THE INDIAN HISTORY

1. ALLURI SITARAMA RAJU

THE CONTEXT: In honor of Alluri Sitarama Raju’s 125th birth anniversary Prime Minister unveiled a 30-foot bronze statue of the freedom fighter. As part of celebrations for the 75th anniversary of Independence, the statue was placed in the Municipal Park at ASR Nagar in Bhimavaram.

THE EXPLANATION:

• The 125th anniversary of Alluri Sitarama Raju’s birth, as well as the 100th anniversary of “Rampa Kranti,” will be commemorated throughout the year marking 75 years of independence.

Who was Alluri Sitarama Raju?

• Alluri Sitarama Raju was popularly known as ‘Manyam Veerdu’ (Hero of the Forest). He also referred to by his surname Alluri. He was born at Pandrangi village of then Visakhapatnam district, on July 4, 1897.
• Regular patriotic discourse during the freedom struggle had highly influenced him. After the death of his father, his schooling got disrupted. He went on a pilgrimage and toured the western, north, north-western, and north-eastern India during his teens.
• The socio-economic conditions of India under the British regime, especially in the tribal areas, moved him deeply.

Rampa Rebellion

• During his tourney to almost entire India, he met revolutionaries in Chittagong (now in Bangladesh). Following this, he decided to build a movement against the British. He organised local Adivasis in forest areas of Visakhapatnam and East Godavari districts into a potent force, for launching a frontal attack. Thus, ‘Rampa Rebellion’ or ‘Manyam Uprising’ born, in the Rampachodavaram forest area of East Godavari district.
• This force was using the traditional weapons of Adivasis’ like bows and arrows and spears. However, he later realised that traditional weaponry was no match to heavily armed British forces. Thus, he planned to snatch weapons of the British in 1924, he got trapped and captured by the British at Koyyuru village in Chintapalle forests. He was tied to a tree and executed by a firing squad.

2. T. N. SENDS SOIL SAMPLES FOR PROJECT RELATING TO NEW PARLIAMENT BUILDING

THE CONTEXT: The rich cultural history of the Tamils will be featured in a project relating to the new Parliament being constructed by the Union government in New Delhi.

THE EXPLANATION:

• Multiple sources confirmed on a request from Delhi, multiple State government departments coordinated to collect the soil samples and sent them to the capital late last month (June 2022). Brief synopses of the samples, such as the place of origin, its geological features and historical importance, have also been sent.
• Soil samples from five ecological regions mentioned in ancient Tamil Sangam literature — Kurinji, Mullai, Marutham, Neithal and Paalai — have been collected and sent to the capital recently.

VALUE ADDITION:

SANGAM LITERATURE

• Tolkappiyam, Pattuppattu, Ettutogai,Pathinenkilkanakku, and two epics named Silappathikaram (Written by Ilango Adigal) and Manimegalai (Written by Sittalai Sattanar) are among the Sangam literature.
• Tolkappiyam: It was written by Tolkappiyar and is thought to be the earliest Tamil literary work.
• Despite the fact that it is a study on Tamil grammar, it also contains information about the political and socio-economic conditions of the time.
• It is a unique work on grammar and poetics that deals with Ezhuthu (letter), Col (word), and Porul (subject matter) in three parts, each with nine sections.
• Tolkappiyar’s study encompasses almost all levels of human language, from spoken to poetic, as he treats phonology, morphology, syntax, rhetoric, prosody, and poetics in exquisitely poetic and epigrammatic statements.

THE INDIAN POLITY AND GOVERNANCE

3. EXPLAINED: THE FREQUENCY, REASONS, AND CONTROVERSY OVER INTERNET SUSPENSIONS BY THE GOVERNMENT

THE CONTEXT: According to the Software Freedom Law Center, since 2012 there have been 665 Internet shutdowns in India to date.

THE EXPLANATION:

• Following the brutal on-camera killing of tailor Kanhaiyalal Teli in Udaipur by two men, the Rajasthan government imposed a ban on Internet services. Shutting down the Internet as an administrative or law-and-order measure has been a common step taken across India — for a range of reasons and by almost all political parties and governments.
• There is no official data on the number of shutdowns but based on estimates by research organisations, it would seem their frequency has increased over the last few years. An increasing number of people have been impacted as a result, because Internet usage has been going up in India, and the coronavirus pandemic has made it even more of a commonly used essential service.

