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Exclusive for Subscribers Daily: Topics like Repo rate, Reverse repo rate for the UPSC Exam? Why are topics like India-France and Marine heatwaves, Governor Powers and his assent to bills, Illegal Migrant important for both preliminary and main exams? Discover more insights in the UPSC Exam Notes for February 08, 2025 |
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Critical Topics and Their Significance for the UPSC CSE Examination on February 08 20205
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RBI slashes rate by 0.25% to revive growth
For Preliminary Examination: Repo rate, Reverse repo rate
For Mains Examination: GS III - Indian Economy
Context:
Lowering India’s interest rates for the first time in the last 57 months, the Monetary Policy Committee (MPC) of the Reserve Bank of India on Friday unanimously cut the repo rate by 25 basis points (bps) to 6.25%, to support fading growth in the hope of inflation easing to 4.4% in this quarter and 4.2% through 2025-26
Read about:
Monetary Policy Committee (MPC)
Reverse repo rate
Key takeaways:
- For the first time in nearly five years, India's Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) has decided to lower interest rates. On Friday, the committee unanimously reduced the repo rate by 25 basis points (bps) to 6.25%, aiming to revive slowing economic growth amid expectations that inflation will ease to 4.4% this quarter and 4.2% throughout 2025-26.
- This policy shift by the RBI, which could lead to reduced borrowing costs for housing, vehicles, and other loans, follows closely after the announcement of the Union Budget for 2025-26. The budget seeks to stimulate urban demand through income tax concessions worth ₹1 lakh crore.
- The repo rate, which refers to the interest rate at which the RBI lends to commercial banks, saw its last reduction in May 2020 during the initial phase of the COVID-19 pandemic when it was cut by 40 bps to 4%. Since 2022, however, the rate had been on an upward trajectory.
- Considering the ongoing risks posed by global economic uncertainties and inflationary pressures, the MPC has opted for a neutral stance. RBI Governor Sanjay Malhotra emphasized that the committee remains "firmly committed to ensuring inflation aligns with the target while also supporting economic growth." This was the first monetary policy review under Mr. Malhotra’s leadership.
- Highlighting concerns such as geopolitical conflicts, rising protectionist trade measures, fluctuations in global commodity prices, and financial market instability, the MPC has forecasted real GDP growth of 6.7% for 2025-26, compared to an estimated 6.4% for the current fiscal year.
- Assuming a normal monsoon next year, Mr. Malhotra noted that inflation is expected to moderate further, gradually aligning with the target. Inflation is projected to average 4.5% in the first quarter (Q1) of 2025-26, followed by 4% in Q2, 3.8% in Q3, and 4.2% in Q4
Significance of Repo Rate and Reverse Repo Rate
The repo rate and reverse repo rate play a fundamental role in India’s monetary policy, influencing liquidity, inflation, and overall economic growth. These rates are determined by the Reserve Bank of India (RBI) and serve as key instruments for regulating money flow in the financial system.
Significance of Repo Rate
- The repo rate (short for repurchase rate) is the interest rate at which commercial banks borrow short-term funds from the RBI by pledging government securities.
- It serves as a benchmark for interest rates across the banking sector and plays a crucial role in controlling inflation and boosting economic growth.
- When inflation rises, the RBI increases the repo rate to make borrowing costlier for banks. As a result, banks raise their lending rates for businesses and consumers, reducing money supply in the economy.
- This, in turn, helps to control inflation by curbing excess spending. On the other hand, when economic growth slows down, the RBI lowers the repo rate to encourage borrowing.
- A reduction in the repo rate leads to cheaper loans for industries and individuals, stimulating investment and consumer demand.
- The repo rate also impacts sectors such as housing and automobile industries, as changes in interest rates affect home loans, car loans, and business financing. Thus, it serves as a vital tool for the RBI to maintain economic stability by balancing inflation and growth.
Significance of Reverse Repo Rate
- The reverse repo rate is the rate at which the RBI borrows funds from commercial banks. It acts as an instrument to absorb excess liquidity from the banking system, helping to control inflation and maintain financial stability.
