Daily Mains Practice Questions 29-03-2023

KEY POINTS

·        The G20 countries together account for around 45% of the world’s coastlines and over 21% of the exclusive economic zones (EEZs).

·        The oceans are reservoirs of global biodiversity, critical regulators of the global weather and climate, and support the economic well-being of billions of people in coastal areas.

·        The term ‘blue economy’ includes not only ocean-dependent economic development, but also inclusive social development and environmental and ecological security.

·        The Government of India has launched bold initiatives to promote the development of a blue economy.

·        The Pradhan Mantri Matsya Sampada Yojana is actively engendering a ‘blue revolution’ through sustainable and responsible development of the fisheries sector. The Sagar Manthan dashboard tracks vessels in real-time.

·        The Deep Ocean Mission explores deep-sea resources in the EEZ and continental shelf as well as development of technology for harnessing them.

·        India adopted the Coastal Regulation Zone notification to classify and better manage coastal regions and conserve ecologically sensitive coastal and marine areas including ecosystems.

·        The inherent inter-connectedness of oceans implies that activities occurring in one part of the world could have ripple effects across the globe.

·        In this context, India’s G20 presidency would play an important role in promoting individual and collective actions to facilitate the transition towards a sustainable blue economy.

KEY POINTS

·        The benefits of transparency are well known: it enables investors and depositors to take informed decisions and regulators to act in a timely manner.

·        Since bank managers cannot hide bad assets under a transparent regime, the risk of a sudden collapse of banks due to bad asset quality reduces.

·        In other words, a depositor treats his/her bank deposits on par with money and behaves as if it does not fluctuate in value regularly.

·        The fact that both the depositor and the restaurant owner treat the deposits at par value enables this transaction. Imagine using equity shares or some listed bonds for transactions.

·        It is hard to arrive at the required number or value of shares or bonds in exchange for a meal as the value of these instruments keeps fluctuating even in the short run.

·        In a highly transparent banking regime, along with bank assets, bank deposits will also fluctuate in value and lose their place as money-like instruments.

·        More importantly, the fact that the deposits were less than par was known to all, including the depositors. This created a good setting for triggering a run.

·        Eventually, the RBI and the government had to bail out the NBFCs through special liquidity facilities offered through banks.

KEY POINTS

·        With consumer price inflation soaring to multi-decade highs over the past year and policymakers riveted towards establishing price stability, it is imperative that doubts do not arise on the accuracy of the CPI index.

·        It was shown that growth in cereal index was much less if the increase in the 20 constituents of cereals and products sub-group were separately computed.

·        The Centre could use these inputs to review the computation methodology of the index, so that it accurately reflects the consumption patterns in the country.

·        Taking the price of free social transfers as zero instead of reducing their weight to zero may represent the price changes more accurately.

·        But growing digitisation, purchasing power and mobility over the past decade is likely to have significantly altered the weights of some items such as entertainment, travel and data consumption.

·        The weight currently given to food and beverages in CPI at 47 per cent is also quite high and may not reflect current eating habits.

·        Besides, this high weight to food poses a conundrum for regulators, as food inflation cannot be easily controlled through policy measures.

·        The Household Consumption Expenditure Survey 2022-23 needs to be expedited so that the data from it can be used to update the CPI.

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