What do the data on internet suspensions say?

• According to the Software Freedom Law Center (SFLC), a legal services organisation working in this field in India, since 2012 there have been 665 Internet shutdowns in India to date. Here, ‘shutdowns’ mean a total ban on mobile (3G, 4G/LTE), or fixed-line (dial-up, wired/wireless broadband) Internet, both or either of which may be shut down.
• According to Internet freedom and tech policy organisations, India is the leading country (by number) for Internet disruption incidents and frequency of shutdowns. This year, 59 shutdowns have been enforced, according to SFLC, which determines shutdowns based on government orders and media reports.
• This brings up another question: Internet shutdowns are not always officially announced, so it might be difficult to know if your phone is simply not working properly, or if a shutdown is in place.

State with highest Suspension

• Jammu and Kashmir has had more than 411 shutdowns since 2012, and the longest one went on for more than 552 days after the abrogation of the special status of the erstwhile state.
• Among the states, Rajasthan has had the most shutdowns — with 88 such instances in almost 10 years. The reasons have ranged from protests by the Gujjar community for reservation, to preventing cheating in the Rajasthan Eligibility Examination for Teachers (REET) held to select primary school teachers last year, which was taken by an estimated 16 lakh aspirants.

How do governments justify shutting down the Internet?

• Governments say misinformation and rumours can lead to deterioration in law and order in an area, so curbing the flow of information helps maintain peace among communities in times of crisis.
• But many experts have countered that in the absence of information sources like news outlets, rumours can actually end up spreading even more. Also, important services such as those related to payments, banking, and educational access, all get cut in an instant, resulting in disruptions at multiple levels and economic losses.

What is the procedure for shutting down the Internet?

• In February 2022, Lok Sabha MP asked in Parliament whether the government maintains records for shutdowns or has plans to do so, and if not, what protocol is followed.
• Minister of State for Communications replied that The Review Committee in states, chaired by the Chief Secretary (the senior-most civil servant in a state) is mandated through the Temporary Suspension of Telecom Services (Public Emergency or Public Safety) Rules, 2017, to decide that the shutdowns have been made as per rules.
• The rules framed by the central government say temporary suspensions can be “due to public emergency or public safety” and give senior bureaucrats from the Home Ministry at the central and state levels the power to order shutdowns.
• Before these rules came into force in 2017, Internet shutdowns were ordered under Section 144 of the Code of Criminal Procedure, which gives District Magistrates broad powers during dangerous situations.

Apex Court’s view

• In SC order passed in January 2020, the court ruled that “freedom of speech and expression and the freedom to practice any profession or carry on any trade, business or occupation over the medium of Internet enjoys constitutional protection under Article 19 (1) (a) and Article 19 (1) (g)”.
• It said, “restriction upon such fundamental rights should be in consonance with the mandate under Article 19 (2) and (6) of the Constitution, inclusive of the test of proportionality”.

THE ENVIRONMENT AND ECOLOGY

4. EXPLAINED: ENFORCING THE SINGLE-USE PLASTIC BAN

THE CONTEXT: A ban on the use of single-use plastics that was notified by the Union Environment Ministry on August 2021 came into effect on July 1 2022. The notification said national and State-level control rooms would be set up to check illegal manufacture, import, stocking, distribution, sale and use of banned single use plastic items.

THE EXPLANATION:

The Plastic Waste Management Amendment Rules, 2021, will also prohibit manufacture, import, stocking, distribution, sale and use of plastic carry bags having thickness less than 120 microns with effect from December 31, 2022.

What is single-use plastic?