- When there is surplus liquidity in the market, the RBI increases the reverse repo rate to encourage banks to park their excess funds with the central bank rather than lending it out. This reduces the money supply in the economy, helping to control inflation.
- Conversely, when liquidity is tight, the RBI lowers the reverse repo rate, making it less attractive for banks to deposit their funds with the RBI and encouraging them to lend more to businesses and individuals, thereby stimulating economic activity.
- The interplay between repo and reverse repo rates ensures that liquidity remains at an optimal level, neither causing excessive inflation nor stifling economic growth. By adjusting these rates, the RBI maintains financial discipline and ensures that the economy grows at a sustainable pace
Following Up Question
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Answer (C)
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The relationship between India and France has evolved over centuries, shaped by colonial interactions, strategic partnerships, and shared global interests. France was one of the earliest European countries to establish trade relations with India, and over time, the two nations have built a strong diplomatic, economic, and defense partnership.
Colonial Era and Early Interactions (17th–20th Century)
- France's engagement with India began in the 17th century when the French East India Company (Compagnie française des Indes orientales) was established in 1664 under King Louis XIV.
- The French set up trading posts in various coastal regions, including Pondicherry (Puducherry), Chandannagar (West Bengal), Mahe (Kerala), Karaikal (Tamil Nadu), and Yanam (Andhra Pradesh). These settlements became important centers of trade and administration.
- During the 18th century, France and Britain competed for dominance in India, particularly during the Carnatic Wars (1746–1763), which were linked to the larger Anglo-French rivalry in Europe.
- However, the defeat of the French forces under Joseph François Dupleix and later under Count de Lally led to British supremacy in India.
- Despite this, France retained control over its small colonies in India until 1954, when the French settlements were officially integrated into the Indian Union.
Post-Independence Diplomatic Relations (1947–Present)
After India gained independence in 1947, France was among the first Western nations to establish strong diplomatic ties with the country. Unlike some other Western nations, France supported India on several crucial international issues, including India’s nuclear policy and sovereignty.
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1954 - Integration of French Territories:
- In 1954, the French voluntarily handed over Pondicherry, Karaikal, Mahe, and Yanam to India, formalizing the transition in 1962.
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1998 - Strategic Partnership:
- India and France elevated their relationship to a Strategic Partnership in 1998, covering defense, nuclear energy, space, and counterterrorism. France has consistently backed India’s nuclear ambitions and was one of the few Western countries that did not condemn India’s Pokhran-II nuclear tests in 1998.
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21st Century Cooperation:
- France has become a key defense supplier to India, including Rafale fighter jets, Scorpène submarines, and advanced military technology.
- India and France collaborate in space exploration, climate change, renewable energy (International Solar Alliance), and counterterrorism efforts.
- France has supported India’s bid for permanent membership in the UN Security Council (UNSC) and plays a vital role in India's engagement with the European Union (EU)
The strategic partnership between the two Nations
Defence/Strategic Ties:
- India has signed a ‘Strategic Agreement’ with more than 35 countries but the deal signed with France in 1998 remains unique. While many other partnerships have run into trouble or are clouded by differences over various issues, the partnership has been growing with France.
- The area of cooperation now extends to technologies related to Nuclear energy, space, defence, cyber security, intelligence-sharing, and counter-terrorism amongst others.
France has supported India in its ‘Make in India’ program and extended its support to all forms of defence manufacturing. - France is a critical partner of the Indian Navy in its P 75I Program which seeks to build 24 naval submarines by 2030, 18 of which will be conventional and 6 shall be nuclear.
- 36 Rafale Fighter Jets will be handed over to the Indian Air Force soon. Already, during the Galwan Valley dispute with China, a few jets were handed over to India.
- As far as the Joint Exercises between the Armed Forces are concerned: Varuna 1, Garuda 2, and Shakti 3 have been held regularly.
