10 June 2024

• Economy: RBI kept the repo rate unchanged at 6.5 per cent. GDP growth for FY 2024-25 projected at 7.2 per cent. Sticky inflation cited as the main reason for the hold.
• Economy: Household Consumption Expenditure Survey 2022-23 released; urban MPCE at 6,459 rupees, rural at 3,773 rupees. Non-food expenditure crosses 50 per cent of total spending.
• Polity: 2024 election result analysis focused on the strengthening of regional parties and implications for cooperative federalism.
• Environment: UNESCO's Greening Education Initiative targets greening 50 per cent of schools globally by 2030.

GS area: Economy (Monetary Policy)

The Reserve Bank of India's Monetary Policy Committee voted 4-2 to keep the policy repo rate unchanged at 6.5 per cent. The rate has been unchanged since February 2023.

• Sticky inflation: the MPC cited "sticky inflation" hovering around 5 per cent as the reason for not cutting rates. The statutory target is 4 per cent with a tolerance band of plus or minus 2 percentage points.
• GDP forecast: the MPC projected real GDP growth at 7.2 per cent for FY 2024-25, supported by domestic demand and investment.
• MPC composition: the Monetary Policy Committee has six members. Three are RBI officials (including the Governor, who chairs it). Three are external members appointed by the central government on the recommendation of a search committee. Each member has one vote; the Governor has a casting vote in case of a tie.
• MPC mandate: established under the RBI Act 1934, as amended in 2016. The primary objective is to maintain price stability while keeping in view the objective of growth. The inflation target (currently 4 per cent) is fixed by the central government in consultation with the RBI every five years.
• Standing Deposit Facility rate: the floor of the Liquidity Adjustment Facility corridor, currently 6.25 per cent. Banks park excess funds with the RBI at this rate.
• Marginal Standing Facility rate: the ceiling of the corridor, at 6.75 per cent. Banks borrow overnight from the RBI at this rate in emergencies.

Static linkage: economy (monetary policy).

GS area: Economy, Society

MoSPI released the Household Consumption Expenditure Survey (HCES) 2022-23, the first such comprehensive survey since 2011-12.

• MPCE: Monthly Per Capita Expenditure. The benchmark for measuring household living standards.
• Rural MPCE: 3,773 rupees per person per month.
• Urban MPCE: 6,459 rupees per person per month. The urban-rural ratio is approximately 1.7:1.
• Non-food share: for the first time, non-food expenditure accounts for more than 50 per cent of total household spending in rural areas. This indicates structural transformation in consumption patterns.
• Gini coefficient: measures income or consumption inequality on a scale of 0 (perfect equality) to 1 (perfect inequality). The survey showed the Gini coefficient declining, suggesting reduced inequality compared to the 2011-12 data.
• Why this survey matters: MPCE data is used to estimate poverty rates, set welfare programme eligibility thresholds, and calibrate the CPI basket. The 13-year gap between surveys created a data void in Indian social policy.
• MoSPI: the Ministry of Statistics and Programme Implementation. It conducts the National Sample Survey, the Census (via the Office of the Registrar General), and releases GDP estimates, CPI, IIP and WPI data.

Static linkage: economy, social indicators.

GS area: Polity, Governance

The 2024 election results, with regional parties capturing a larger share of Parliament, were analysed as potentially strengthening cooperative federalism.

• Regional party gains: parties like TDP, JD-U, Trinamool Congress, DMK, SP and others collectively hold a larger share of the 543 seats than in 2019. The INDIA bloc's 234 seats include major regional parties.
• Cooperative federalism: a model where Centre and states work in partnership on shared goals, pooling resources and administrative capacity. India's Constitution is quasi-federal with a centralising tilt.
• GST Council as example: the GST Council makes decisions by consensus, giving states a formal voice in tax rate-setting. All states have representation. This is considered a cooperative federalism achievement.
• Concurrent List: the Seventh Schedule's List III contains 52 subjects on which both Parliament and state legislatures can legislate. Central law prevails in case of conflict.
• Inter-State Council: a constitutional body under Article 263, set up to discuss subjects of common interest between states or between the Centre and states. It has been used intermittently.
• Finance Commission's role: recommends distribution of the divisible pool. The 15th Finance Commission recommended 41 per cent devolution to states for 2021-26.