• The Centre defines it as an object made of plastic that is intended to be used “only once” before being disposed off or recycled. For the purposes of the ban, there is a list of 21 items that come under the definition of single-use plastic including ear buds with plastic sticks, plastic sticks for balloons, plastic flags, candy sticks, ice-cream sticks, thermocol for decoration, plates, cups, glasses, cutlery such as forks, spoons, knives, straw, trays, wrapping or packing films around sweet boxes, invitation cards, and cigarette packets, plastic or PVC banners less than 100 microns, stirrers.
• These objects were listed by the Environment Ministry in August when it notified the Plastic Waste Management Amendment Rules, 2021. Single-use plastic items such as these had “low utility and high littering potential,” it noted.
• Plastic packaging waste, a major contributor to the much larger problem of plastic waste pollution, isn’t yet covered under the phase-out of single-use plastic items. Mineral water bottles or plastic bottles of aerated drinks are unaffected by the ban, though, in popular imagination, they are representative of ‘plastic pollution.’

Why are Single Use Plastics disastrous?

• By 2050, it has been predicted that single-use plastic might contribute 5–10% of greenhouse gas emissions, depending on the production trajectory currently in place.
• India ranks 94th out of the top 100 nations for producing the most single-use plastic garbage, behind Singapore, Australia, and Oman according to Australia’s charitable organisation, the Minderoo Foundation.
• India produces 4 kg of single-use plastic garbage per person yearly, with 11.8 million metric tonnes produced domestically and 2.9 million tonnes imported.
• The decision to ban the initial batch of single-use plastic items was made due to their “difficulty of collection, and consequently recycling.”
• Microplastics, which are particularly dangerous, are created when plastic is left in the environment for a very long time and does not decompose.
• These microplastics then find their way into our food supplies and eventually into our bodies.

How do other nations handle single-use plastic?

• A resolution to draft an agreement that will eventually make it legally binding for the signatories to address the full life of plastics from production to disposal in order to end plastic pollution was signed earlier this year by 124 countries, parties to the United Nations Environment Assembly, including India.
• In 2002, Bangladesh became the first nation to outlaw thin plastic bags. In July 2019, New Zealand became the most recent nation to outlaw plastic bags. 2020 saw the issuance of a phased-in ban on plastic bags in China.
• 68 nations had plastic bag bans in place as of July 2019 with various levels of enforcement.
• Plastic straws are totally prohibited in Vanuatu and the Seychelles.

Way forward

• The lack of specific recommendations regarding alternatives to the ban has drawn criticism.
• In its statement, the CPCB mentions biodegradable plastics, cotton bags, sustainable apparel, bamboo tableware and straws, wood from sustainably managed forests for domestic products, pottery without hazardous glazes, and ceramics.
• Additionally, it created a Standard operating procedure (SOP) for awarding biodegradable plastics makers and merchants with certificates.
• The CPCB is required by the Plastic Waste Management Rules 2022 to create a sustainable packaging guideline based on the following criteria: package designing that encourages reuse; package designing that is conducive to recycling; recycled plastic content in plastic packaging material; and package designing for the environment. However, nothing is publicly available yet.

THE SCIENCE AND TECHNOLOGY

5. EXPLAINED: THE NEED FOR SPACE SUSTAINABILITY

THE CONTEXT: Recently, the U.K. hosted the fourth summit for Space Sustainability in London in collaboration with the Secure World Foundation. During the summit, the UK launched a new ‘Plan for Space Sustainability’.

THE EXPLANATION:

About the ‘Plan for Space Sustainability’

Aim:

• To set a global commercial framework for the insurability, licensing and regulation of commercial satellites.
• To reduce the cost for those who comply with the best sustainability standards and thus encourage a thriving ecosystem for the industry.
• The plan also hopes to drive the sustainability factor internationally and provide an opportunity for the private sector to develop models that enhance operations’ safety and reduce debris footprint.

How does the plan propose to achieve space sustainability?

• The U.K. calls for an “Astro Carta” for space sustainability, based on the Artemis Accords model for sustainable space exploration.
• The plan proposes a) Active debris removal and in-orbit servicing, b) Encouraging space research and the development of technology to ensure the reuse and recycling of satellites at every stage.

Where does India stand on space sustainability?