- Earlier, the Cyber Security and Digital technology roadmap had been agreed to by both sides. This entails cooperation in the field of emerging technologies such as Artificial Intelligence, Super Computing and Machine Learning amongst others.
- Recently, an Agreement between the Centre for Development of Advance Computing (C-DAC) and ATOS for cooperation in quantum computing, AI and supercomputing is signed.
- France also supports India in its bid for permanent membership of the United Nations Security Council.
- With the assistance and support of France, India became a member of various non-proliferation groups such as the Wassenaar group (2017), NSG, Missile Technology Control Regime (2016) and the Australia Group (2018).
- France has also opposed many of the unsustainable projects being executed under China’s One Belt One Road (OBOR) initiative
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Answer (A)
The Treaty on the Non-Proliferation of Nuclear Weapons (NPT) classifies countries into Nuclear Weapon States (NWS) and Non-Nuclear Weapon States (NNWS). According to the NPT, only those nations that had tested and possessed nuclear weapons before January 1, 1967 are recognized as Nuclear Weapon States. These nations include:
Now, let's analyze the countries given in the question:
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- A marine heatwave (MHW) is an extreme climatic phenomenon that occurs when the sea surface temperature in a specific region rises by 3 to 4 degrees Celsius above the average for a minimum of five days.
- These events can persist for extended periods, ranging from weeks to months or even years, as noted by the National Oceanic and Atmospheric Administration (NOAA), a US government agency.
- The impact of MHWs on marine ecosystems can be devastating. For instance, the 2010-11 marine heatwave in Western Australia led to the large-scale death of fish and other aquatic organisms, disrupting the local marine environment.
- Additionally, this event severely damaged kelp forests, which typically thrive in colder waters and serve as a crucial habitat and food source for various marine species.
- One of the significant consequences of marine heatwaves is coral bleaching, a phenomenon that weakens corals, reduces their ability to reproduce, and increases their susceptibility to diseases. Since coral reefs support thousands of marine organisms, their deterioration poses a serious threat to biodiversity.
- According to an analysis by the non-profit Climate Central, the intensity of MHWs continues to rise, with sea surface temperatures (SST) in certain areas exceeding the average by at least 2 degrees Celsius for the season.
- Western Australia is currently experiencing its second-most severe marine heatwave on record, surpassed only by the 2010-11 event, when temperatures rose 5 degrees Celsius above normal, particularly during February and March, as reported by the University of Western Australia.
- Over the last few decades, MHWs have become more frequent, intense, and longer-lasting. A 2018 study published in Nature titled "Marine Heatwaves under Global Warming" highlighted a twofold increase in MHW occurrences between 1982 and 2016.
- Similarly, a 2021 report by the International Union for Conservation of Nature (IUCN) found that the frequency of MHWs had surged by 50% in the previous decade.
- These heatwaves can extend for weeks or even years, affecting localized coastal zones as well as multiple ocean basins. They have been observed in both shallow and deep waters, across all latitudes, and in diverse marine ecosystems worldwide
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Answer (B)
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What issues will the Supreme Court consider in the TN govt-Governor dispute case?
For Preliminary Examination: Current events of national and international importance
For Mains Examination: GS II - Indian Polity & Governance
Context:
The Supreme Court on Friday continued to hear petitions filed by the Tamil Nadu government raising questions on the scope of the Governor’s powers in the legislative process. The state argued that the prolonged delay in acting upon Bills passed by the state legislature would result in a situation where the “system of democracy will fail in this country.”
Read about:
Governor Powers and his assent to bills
Governor’s role in lawmaking
Key takeaways:
Governor’s Role in Lawmaking and the Tamil Nadu Dispute
The Constitution envisions the Governor's position as an impartial and apolitical entity. Over time, various rulings by the Supreme Court have placed restrictions on the Governor’s discretionary powers, requiring them to largely act based on the aid and advice of the state’s Council of Ministers. However, there are exceptions to this rule, such as when recommending President’s Rule under Article 356 or granting assent to Bills under Article 200.
