records, the Bill proposes the establishment of a centralized registration system. All information regarding waqf properties must be uploaded to this portal within six months of the law’s enactment, and any new waqf property registrations must be submitted through this portal to the Waqf Boards.
• Additionally, the Bill removes section 40, which previously allowed waqf tribunals to determine whether a property qualifies as waqf. Instead, the district collector is now designated as the final authority on such matters.
• Once a decision is made, the collector must update the revenue records and report to the State government. Importantly, the Bill states that the disputed property cannot be treated as waqf property until the collector submits a final report, meaning the Waqf Board cannot take control of the land until the government resolves the issue.
• One of the most debated provisions in the Bill is the proposal to include non-Muslims in key waqf institutions, such as the Central Waqf Council, State Waqf Boards, and waqf tribunals.
• The Bill authorizes the Centre to appoint three Members of Parliament (two from the Lok Sabha and one from the Rajya Sabha) to the Central Waqf Council without requiring them to be Muslims. Previously, under the 1995 Act, these MPs had to be from the Muslim community.
• The new Bill also mandates that State Waqf Boards must include two non-Muslims and two women as members. The composition of waqf tribunals has been altered from a three-member body to a two-member body, consisting of a district judge and an officer of joint secretary rank to the State government.
• The proposed law requires tribunals to resolve disputes within six months, with a possible six-month extension.
• Furthermore, the Bill gives the Centre the authority to “direct the audit of any waqf at any time by an auditor appointed by the Comptroller and Auditor-General of India, or by any officer designated by the Central Government for that purpose.”
• The Waqf Boards are required to audit their accounts annually, selecting auditors from a panel formed by the State governments. Mutawallis who fail to maintain proper accounts will face penalties.
• The proposed law also allows courts to intervene in waqf disputes by removing the finality of waqf tribunal decisions, enabling aggrieved parties to appeal directly to the relevant High Court. This measure aims to increase judicial oversight and reduce instances of arbitrary power exercised by Waqf Boards or tribunals

5. Way forward

 

Following its introduction in Parliament, the Bill was sent to a joint parliamentary committee for further examination after the Congress-led INDIA bloc opposed the proposed legislation in its current form.

In March of the previous year, the Union government informed the Delhi High Court that nearly 120 petitions challenging various provisions of the 1995 Act are currently pending in courts across the country

 

 

 

 

For Prelims: Waqf board, Amendment process in Parliament   For Mains: GS II - Indian Governance

 

 

Source: The Hindu

 

UNIFORM CIVIL CODE (UCC)

 

 

1. Context

National integration and gender equality, the need to pre-empt criminal offences, and protection of children born out of live-in relationships — these are some of the major arguments that the State’s counter affidavit has put forth in response to a clutch of petitions challenging the Uniform Civil Code in the Uttarakhand High Court

 

2. 22nd law commission on UCC

• Underlining that the Uniform Civil Code is “neither necessary nor desirable at this stage”, the 21st Law Commission of India, in 2018, argued for reform of family laws of every religion through amendments and codification of certain aspects so as to make them gender-just
• In its ‘Consultation Paper on Family Law Reforms’, the Law Commission took a stand in favour of “equality ‘within communities’ between men and women” (personal law reform), “rather than ‘equality between’ communities” (UCC)
• According to the 22nd Law Commission Cultural diversity cannot be compromised to the extent that our urge for uniformity itself becomes a reason for threat to the territorial integrity of the nation
• women must be guaranteed their freedom of faith without any compromise on their right to equality

 

3. What is the Uniform Civil Code

• A UCC would provide for one law for the entire country, applicable to all religious communities, in their personal matters such as marriage, divorce, inheritance, adoption etc
• Currently, Indian personal law is fairly complex, with each religion adhering to its own specific laws
• Separate laws govern Hindus including Sikhs, Jains and Buddhist, Muslims, Christians, and followers of other religions
• Moreover, there is diversity even within communities. All Hindus of the country are not governed by one law, nor are all Muslims or all Christians
• For instance, in the Northeast, there are more than 200 tribes with their own varied customary laws
• The Constitution itself protects local customs in Nagaland. Similar protections are enjoyed by Meghalaya and Mizoram. Even reformed Hindu law, in spite of codification, protects customary practices
• The exception to this rule is the state of Goa, where all religions have a common law regarding marriages, divorces, and adoption

