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The Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) on September 30, 2022, increased the policy repo rate by 50 basis points (bps) to 5.9% making loans expensive. The MPC also lowered the growth projection of FY23 from 7.2% to 7%.
Growth for the second quarter has been projected at 6.3%, for the third quarter at 4.6%, for the fourth quarter at 4.6%, and 7.2% for the first quarter of the next financial year.
The inflation projection for FY has been retained at 6.7%. While the projection for the second quarter is 7.1%, the projection for the third quarter and fourth quarter is 6.5% and 5.8% respectively. For the first quarter of the next financial year, inflation has been projected at 5%.
Announcing the monetary policy RBI governor Shaktikanta Das while explaining the rationale behind the rate hike said the MPC was of the view that persistence of high inflation necessitates further calibrated withdrawal of monetary accommodation to restrain broadening of price pressures, anchor inflation expectations and contain the second-round effects.
This action will support medium-term growth prospects. Accordingly, the MPC decided to increase the policy repo rate by 50 basis points to 5.9% and to remain focused on withdrawal of accommodation, while supporting growth.
He said in the last two and half years, the world has witnessed two major shocks — the COVID-19 pandemic and the conflict in Ukraine.
These shocks have produced a profound impact on the global economy. “As if that was not enough, now we are in the midst of a third major shock — a storm — arising from aggressive monetary policy actions and even more aggressive communication from Advanced Economy (AE) central banks.
The necessity of such actions is driven by their domestic considerations, but in a highly integrated global financial system, they inevitably cause negative externalities through global spillovers.
He said the recent sharp rate hikes and forward guidance about further big rate hikes have caused tightening of financial conditions, extreme volatility and risk aversion.
All segments of the financial market including equity, bond, and currency markets are in turmoil across countries. There is nervousness in financial markets with potential consequences for the real economy and financial stability. The global economy is in the eye of a new storm.
Kejriwal announces 15-point Winter Action Plan, seeks support of States (Page no. 1)
(GS Paper 3, Art and Culture)
Delhi Chief Minister Arvind Kejriwal announced a 15-point Winter Action Plan issuing a public appeal for unity and cooperation both among governments and citizens as the pillars of the fight against air pollution.
While the ban on the manufacture and sale of firecrackers continues in the Capital, Mr. Kejriwal said the government will spray bio-decomposer over a larger area for free to tackle stubble burning.
He said the government’s efforts to confront air pollution had started bearing fruit and PM10 levels in 2021-22 were down by 18.6% compared with 2017-18 levels as per the Centre’s National Clean Air Programme report.
We will implement GRAP (Graded Response Action Plan) meticulously and coordinate with the Central government and NCR States to tighten the noose on pollution, even as he appealed to neighbouring States to only allow CNG or electric vehicles to enter Delhi.
Mr. Kejriwal said the anti-dust campaign will begin from October 6 and 586 teams have been formed for regular inspection of construction sites. “Ban on firecrackers will continue this year as well, 210 teams have been formed for surveillance.
The Chief Minister announced that it will be mandatory for construction sites above 5,000 square metres to have anti-smog guns; 233 smog guns will be installed across Delhi and the government will deploy 80 road sweeping and 521 water sprinkling machines besides 150 mobile anti-smog guns.
With as many as 203 busy roads in the city, the government has prepared alternative routes to divert traffic while 611 teams have been formed to penalise open burning of garbage.
Data from a “real-time source apportionment study”, a Delhi government collaboration with IIT Kanpur, would reveal the type and source of pollution from October 20.
States
Cloud over 200 Assam Foreigners’ Tribunals (Page no. 4)
(GS Paper 2, Polity and Governance)
The Assam government has decided not to extend the term of members who were appointed for 200 additional Foreigners’ Tribunals (FT) that were set up primarily to handle cases related to the National Register of Citizens (NRC).
A Foreigners’ Tribunal or FT is a quasi-judicial body and a member is a designation similar to a judge. Practising lawyers and retired civil servants and judicial officers were appointed as members for the additional FTs soon after the complete draft NRC was published in August 2019, leaving out 19.06 of some 3.3 lakh applicants.
Assam has had 100 regular FTs since 2009 to try the cases of suspected foreigners referred by the Border wing of the Assam police.
A case pertaining to the tenure of the FT members came up for hearing in the Gauhati High Court. The State government did not give any written submission, but its counsel told the court that the Political (B) Department has decided not to extend the tenure of the members for the additional FTs. The annual term of the 200 members expired on September 22.
