To revive the ‘COVID-hit’ Indian economy, various Regulatory Authorities have devised policies and approaches to execute their plans. The Reserve Bank of India (RBI), the nation’s Apex Bank, is no exception. Right from the beginning, RBI brought out several Reforms to help out and retain the banking sector’s customers’ expectations.
Objectives of introducing Reforms
- To maintain adequate liquidity in the system;
- To facilitate credit flows;
- To ease financial stress;
- To enable the smooth functioning of markets.
Gist of the Reforms introduced by RBI
Aim: To Improve the ‘Liquidity position’ of the economy by injecting money into the financial system.
Cut in the interest rate;
Restrictions on banks seeking to store money with RBI, instead of lending;
Moratorium on loan repayments for all the borrowers;
Allowing an Interest Moratorium to the lending institutions;
Decrease in the repo and reverse-repo rates;
Reconsideration of Cash Reserve Ratio (CRR);
Reconsideration of the Marginal Standing Facility (MSF);
Undertaking Long Term Repo Operations (LTRO);
Providing ease in Working Capital Finance;
Deferment of Net Stable Funding Ratio (NSFR) from 01 April 2020 to 01 October 2020;
Permitting State governments and Union Territories for availing overdraft facilities.
RBI’s call for extensive reforms to cope up with the ‘new normal.’
It further announced that “In a post-pandemic scenario, deep-seated and wide-ranging structural reforms in factor and product markets, the financial sector, legal architecture, and in international competitiveness would be needed to regain potential output losses and return the economy to a path of strong and sustainable growth with macroeconomic and financial stability.”
When compared to the Rest of the World, it will be better noted that “India’s potential output can undergo a structural downshift as the recovery driven by stimulus and regulatory easing gets unwound in a post-pandemic scenario.”
It also added that, “This recovery is likely to be different as the global financial crisis occurred after years of robust growth with macroeconomic stability; by contrast, COVID-19 has hit the economy after consecutive quarters of slowdown.”
Interestingly, Mr. Shaktikanta Das, R.B.I.’s Governor, took to media, on 27 August 2020, to highlight the need for more reforms in governance culture and risk management practices. Although the banking sector is currently stable, “more needs to be done to bring about more reforms,” the Governor said.
At the event, the Governor had mentioned that the following factors were in favor of the current Indian economy:-
- Improved Debt to Gross Domestic Product ratio;
- An in-check fiscal deficit;
- Well-controlled inflation;
- Better Current Account.
He also stated that the Apex Bank has ‘not exhausted its ammunition,’ be it rate cuts or any other policy actions, to deal with the current situation due to the virus outbreak. It is to be noted that the RBI has refrained from providing any forecast on growth or inflation and is part of the few Central Banks around the world not to do so.
To strengthen this move of RBI, the Governor told that, “The Central Bank doesn’t have the luxury of giving one number today and modifying it one or two months down the road.” “Once there is some amount of clarity about the COVID curve or the other aspects around COVID, then RBI will certainly start giving the numbers,” he added.
Were RBI’s Reforms successful?
So far, RBI’s decisions have been warmly welcomed by several economy sectors, without any significant opposition. Various experts have expressed their satisfaction with the decisions taken by India’s Apex Bank (especially the one on Restructuring of loans for the corporates). Although these Reforms might have provided the required relief to the customers to a reasonable extent, RBI’s Governor still feels that more Reforms can be introduced in the banking sector (as mentioned on 27 August 2020 at an event organized by the Business Standard newspaper).
Rumki Majumdar, Deloitte India’s Economist, said that ‘the RBI’s dynamic, proactive, and balanced approach is in line with our expectations that the central bank will be looking at alternate measures such as forward guidance and maintain sufficient liquidity.”
Ishpreet Singh Gandhi, Founder and Managing Partner at Stride Ventures, said, “Under the new priority sector lending norms, startups will now be able to attract better pricing.”
Naveen Kukreja, Chief Executive Officer and Co-founder at paisabazaar.com, appreciated RBI’s decision on increasing the ‘Loan To Value’ (LTV) ration in gold loans.
The public did not react any differently,
Hatts off…… RBI.. The best what They can Do…. 🙏🇮🇳
— AVANISH SINGH TOMAR (@Avi610tomar) April 17, 2020
With every economy trying their best to recover from the invisible virus’s considerable blow, there is a time for everything under the Heavens. One can expect that these reforms have been devised and placed to shape a possible tomorrow’s economy.
All You Need To Know About National Institute Of Food Technology Entrepreneurship And Management Bill 2021
On July 26, 2021, Lok Sabha passed a bill under the ministry of Food Processing Industry. The bill is titled as National Institute of Food Technology Entrepreneurship and Management Bill, 2021. The main motive of this bill is to address issues with the Food Processing Industry, Entrepreneurship and one Institution for National Importance. With the passing of this bill, the Indian Institute of Food Processing Technology (IIFPT) and National Institute of Food Technology Entrepreneurship and Management (NIFTEM) is now merged as Institutions of National Importance, and it aims at providing various research and advancement in learning about the Food Industry and its associated branches. The bill was first introduced in the house in February 2019 but was pending due to protest by the opposition.
