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)

India´s gross domestic product (GDP) estimates have long been the subject of controversy.For this reason, it is encouraging to seea recent news report that the governmentt is planning to improve GDP measurement by using data from the goods and services tax (GST).

There are three primary ways to calculate GDP:

1. Production Approach (GDP by Production): This approach calculates GDP by adding up the value-added at each stage of production. It involves summing up the value of all final goods and services produced in an economy.

2. Income Approach (GDP by Income): This approach calculates GDP by summing up all the incomes earned in an economy, including wages, rents, interests, and profits. The idea is that all the income generated in an economy must ultimately be spent on purchasing goods and services.

3. Expenditure Approach (GDP by Expenditure): This approach calculates GDP by summing up all the expenditures made on final goods and services. It includes consumption by households, investments by businesses, government spending, and net exports (exports minus imports).

3. Measuring GDP

GDP can be measured in three different ways:

1. Nominal GDP: This is the raw GDP figure without adjusting for inflation. It reflects the total value of goods and services produced at current prices.

2. Real GDP: Real GDP adjusts the nominal GDP for inflation, allowing for a more accurate comparison of economic performance over time. It represents the value of goods and services produced using constant prices from a specific base year.

3. GDP per capita: This is the GDP divided by the population of a country. It provides a per-person measure of economic output and can be useful for comparing the relative economic well-being of different countries.

The GDP is a useful measure of economic health, but it has some limitations. For example, it does not take into account the distribution of income in an economy. It also does not take into account the quality of goods and services produced.

Despite its limitations, the GDP is a widely used measure of economic health. It is used by economists, policymakers, and businesses to track the performance of an economy and to make decisions about economic policy

4. Gross Value Added (GVA)

 

Gross Value Added (GVA) is a closely related concept to Gross Domestic Product (GDP) and is used to measure the economic value generated by various economic activities within a country. GVA represents the value of goods and services produced in an economy minus the value of inputs (such as raw materials and intermediate goods) used in production. It's a way to measure the contribution of each individual sector or industry to the overall economy.

GVA can be calculated using the production approach, similar to one of the methods used to calculate GDP. The formula for calculating GVA is as follows:

GVA = Output Value - Intermediate Consumption

Where:

• Output Value: The total value of goods and services produced by an industry or sector.
• Intermediate Consumption: The value of inputs used in the production process, including raw materials, energy, and other intermediate goods.

5. GDP vs GNP

Gross Domestic Product (GDP) and Gross National Product (GNP) are both important economic indicators used to measure the size and health of an economy, but they focus on slightly different aspects of economic activity and include different factors. Here are the key differences between GDP and GNP:

1. Definition and Scope:

   • GDP: GDP measures the total value of all goods and services produced within a country's borders, regardless of whether the production is done by domestic or foreign entities. It only considers economic activities that take place within the country.
   • GNP: GNP measures the total value of all goods and services produced by a country's residents, whether they are located within the country's borders or abroad. It takes into account the production of residents, both domestically and internationally.

2. Foreign Income and Payments:

   • GDP: GDP does not consider the income earned by residents of a country from their economic activities abroad, nor does it account for payments made to foreigners working within the country.
   • GNP: GNP includes the income earned by a country's residents from their investments and activities abroad, minus the income earned by foreign residents from their investments within the country.

3. Net Factor Income from Abroad:

   • GDP: GDP does not account for net factor income from abroad, which is the difference between income earned by domestic residents abroad and income earned by foreign residents domestically.
   • GNP: GNP includes net factor income from abroad as part of its calculation.

4. Foreign Direct Investment:

   • GDP: GDP does not directly consider foreign direct investment (FDI) flowing into or out of a country.
   • GNP: GNP considers the impact of FDI on the income of a country's residents, both from investments made within the country and from investments made by residents abroad.

5. Measurement Approach:

   • GDP: GDP can be calculated using three different approaches: production, income, and expenditure approaches.
   • GNP: GNP is primarily calculated using the income approach, as it focuses on the income earned by residents from their economic activities.

