Current Affairs for UPSC IAS Exam – 7 August 2020

Contents

1. RBI on: Policy Rates, Debt recast for MSMEs, Inflation
2. India rejects China’s UNSC move on Kashmir
3. U.S. concerned about Kashmir restrictions
4. Indian Astronauts complete training on abnormal landing

RBI ON: POLICY RATES, DEBT RECAST FOR MSMES, INFLATION

Focus: GS-III Indian Economy

Why in news?

• The Reserve Bank of India, during the third review of the monetary policy since the COVID-19 pandemic spread in the country, left the key policy rates unchanged in the face of rising inflation pressures.
• RBI also extended the one-time debt restructuring for small businesses by three months to support viable MSME entities.
• RBI said that India’s GDP will shrink in 2020-21, while inflation will continue to stay elevated in the coming months.
• The RBI also released the results of its Consumer Confidence Survey (CCS) which showed that this index had plummeted with the current situation index (CSI) recording an all-time low.

Rates Unchanged

• The Reserve Bank of India (RBI) kept the key policy rates unchanged, but promised to continue with the accommodative stance as long as it is necessary to revive growth and mitigate the impact of Covid-19 on the economy, while ensuring that inflation remains within the target range for the future.
• The monetary policy committee (MPC) unanimously decided to keep the policy rate unchanged at 4% after evaluating the global and domestic economic situations and the trajectory of inflation in the months ahead.
• Since, early 2019, RBI has cut interest rates by 250 basis points (100 bps =1 percentage point) to boost growth.
• It has also unveiled a raft of measures to provide relief to the economy ravaged by the coronavirus pandemic.

RBI on Moratorium of Loans

• RBI didn’t extend the moratorium on loan repayments offered to borrowers beyond August, but allowed banks to restructure loans from large corporates, micro, small and medium enterprises as well as individuals to help stem the rising stress on incomes and balance sheets.
• These restructuring efforts may or may not include a moratorium on instalment repayments, the RBI said, leaving the decision to banks, with an eye on averting such loans from slipping into non-performing assets.

RBI on debt recast plan for MSMEs

• Besides extending the debt restructuring for small businesses, RBI has also relaxed some existing provisions for availing of this Debt Restructuring scheme by Micro, Small and Medium Enterprises (MSMEs).
• With COVID-19 continuing to disrupt normal functioning and cash flows, the stress in the MSME sector has got accentuated, warranting further support.
• This move would help MSMEs impacted by COVID-19 to get time and space to service debt when cash flows are under pressure due to uncertainty.

Inflation to stay elevated

• Even though RBI refrained from projecting an estimate for the contraction, with an early containment of the COVID-19 pandemic being the only hope for a positive surprise, the RBI projected that India’s GDP will shrink in 2020-21.
• The RBI is hopeful of inflation easing during the second half of 2020-21.
• Headline inflation had gone up to more than 6% in June 2020, with price pressures evident across items, including food.
• A good monsoon and a bumper kharif crop could ease food prices, especially those of protein-based food items and vegetables that are propping up food inflation, RBI noted.

-Source: The Hindu, Hindustan Times

INDIA REJECTS CHINA’S UNSC MOVE ON KASHMIR

Focus: GS-II International relations

Why in news?

• China recently prompted the United Nations Security Council (UNSC) to discuss the Kashmir issue in a closed-door meeting.
• India “firmly” rejected the Chinese initiative and reiterated Kashmir is a domestic issue.

China on the Kashmir issue in the UNSC

• On previous occasions, this attempt of China to bring up the Kashmir and Abrogation of article 370 in the UNSC calling for closed-door meetings, has met with little support from the international community.
• The Chinese move came on the first anniversary of the abrogation of Article 370, which led to the creation of the Union Territories of Jammu & Kashmir and Ladakh and ended the ‘special status’ for the region.
• China initiated a similar move in 2019 when it revived “The India-Pakistan Question” at the UNSC.
• The frequency of the attempts by China to take up the Kashmir issue at the UNSC has prompted diplomats to highlight the unequal nature of the top organisation of the U.N. where the agenda is set by the permanent members (P5) of the UNSC.
• Veteran diplomats demanded that South Block launch a campaign to remove Kashmir from the agenda of the Council.