Significance of Institutions of National Importance (INI)
With the passing of this bill, the institutions enjoy greater autonomy through which they can carry out various courses, research attracting skilled faculties and students from all over the country and overseas. Good standards in education will be adopted to improve the present and future of education in this branch and sector, overcoming the technological gap in the country. This law aims to improve and introduce new changes in food, bio-nanotechnology, cold chain technology etc. The desired efforts will be taken in terms of human resources and infrastructure developments, labs for research etc. Liberty to open centres anywhere in India is also granted to INI and include courses regarding food technology certification and improving the workforce of the country.
Some other important features of this act are the Institution has been authorized with the Board of Government, Senate and other acting Authorities. The Council of Board will include 16 members from different branches from the same field. The Head will be Chairperson, who will be a skilled person from the Food Industry, the Director, Dean and Registrar. Members appointed from Centre and State Governments, Members from FSSAI and Council of Agriculture Research, as mentioned in the bill. The 16 members of the board will carry out work of taking administrative decisions, creating annual budgets and paths for institution progress as an organization, establishing departments, their appointment terms of services, faculties etc. The Board of Council also holds power to grant Honorary Degrees and Diplomas. The Senate shall be the principal academic body of the Institute, consisting of the people such as Director as the Chairperson; Registrar; Full-time skilled level Professor; and Three academically skilled Individuals nominated by the board from the field.
The Union Minister of Food Processing Industry, Mr Pashupati Kumar Paras, expressed his gratitude to PM Modi for this landmark step in this industry from his Twitter handle, indicating new opportunities in Food Technology Industries. Therefore, this Act looks promising on paper with new opportunities and in Educational Development. Amidst the Pegasus Spyware and repeal of the farm laws, this looks positive from the Modi Government.
लोकसभा में आज, राष्ट्रीय खाद्य प्रौद्योगिकी, उद्यमिता और प्रबंध संस्थान विधेयक, 2021 (निफ्टेम विधेयक, 2021) को पारित किया गया।
इस विधेयक के पारित होने पर इससे जुड़े हर व्यक्ति को बधाई देता हूँ और साथ ही खाद्य प्रसंस्करण से जुड़े छात्रों को भी बधाई देता हूँ। @MOFPI_GOI
— Pashupati Kumar Paras (@PashupatiParas) July 26, 2021
Curious Case Of Pegasus: Explained
Pegasus is a spyware that can hack the victims’ mobile phones and read their SMS messages and emails. The Pegasus spyware is owned by an Israeli software company named NSO Group. According to the various reports, this company has targeted more than 50,000 phone numbers at the Global level, of which 300 are in India for surveillance.
The news broke out after the 17 media partners investigated. This investigation brought into the picture information about a leaked database of mobile telephone numbers of Indian Ministers, Opposition leaders, journalists, the legal community, business people, government officials, scientists, activists and many influential personalities of the nation.
Pegasus Spyware and India
According to the report by the agency, the Israeli company which sells Pegasus around the world says that its clients are confined to ‘vetted governments”, believed to number 36. The NSO Group also says that ‘the target list in India is not ours, never was.’ Their refusal of the leaked database has created a loophole in understanding this case.
This whole case has violated the integrity of democratic institutions. According to the report by the agencies, after the mobile phones of the opposition leader Rahul Gandhi and various other leaders were hacked under the Pegasus spyware surveillance. Multiple tweets were made against the Bharatiya Janata Party(BJP) government in India. This whole case has become one of the major threats in the political arena and the Indian Democracy.
Though at the start, it was used for national security purposes. The explosive expansion of surveillance technology vendors has become a vast human rights and a global security issue. If such surveillance technologies increase, it might cause a lot of problems to countries around the globe. Hence, as a precaution, all these countries need to work on regulating this technology.
According to the reports by the agency, one of the targeted phones by the Pegasus spyware was of the former election commissioner of India, Ashok Lavasa. Various such people and such opposition leaders were somehow against the BJP government having their phones hacked with the NSO-owned spyware. All these instances and the names in the leaked list have pointed figures towards the Modi Government.
The Modi government’s stand on this case was put forward in Lok Sabha by two serving ministers, Ashwini Vaishnaw and Prahlad Singh Patel. These two leaders were also featured in the leaked database. The recent Information Technology Minister, Ashwini Vaishnaw defended the BJP government in the parliament by saying, “the expose was an attempt to malign Indian democracy and its well-established institutions.” She even said, ‘any form of illegal surveillance is not possible with the checks and balances in our laws and robust institutions.’
This case has adjourned the parliament proceedings due to the protests inside and outside the house of parliament by the opposition party.
Pegasus Spyware and World.
In the statement given to the agency, Access Now, an organisation defending the digital rights of global users, said it was outraged that products sold by NSO were allegedly “used to hack and invade the private communications” of thousands of people across the globe.