 

 

 

 

For Prelims: GDP, GVA, FDI, GNP For Mains: 1.Discuss the recent trends and challenges in India's GDP growth 2.Examine the role of the service sector in India's GDP growth 3.Compare and contrast the growth trajectories of India's GDP and GNP

 

 

Previous Year Questions 1.With reference to Indian economy, consider the following statements: (UPSC CSE, 2015) 1. The rate of growth of Real Gross Domestic Product has steadily increased in the last decade. 2. The Gross Domestic Product at market prices (in rupees) has steadily increased in the last decade. 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 (b) 2.A decrease in tax to GDP ratio of a country indicates which of the following? (UPSC CSE, 2015) 1. Slowing economic growth rate 2. Less equitable distribution of national income Select the correct answer using the code given below: (a) 1 only (b) 2 only (c) Both 1 and 2 (d) Neither 1 nor 2 Answer (a) Previous year UPSC Mains Question Covering similar theme: Define potential GDP and explain its determinants. What are the factors that have been inhibiting India from realizing its potential GDP? (UPSC CSE GS3, 2020) Explain the difference between computing methodology of India’s Gross Domestic Product (GDP) before the year 2015 and after the year 2015. (UPSC CSE GS3, 2021)

 

Source: indianexpress

 

 

MIRRORS

 

 

1. Context

 

Dressing up is probably one of the most annoying things. You stand in front of a mirror and try to find the right combination of clothes of various colours hoping you look more tolerable to people. This is probably one trait that distinguishes us from other animals: we spend a few good minutes every morning staring at a mirror.

 

2. What is a mirror?

 

Most mirrors have a glass-like feel—they're typically heavy and fragile. However, despite this similarity, the experience of looking into a mirror versus a regular glass surface, like a window, is quite different.

During daylight, window glass is transparent, allowing you to view the world outside. But at night, if your room is brightly lit and you look at the same window, you'll notice your own reflection instead. A mirror, in contrast, consistently shows your reflection whether it's day or night, as long as there's sufficient light.

To grasp why mirrors and window glass behave so differently, it's important to explore the roles of metals and insulators

 

3. Metals and Insulators

 

• Metals are typically shiny materials—like steel utensils, aluminum pressure cookers, or the coins you carry. They're usually strong, tough to break, and have a silvery appearance.
• Metals also respond quickly to temperature changes and are good conductors of electricity. That’s why it’s dangerous to touch a live electrical socket with something like a metal spoon.
• In contrast, insulators—such as glass, wood, and plastic—do not conduct electricity well and generally lack that metallic shine.
• Electricity flows through the movement of electrons. Atoms contain both positively charged protons and negatively charged electrons. In metals, electrons are free to move—they behave like energetic kids, roaming between atoms, creating what’s often called an "electron sea."
• In insulators, however, electrons stay close to their respective atoms and don’t move around freely. So when a battery is connected, electrons can travel easily through metals but not through insulators.
• Interestingly, this same difference in how electrons behave with electricity also affects how they respond to light

 

4. Interaction of light and electrons

 

• Light is a type of electromagnetic wave. A wave, in general, is a repeating disturbance that travels from one location to another. For example, dropping a stone in water creates ripples, while speaking generates sound waves in the air.
• When light reaches us, it comes in the form of electromagnetic waves—regular patterns of changing electric and magnetic fields. Electric fields can move electrons, as seen in electronic devices like watches, while magnetic fields are what hold magnets to your fridge. When these fields begin to change rhythmically over time, they produce electromagnetic waves—what we perceive as light.
• Electrons respond in interesting ways when exposed to light. Similar to how we move rhythmically when pushed on a swing, electrons also begin to oscillate when struck by light, almost like they’re dancing.
• However, this “dance” varies between materials. In metals, where electrons are free to move around in a shared "electron sea," they respond collectively—like a choreographed group performance. In contrast, electrons in insulators remain close to their own atoms, moving individually in place.
• This difference in electron behavior determines how a material interacts with light. In metals, the synchronized movement of electrons blocks light, reflecting it back instead of letting it pass through.
• That’s why light bounces off metallic surfaces. In insulators, electrons only wiggle slightly within their atoms, allowing most of the light to pass through.
• This is why transparent insulators like glass allow light to pass, while metals typically do not.
• It also explains why you can see your reflection clearly in a steel spoon—light from your face bounces straight back into your eyes. But during the day, when you look at a window, most of the light from your face passes through the glass, making your reflection faint.
• At night, with less light outside and more indoors, a small amount reflects back from the glass, letting you see yourself faintly

