UPSC Key | Buffer stocks, JP Morgan Index, Hijab ban and more

Explained

Case for a buffer food policy

UPSC Syllabus:

Preliminary Examination: Economy

Mains Examination: GS-II, III: Government policies, Economy

What’s the ongoing story- Inflation, based on the official consumer price index (CPI), stood at 8.69 % for cereals in May, and almost twice as much (17.14%) for pulses. These rates would probably have been higher, but for the sales from buffer stocks, especially of wheat and chana (chickpea), built by government agencies during surplus production years.

Prerequisites:

— What is the Consumer Price Index (CPI)?

— What are buffer stocks?

— What is the Open Market Sale Scheme (OMSS)?

Key takeaways: 

— The FCI’s open market sale scheme brought down retail inflation in cereals and wheat, from their respective highs of 16.73% and 25.37% in February 2023 to 8.69% and 6.53% in May 2024.

— The inherently volatility and unpredictability of food prices, exacerbated by climate change — fewer rainy days and extended dry spells, interspersed with intense precipitation, and also shorter winters and heat waves — has made it difficult for the Reserve Bank of India (RBI) to consider any monetary easing or cutting interest rates.

— The government, too, is forced to resort to undesirable measures such as restricting exports, or imposing produce stock limits on traders and processors.

— One possible way out of the conundrum would be to build a buffer stock of all essential food items, by procuring these from farmers during years of surplus production, and offloading the same in times of crop failures to moderate market prices.

— There’s scope to not only expand procurement of pulses and oilseeds, but extend it to staple vegetables and even skimmed milk powder (SMP).

— The onion, potato and tomato procured can be stored in dehydrated/processed form such as paste, flakes and puree for sales to hotels, restaurants, canteens, and other institutional buyers. This would ensure that both households and bulk buyers do not compete to drive up prices during shortages.

— The fiscal cost of maintaining buffer stocks of essential food items may not be that much: the stocked commodities are not meant to be given out free and, instead, offloaded during scarcity/inflationary periods at near-market prices.

— Buffer stocking can be an instrument for curbing excessive volatility in food prices, similar to the RBI’s foreign exchange reserves vis-à-vis the currency market. Increasing climate-driven price volatility — ultimately helping neither consumers nor producers — only strengthens the case for a food buffer policy.

For Your Information:

— The Union government is planning to significantly scale up the irradiation of onions this financial year to increase the shelf life of its buffer stock, a senior official said. This low, regulated dose of radiation — which poses no health risk — stops sprouting in onions, making them less perishable.

Points to Ponder: 

— What is the relationship between buffer stock and food security?

— What are the challenges with maintaining buffer stocks?

— What are the government schemes with maintaining buffer stocks?

Post Read Question:

Consider the following statements:

1. The concept of buffer stocks was first introduced in the Third Five Year Plan.

2. It is maintained by the state government for the monthly release of food grains through the Targeted Public Distribution System.

Which of the following statements is correct?

(a) 1 only

(b) 2 only

(c) Both 1 and 2

(d) Neither 1 nor 2

Other Important Articles Covering the same topic:

To boost shelf life of onion buffer stock, govt plans to expand irradiation process

Indian Government Bonds in JP Morgan index: what this means

UPSC Syllabus:

Preliminary Examination: Economy

Mains Examination: GS-III: Economy

What’s the ongoing story- The inclusion of Indian Government Bonds (IGBs) in JP Morgan’s emerging markets bond indices will begin from Friday (June 28). The inclusion, which will be spread over 10 months until March 31, 2025, is likely to bring nearly $20-25 billion into the country, according to various estimates.

Prerequisites:

— What is the JP Morgan Index?

— What is foreign exchange reserve?

— What is Fully Accessible Route (FAR)?

— What are the Indian Government Bonds (IGBs)?

Key takeaways: 

— India is expected to reach the maximum weight of 10 per cent in the GBI-EM Global Diversified Index (GBI-EM GD). A higher weightage will prompt global investors to allocate more funds for investment in Indian debt.

— Only IGBs designated under the Fully Accessible Route (FAR) are index-eligible. In March 2020, the RBI, in consultation with the government, introduced a separate channel, called the FAR, to enable non-residents to invest in specified Government of India dated securities.

— As per the index inclusion criteria, eligible instruments are required to have notional outstanding above $1 billion (equivalent) and at least 2.5 years remaining maturity, JP Morgan said.

— It will not only result in lower risk premia, but will also help India to finance its fiscal and current account deficit (CAD), as well as enhance the liquidity and ownership base of government securities (G-secs; debt instruments issued by the central government to meet its fiscal needs), Arora said in a report in September last year.