At a global level, France’s Emmanuel Macron was targeted in the Pegasus spyware case. As the phone of French President Emmanuel Macron was hacked, the investigation was carried out and later on was published which was directed by the Paris-based non-profit journalism group Forbidden. After this case came in front of the whole world, the Pegasus spyware surveillance came into the picture.
If this continues for some more time, it will ruin India’s Democratic values at a global level. As well as this might become a huge technological threat between the different nations around the globe.
Modi Cabinet 2.0: Young and Dynamic Leadership or Otherwise
On the 7th of July, the union government announced the biggest cabinet expansion in the 7 years of NDA rule. The recent expansion increased the size of the Council of Ministers from 53 to 77. About 43 new ministers were sworn in, 15 of which were Cabinet Ministers and 28 Ministers of State (MoS). This is the first cabinet overhaul in the second term of NDA governance.
Experts however claim that the new cabinet expansion is a pre-emptive measure to balance electoral formulae in different states ahead of the 2022 State Assembly elections. It is also conjectured that the reshuffle comes as rectification of prolonged criticism about BJP’s governance in the past 2 years, including the Healthcare management during the Pandemic.
The Performance Paradox
This recent cabinet expansion is a report card of the BJP government’s performance in the last 2 years. Major ministerial changes, such as the resignation and replacement of Dr. Harshvardhan as the Health Minister indicate a confession of their mismanagement of the pandemic.
He has been replaced by Mansukh Mandaviya, a 2 time Rajya Sabha MP who has also been awarded by the UN for initiatives in Women’s healthcare in the past. His appointment as the Health Minister is one of hope for BJP, to change and streamline (a.) the COVID-19 Pandemic response and (b.) BJP’s image in the name of healthcare management.
On the contrary, Anurag Thakur’s promotion from MoS Finance to a Cabinet Minister defies all logical explanations for awarding performance. Not only has India’s economic condition worsened under his management, his controversial statements like “Desh ke Gadaaro ko…” do not present a strong case for him. His appointment is a political investment by BJP in Himachal Pradesh’s state elections next year which happens to be Thakur’s home state.
Similarly, Sitharaman’s finance ministry has remained untouched, after historical mismanagement of our Finance capabilities. All of this reflects a selective approach adopted by BJP, which is one of political hesitation and hyperopic ignorance.
BJP’s Political Calculator
Apart from the ‘punishment’ narrative, the new cabinet expansion has also given an insight into BJP’s political planning. This expansion has incorporated key leaders from several states that go to elections next year. Moreover, it has also been carefully planned to cover the losses BJP has incurred in the past two years.
As a reward for dismantling the elected Madhya Pradesh government and tipping scales in BJP’s favor, Jyotiraditya Scindia was appointed as the Cabinet Minister for Civil Aviation (a post held by his father as well in ’91) almost after 3 years.
On the contrary, Pashupati Kumar Paras got an early reward for breaking down Lok Janshakti Party’s (LJP) representation in Lok Sabha. He was appointed as the Union Minister for Food Processing, after the attempted coup on Chirag Paswan’s leadership.
Sarbananda Sonowal, who was replaced by Himanta Biswa Sharma as the Chief Minister of Assam after the fresh elections, was also awarded a berth in the Cabinet. It is conjectured that this development was in talks ever since Himanta Biswa Sharma was chosen as the CM.
As the Uttar Pradesh elections near, BJP also made sure to improve representation from the state. Major appointments such as Niranjan Jyoti (MoS Food Processing), Anupriya Patel (Mos Commerce and Industry), and Bhanu Pratap Singh Verma (MoS MSME) were made majorly because of their heavy support base in UP.
Following the same lead, Ajay Bhatt from Uttarakhand was appointed as MoS Defence and Tourism. As seen earlier, BJP has made major organizational changes in Uttarakhand which goes to elections next year.
In the mirage of calculated placements and image reconstruction, BJP has hit a few rights with this organizational change. The new cabinet includes a maximum number of women to have ever served in a Union Cabinet, a first in a nation with largely patriarchal tendencies.
The cabinet has also tried to focus on bringing people with commendable background experience and education on board. Ashwini Vaishnav, former IAS and an alumnus of Wharton School have been given major ministries such as Railways, Communications, and IT. Similarly, Anupriya Patel who has been given the Commerce and Industry as an MoS has also served as an educator at Amity University.
Moreover, the diffused reliance on regional strength has become the overarching theme in this cabinet reshuffle. Even though the ruling party intends to balance the voter dynamics, this regional unity has become something to watch out for.
Yet, the big story remains the ouster of major politicians who have served loyally and faithfully to this government. Ravi Shankar Prasad, Prakash Jaavedkar, and Dr. Harshvardhan are major losers in this dynamic reshuffle. While the current government has tried to modernize the leaders of this nation, it has set a new precedent that loyalty is not the most critical virtue anymore; Election Commission’s schedule is.
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