India has always emphasised cost-effective and efficient missions with problem-solving applications. For example, India’s debris footprint is minuscule; India has 114 debris among the 25,182 pieces of sizes larger than 10 cm, in the lower earth orbits. Apart from that, the recent activities of India on space sustainability are,

• Project NETRA: The Indian Space Research Organisation (ISRO) has initiated ‘Project NETRA’ to monitor space debris, 2
• Earlier this year, India and the U.S. signed a new pact for monitoring space objects at the 2+2 dialogue.
• Increased private participation: With Indian National Space Promotion and Authorisation Centre (In-SPACe), India expects an increased role of the private sector in India’s space activities, and
• SPADEX: ISRO is developing a docking experiment to provide in-orbit servicing named SPADEX. It looks at docking a satellite on an existing satellite, offering support in re-fuelling and other in-orbit services while enhancing the capability of a satellite. Hence, the SPADEX can increase the longevity of a mission and also provide a futuristic option to combine missions/experiments.

What are the challenges in achieving space sustainability?

• Orbital crowding poses a big threat to space sustainability. This poses a direct threat to the operations and safety of a mission and is likely to cause legal and insurance-related conflicts.
• Space debris: After the completion of a mission, an ‘end-of-life protocol’ requires space objects to be moved to the graveyard orbit or to a low altitude. Neither of the options is sustainable in the long run.
• Solar and magnetic storms: These storms can potentially damage communication systems. Such space weather threats need to be addressed along with the efforts to identify the terrestrial carbon footprint of outer space missions.
• Note: Outer space is considered a shared natural resource. The United Nations Committee on the Peaceful Uses of Outer Space (COPUOS) in 2019 adopted a set of 21 voluntary, non-binding guidelines to ensure the long-term sustainability of outer space activities.

What’s Next?

• A collective effort by all space players, with the active role of the UN COPUOS or the United Nations Office for Outer Space Affairs (UNOOSA), is needed to set equitable standards for the ease of activities.
• Many of the measures for sustainability are resource-consuming and expensive for medium-and-small space programs. Hence, there is a need for addressing the principles and rules that guide the activities in outer space with better clarity.
• Encourage the private sector with a set of sustainability guidelines to ensure optimum utilisation of resources and increase the safety and productivity of missions.

VALUE ADDITION:

ABOUT UNITED NATIONS OFFICE FOR OUTER SPACE AFFAIRS (UNOOSA):

• The United Nations Office for Outer Space Affairs (UNOOSA) works to promote international cooperation in the peaceful use and exploration of space, and in the utilisation of space science and technology for sustainable economic and social development.
• The Office assists any United Nations Member States to establish legal and regulatory frameworks to govern space activities and strengthens the capacity of developing countries to use space science technology and applications for development by helping to integrate space capabilities into national development programmes.
• UNOOSA is also responsible for implementing the Secretary-General’s responsibilities under international space law and maintaining the United Nations Register of Objects Launched into Outer Space.
• UNOOSA is the current secretariat of the International Committee on Global Navigation Satellite Systems (ICG).
• Headquartered: Vienna, Austria.

THE PRELIMS PRACTICE QUESTIONS

QUESTION OF THE DAY

1. Why was Alluri Sitarama Raju well known?
(a) He led the militant movement of tribal peasants in Andhra Pradesh.
(b) He led a peasant movement in Avadh.
(c) He led a satyagraha movement in Bardoli.
(d) He set up an organisation for the uplifment of the dalits.

 ANSWER FOR 4^TH JULY 2022

ANSWER: A

EXPLANATION:

• The Athirappilly Falls is located in Kerala.

1. Living Rightly READ MORE
2. The absence of civil liberties leads to violence READ MORE
3. Everyday mystic experiences God through duties READ MORE

1. Clear & present danger: Five types of extreme weather events are linked to human-induced climate change READ MORE
2. Single-use plastic ban success is suspect without options READ MORE
3. Climate initiatives must keep out large hydropower projects READ MORE

1. Contrasting laws on abortion in India, US READ MORE
2. The individual has become the new society READ MORE

1. Stable trading worse than horse-trading READ MORE
2. Protecting the SC: Politically sensitive matters require care READ MORE
3. India has 71 towns, cities under Police Commissionerate. It just creates hierarchy READ MORE
4. Don’t leave regulation in hands of social media platforms. Govt must re-evaluate its role READ MORE

