CAO Daily Editorial analysis for UPSC IAS

Current Affairs Only Daily Editorial Analysis for Competitive Exams

1.Economic Graffiti: Don’t be cautious, RBI

Indian Express

Why in news?

Recently RBI reduced the repo rate by 25 points.

What is Repo Rate?

When we need money, we take loans from banks. And banks charge certain interest rate on these loans. This is called as cost of credit (the rate at which we borrow the money).

Similarly, when banks need money they approach RBI. The rate at which banks borrow money from the RBI by selling their surplus government securities to the central bank (RBI) is known as “Repo Rate.” Repo rate is short form of Repurchase Rate. Generally, these loans are for short durations (up to 2 weeks).

It simply means the rate at which RBI lends money to commercial banks against the pledge of government securities whenever the banks are in need of funds to meet their day-to-day obligations.

Banks enter into an agreement with the RBI to repurchase the same pledged government securities at a future date at a pre-determined price. RBI manages this repo rate which is the cost of credit for the bank.

Example – If repo rate is 5% , and bank takes loan of Rs 1000 from RBI , they will pay interest of Rs 50 to RBI.

Consequences of reduction in repo rate

  • Higher the repo rate higher the cost of short-term money and vice verse. Higher repo rate may slowdown the growth of the economy. If the repo rate is low then banks can charge lower interest rates on the loans taken by us.
  • If RBI cuts Repo rates in its next monetary policy review then it means the cost of short-term credit can come down.
  • Whenever the repo rate is cut, can we expect that both the deposit rates and lending rates of banks to come down to some extent?
  • This may or may not happen every time. The lending rate of banks goes down to the existing bank borrowers only when the banks reduce theirbase rates, as all lending rates of banks are linked to the base rate of every bank. In the absence of a cut in the base rate, the repo rate cut does not get automatically transmitted to the individual bank customers. This is the reason why you might have observed that your loan EMIs remain same even after RBI lowers the repo rates.

RBI should be more aggressive in cutting the repo rate Why?

  • The fact that there is no indication of rapid, generalised inflation in India. There may be single-item price spikes, but these are caused by structural factors and bottlenecks, not overall liquidity in the economy. In an emerging economy like ours, it is good to have an inflation rate of around 3 to 4 per cent. This makes the labour market more flexible and facilitates job creation.
  • India’s growth needs a shot in the arm. As a result of the liquidity crunch associated with last November’s demonetisation, overall GDP growth in India is now down to 6.1 per cent per annum.

By holding on to high interest rates, it is attracting capital flows into the country, as evidenced by the large foreign exchange reserve held by the Reserve Bank.

 Reverse repo

It is the exact opposite of repo. In a reverse repo transaction, banks purchase government securities form RBI and lend money to the banking regulator, thus earning interest. Reverse repo rate is the rate at which RBI borrows money from banks. Banks are always happy to lend money to RBI since their money is in safe hands with a good interest.

2.The costly failure of the South Asian judiciary


In this article author explains about the judicial system in South Asian Countries

It is widely recognized that judicial independence is an important prerequisite in the making of a successful democracy. India is rather fortunate on this count. Beyond the brief period of Emergency (1975-77), the independence of the judiciary has largely not been under suspicion.

Example of judicial system in various countries.

  •  In Pakistan, the Supreme Court recently disqualified Nawaz Sharif from holding any public office, leading to his resignation from the post of prime minister. This has meant that no Pakistani prime minister has yet been able to complete a full tenure in office. The conduct of the judges, the composition of the investigation team and the most trivial of all charges that was found to implicate Sharif confirmed that his disqualification was not the judiciary’s decision alone. At some level, the Pakistani army was involved.
  • This instance is an addition to the unfortunate precedent in 2012 when then prime minister Yousaf Raza Gilani was disqualified by the Supreme Court on charges of contempt of court. In this way, the Pakistan army may have found a compliant judiciary as the new tool to cut democratically elected prime ministers down to size.
  • Just weeks before her retirement, the first woman chief justice of the Nepalese Supreme Court, Sushila Karki, found herself close to being impeached when the members of the ruling coalition moved a motion to that effect. 

The key factors in developing a robust judiciary 

  • separation from the executive and the legislature
  • appointment of judges on the basis of merit
  • provision of a term of service which cannot be arbitrarily curtailed
  • making the removal of judges difficult through procedures which involve a high majority in the elected legislature.

International Commission of Jurists (ICJ) 

  • It is an international human rights non-governmental organization.
  • The Commission itself is a standing group of 60 eminent jurists (including senior judges, attorneys and academics) dedicated to ensuring respect for international human rights standards through the law.
  • Commissioners are known for their experience, knowledge and fundamental commitment to human rights. The composition of the Commission aims to reflect the geographical diversity of the world and its many legal systems.

3.When human beings go past language


This article talks about the survey of living languages in four countries including India


India is one of four countries, along with Nigeria, Indonesia and Papua New Guinea, with the largest number of living languages. Since 2010, in a project initiated by Prof. G.N. Devy, founder of the Bhasha Research and Publication Centre in Vadodara, a large team of scholars has been conducting a comprehensive survey of Indian languages, publishing their findings in state-wise volumes from 2013 onwards.

Why in news?

This month, the People’s Linguistic Survey Of India (PLSI) brought out another 11 volumes, taking the total to 37, and proposes to complete its task of publishing 92 books by 2020.

Some facts about the survey

  • The ‘PLSI’ has recorded 780 languages
  • The 1961 census recorded 1,652 mother tongues. The ‘PLSI’ has recorded 780 languages.

The People’s Linguistic Survey of India (PLSI)


The people who speak the languages that is at risk of falling out of use  must survive.

It is a linguistic survey launched in 2010 in order to update existing knowledge about the languages spoken in India. Conducted by 3500 volunteers, including 2000 language experts, social historians and the staff of the NGO Bhasha Research and Publication Centre, Baroda, the survey has identified 780 languages in India. The 35,000 page survey is being published in 50 volumes.The first six volumes were released at the BhashaVasudha Global Languages Conference in Vadodara on January 7, 2012.

The publications of the survey include the following information

  • Name of the language.
  • Brief history.
  • Geographical region where the language is spoken.
  • Short bibliography.
  • Sample oral songs with translation.
  • Sample oral stories with translation.
  • Colour terms.
  • Relational terms.
  • Terms for time and space.

Why it is important to conserve languages?

  • If a language is not recognized and the community feels the language has no market value, they collectively and unconsciously decide to give up on that language.
  •  Nobody keeps a language going just for the pride of it. People feel speaking Hindi is a good idea, but they all feel that learning English is a better idea. If livelihood opportunities are not there, people start giving up on languages.
  •  If there’s no education in the mother tongue, children tend to drop out when they go to the high-school stage.


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