Once a Bill is passed by the state legislature, it is sent to the Governor for approval. Under Article 200, the Governor has three options:
- Grant assent to the Bill, making it a state law.
- Return the Bill to the state Assembly for reconsideration. If the Assembly passes it again, the Governor is obligated to grant assent, except in cases where it might weaken the High Court’s authority, in which case it must be sent to the President.
- Reserve the Bill for the President’s consideration, in which case the final decision rests with the Union government.
The Tamil Nadu Controversy
- Since RN Ravi’s appointment as Governor of Tamil Nadu in September 2021, the Dravida Munnetra Kazhagam (DMK)-led government has repeatedly objected to delays in granting assent to Bills passed by the state Assembly.
- In November 2023, the Tamil Nadu government approached the Supreme Court, arguing that the Governor had withheld assent on multiple Bills, some pending since January 2023.
- During the hearing on November 6, 2023, the Supreme Court criticized the Governor’s inaction, emphasizing that Governors are not elected representatives and should not delay decision-making. The Court also questioned why state governments had to seek judicial intervention for such matters.
- Following this, the Tamil Nadu Assembly re-enacted the pending Bills. However, Governor Ravi referred two Bills to the President while withholding assent for the remaining ones, further intensifying the dispute between the state government and the Governor’s office
Issues for the Supreme Court’s Consideration
The Supreme Court is currently considering several key issues, including:
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Governor's authority to withhold assent: Whether a Governor can withhold assent for a second time after a Bill has been re-passed by the state Assembly, especially if the Governor did not initially reserve the Bill for Presidential consideration.
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Referral to the President: Whether the Governor's power to refer a Bill to the President applies to all Bills or is restricted to certain types of legislation.
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Factors influencing the Governor’s decision: What considerations guide the Governor’s decision to refer a Bill to the President rather than granting assent.
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Pocket veto: The validity of the pocket veto, which occurs when the Governor delays granting assent indefinitely, and whether such an action is constitutionally permissible in India.
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Time frame for assent: Whether a specific time frame should be prescribed for the Governor to grant assent to a Bill under Article 200.
Supreme Court’s View on Time Frame for Assent
While Article 200 of the Constitution states that the Governor must act on a Bill "as soon as possible," it does not define a strict timeline for this decision. The Supreme Court has addressed this issue in previous cases but has not set any formal directions regarding a time frame. In the Nabam Rebia and Bamang Felix vs Deputy Speaker (2016) case, Justice Madan Lokur, part of the five-judge bench, wrote a concurring opinion, emphasizing that the Governor cannot withhold assent indefinitely. He stated that the Governor must return the Bill to the state Assembly with a message, which could include recommendations for amendments
Follow Up Question
1.With reference to the Legislative Assembly of a State in India, consider the following statements: ( UPSC 2019)
Which of the statements given above is/are correct?
A. 1 only
B. 2 only
C. Both 1 and 2
D. Neither 1 nor 2
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Answer (C)
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Jumping fences, crossing jungles: How migrants use ‘dunki routes’ to reach US
For Preliminary Examination: Current events of national and international importance
For Mains Examiantion: GS II - Polity
Context:
Illegal Immigrants in US Dunki Route Journey Explained: On Thursday (February 6), Lok Sabha Leader of Opposition Rahul Gandhi and other Opposition leaders protested over how undocumented Indian immigrants were deported from the US.
Read about:
Who is a Illegal Immigrant?
Migrant Domestic Workers
Key takeaways:
An illegal migrant (also referred to as an undocumented migrant) is a person who enters, resides, or remains in a country without the legal authorization or permission required by the immigration laws of that country. This can occur in several ways, such as:
- Entering without proper documentation – A person who enters a country without the necessary visas, permits, or authorization.
- Overstaying a visa – A person who enters the country legally on a temporary visa (e.g., tourist visa, student visa) but stays beyond the allowed duration, thus becoming an illegal resident.