(Newspapers, PIB and other important sources)

Prelim and Main

1. What is the Large Hadron Collider, now readying to seek answers to fundamental questions of particle physics? READ MORE
2. Explained | The need for space sustainability READ MORE
3. Government to review oil export tax based on forex rate, oil prices every fortnight READ MORE
4. Explained: The Law of Arrest, Remand and Bail READ MORE
5. Amid rising inflation, the global drive to keep food cheap is unsustainable READ MORE
6. Urbanisation, low profitability: Why prices of tamarind leaves in Andhra Pradesh have rocketed READ MORE
7. Glacier collapses in Italian Alps, at least 6 reported dead READ MORE
8. Digital India empowered people by making technology more accessible, says PM Modi; launches ‘Digital India Bhashini’ to provide easy access to the internet & digital services in Indian languages READ MORE

Main Exam    

GS Paper- 1

1. Contrasting laws on abortion in India, US READ MORE
2. The individual has become the new society READ MORE

GS Paper- 2

POLITY AND GOVERNANCE

1. Stable trading worse than horse-trading READ MORE
2. Protecting the SC: Politically sensitive matters require care READ MORE
3. India has 71 towns, cities under Police Commissionerate. It just creates hierarchy READ MORE
4. Don’t leave regulation in hands of social media platforms. Govt must re-evaluate its role READ MORE

INTERNATIONAL ISSUES

1. A chaotic world, the perils of multilateralism: Instead, bilateral engagements may be much more productive at this point in history READ MORE
2. With China’s expanding influence, Asia is also seeking to diversify its security partnerships READ MORE
3. What will India’s G20 presidency focus on? READ MORE

GS Paper- 1

ECONOMIC DEVELOPMENT

1. Slippery slope: RBI should stick to its approach of maintaining an orderly movement in the rupee READ MORE  
2. GST @ 5 Years: The Union Govt and States Can’t Ignore the Most Contentious Bits Any Longer READ MORE
3. Amid rising inflation, the global drive to keep food cheap is unsustainable READ MORE

ENVIRONMENT AND ECOLOGY

1. Clear & present danger: Five types of extreme weather events are linked to human-induced climate change READ MORE
2. Single-use plastic ban success is suspect without options READ MORE
3. Climate initiatives must keep out large hydropower projects READ MORE

GS Paper- 1

ETHICS EXAMPLES AND CASE STUDY

1. Living Rightly READ MORE
2. The absence of civil liberties leads to violence READ MORE
3. Everyday mystic experiences God through duties READ MORE

Questions for the MAIN exam

1. How far do you agree with this view that by disempowering MPs and MLAs, anti-defection law is undermining the very idea of representation in a parliamentary democracy? Analyse your view.
2. ‘Social media discourse has demonstrated an exceptional ability to upend trust in established authorities in recent years’. In light of the statement, to what extent do you think that Social Media regulation is needed at the time? Justify your views with relevant examples.

QUOTATIONS AND CAPTIONS

• Divide each difficulty into as many parts as is feasible and necessary to resolve it.
• Multilateral negotiations will be increasingly difficult in the present chaotic global situation. Only by working bilaterally with potential allies can India attain the status of a pole in the new world with steadfast friends and followers.
• The core changes proposed by the Draft E-waste Management Rules require careful deliberation.
• The draft e-waste Rules propose a few positive changes, including expanding the definition of e-waste, more clearly specifying the penalties for violation of rules, introducing an environmental compensation fund based on the ‘polluter pays’ principle, and recognising the informal waste workers.
• The core changes it proposes within the EPR framework, however, require careful deliberation with all the relevant stakeholders before the Rules are finalised.
• With China’s expanding influence, Asia is also seeking to diversify its security partnerships. This has led to greater Asian engagement with Europe as well as the creation of new Indo-Pacific regional institutions – including Quad and AUKUS.
• Any form of media regulation is tricky, and that of social media hard to enforce, given its more amorphous nature.
• Comprehensive restrictions imposed on basic freedoms during the Emergency jolted India. We realised that it is not enough to grant rights.
• Freedom lies at the heart of a coherent theory of rights.
• Even after the Supreme Court judgment uphold the dignity of sex workers, a lot more needs to be done on the ground to ensure they really lead a dignified life.
• The anti-defection law is evil because, by disempowering MPs and MLAs, it has killed the very idea of representation in a parliamentary democracy.
• Social media discourse has demonstrated an exceptional ability to upend trust in established authorities in recent years.