 

5. How does a mirror work?

 

• So how is it that a mirror, which feels like ordinary glass—an insulator—can reflect light as effectively as a metal surface like steel? The secret lies in its structure. A mirror isn’t just glass; it has a hidden component.
• While the front surface is glass, allowing light to pass through, a thin metallic layer is applied to the back. It’s this metal layer that reflects light, thanks to the dynamic movement of electrons within it.
• This clever combination is what enables you to see your reflection clearly when you look into a mirror. In essence, a mirror is a hybrid—it brings together the properties of both materials. The glass with its tightly held electrons, and the metal with its freely moving ones, work together to form the mirrors you find in wardrobes or bathrooms.
• Now, consider the idea of encasing a block of glass with silver on all sides. It would appear metallic from the outside, but wouldn't conduct electricity internally like a true metal. This raises an interesting question: can a single material behave like a metal on the surface but act as an insulator inside?
• Surprisingly, such materials do exist. Discovered in the latter part of the 20th century, they are known as topological materials. Their unique properties earned their discoverers the Nobel Prize in Physics in 2016. More recently, Microsoft unveiled a quantum computing chip made from these very materials.
• To truly understand how and why these materials work the way they do, one must dive into the world of quantum mechanics—an incredibly elegant and fascinating branch of physics. In recognition of its impact, the United Nations has designated 2025 as the International Year of Quantum Science and Technology, marking a century since the field's foundational discoveries

 

6. Way Forward

 

Although you might now have a basic understanding of how mirrors work, to truly grasp why some electrons move freely while others stay close to their atoms—or how they respond when light hits them—you’ll need to explore quantum mechanics.

Until then, the next time you gaze into a mirror, don’t just focus on your reflection. Take a moment to admire the invisible motion of electrons—those bound within the glass and those freely moving in the metallic layer behind it—that work together to bounce your image back to you

 

For Prelims: Electrons, Neutrons, Total internal reflection   For Mains: GS III - Science & technology

 

Source: The Hindu

 

MADHAV NATIONAL PARK (TIGER RESERVE)

 

 

 

1. Context

 

On March 9, Environment Minister Bhupender Yadav announced that the Centre had declared the Madhav National Park in Madhya Pradesh as the country’s 58th tiger reserve. This is the ninth tiger reserve in the State, the highest among the States. Maharashtra has six; Rajasthan, Tamil Nadu, and Karnataka have five each.

 

2. Reasons for setting up of national tiger reserve

 

• Throughout history, tigers were widespread across India; however, their population began to decline sharply in the early 20th century due to rampant hunting, poaching, and the large-scale exploitation of forests for timber, particularly during the colonial era.
• Estimates from 1964 suggest that around 40,000 tigers may have existed in India at the beginning of the 20th century.
• By the 1960s, their numbers had plummeted to between 2,000 and 4,000, primarily due to indiscriminate hunting, the widespread issuance of gun licenses after 1947, increased accessibility to forests, extensive deforestation for various purposes, and the rise of commercial enterprises such as “Shikar Companies” and the fur trade.
• Concerned about the alarming decline, naturalists raised the issue, prompting the Indian Board for Wild Life (IBWL), the predecessor of the National Board for Wild Life, to recommend a complete ban on the export of wild cat skins, including those of tigers, during a meeting in New Delhi in July 1969.
• That same year, the 10th Assembly of the International Union for Conservation of Nature (IUCN), held in Delhi, classified the tiger as an endangered species in its "Red Data Book" and passed a resolution advocating for a ban on tiger hunting.
• As tiger numbers dwindled further, reaching approximately 1,863, then-Prime Minister Indira Gandhi appointed an 11-member Task Force to investigate the issue and develop a strategy for tiger conservation in India.
• In August 1972, the Task Force proposed designating eight tiger habitats across the country under a new initiative, later named Project Tiger.
• Officially launched on April 1, 1973, at Corbett Tiger Reserve, Project Tiger initially included nine reserves: Corbett (formerly in Uttar Pradesh, now in Uttarakhand), Palamau (formerly in Bihar, now in Jharkhand), Simlipal (Odisha), Sundarbans (West Bengal), Manas (Assam), Ranthambore (Rajasthan), Kanha (Madhya Pradesh), Melghat (Maharashtra), and Bandipur (Karnataka). These reserves were selected to represent the diverse tiger habitats across India.