4. Constitution on UCC

• Article 44 of the Constitution lays down that the state shall endeavour to secure a UCC for citizens throughout the territory of India
• Article 44 is among the Directive Principles of State Policy. Directive Principles are not enforceable by court, but are supposed to inform and guide governance
• However, in some senses, Article 44 is unique in this manner. While Article 44 uses the words “state shall endeavour”, other Articles in the ‘Directive Principles’ chapter use words such as “in particular strive”; “shall in particular direct its policy”; “shall be obligation of the state
• The phrase “by suitable legislation” is absent in Article 44. All this implies that the duty of the state is greater in other directive principles than in Article 44

5. Uniform Code for Personal Law

Article 25 lays down an individual’s fundamental right to religion; Article 26(b) upholds the right of each religious denomination or any section thereof to “manage its own affairs in matters of religion”

Article 29 defines the right to conserve distinctive culture

An individual’s freedom of religion under Article 25 is subject to “public order, health, morality” and other provisions relating to fundamental rights, but a group’s freedom under Article 26 has not been subjected to other fundamental rights

6. Way forward

Over the next 30 days, the Law Commission will receive views of the public and stakeholders

The notice said the stakeholders concerned are at liberty to make submissions in the form of consultation/discussion/working papers on any of the issues pertaining to the UCC to the Member Secretary, Law Commission of India

After reviewing the submissions, the Law Commission will again make observations/recommendations regarding a UCC, which may or may not differ from the previous Commission’s observations

 

 

For Prelims: Unifrom Civil Code (UCC), DPSP, Fundamental rights, Law Commission For Mains: 1. What is the Uniform Civil Code? What are the challenges in implementing a Uniform Civil Code in a diverse country like India?

 

Previous Year Questions Q1. Consider the following provisions under the Directive Principles of State Policy as enshrined in the Constitution of India: (2012) Securing for citizens of India a uniform civil code Organising village Panchayats Promoting cottage industries in rural areas Securing for all the workers reasonable leisure and cultural opportunities Which of the above are the Gandhian Principles that are reflected in the Directive Principles of State Policy? (a) 1, 2 and 4 only (b) 2 and 3 only (c) 1, 3 and 4 only (d) 1, 2, 3 and 4 Answer (b) 2. A legislation that confers on the executive or administrative authority an unguided and uncontrolled discretionary power in the matter of the application of law violates which one of the following Articles of the Constitution of India? (a) Article 14 (b) Article 28 (c) Article 32 (d) Article 44 Answer (a) Mains 1.Discuss the possible factors that inhibit India from enacting for its citizens a uniform civil code as provided for in the Directive Principles of State Policy. (2015)

Source: indianexpress

 

MULTIDIMENSIONAL POVERTY 

 

 

 

1. Context 

 

India’s economic growth as well as government welfare programmes have been widely inclusive, their impact on minorities and vulnerable groups has been substantial. Poverty has come down among all communities.

2. Basis for the Assessment 

• The basis for this assessment is outlined in a discussion paper titled "Multidimensional Poverty in India Since 2005-06," published by NITI Aayog on January 15.
• The paper incorporates technical inputs from the United Nations Development Programme (UNDP) and the Oxford Policy and Human Development Initiative (OPHI). 
• The study reveals that multidimensional poverty in India witnessed a decline from 29.17% in 2013-14 to 11.28% in 2022-23, resulting in approximately 24.82 crore people escaping poverty during this period.
• At the state level, Uttar Pradesh led the way with 5.94 crore people emerging from poverty, followed by Bihar with 3.77 crore and Madhya Pradesh with 2.30 crore.

 

3. About Multi-dimensional Poverty Index

While traditional poverty measures rely solely on income or expenditure levels, the Multidimensional Poverty Index (MPI) offers a more nuanced picture. Developed by the Oxford Poverty and Human Development Initiative (OPHI) and the United Nations Development Programme (UNDP), the MPI takes into account not just income, but also various deprivations across three key dimensions:

• Health: This dimension incorporates indicators like nutrition and child mortality, reflecting access to basic healthcare and well-being.
• Education: Years of schooling and school attendance are used to gauge educational attainment and opportunities for future development.
• Standard of living: A set of six indicators, including housing, household assets, cooking fuel types, sanitation access, water availability, and electricity, capture essential living conditions and resource ownership.

In the Indian context, the MPI goes a step further by including two additional indicators:

• Maternal health: Recognizing the importance of mothers' well-being for family health, this indicator reflects access to proper care during pregnancy and childbirth.
• Bank accounts: This indicator signifies financial inclusion and the potential for accessing financial services, which can be crucial for escaping poverty.