Essay topic

• Freedom lies at the heart of a coherent theory of rights.

50 WORD TALK

• The hike in taxes on gold imports is retrograde. Taxes on gold, a high-priced commodity, reaching almost 19% breaches the arbitrage threshold where smuggling becomes profitable. A big gain of the 1991 reform was putting an end to gold smuggling, which financed malevolent mafias. It’d be imprudent to reverse that.

Things to Remember:

• For prelims-related news try to understand the context of the news and relate with its concepts so that it will be easier for you to answer (or eliminate) from given options.
• Whenever any international place will be in news, you should do map work (marking those areas in maps and exploring other geographical locations nearby including mountains, rivers, etc. same applies to the national places.)
• For economy-related news (banking, agriculture, etc.) you should focus on terms and how these are related to various economic aspects, for example, if inflation has been mentioned, try to relate with prevailing price rises, shortage of essential supplies, banking rates, etc.
• For main exam-related topics, you should focus on the various dimensions of the given topic, the most important topics which occur frequently and are important from the mains point of view will be covered in ED.
• Try to use the given content in your answer. Regular use of this content will bring more enrichment to your writing.

THE CONTEXT: The RBI and government of India took several measures after retail Inflation hit 7.8 per cent in April and the wholesale prices crossed 15 per cent reflecting the input cost pressures. Retail Inflation has been trending above the Reserve Bank’s upper tolerance level of 6 per cent for the past three months. The rising food and fuel prices have made the situation worse in the wake of the Russia-Ukraine war. The Increases in the prices of imported fuels, materials, and components increase domestic costs of production and lead to increases in the prices of domestically produced goods. Thus the Inflation is mostly imported in nature. This article explains in detail about approach and steps taken by RBI and the government of India.

THE BACKGROUND

• The main driver of the surge in the consumer price index (CPI) was the increase in food prices, which rose from 0.7% in September 2021 to 8.4% in April 2022. Among food products, the highest increase was in edible oil and fats (17.3%) in April 2022. This was mainly fuelled by the rise in international edible oil prices after the disruption of trade following the war and the ban on oil exports by Indonesia.
• The prices of services continue to accelerate even after the containment of the pandemic. For instance, the prices of goods and services consumed by households have shot up from 1.9% in April 2021 to 8% now. And the price increases of recreation and health services have moved up above 7%, while that of personal care is above 8%, and that of transport and communication above 10%. All these belie the claim that supply-side bottlenecks are the main reason for the rising prices.

MEASURES TAKEN BY RBI AND THE GOVERNMENT OF INDIA

STEPS TAKEN BY RBI TO CONTROL INFLATION

• The Reserve Bank of India called an off-cycle policy meeting and increased the cash reserve ratio by 50 basis points to 4.5% and the repo rate by 40 basis points to 4.4%, the first-rate hike after August 2018.

STEPS TAKEN BY THE GOVERNMENT OF INDIA TO CONTROL INFLATION

1. The government announced an excise tax cut of Rs 8 per litre on petrol and Rs 6 per litre on diesel. The government will bear a shortfall of Rs 1 lakh crore due to the excise duty cut on petrol and diesel.
2. Taking a cue from Centre. Three states – Kerala, Rajasthan and Maharashtra – also announced a reduction in state taxes. The reduction in pump prices of petrol and diesel will bring down the logistics cost for the industry.
3. The government also reduced the import duty on key raw materials and inputs for the steel and plastic industry.
4. The government has levied export duty on some steel products and raised it on iron ore and concentrates. Together with the import duty cut, the price of steel will come down.
5. During the current and next financial year, the government has permitted duty-free imports of 20 lakh tonnes of crude soybean and crude sunflower oil.
6. Under the Ujjwala Yojana, the government has also granted a Rs 200 per cylinder subsidy. This will benefit around nine crore beneficiaries.
7. The government set a limit of 100 lakh tonnes on sugar exports to ensure that there is adequate stock when the sugar season begins in October to cover three months’ worth of consumption.
8. The Centre has also regulated sugar exports to maintain adequate stocks in the country. From June 1, only 10 million tonnes of sugar can be exported in the current marketing year, which ends in September.
9. India slapped a ban on wheat exports to maintain food security and cool prices.
10. Over and above Rs 1 lakh crore budgeted for the current fiscal, the government will provide an additional fertilizer subsidy of Rs 1.1 lakh crore to farmers.

