9 February 2023

• Monetary policy: RBI's Monetary Policy Committee raised the repo rate by 25 basis points to 6.5 per cent. GDP growth projection for FY2024 set at 6.4 per cent.
• Diplomacy: India marked 50 years of diplomatic ties with Qatar and South Korea. Both relationships carry economic and strategic weight.
• Culture: Salman Rushdie's novel "Victory City" put the Vijayanagara Empire in focus. The empire's history, trade and architecture are classic prelims material.
• Agriculture: millets promotion under the "Shree Anna" initiative. The UN declared 2023 the International Year of Millets.

GS area: Economy

The Monetary Policy Committee raised the repo rate by 25 basis points at its February 2023 meeting:

• New repo rate: 6.5 per cent, up from 6.25 per cent. This was the sixth consecutive rate increase since May 2022.
• What repo rate does: the rate at which the RBI lends overnight to commercial banks. A higher repo rate raises borrowing costs across the economy, reducing demand and thereby cooling inflation.
• Over 43 per cent of bank loans: are linked to external benchmarks (mostly the repo rate) by RBI mandate since October 2019. Rate changes transmit rapidly to EMIs.
• GDP projection: the RBI projected real GDP growth at 6.4 per cent for 2023-24. The Economic Survey had projected 6.0 to 6.8 per cent.
• Inflation context: the RBI targets CPI inflation at 4 per cent with a tolerance band of plus or minus 2 percentage points. Breaching 6 per cent for three consecutive quarters triggers a mandatory explanation to the government.
• MPC composition: six members, three from the RBI (Governor as chair, Deputy Governor, one officer) and three external members appointed by the Central Government. Decisions are by majority; the Governor has a casting vote in a tie.

Static linkage: Indian Economy (monetary policy, RBI, interest rates).

GS area: International Relations

India and Qatar established diplomatic relations in 1973. The 50th anniversary fell in 2023:

• Energy: Qatar is one of India's major suppliers of liquefied natural gas (LNG). The India-Qatar LNG relationship is long-term and contract-based.
• Diaspora: over 8 lakh Indians live and work in Qatar, making it one of the largest Indian communities in the Gulf. Remittances from Qatar flow into Kerala, Andhra Pradesh, Rajasthan and Tamil Nadu.
• Education: 14 Indian CBSE schools operate in Qatar.
• Military exercise: Za'ir-Al-Bahr is the naval exercise between India and Qatar.
• FIFA World Cup 2022: Qatar hosted the tournament, bringing Indian interests (workers' rights, construction oversight) into focus in international debates.

Static linkage: International Relations (India-Gulf relations, energy, diaspora).

GS area: International Relations

India and South Korea upgraded ties to ambassador-level in 1973. The 50th anniversary coincided with February 2023:

• Bilateral trade: over $27 billion in 2022. Target: $50 billion by 2030.
• Korean investment in India: Hyundai, Samsung, LG and POSCO are major South Korean investors in India's manufacturing and electronics sectors.
• CEPA: the India-Korea Comprehensive Economic Partnership Agreement came into force in 2010. It covers goods, services and investment.
• Cultural ties: 108 Buddhist monks participating in a pilgrimage commemorated ties, reflecting the Buddhist connection (Queen Heo, the legendary bride of King Suro of ancient Korea, is believed by some Korean traditions to have come from the Ayodhya region of India).
• Defence: South Korea supplies K9 Vajra self-propelled howitzers to the Indian Army. The K9 Vajra is produced under licence by L&T in India.

Static linkage: International Relations (India-South Korea relations, trade).

GS area: History (Medieval India)

Salman Rushdie's 2023 novel "Victory City" is set in the Vijayanagara Empire, bringing it back to attention:

• Founded: 1336 CE by Harihara I and Bukka I (the Sangama brothers) at Hampi on the Tungabhadra River in present-day Karnataka.
• Duration: 1336 to 1646 CE (the empire continued in weakened form after the Battle of Talikota in 1565).
• Peak: under Krishnadevaraya (1509 to 1529 CE). He was a patron of art and literature and composed in Telugu and Sanskrit.
• Capital: Hampi. It is now a UNESCO World Heritage Site.
• Trade exports: pepper, ginger, cinnamon, cardamom, myrobalan, tamarind, timber. The Vijayanagara rulers controlled India's southern spice trade and taxed it heavily.
• Architecture: blended Chalukya, Hoysala, Pandya and Chola styles. The Hazara Rama Temple and Vittala Temple at Hampi are representative structures. The Vittala Temple's stone chariot is one of the most photographed images of medieval Indian architecture.
• Fall: the Battle of Talikota (1565) saw a coalition of Deccan Sultanates defeat the Vijayanagara army. The capital Hampi was sacked and never recovered.

Static linkage: History (medieval India, Vijayanagara Empire, South Indian trade).

GS area: Economy (agriculture, nutrition)

Budget 2023-24 branded millets as "Shree Anna" to promote their cultivation and consumption:

• UN International Year of Millets: 2023. India proposed this at the UN. Millets grown primarily in India, Nigeria, Niger, China, Mali and Sudan.
• Nutritional benefits: low glycaemic index (good for diabetics), high dietary fibre, gluten-free, and rich in minerals. Finger millet (ragi) is especially high in calcium.
• Agronomic advantages: require significantly less water than rice and wheat. Can grow in poor soils without irrigation. Making them central to climate-resilient agriculture.
• FSSAI: the Food Safety and Standards Authority of India was formulating guidelines to include millets in school meals and hospital diets.
• Key millet crops: sorghum (jowar), pearl millet (bajra), finger millet (ragi), foxtail millet, barnyard millet, little millet, kodo millet.
• India's export opportunity: with global interest in millets rising, India aims to become the global hub for millet processing and export.

Static linkage: Agriculture (millet policy, food security, climate-resilient crops).

GS area: Economy

Budget 2023-24 set the disinvestment target at Rs 51,000 crore for 2023-24, a 21 per cent decrease from the previous year's target:

• Track record: the government had met its disinvestment targets in only 6 of the 30 years since disinvestment began in 1991-92.
• Why targets are missed: market conditions, legal challenges, employee unions, valuation disputes, and political resistance to loss of state ownership.
• Strategic disinvestment vs. financial disinvestment: strategic disinvestment involves transferring management control to private hands (as with Air India in 2022). Financial disinvestment involves selling a minority stake while the government retains control (CPSE ETFs, OFS).
• Air India: completed its strategic disinvestment to the Tata Group in January 2022 after decades of losses.

Static linkage: Indian Economy (disinvestment, public sector enterprises).

• Sangam Age redated: archaeological findings push the Sangam Age (Tamil literary and historical period) back to 800 BCE, earlier than the conventionally accepted 300 BCE. Three sub-periods are now proposed: 800 to 500 BCE, 500 BCE to 1 CE, and 1 to 300 CE.
• Dhamaal music: a Sufi-African fusion music and dance tradition of the Siddi community in Gujarat, who trace their ancestry to East African migrants. Performed at Sufi shrines.
• QR Code Coin Vending Machine: RBI piloted a UPI-based cashless coin dispensing machine with banks, reducing the need for manual coin distribution.