The decision has put a cloud on the NRC exercise, which has not progressed to the next phase – issuing each of the 19.06 lakh “excluded” people a rejection slip, containing the reasons for his or her exclusion, for appealing to the new FTs within 120 days of receiving the slip.
The NRC exercise, which most more than ₹1,600-crore, was paused due to petitions filed in the Supreme Court seeking the re-verification of the list of citizens in view of “major irregularities” allowing “people of suspect nationality” be counted as Indians.
The Assam government had appointed 221 new members but 19 of the either did not join or resigned soon after their appointment in September 2019 while vacancies in the existing 100 FTs were filled up with 23 others.
As the new FTs are not functional, the remaining 179 members were attached to the existing FTs during their term, an officer of Assam’s Home Department said, adding that their monthly pay of ₹89,000 each was stretching the State exchequer.
The decision to not extend the service of the FT members is likely to close the doors on the appointment of some 1,600 Ministerial staff who were selected to serve in the additional 200 FTs. A case filed by 238 of these selected candidates is scheduled for hearing in the high court on October 14.
Editorial
Letting go of a chance to democratise telecom services (Page no. 8)
(GS Paper 2/3, Governance/Economy)
The draft Indian Telecommunication Bill, 2022 (Telecom Bill) — published for public consultation on September 21, 2022 — aims to create a legal framework attuned to the realities of the 21st century to ensure India’s socio-economic development.
This Telecom Bill follows the release of the consultation paper, “Need for a new legal framework governing Telecommunication in India”, which was published on July 23, 2022.
However, it fails to let go of the colonial moorings that have shaped the law around telecommunications in India for the past century.
Instead, it represents multiple squandered opportunities for significant legislative reform. The Telecom Bill misses the opportunity for the democratisation of telecommunication services.
Now, it has preferred a move towards centralisation of power through its new licensing regime. Here, the Telecom Bill also fails to inculcate the learnings evolved in courts and other institutions of authority, and instead repackages the provisions from pre-Independence laws to pass them off as legislative advancements.
This is in lieu of enacting sweeping legislative reform which would cement user rights as the cornerstone of the Indian telecommunication sector.
The Telecom Bill will usher in a wave of stricter regulations and centralised power by introducing licences for telecommunication services.
The definition for such services has been significantly expanded under Clause 2(21) of the Telecom Bill to include online communication service providers such as WhatsApp, Apple Watch, Jitsi, etc. Such a move reflects historical baggage and flows from a long-standing argument and demand made by large telecom companies (‘telcos’) to bring online communication services under regulation for a ‘level-playing field’.
The argument that over-the-top (OTT) services are a “substitute” of the services provided by telcos, often termed as the “same service, same rules” argument, is flawed as the two have inherently different functionalities.
For instance, while telecom operators act as the gatekeepers to the underlying broadband infrastructure, OTT services can only be accessed through telco-controlled infrastructure.
Introduction of OTT communication services under the ambit of telecommunication services is illustrative of a reductionist approach, wherein the diverse services provided by such OTT service providers such as social networking and video calling are aggregated, stripping it of its richness.
Such a move may lead to uncertainty in treatment, build ad hocism, and pose overbearing compliance and legal costs on service providers, having deleterious effects on innovation.
On September 14, 2020, the Telecom Regulatory Authority of India (TRAI) issued recommendations on OTT regulation, which were broadly supportive of user choice and the demands raised mainly by digital rights organisations against placing regulatory burden on Internet communication services.
As India ages, keeping an eye on the elderly (Page no. 8)
(GS Paper 2, Social Justice)
The United Nations marks today as International Day for Older Persons (October 1), as part of the organisation’s efforts to draw attention to healthy ageing.
Recently, a report by the UN Department of Economic and Social Affairs (UNDESA), “World Population Prospects 2022”, has projected big shifts in global demographic patterns in the coming decades.
As global birth rates stabilise and shrink, 16% of the world population by 2050 is expected to be made up of people over 65 years.
India will be home to the largest population in the world which would include a large elderly sub-population. This demographic change will have a profound impact on its health systems.
In this, eye care service delivery is uniquely placed to be the first point-of-contact with the elderly and to also help with health surveillance and planning.
The “World Population Prospects 2022” report estimates that by 2050, the global population will be 9.7 billion people. By then, those older than 65 years will be twice as many as children under five.
That year is also projected to be a pivotal year for India’s population too. The report projects India’s population to be 1.7 billion by 2050, having overtaken China to be the world’s most populous country. Eight countries — India is among them — will account for more than half of the world’s increasing population by 2050.