— While higher inflows will boost the rupee, inflation is likely to come under pressure. When the RBI mops up dollars from the market, it will have to release an equivalent amount in rupees, putting pressure on inflation.

For Your Information:

— After JP Morgan Chase & Co, Bloomberg on Tuesday announced inclusion of Indian bonds in the Bloomberg Emerging Market (EM) Local Currency Government Index and related indices from January 31, 2025.

— Inclusion of domestic bonds to global indices will help bring in dollar inflows into India and ensure a stable financing of the current account gap of the country.

Points to Ponder: 

— What was the purpose of introducing FAR?

— How the Voluntary Retention Route (VRR) is different from the FAR?

— What are the significance and challenges of the inclusion of India in GBI-EM Index?

Post Read Question:

With reference to ‘IFC Masala Bonds’, sometimes seen in the news, which of the statements given below is/are correct? (UPSC CSE 2016)

1. The International Finance Corporation, which offers these bonds, is an arm of the World Bank.

2. They are the rupee-denominated bonds and are a source of debt financing for the public and private sector.

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

Other Important Articles Covering the same topic:

After JP Morgan, Bloomberg to include Indian bonds in EM index

‘Larger academic interest’: Behind Bombay HC’s hijab ban decision 

UPSC Syllabus:

Preliminary Examination: Current events of national and international importance

Mains Examination: GS-II: Government policies and interventions

What’s the ongoing story- The Bombay High Court on June 26 dismissed a plea by nine students of Chembur’s N G Acharya and D K Marathe College challenging the institute’s dress code banning hijabs, and held that the decision was “in larger academic interest”.

Prerequisites:

— What are Article 19 and Article 25?

— What are the constitutional provisions related to religious freedom?

— What is the issue related to hijab?

Key takeaways: 

— The Chembur college issued a new dress code in May this year, which was to come into effect in the academic year beginning in June. This came after the college saw controversy last August, when several junior college girls wearing hijabs were denied entry for alleged non-compliance with the prescribed uniform.

— The new dress code clearly stated that burqas, niqabs, hijabs, or any religious identifiers such as badges, caps, or stoles, will not be permitted inside the college.

— The students said that the college’s restrictions are “impeding their access to education” and violating their fundamental rights under Article 19(1)(a) (Right to Freedom of Expression) and Article 25 (Right to Freedom of Religion) of the Constitution.

— A division Bench of Justices Atul S Chandurkar and Rajesh S Patil held that the dress code issued by the college was in “larger academic interest”, and “[did] not suffer from infirmity so as to violate provisions of Article 19(1)(a) and Article 25 of the Constitution”.

— “The object behind issuing the same is that the dress of a student should not reveal his/her religion, which is a step towards ensuring that the students focus on gaining knowledge and education which is in their larger interest,” the bench stated.

Points to Ponder: 

— What is the Fathima Thasneem v State of Kerala case?

— What is the debate around essential religious practise?

— How does the constitution provide a balance between religious freedom and secularism?

Post Read Question:

How the Indian concept of secularism is different from the western model of secularism? Discuss. (UPSC CSE 2016)

Other Important Articles Covering the same topic:

Explained: Courts rulings on hijab

 

The Ideas Page

Not by a single exam

UPSC Syllabus:

Preliminary Examination: Current events of national and international importance

Mains Examination: GS-II: Government policies and interventions for development in various sectors, issues related to Education.

What’s the ongoing story- R Subrahmanyam and Sutirtha Bhattacharya write: The entire country is disturbed by the inability of the system to conduct crucial exams that determine the lives and careers of millions of students. After the NEET and UGC NET exam fiascos, the National Teaching Agency (NTA) has become the whipping boy in several quarters… Fixing accountability for the current crisis is no doubt necessary. More needs to be done.

Prerequisites:

— What is NTA?

— What is the current issue regarding NTA examination?

— What is the New Education Policy (NEP)?

Key takeaways: 

— The problem at hand is disturbing. First, the selection for professional courses is done through a single high-stakes exam. This pushes most students to cramming the learning material and coaching centres flourish.

— Second, aptitude is usually not the basis for selection in the field of study or a branch within that.

— Third, the school system, especially the higher classes (11th and 12th), has been undermined, and yielded place to coaching institutions.

— Fourth, the school boards are in shambles, the assessment system is archaic and evaluation mechanisms are not standardised.

— Finally, our inability to conduct exams on a large scale is very disturbing.

— Proposal: One, 40 per cent weightage could be assigned to eight quarterly academic assessments (over two years) conducted online using a standardised question bank… Question banks can be built up to test critical thinking and conceptual understanding as well as to assess the ability of a student to use concepts for problem-solving.