Static linkage: polity, federalism, governance.

GS area: Economy, Society

Capgemini's World Wealth Report 2024 showed India's High Net Worth Individual (HNWI) population grew 12.2 per cent, exceeding 3 million for the first time.

• HNWI definition: individuals with investable assets (excluding primary residence) of 1 million US dollars or more.
• India's growth rate: 12.2 per cent, among the faster-growing HNWI populations globally. Financial wealth grew by over 12 per cent to reach 1.445 trillion US dollars.
• Context: India's economic growth has concentrated wealth gains at the top. The Oxfam 2024 report separately showed that India's top 1 per cent hold approximately 40 per cent of national wealth.
• Gini and HNWI: the HCES 2022-23 shows declining Gini in consumption expenditure. The HNWI data shows rising wealth concentration. These can coexist because consumption and wealth are different measures.
• SEBI and HNI regulation: the Securities and Exchange Board of India categorises investors. High Net Worth Individuals who qualify as "Qualified Institutional Buyers" get access to certain IPO allotments and alternative investment funds.

Static linkage: economy, society.

GS area: Environment, Education, International Organisations

UNESCO's Greening Education Partnership aimed to green 50 per cent of schools globally by 2030 and integrate climate education across curricula.

• Partnership goals: make schools environmentally sustainable in infrastructure; embed climate change in all school subjects; develop green schools standards.
• India's actions: NCERT textbooks have integrated climate change content. The National Curriculum Framework 2023 identifies environmental sustainability as a key theme. The NEP 2020 designates climate as a cross-cutting theme.
• NEP 2020: National Education Policy 2020 is a comprehensive overhaul of the Indian education framework. It replaced the 1986 National Policy on Education. Key features include 5+3+3+4 curricular structure, mother-tongue medium instruction in early years, and multidisciplinary higher education.
• NCERT: the National Council of Educational Research and Training develops textbooks for central board schools. States may adapt or adopt them.
• UNESCO's role in education: UNESCO's mandate includes Education for Sustainable Development (ESD). India is a member of UNESCO.

Static linkage: environment, education, international organisations.

GS area: Economy, International Relations

The OECD-G20 BEPS framework, covering 147 countries, continued in implementation.

• BEPS: Base Erosion and Profit Shifting refers to tax avoidance strategies that exploit gaps between different countries' tax systems. Multinational enterprises shift profits to low-tax jurisdictions.
• Pillar One: reallocates taxing rights. Countries where companies earn revenue (market jurisdictions) get a share of the profits of the largest multinationals, even if the company has no physical presence there.
• Pillar Two: establishes a global minimum corporate tax rate of 15 per cent. If a country taxes a multinational at less than 15 per cent, other countries can impose a top-up tax on the difference.
• India's position: India supported the BEPS framework. It collects an Equalisation Levy (commonly called digital services tax) on foreign digital companies earning revenue from Indian users.
• Developing countries: disproportionately harmed by BEPS because they rely more heavily on corporate taxes relative to personal income taxes and have less capacity to audit complex multinational structures.

Static linkage: economy (international taxation), international relations.

• TRISHNA Mission: ISRO-CNES (French space agency) collaborative satellite in a sun-synchronous orbit. Measures thermal infrared emissions to monitor surface temperature, water use in agriculture, and urban heat. Relevant to India's heatwave and climate adaptation work.
• Placental mammals and brown fat: a study found brown adipose tissue (which generates heat) evolved exclusively in placental mammals, distinguishing them from marsupials. This is a science fact for prelims.