4. Calculation of the Multidimensional Poverty Index (MPI)

To determine the Multidimensional Poverty Index (MPI), the process involves three distinct calculations according to the MPI methodology:

1. Incidence of Multidimensional Poverty (H): This calculation determines the proportion of multidimensionally poor individuals in the population. It is achieved by dividing the number of multi-dimensionally poor individuals by the total population. In simpler terms, it answers the question: How many people are considered poor?
2. Intensity of Poverty (A): The intensity of poverty assesses the average proportion of deprivation experienced by multidimensionally poor individuals. To compute intensity, the weighted deprivation scores of all poor individuals are summed and then divided by the total number of poor people. More technically, it answers the question: How poor are the individuals who are considered multidimensionally poor?
3. Multidimensional Poverty Index (MPI): The MPI is derived by multiplying the incidence of multidimensional poverty (H) and the intensity of poverty (A). The MPI value for a given population is, therefore, the share of weighted deprivations faced by multidimensionally poor individuals divided by the total population.

 

5. Data Sources 

 

• The data for the years 2013-14 and 2022-23 were gathered through established methods, with the health metrics relying on information from various rounds of the National Family Health Survey (NFHS).
• Conducted every five years, the most recent round of NFHS pertains to the period from 2019 to 2021.
• The NFHS serves as a crucial data source, offering insights into health-related indicators that contribute to the assessment of multidimensional poverty.
• The utilization of NFHS data ensures a comprehensive and periodic evaluation of health metrics, providing a reliable basis for the assessment of multidimensional poverty over the specified time frames.

 

6. Calculation Methodology for MPI in 2012-13 and 2022-23

The determination of the Multidimensional Poverty Index (MPI) for the years 2012-13 and 2022-23 involved a process of interpolation for the former and extrapolation for the latter, as outlined in the paper.

• Interpolation for 2012-13: The estimation for the year 2013-14 served as a reference point. To obtain MPI values for the preceding year, interpolation techniques were applied, allowing for a comprehensive understanding of poverty and deprivation in 2012-13.
• Extrapolation for 2022-23: For the year 2022-23, extrapolation methods were employed to project MPI values based on the available data points. This forward projection allowed for an assessment of poverty and deprivation in the specified year.

 

7. The Way Forward

The NITI Aayog paper provides valuable insights, understanding the basis for the assessment requires considering the limitations of interpolation and extrapolation used for crucial years and the lack of detailed information about the methods employed. Transparency in data sources and methodologies is crucial for a more comprehensive evaluation of the claim.

 

For Prelims: Poverty, Interim Budget, Niti Aayog, UNDP, Multidimensional Poverty Index  For Mains:  1. Critically examine the role of government policies and programs in contributing to the reduction of multidimensional poverty in India. Suggest potential interventions that could further address this issue. (250 Words) 2.  Imagine you are appointed as a policy advisor to the government. Design a multi-pronged strategy to address multidimensional poverty in a specific rural or urban community in India. Consider the economic, social, and environmental dimensions of poverty reduction. (250 Words)

 

Previous Year Questions   1. Which of the following are the Objectives of 'National Nutrition Mission'? (UPSC 2017) 1. To Create Awareness relating to malnutrition among pregnant women and lactating mothers 2. To reduce the incidence of anaemia among young children, adolscent girls, and women 3. To promote the Consumption of millets, coarse cereals, and unpolished rice 4. To promote the consumption of poultry eggs Select the correct answer using the code given below A. 1 and 2 Only       B.1, 2 and 3         C. 1, 2 and 4           D. 3 and 4   2. In a given year in India, official poverty lines are higher in some States than in others because (UPSC 2019) A. Poverty rates vary from State to State B. Price levels vary from State to State C. Gross State Product varies from State to State D. Quality of public distribution varies from State to State   Answers: 1-A, 2- B

 

Source: The Indian Express

 

MONETARY POLICY COMMITTEE (MPC)

 

 

1. Context

Ahead of the Reserve Bank of India’s monetary policy review on April 9 and US President Donald Trump’s new tariff policy, India’s benchmark 10-year bond yields on Wednesday fell sharply by nine basis points (bps) to 6.49 per cent on a year-on-year after the central bank announced it would buy Rs 80,000 crore worth of bonds in April

 

2. What is Monetary policy?

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)

5.Monetary Policy Committe and Inflation

• 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

6. Way forward

With more than half of the current financial year witnessing positive developments in the economy, the full financial year should conclude as projected with a strong growth performance and macroeconomic stability. Yet risks on the downside persist. Inflation is one of them that has kept both the government and the RBI on high alert. Financial flows in the external sector also need constant monitoring as they impact the value of rupee and the balance of payments. A fuller transmission of the monetary policy may also temper domestic demand

 

 

 

 

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.

 

 

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) Bank rate Open Market Operations Public debt Public revenue 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

 

Source: Indianexpress