— Two, 40 per cent weightage could be assigned for social and professional aptitude…

— Three, 20 per cent weightage should be accorded to the final NEET/JEE exam. This exam should be conducted online, at least twice a year, allowing the student to choose the best score for the final reckoning.

— Assessment systems in school education need to be reformed to test concept-based understanding, thereby fulfilling the mandate of NEP 2020. The stakes involved in a single exam will be eliminated. That could be an important step towards the elimination of examination fraud.

For Your Information:

— The coaching industry is a consequence of a failed school system due to poor governance. Lackadaisical approaches, unending tinkering with the syllabus, a focus on rote learning rather than enquiry and scientific temper, poor quality of teaching and supervision, large vacancies and inadequate infrastructure have taken their toll.

Read More in Our UPSC KEY | NEET-NET crisis, National Security Strategy, Hooch tragedy and more

Points to Ponder: 

— What is the Public Examinations (Prevention of Unfair Means) Bill, of 2024?

— What are the challenges of ‘one-size-fits-all’ approach in education?

— What steps need to be taken to overcome the challenges in conducting the exam?

Post Read Question:

Discuss the main objectives of Population Education and point out the measures to achieve them in India in detail. (UPSC CSE 2021)

Other Important Articles Covering the same topic:

NEET-NET crisis: The reason behind India’s failing exam system

The Editorial

Big reforms push

UPSC Syllabus:

Preliminary Examination: Polity and Economy

Mains Examination: GS-II, III: Government policies and interventions, Budget

What’s the ongoing story- Prachi Mishra writes: In most advanced economies, the annual budget is a non-event. In emerging markets, on the other hand, the budget presentation has special significance. In the case of India, the budget is a legacy inherited from colonial times to the extent that the timing of the presentation was also aligned with British time.

Prerequisites:

— What are the constitutional provisions related to Budget?

— What is fiscal policy?

— What is Fiscal Responsibility and Budget Management (FRBM) Act?

Key takeaways: 

— “The 2024-25 budget is expected to present a long-term vision for the Indian economy. In my view, this vision must entail five key elements: (i) growth (ii) employment (iii) manufacturing (iv) public finance and (v) others.”

— First, on growth, the government has already clearly laid out its vision for a “Viksit Bharat”, to make India a developed economy by 2047. The question is what kind of growth rates are needed to increase India’s per capita income from $2,500 to $14,000.

— Second is employment and related to it is the third component, manufacturing with scaling up trade and competitiveness. There is no tradeoff between services and manufacturing. Undoubtedly, we need both — a boost to labour-intensive manufacturing to enable seizing the demographic dividend.

— On the institutional side, the FRBM review committee recommended setting up an independent Fiscal Council… While this recommendation was not immediately accepted, this may be the right time to rethink our fiscal institutions…

— Finally, I leave the fifth element as broad, but equally crucial — further development of agriculture markets, renewed emphasis on cleaning up of higher education, improving health outcomes, and meeting the carbon limits.

— The time is ripe for another big push to important reforms. The 2024-25 budget is an opportune moment to signal the direction and vision. Ten per cent real growth can happen.

Points to Ponder: 

— What is the purpose of Budget?

— What are the challenges of Indian economy in becoming 7 trillion economy by 2047?

— What measures need to be adopted to address the challenges?

Post Read Question:

Consider the following statements : (UPSC CSE 2018)

1. The Fiscal Responsibility and Budget Management (FRBM) Review Committee Report has recommended a debt to GDP ratio of 60% for the general (combined) government by 2023, comprising 40% for the Central Government and 20% for the State Governments.

2. The Central Government has domestic liabilities of 21% of GDP as compared to that of 49% of GDP of the State Governments.

3. As per the Constitution of India, it is mandatory for a State to take the Central Government’s consent for raising any loan if the former owes any outstanding liabilities to the latter.

Which of the statements given above is/are correct ?

(a) 1 only

(b) 2 and 3 only

(c) 1 and 3 only

(d) 1, 2 and 3

Other Important Articles Covering the same topic:

A to Z of Budget

Unfit India

UPSC Syllabus:

Preliminary Examination: Current events of national and international importance

Mains Examination: GS-I, II: Society, Government policies and interventions, issues related to health

What’s the ongoing story- Alarm bells about the growing burden of non-communicable diseases in India have been ringing for a few years now. Study after study has found that obesity and lifestyle-related illnesses are claiming more lives than ever, and are no longer solely prevalent in urban areas. They have begun to affect rural populations as well.

Prerequisites:

— What are non-communicable diseases?

— What is the WHO recommendation on physical activity?

— What are the cardiovascular diseases?