 

3. National Tiger Conservation Authority (NTCA)

 

Since 2006, Project Tiger has been replaced by the National Tiger Conservation Authority (NTCA), which mandates that each tiger reserve be managed according to a site-specific management plan. Project Tiger played a crucial role in establishing a structured approach to the scientific management of protected areas in India. It introduced key concepts such as the designation of core and buffer zones, implementation of protective measures, habitat enhancement, systematic field data collection on changes in flora and fauna, wildlife population estimation, and other essential conservation aspects.

The guidelines also introduced Tiger Conservation Plans (TCPs) to ensure:

• Protection and targeted habitat management for sustaining viable populations of tigers, their prey, and co-predators.
• Ecologically sustainable land use within tiger reserves and the surrounding areas, particularly those connecting different protected zones, while considering the livelihood needs of local communities.

Recognizing the challenges posed by small reserves surrounded by human settlements, the NTCA guidelines focus on establishing source populations within reserves while maintaining corridors that connect these habitats to others. Source areas are those where tiger populations are growing, whereas sink areas experience declining numbers and require periodic reintroduction of individuals to maintain a stable population.

The process of designating a tiger reserve begins when the State Government submits a proposal to the Central Government. Upon evaluation, the NTCA reviews and recommends the proposal to the State, which then officially notifies the area as a tiger reserve

Funding of Tiger reserve   As per Project Tiger guidelines, the Central Government provides 60% of the funding for conservation efforts, while the remaining 40% is covered by the respective State Government. However, for Northeastern and Himalayan states, the Centre funds 90% of the expenses. These conservation efforts include anti-poaching measures, habitat restoration, water resource development, and mitigation of human-wildlife conflicts. Additionally, the guidelines emphasize creating inviolate spaces for tigers and relocating villages from critical tiger habitats by offering improved rehabilitation packages. Furthermore, the initiative assists states in resolving the rights of displaced communities, rehabilitating traditional hunting tribes residing in and around tiger reserves, and conducting independent assessments to monitor and evaluate the effectiveness of tiger conservation programs

 

4. The significance of Madhav National Park important

• Covering an estimated 165.32 sq km, Madhav National Park in Madhya Pradesh was initially designated as a National Park in 1956 under the MP National Parks Act, 1955. Today, the Madhav National Park and Tiger Reserve has expanded to a core area of 355 sq km, with a buffer zone of 4-6 sq km. The park did not have a resident tiger population until 2023, when a male tiger and two females were relocated. Since then, the population has grown to seven tigers.
• Importantly, the Madhav Tiger Reserve serves as a key corridor connecting to the Ranthambore Tiger Reserve in Rajasthan. It is also linked to Kuno National Park, which currently houses a population of captive cheetahs. Experts suggest that competition for prey species, such as deer, could lead to intricate ecological interactions between these predators.
• Madhya Pradesh is home to several renowned tiger reserves, including Kanha, Panna, and Bandhavgarh, and currently has the highest tiger population in India (785 tigers) due to effective conservation measures. However, the Kuno-Madhav forest division in the northern part of the state has historically received less attention.
• With Kuno gaining prominence as a cheetah reserve, a more integrated management approach is anticipated to oversee both cheetah and tiger populations, enhancing the region’s long-term wildlife conservation efforts.
• Additionally, there are ongoing plans to relocate Asiatic lions from Gir (Gujarat) to Kuno National Park, following Supreme Court approval. However, in March 2023, the government informed the Court that the coexistence of lions and cheetahs in Kuno could lead to territorial conflicts and requested additional time to reassess the relocation.
• If lions are introduced, it could attract greater funding from both national and international conservation bodies, further boosting the park’s wildlife conservation initiatives

 

 

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)

 

 

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) Nagarhole National Park Papikonda National Park Sathyamangalam Tiger Reserve Wayanad Wildlife Sanctuary 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

 

Source: The Hindu