Current News Economy Development
RBI Amends India’s Inflation-forecasting Model
- The Reserve Bank of India (RBI) has revised its inflation-forecasting model to better capture how fiscal and monetary policy, interact with real-economy elements.
- The adjustments incorporate fiscal-monetary dynamics, India’s unique and often chaotic fuel pricing regime, and exchange-rate fluctuations and their impact on balance of payments.
- Dubbed as the Quarterly Projection Model 2.0, the RBI’s economists describe the framework as a forward-looking, open economy, calibrated, new-Keynesian gap model. The previous version had often been criticized for over-estimating upside risks to inflation.
The new model is broken into three blocks:
- Fiscal Block: The first, or fiscal block, decomposes the government’s primary deficit into structural and cyclical components. A shock to the former impacts inflation through aggregate demand and country risk premia; for instance, a structural increase in the deficit would create a positive output gap and the higher debt makes borrowings costlier and depreciates the currency, leading to higher inflation. A cyclical shock is negligible.
- Fuel Block: The second, or fuel block, takes into account India’s complex system of pricing. Items like petrol and diesel are priced on the basis of international oil prices, exchange rates, and local taxes, while liquefied petroleum gas and kerosene prices are market-determined but with lagged pass-through. Electricity costs are administered by state governments. Headline inflation goes up by 25 basis points in response to a fuel tax increase of 10 rupees per liter and inflation expectations edge higher and remains entrenched if tax reversals do not happen.
- Balance of Payments Block: The balance of payments block recognizes the costs associated with spurts in volatility in the exchange rate. In case of a capital outflow shock of 1% of GDP, and assuming the RBI intervenes and sterilizes 70% of this outflow, reserves will deplete by 0.7% of GDP and the exchange rate will depreciate, inducing inflationary pressure.
News Crux Social Justice
Divorced Daughter Entitled To Samman Pension: HC
The Calcutta High Court, in a recent judgment, said a freedom fighter’s widowed or divorced daughter is entitled to his pension and exclusion is violative of Article 14 of the Constitution.
Article 14 in the Constitution of India
- Justice Sabyasachi Bhattacharyya said that with no independent source of income, widowed or divorced daughters stand on an equal footing with an unmarried daughter as heirs to the deceased freedom fighter. “The marital status of all of them is ‘unmarried’. Thus, the criterion of exclusion of widowed/divorced daughters, as sought to be projected by respondent no.1, is untenable in the eye of law”.
- Under Clause 5.2.5 of the guidelines of disbursement of Central Samman Pension a “widowed/divorced daughter is not eligible for samman pensions”. The clause points out that in order to transfer the pension to the spouse or daughter, a twin condition has to be fulfilled i.e. being unmarried and having no independent source of income.
- The court, in its order, said the guidelines issued by the Union Ministry of Home Affairs were violative of Article 14 after observing that the “blanket exclusion of widowed/ divorced daughters, including even those who do not have any personal income in lieu of maintenance or otherwise, is patently de hors Article 14, which enshrines the guarantee to all citizens of India.”
- Thus, as in the event an unmarried daughter who has no income is ineligible for the pension, widowed/divorced daughters stand on a similar footing as daughters of the deceased and shall not be eligible anyway if they have any independent source of income, which can very well be alimony or maintenance as well.
News Crux International
Singapore: First Country To Ratify ‘RCEP’
- On April 9, 2021, Singapore became the first country among 15 participating countries to ratify the Regional Comprehensive Economic Partnership (RCEP) agreement.
- RCEP is the world’s largest free trade agreement, led by China and comprising 10 ASEAN economies as well as Australia, China, Japan, New Zealand and South Korea.
- To come into effect, the RCEP must first be ratified by at least six ASEAN and three non-ASEAN member states.
- Once implemented, RCEP would be the world’s largest free trade agreement, covering around one third of the world’s population and about 30% of the world’s economy.
News Crux Sports
PCB Launches Own Hall Of Fame
- The Pakistan Cricket Board has decided to have its own ‘Hall of Fame’ to acknowledge and celebrate the achievements of its stalwarts.
- As part of the launch, six members of the ICC Cricket Hall of Fame — Hanif Mohammad, Imran Khan, Javed Miandad, Wasim Akram, Waqar Younis and Zaheer Abbas — will be inducted into the PCB Hall of Fame.
- There will be three more inductions each year from 2021 with the inductees to be chosen by an independent panel and announced on October 16, the day when the country made its Test debut in 1952.
PIB News Awards
AICTE Lilavati Awards 2020
- Union Minister of Education Shri Ramesh Pokhriyal 'Nishank' presented the AICTE Lilavati Awards 2020 on women empowerment to the winners in New Delhi on 11 April 2021.
- The awards were based on the theme 'Women Empowerment’ across 6 sub themes - Women's Health, Self-Defense, Sanitation and Hygiene, Literacy, Women Entrepreneurship, and Legal Awareness.
Winners in Different Sub-themes
- Women Entrepreneurship: SWEAT (Sona Women Entrepreneurship and Training) from Sona College of Technology, Tamil Nadu.
- Digital Literacy:Bharatiya Vidyapeeth.
- Literacy: Institute of Management and Entrepreneurship Development Pune.
- Women's Health: WIT Women Health Coalition from Walchand Institute of Technology, Maharashtra.
- Legal Awareness: Radiant Seetha from Thiagarajar Polytechnic College.
- Self Defense: Paritrana from St. Joseph's College of Engineering, Tamil Nadu.