— What is Fit India movement?

Key takeaways: 

— Bringing the big picture of ill-health into sharper focus is new data published in the Lancet Global Health this week, according to which an alarming 57 per cent women and 42 per cent men in India fail to meet the World Health Organisation’s guidelines for sufficient physical activity.

— Should this trend remain unchecked, it is estimated that by 2030, about 60 per cent of India’s adult population would be at risk of diseases like cardiovascular ailments, diabetes and even dementia and cancer of the breast and colon.

— Addressing this, as the head of the WHO Unit for Physical Activity has pointed out, requires “a whole-of-society” approach, one which sees open spaces, pothole-free roads and pavements, safety and low pollution levels as crucial to the goal of a fitter citizenry

For Your Information:

— WHO recommends at least 150 to 300 minutes of moderate aerobic activity per week (or equivalent vigorous activity) for all adults. Insufficient physical activity is defined as not doing 150 minutes of moderate-intensity activity, 75 minutes of vigorous-intensity activity, or an equivalent combination per week.

— According to the WHO, physical inactivity puts adults at greater risk of cardiovascular diseases such as heart attacks and strokes, Type 2 diabetes, dementia and cancers of the breast and colon.

Points to Ponder: 

— What are the reasons for insufficient physical activity among women in India?

— What initiatives has the government undertaken to address these issues?

— How modern lifestyle is impacting physical activity?

Post Read Question:

Explain why suicide among young women is increasing in Indian society. (UPSC CSE 2023)

Other Important Articles Covering the same topic:

Lancet study says half of Indians physically unfit: What should you do to get off the mark now?

 

Express Network

Heatwaves need to be declared as disaster: Report

UPSC Syllabus:

Preliminary Examination: General issues on Environmental Ecology, and Climate Change – that do not require subject specialisation.

Mains: GS-I, GS-II, GS-III: Important Geophysical Phenomena, Climate Change Environmental Pollution & Degradation, Government Policies & Interventions.

What’s the ongoing story- An analysis of heat action plans (HAP) for nine cities and five districts found that there was no clear assessment of heat impact on the local population, lack legal and financial backing and that the response mechanism needs to be strengthened by identifying heat waves as a national disaster, shows a report released by non-profit research organisation iForest on Thursday.

Prerequisites:

— What is a Heat Action Plans (HAP)?

— What is a heatwave?

Key takeaways: 

— “NDMA guidelines require cities to develop local thresholds for an early warning system as it depends on many factors, including the built environment, slum population and urban heat island effect,” the analysis by iForest (International Forum for Environment, Sustainability and Technology) said.

— It recommended that heat waves be notified as a disaster under the Disaster Management Act, 2005, to ensure focused funding. It also recommended a review of heat wave definition by the IMD and account for high night temperatures, relative humidity and ‘real feel’ of temperatures.

For Your Information:

— Heatwaves are not defined by high temperatures. They are defined by abnormalities in temperature. For example, a place that normally sees a temperature of 40 degree Celsius during summer is not said to be experiencing a heatwave even if the temperature rises to 42 or 43 degrees. On the other hand, another location would be said to be facing a heatwave even at 35 degrees if its normal temperature during that time is 27 or 28 degrees.

Points to Ponder: 

— What is the impact of heatwaves on food security and human health?

— What is the role of the National Disaster Management Authority (NDMA)?

— Why has India not declared the heatwave as disaster?

Post Read Question:

Consider the following statements:

1. Heatwaves typically occur between March and June, and in some rare cases even extend till July.

2. Heatwaves need not be considered till the maximum temperature of a station reaches at least 40°C for Plains and at least 30°C for Hilly regions.

3. A severe heatwave is declared when the departure from normal is more than 6.4 degrees Celsius.

How many of the statements given above is/are correct?

(a) Only 1

(b) Only 2

(c) All three

(d) None

Other Important Articles Covering the same topic:

Explained: The criteria for heatwaves, how climate change is affecting it

UPSC Ethics and Essay Snippet

‘Wordly Wise’ from The Editorial Page

“Art has to be disturbing, Art has to ask a question, Art has to predict a future.”

– Marina Abramovik 

(Thought Process: How do you perceive art? Do you think it should go beyond providing beauty and comfort? Do you believe art serves a larger purpose of  asking question and predicting future? Can art be inherently thought-provoking? In what ways can art be utilized as a form of protest? For instance, following the George Floyd murder in 2020, Black Lives Matter protestors in the UK’s Bristol threw the statue of the 17th century slave trader, Edward Colston, into the canal, signifying a confrontation with the nation’s colonial history and its ongoing repercussions.the future? You can read more in our editorial, Lincoln the hothead)

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