5th June 2021- Topics
RBI monetary policy meet
RBI position on Cryptocurrency
World's Environment Day
Monetary policy committee Meet
MPC has kept the policy repo rate unchanged at 4%.
It further reiterates that it will retain its accommodative stance for “as long as necessary to revive and sustain growth on a durable basis.
Various monetary policy stance:
Hawkish Monetary Policy Stance:
This policy stance is implemented in order to keep inflation in check.
In this stance high-interest rates are favoured as it will make borrowing (taking loans from banks) less attractive.
Due to the lack of money, consumers would not purchase or purchase less and also would stay away from taking credit (loans) from banks.
This would in turn lead to decreased demand for Goods & Services. As a result of low demand, prices of Goods & Services would tend to stabilise
Dovish Monetary Policy Stance :
This type of monetary policy stance involves low interest rates.
Low-Interest Rates would encourage consumers to take credit (loans) from Banks and other sources.
Now that people will have more money in their hands or let’s say money at their disposal.
They would spend more and thereby demand of the products and services would rise, leading to cost pull inflation.
Accommodative Monetary Policy Stance:
The Central bank (RBI) attempts to expand the overall money supply to boost the economy if the economic growth is slowing down.
The major aim is to increase spending.
Accommodative monetary policy is implemented to allow the money supply to rise in line with national income and the demand for money. This is also known as “easy monetary policy”.
Neutral Monetary Policy stance:
In a neutral stance the policy rates neither stimulate (speed up) nor restrains (slowdown) the economic growth by taxation and government spending.
Economic conditions are appropriate for the economy. The Key Policy Rates are neither increased or decreased.
PROJECT 75 I or 75 India
News: Defence Acquisition Council approved Request For Proposal (RFP) for 6 conventional submarines, based on diesel.
Significance: It is the first case processed under the Strategic Partnership (SP) model.
About the project:
It is a Naval Project.
It includes procurement of 6 advance submarine through Strategic Partnership (SP) model of defence Procurement procedure
It is a follow on project of Project 75 Kalvari class submarines.
These 6 submarine will have
land attack cruise missiles and
Air independent propulsion for greater underwater endurance
Strategic partnership route: Indian private strategic partner will tie up with a foreign manufacturer to manufacture submarines domestically through technology transfer.
They will have vertical launch system which will enable them to carry multiple Brahmos cruise missile making submarine fully capable of anti surface and anti ship warfare mission.
They will have advanced stealth capabilities such as greater ability to suppress noise and acoustic signatures.
It is an indegenous hydraulic survey ship which has been decommissioned after 40 year of service at visakhapatnam.
It was built at Garden Reach Ship Builders Limited (GRSE) Kolkata.
This ship paved the way for all the survey ships in various modifications till recently.
It was a participant in Op Pawan (assisting the Indian Peace Keeping Force in Sri Lanka in 1987), Op Sarong, and Op Rainbow (rendering humanitarian assistance post 2004 Tsunami) and participated in the maiden joint Indo-US HADR Exercise ‘Tiger-Triumph’.
RBI Position on Cryptocurrency
RBI has retained its position that cryptocurrency such as bitcoin are not a safer option to invest as it is volatile in nature.
RBI in 2018, released a circular, cautioning people against investing in cryptocurrencies that do not have sovereign character. It had barred entities which are regulated by RBI to refrain from any dealings in Cryptocurrency.
However, in 2020, the Supreme court quashed the order.
Now, RBI reiterated its stance and said that it is not advising any investment in cryptocurrency, however it's up to the investor to use due diligence.
World’s Environment Day
News: World Environment Day is celebrated on June 5, every year to encourage awareness and environmental protection.
As per the United Nations, "the celebration of this day provides us with an opportunity to broaden the basis for an enlightened opinion and responsible conduct by individuals, enterprises, and communities in preserving and enhancing the environment."
Significance of 2021- World’s Environment Day
Theme of World’s Environment Day: Ecosystem Restoration
Host country: Pakistan
2021 World Environment Day will mark the beginning of the UN Decade on Ecosystem Restoration (2021-2030), a global mission to revive billions of hectares, from forests to farmlands, from the top of mountains to the depth of the sea.
Need of Ecosystem Restoration:
Every three seconds, the earth is losing enough forest to cover a football pitch.
In the last century over 50% of the wetlands have been destroyed by mankind.
We have lost 50 percent of the world's coral reefs and up to 90 percent of coral reefs could be lost by 2050, even if global warming is limited to an increase of 1.5 degrees Celsius.
Global greenhouse gas emissions have grown for three consecutive years.
Ecosystem restoration means preventing, halting, and reversing the damage caused to the environment to go from exploiting nature to healing it. It assists in the recovery of ecosystems that have been degraded or destroyed, as well as conserving the ecosystems that are still intact. Restoration may occur in multiple ways, for example through actively planting or by removing pressures so that nature can recover on its own.