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The Monetary Policy Committee (MPC) of the Reserve Bank of India raised the benchmark lending rate by 25 basis points (bps) to 6.5% as the RBI targets persistently high core or underlying inflation that it sees as a risk to the improving outlook for the economy.
Observing that the rate increases since May were still working their way through the system, Governor Shaktikanta Das said, “The MPC was of the view that further calibrated monetary policy action is warranted to keep inflation expectations anchored, break the persistence of core inflation and thereby strengthen the medium-term growth prospects.”
The MPC, which lowered its CPI inflation forecast for the current fiscal year to 6.5% from the 6.7% it projected at its last policy meeting in December and raised its growth estimate for Q1 of the fiscal year beginning in April by 70 bps to 7.8%, also reiterated that it would stay focused on withdrawal of accommodation.
Two of the panel’s six members, however, voted against the majority decision to raise rates.Answering reporters’ questions on the Adani group, Mr. Das said the Indian banking sector was strong and that one case would not impact it.
City
Constitution doesn’t allow aldermen right to vote, says SC (Page no. 3)
(GS Paper 2, Governance)
The Supreme Court said the Constitution does not allow nominated members of a municipality the right to vote in meetings, while issuing notice to the Lieutenant-Governor and the pro tem presiding officer of the Municipal Corporation of Delhi (MCD) in a petition filed by the Aam Aadmi Party (AAP) alleging deliberate stalling of mayoral elections for the third time in a row.
AAP mayoral candidate Shelly Oberoi had moved the Supreme Court on January 27 pleading for swift and timely conduct of the mayoral polls after the House was stalled twice — January 6 and 24. She later withdrew the petition while seeking permission to move the court again in case the aldermen were allowed to vote.
Soon after the House was adjourned on February 6, senior AAP leader Manish Sisodia had said that the party would seek the SC’s intervention for impartial conduct of the mayoral elections.
Senior advocate A.M. Singhvi, appearing for Ms. Oberoi on Wednesday, urged that the case concerned “destruction of democracy”. He said Article 243U of the Constitution mandates that elections to constitute a municipality should be completed well in time.
Mr. Singhvi pointed out that the MCD elections were held on December 4, 2022, but subsequent polls for the offices of Mayor, Deputy Mayor and members of the Standing Committees have been stalled thrice.
He said the pro tem presiding officer has allowed nominated members to vote in direct violation of Article 243R(2)(iv) of the Constitution.
“It is not just a statute, the Constitution itself does not allow them to vote,” Justice P.S. Narasimha remarked at the point.
Mr. Singhvi argued that the pro tem presiding officer [BJP’s Satya Sharma] is herself “illegal” as she is not the senior-most member.
Then she orders all three elections of the Mayor, Deputy Mayor and Members of the Standing Committees to be held together.There is directly a provision that this cannot be done.
States
Key trials for Gaganyaan conducted (Page no. 5)
(GS Paper 3, Space)
The Indian Space Research Organisation (ISRO), along with the Indian Navy, has conducted an important trial for the Gaganyaan, human space flight mission.
They carried out initial recovery trials of the Crew Module in the Navy’s Water Survival Test Facility (WSTF) in Kochi.
The trials were part of the preparation for crew module recovery operations for the Gaganyaan mission that will be carried out in Indian waters with the participation of Indian Government agencies, the overall recovery operations being led by the Indian Navy.
A Crew Module Recovery Model (CMRM), that simulates the mass, center of gravity, outer dimensions, and externals of the actual Crew Module at touchdown, was used for the trials.
The sequence of operations required for the recovery of the Crew Module were carried out as part of the trials.
According to ISRO, as the safe recovery of the crew is the final step to be accomplished for any successful human spaceflight, it is of paramount importance and it has to be carried out with the minimum lapse of time.
The project envisages demonstration of human spaceflight capability by launching a crew of three members to an orbit of 400 km for a three-day mission and bringing them back safely to earth, by landing in Indian waters.
Editorial
A Nordic-India connect to power a green transition (Page no. 6)
(GS Paper 3, Environment)
Over the last decades, Nordic countries have been pioneering green technologies. Together, the Nordics and India can power the green transition the world needs.