WHAT IS INFLATION TARGETING?

• Inflation can be majorly caused due to two reasons. One is the Demand-Pull Inflation, and the other is the cost-push Inflation on the supply side.
• In the case of demand-pull Inflation, all the control measures revolve around reducing the demand, and this can be done by either reducing the money supply or increasing prices by taxation.
• In the case of cost-push Inflation, the control measures revolve around increasing the supply to meet the demand in the market and reducing the prices by providing subsidies and technological expertise.
• In all cases, the inflation control measures can be divided into Monetary Measures, Fiscal Measures, and Price controls.

MONETARY MEASURES:

• Monetary policy refers to the central bank’s approach to managing the money supply and interest rates through the use of monetary policy instruments under its control.
• The Reserve Bank of India (RBI) Act, 1934, was amended in May 2016 to provide a legal foundation for the implementation of the flexible inflation-targeting framework.
• The primary goal of monetary policy is to keep prices stable (keeping Inflation within the target band of 2 per cent to 6 per cent).

FISCAL MEASURES:

• Fiscal policy is the policy by which a country’s government controls the flow of tax revenues and public expenditures in order to navigate the economy.
• For example, during a slowdown, the government may decide to spend more on infrastructure projects and other initiatives in order to stimulate the economy. To increase revenue, the government may raise taxes on the wealthy.
• To combat/control inflation, the government employs a variety of fiscal policy measures.

PUBLIC EXPENDITURE:

• It is the amount of money spent by the country’s government. For example, the government constructs public infrastructure such as roads, railways, and housing.
• It is an important tool in the fight against Inflation.
• When Inflation is high, the government reduces government spending. A decrease in public spending has an impact on private investment, resulting in a decrease in aggregate demand.
• For example, during periods of high Inflation, the government reduces its spending on rural infrastructure expansion. It will result in a decrease in demand in rural areas.
• Similarly, in the event of deflation, the government increases public spending in order to boost private investment and aggregate demand.

TAXATION:

• Taxation policy can be used to encourage or discourage household consumption and private investment by raising or lowering the personal income tax, corporate tax, or indirect tax (Such as GST)
• In the event of high Inflation, the government may raise personal or corporate taxes in order to reduce household expenditure/private investment. Increased taxation means that people have less money to spend (and private players for investment). This would result in a decrease in aggregate demand and aid in the containment of rising Inflation.
• Similarly, in the event of deflation, the government lowers tax rates in order to stimulate household and private consumption, resulting in an increase in aggregate demand.
• Conclusion:Inflation in a regulated manner is good for the growth of the country. However, if it’s not under control, then it will spiral, cause hyperinflation, and lead the economy into a vicious cycle. Therefore necessary measures are designed both by the central bank and the government to keep it in check.

ADMINISTRATIVE MEASURES

• In addition to monetary and fiscal instruments, the government can use other measures to maintain price stability and control inflationary price rises in the economy. Other measures include direct price controls, restrictions on speculation and hoarding, the use of buffer stocks, a ban on exports, and imports to supplement domestic supply, and a prohibition on commodity futures trading.

PRICE CONTROL THROUGH DIRECT ACTION

• Under the Essential Commodity Act of 1955, the government can declare a commodity to be an essential commodity in order to ensure that it is available to the public at reasonable prices. The Drug Price Control Order (DPCO) aims to keep pharmaceutical prices under control.