- Failure to comply with immigration laws – A person who may have entered the country legally but violated the terms of their stay or failed to renew or update their legal status.
Illegal migrants do not have the same legal rights or protections as legal immigrants, and they can face deportation, legal penalties, or difficulty accessing public services. Their status is often subject to immigration enforcement policies in the country they are residing in
Social policy for migrants would include the following elements
- Universal access to social protection: Migrants should have the same access to social protection programs as citizens, such as health insurance, pension schemes, and unemployment benefits.
- Portability of social protection benefits: Migrants should be able to access social protection benefits in their destination states, even if they have not contributed to those schemes in the past.
- Enforcement of labor laws: The government should enforce labor laws to ensure that migrant workers are not exploited by their employers.
- Access to education and healthcare: Migrants should have access to quality education and healthcare, regardless of their location.
- Protection from discrimination: Migrants should be protected from discrimination in housing, employment, and access to public services.
The key components of social policy for migrants
Healthcare: Access to quality healthcare is a fundamental human right, yet migrants in India frequently encounter barriers in accessing healthcare services. An inclusive social policy should ensure that migrants have equal access to affordable healthcare facilities, regardless of their legal status. This can be achieved through measures such as establishing migrant-friendly health centers in areas with high migrant populations, providing multilingual healthcare services, and disseminating information about available healthcare schemes. Furthermore, health insurance schemes targeted specifically at migrants can offer financial protection and enhance healthcare accessibility.
Education: Education plays a pivotal role in empowering individuals and fostering social mobility. However, migrant children often face difficulties in accessing education due to language barriers, discrimination, and lack of documentation. An inclusive social policy must guarantee the right to education for all migrant children, irrespective of their migration status. This can be achieved by setting up bridge courses and language support programs to facilitate their integration into mainstream educational institutions. Special provisions should be made to ensure continuity of education, even when migrants move across different regions.
Employment: Migrants contribute significantly to the workforce, especially in sectors like construction, agriculture, and domestic work. However, they are vulnerable to exploitation, low wages, and unsafe working conditions. An inclusive social policy should prioritize decent work conditions and fair wages for migrants. This can be accomplished through the enforcement of labor laws, regular monitoring of workplaces, and provision of legal aid to address labor rights violations. Additionally, skill development programs and vocational training initiatives can equip migrants with the necessary skills to access better job opportunities.
Social Integration: Social integration is crucial for migrants to feel a sense of belonging and participate fully in society. An inclusive social policy should foster social cohesion by promoting dialogue, cultural exchange, and community engagement between migrants and host communities. Initiatives such as language classes, cultural festivals, and community centers can serve as platforms for interaction and mutual understanding. Efforts should also be made to combat discrimination and xenophobia through awareness campaigns and legal frameworks that protect migrants' rights.
Legal and Social Protection: Migrants often face legal and social vulnerabilities due to their precarious status. An inclusive social policy should provide legal safeguards and social protection mechanisms to address these vulnerabilities. This can include measures such as simplifying the process of obtaining legal documentation, ensuring access to justice through legal aid services, and creating social safety nets that cater to migrants' specific needs. Furthermore, efforts should be made to raise awareness about migrants' rights and provide them with information on available support systems.
Follow Up Question
1. “Refugees should not be turned back to the country where they would face persecution or human right violation”. Examine the statement with reference to the ethical dimension being violated by the nation claiming to be democratic with open society. (2021)
2. Rehabilitation of human settlements is one of the important environmental impacts which always attracts controversy while planning major projects. Discuss the measures suggested for mitigation of this impact while proposing major developmental projects. (2016)
3. Discuss the changes in the trends of labour migration within and outside India in the last four decades. (2015)
| Subject | Topic | Description |
| Polity | Fundamental Duties | Fundamental Duties |
| Environment & Ecology | Biodiversity in India | Biodiversity |
| History | Modern Indian History | Constitutional Development in India |
| History | Modern Indian History | Peasants, Tribal and other movements |
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