Previous United Nations reports have projected that the proportion of India’s elderly population will double to be nearly 20% of the total population by that year.
The prevalence of non-communicable diseases such as diabetes, hypertension and heart disease, or disabilities related to vision, hearing or mobility is higher among the elderly.
The change in demographic structure will increase the pressure on public health systems that are not geared to deliver universal health care along with social security measures such as old-age and disability pensions.
The Hyderabad Ocular Morbidity in the Elderly Study (HOMES) by the L.V. Prasad Eye Institute has been producing a series of systematic reports on various aspects of health, quality of life, mental health, morbidity, and disability amongst the elderly living in homes-for-the-aged in Hyderabad, Telangana. Using eye care as a point of entry, the study has been measuring a variety of health and social metrics in over 1,000 participants (all aged over 60), spread across a range of socio-economic circumstances.
Over 30% of the elderly in the study had distance vision loss and over 50% had near vision impairment (they needed reading glasses). Nearly half the participants had at least one disability and a third of them had multiple morbidities.
News
AFSPA extended in Nagaland, Arunachal (Page no. 11)
(GS Paper 2, Governance)
The Ministry of Home Affairs (MHA) has extended the Armed Forces (Special Powers) Act (AFSPA) in parts of Arunachal Pradesh and Nagaland for another six months.
Tirap, Changlang and Longding districts in Arunachal Pradesh and the areas falling within the jurisdiction of Namsai and Mahadevpur police stations in Namsai district along the Assam border, are declared as “disturbed areas” under Section 3 of the AFSPA 1958 for a period of six months from October 1, “unless withdrawn earlier”, the Ministry said in a notification.
Nine districts and 16 police stations in four districts of Nagaland were being declared as “disturbed areas” after a review of the law and order situation in the State.
AFSPA has been extended in Dimapur, Niuland, Chumoukedima, Mon, Kiphire, Noklak, Phek, Peren and Zunheboto districts in Nagaland and the areas in Nagaland falling within the jurisdiction of i) Khuzama, Kohima North, Kohima South, Zubza and Kezocha police stations in Kohima District; ii) Mangkolemba, Mokokchung-I, Longtho, Tuli, Longchem and Anaki ‘C’ police stations in Mokokchung District; iii) Yanglok police station in Longleng District; and iv) Bhandari, Champang, Ralan and Sungro police stations in Wokha District for another six months.
On April 1, MHA had considerably reduced “disturbed areas” in the States of Assam, Manipur and Nagaland. AFSPA had been applicable in the whole of Nagaland since 1995.
The law gives unbridled power to the armed forces and the Central Armed Police Forces deployed in “disturbed areas” to kill anyone acting in contravention of law, arrest anyone and search any premises without a warrant, and protection from prosecution and legal suits without the Central government’s sanction. Both State and Central government can issue notification regarding AFSPA.
Currently, the MHA has issued periodic “disturbed area” notification to extend the AFSPA only for Nagaland and Arunachal Pradesh.
The notification for Manipur and Assam is issued by the State governments. Tripura revoked the Act in 2015 and Meghalaya was under the AFSPA for 27 years, until it was revoked by the Ministry on April 1, 2018.
Business
Fiscal deficit hit 32.6% of FY23 target till August: data (Page no. 14)
(GS Paper 3, Economy)
The Central government's fiscal deficit touched 32.6% of the annual target in the current financial year till August as against 31.1% recorded a year earlier, according to official data released.
In actual terms, the fiscal deficit — the difference between expenditure and revenue — was ₹5,41,601 crore during the April-August period of this financial year.Fiscal deficit is an indicator of the government's borrowings from the market.
As per the data released by the Controller General of Accounts (CGA), the government's total receipts, including taxes, stood at ₹8.48 lakh crore or 37.2% of the Budget Estimates (BE) for 2022-23.During the year-ago period, the collection was 40.9% of BE 2021-22.The tax revenue stood at about ₹7 lakh crore or 36.2% of this year's BE.
The Central government's total expenditure was ₹13.9 lakh crore or 35.2% of the BE 2022-23. It was 36.7% of BE 2021-22.
For 2022-23, the fiscal deficit of the government is estimated to be ₹16.61 lakh crore or 6.4% of the GDP.
According to the data, capital expenditure was 33.7% of the full-year budget target in the current fiscal compared to 31% in the corresponding period last year, as per the monthly account of the Union government up to August.