EXAMINE SPECULATION AND HOARDING

• The Act to Prevent Black Marketing and Maintain Supplies of Essential Commodities, 1980 – This act authorizes the central government or a state government to detain individuals who engage in activities such as hoarding, creating artificial scarcity of essential commodities in the market, and price rigging.

POLICY ON BUFFER STOCKS

• The Government of India has maintained buffer stocks of food grains to cover any unanticipated situation. Food Corporation of India is in charge of purchasing, storing, moving, transporting, distributing, and selling food grains and other food items.

BAN ON EXPORTS

• The Government of India imposes a Minimum Export Price (MIP) to discourage commodity exports and ensure their availability in domestic markets.

BAN ON COMMODITY FUTURES TRADING

• Commodities (e.g., the government prohibited future trading in chana, etc.).

To reduce speculation-driven price increases, governments frequently prohibit future trading in

THE WAY FORWARD

• Focus on supply of agricultural goods: The implication for the policymaker that Inflation is driven by agricultural goods prices, as is the case in India presently, is that the focus should be on increasing the supply of these goods.
• Growing per capita income in India has shifted the average consumption basket towards foods rich in minerals, such as fruits and vegetables, and protein, such as milk and meat.
• The government should reduce unnecessary expenditure on non-development activities in order to curb Inflation. This will also put a check on private expenditure, which is dependent upon government demand for goods and services. But it is not easy to cut government expenditure. Though this measure is always welcome, it becomes difficult to distinguish between essential and non-essential expenditure. Therefore, this measure should be supplemented by taxation.
• An important measure is to adopt the anti-inflationary budgetary policy. For this purpose, the government should give up deficit financing and instead have surplus budgets. It means collecting more in revenues and spending less.
• Another important measure is to adopt a rational wage and income policy. Under hyperinflation, there is a wage-price spiral. To control this, the government should freeze wages, incomes, profits, dividends, bonus, etc.

THE CONCLUSION: Inflation in a regulated manner is good for the growth of the country. However, if it’s not under control, then it will spiral, cause hyperinflation, and lead the economy into a vicious cycle. Therefore, necessary measures are designed both by the central bank and the government to keep it in check.

VALUE ADDITION

Monetary policy:

• Monetary policy refers to the central bank’s approach to managing the money supply and interest rates through the use of monetary policy instruments under its control.
• In India, the monetary policy of the Reserve Bank of India is aimed at managing the quantity of money in order to meet the requirements of different sectors of the economy and to increase the pace of economic growth.
• The RBI implements the monetary policy through open market operations, bank rate policy, reserve system, credit control policy, moral persuasion and many other instruments.
• The Reserve Bank of India (RBI) Act, 1934, was amended in May 2016 to provide a legal foundation for the implementation of the flexible inflation-targeting framework.
• The primary goal of monetary policy is to keep prices stable (keeping Inflation within the target band of 2 per cent to 6 per cent).

Monetary policy committee:

• The Monetary Policy Committee (MPC) is the committee set up by the Union government to set the policy interest rates as a part of its monetary policy. It is headed by the Governor of the Reserve Bank of India (RBI). The Monetary Policy Committee decisions will impact the money supply and liquidity in the economy.
• The monetary policy Committee is concerned with setting policy rates and other monetary policy decisions in order to achieve:

1. Price stability
2. Accelerating the growth of the economy
3. Exchange rate stabilization
4. Balancing savings and investment
5. Generating employment
6. Financial stability

• In order to maintain price stability, Inflation must be kept under control.
• Every five years, the Indian government sets an inflation target. The Reserve Bank of India (RBI) plays an important role in the consultation process for inflation targeting. The current inflation-targeting framework in India is flexible, with a target of 4% with a band of +/-2%.

QUESTIONS FOR MAIN EXAMINATION

1. Explain the role played by the Central bank and Government of India in curbing the Inflation? Also, suggest some measures to deal with Inflation in the present scenario.
2. ”Inflation in a regulated manner is good for the growth of the country. If it’s not under control, then it will spiral, cause hyperinflation, and lead the economy to a vicious cycle.’’ Elucidate.

[WpProQuiz 267]