The thought of the Nordic countries might evoke different things to an Indian. Snow, fjords, lakes, and northern lights are definitely things we have plenty of.
Over the last decades, we have also been at the forefront of developing new green technologies and solutions such as hydrogen, offshore wind, batteries and carbon capture and storage — solutions that are essential for the world to succeed in the green transition it desperately needs.
The Nordics have succeeded in building stable, secure, welfare-based societies that, to a large extent, manage to meet the needs and the wishes of their inhabitants.
Our common ambition is for the Nordic region to become the most sustainable and integrated region in the world by 2030. We work together to build a green, competitive, and socially sustainable region.
However, the Nordic countries alone cannot deliver the green transition the world requires. Together, the Nordics and India can deliver key technologies and solutions to stop climate change and boost green growth.
At the Nordic-India Summit held in Copenhagen in May 2022, the five Nordic Prime Ministers and India’s Prime Minister Narendra Modi agreed to intensify cooperation on digitalisation, renewable energy, maritime industries, and the circular economy.
Mr. Modi expressed an interest in joint Nordic solutions that can support India’s green transition. It is very much with this in mind that we, the Trade Ministers of Norway and Finland, are currently visiting India together (February 9-10).
During our visit, we aim to showcase the added value to the partnership we can bring to India and learn from the impressive innovations and digital solutions being developed in India.
We have with us business delegations and companies that are leaders within sectors such as clean energy, circular economy, digitalisation, tourism, and the maritime sector. They have great ambitions for increased collaboration with India.
Our most valued and renowned businesses are already operating in India and have made substantial investments. Our business community in India is also growing. There are now 240 Norwegian and Finnish companies in India.
Explainer
The status and proceeds of disinvestment (Page no. 8)
(GS Paper 3, Economy)
In the Union Budget for 2023-24, the government has set a disinvestment target of ₹51,000 crore, down nearly 21% from the budget estimate for the current year and just ₹1,000 crore more than the revised estimate.
It is also the lowest target in seven years. Moreover, the Centre has not met the disinvestment target for 2022-23 so far, having realised ₹31,106 crore to date, of which, ₹20,516 crore or close to a third of the budgeted estimate came from the IPO of 3.5% of its shares in the Life Insurance Corporation (LIC).
Disinvestment or divestment, in this context, is when the government sells its assets or a subsidiary, such as a Central or State public sector enterprise.
Minority disinvestment, majority disinvestment, and complete privatisation are the three main approaches to disinvestment. On fruition of minority disinvestment, the government retains a majority in the company, typically greater than 51%, thus ensuring management control.
In the case of majority divestment, the government hands over control to the acquiring entity but retains some stake whereas in complete privatisation, 100% control of the company is passed on to the buyer.
The Union Finance Ministry has a separate department for undertaking disinvestment-related procedures called the Department of Investment and Public Asset Management (DIPAM).
The government may disinvest in order to reduce the fiscal burden or bridge the revenue shortfall for that year. It also uses disinvestment proceeds to finance the fiscal deficit, to invest in the economy and development or social sector programmes, and to retire government debt.
Disinvestment also encourages private ownership of assets and trading in the open market. If successful, it also means that the government does not have to fund the losses of a loss-making unit anymore.
After the Atal Bihari Vajpayee-led NDA government’s privatisation drive, the stock market saw the listing of shares of a bunch of public sector firms.
A bold push for disinvestment of the public sector was expected soon after Prime Minister Narendra Modi assumed office in May 2014, announcing that the government had “no business to be in business”.
News
Surface to air missile: DRDO working to fix a few glitches (Page no. 12)
(GS Paper 3, Defence)
The indigenous Quick Reaction Surface-to-Air Missile (QRSAM) being developed by the Defence Research and Development Organisation (DRDO) is set to be tested again in April with some changes suggested by the Army.
The mission reliability has to be improved and some glitches have to be fixed. The DRDO is already working on it,” a defence source said. The QRSAM with a range of 25-30 km is a pressing requirement for the Army.
The missile was last tested in September 2022 with six flight-tests conducted from Integrated Test Range (ITR) Chandipur, off the Odisha coast as part of evaluation trials by the Army.
The missile is designed to operate on the move with search and track capability and fire on a short halt.