-Source: The Hindu, Hindustan Times

U.S. CONCERNED ABOUT KASHMIR RESTRICTIONS

Focus: GS-II International relations

Why in news?

A year after the government altered the status of the former State of Jammu & Kashmir by abrogating Article 370, the leadership of an important committee of the U.S. Congress noted “with concern” that conditions in the region have not returned to normality.

Details

• In a letter to the Indian External Affairs Minister the U.S. Chairman of the powerful House Foreign Affairs Committee (HFAC) and Ranking Member, underscore the bipartisan nature of the concerns over Jammu and Kashmir and the larger context of the bipartisan support for the U.S.-India relationship.
• The U.S. acknowledged the ongoing serious security and counter-terrorism concerns in the region, and offered to with the Indian government to address the issues.
• The U.S. letter spoke about upholding the shared commitments to the democratic values and freedoms on which the bond between the two countries was built.
• The HFAC also made a specific mention to China’s ‘belligerence’ at the Line of Actual Control, assuring U.S. support as “India faces aggression from China along the shared border, which is part of the Chinese government’s consistent pattern of unlawful and belligerent territorial aggression across the Indo-Pacific”.

U.S. Concerns and India’s actions

• India has faced a series of statements from the U.S., the European Union and the U.N. agencies since the abrogation of article 370 in 2019,
• U.N. human rights experts have issued a statement from the Office of the High Commission for Human Rights (OHCHR) calling on the international community to “address the alarming human rights situation” in J&K.
• Responding to these statements, the Indian External Affairs Ministry said it would be “happy to brief the U.S. Congress” on the situation in the Union Territory one year after the move.
• The MEA said that there have been several positive changes in the UT of J&K in the past year, whether be it in terms of good governance or socio-economic development or ensuring justice to disadvantaged sections of the population.

-Source: The Hindu

INDIAN ASTRONAUTS COMPLETE TRAINING ON ABNORMAL LANDING

Focus: GS-III Science and Technology

Why in news?

The four Indian astronaut-elects have completed training on crew actions in the event of an abnormal descent module landing in three different scenarios.

Details

• Glavkosmos, a subsidiary of Russian space organisation Roscosmos confirmed that all Indian astronaut elects passed training in short-term weightlessness mode.
• Isro’s Human Spaceflight Centre (HSC) had signed an agreement with Glavkosmos for the training of Indian astronauts.
• All their training is taking place at the Gagarin Cosmonaut Training Center (GCTC).
• The programme for Indian astronauts also includes training in a centrifuge and in a hyperbaric chamber to prepare their organisms for sustaining spaceflight factors, such as G-force, hypoxia and pressure drops.
• The astronauts are undergoing training at the GCTC following the courses of the general space training programme and of the systems of the Soyuz MS crewed spacecraft.
• Their training also includes a number of courses necessary for prospective Indian cosmonauts.

Indian Human Spaceflight Programme

• The Indian Human Spaceflight Programme (HSP) was initiated in 2007 by the Indian Space Research Organisation (ISRO) to develop the technology needed to launch crewed orbital spacecrafts into low Earth orbit.
• The first crewed flight was planned with a spacecraft called Gaganyaan for 2021, on a GSLV Mark III rocket.
• Before the Gaganyaan mission announcement, human spaceflight was not a priority for ISRO earlier.
• If completed, India will become the fourth nation to conduct independent human spaceflight after the Soviet Union/Russia, United States and China.
• After conducting crewed spaceflights, the agency intends to start a space station programme and possibly a crewed lunar landing.

-Source: Times of India