 Good evening aspirants. Welcome to the Hindi news analysis by Shankar Ayes academy. The list of articles which has been chosen for today's analysis are provided here. The ring for the handwritten notes and the time stamping for the displayed articles is provided in the description box below. And for the benefit of smartphone users, the time stamping is also provided in the comments section. Let's move on to our first article discussion. This news article is about the recent developments in India-Central Asia relations. So in this context, we'll be discussing in brief about the Central Asian region, then the importance of the Central Asia, and also the significant developments in India-Central Asia relationship. The syllabus that can be linked to this discussion is given here for your reference. First, let us understand in brief about Central Asia. Central Asia is the central region of Asia. It extends from the Caspian Sea in the west to the border of western China in the east. It is bound on the north by Russia and on the south it is bound by Iran, Afghanistan and China. And the Central Asian region consists of the former Soviet republics, namely Kazakhstan, Turkmenistan, Uzbekistan, Tajikistan and Kyrgyzstan. So why these Central Asian countries are important for India? The first and foremost reason is the strategic location of India and the Central Asia. The Central Asia connects Europe and Asia. So if India can establish friendly relations with Central Asia, then India can access European countries. And as you can see in this map, the Central Asian region is landlocked, so its trade potential is underutilized. Hence, this region offers huge potential for trade investment and growth. In addition to this, Central Asia is a huge depository of resources such as crude oil, natural gas, gold, copper, iron, etc. And they also have huge deposits of uranium. So these resources can meet our industrial needs and they can also ensure energy security. In addition to this, having a friendly relation with Central Asian countries will earn their support for India in the international arena. For example, when India will seek for a permanent membership in the UNSC, that is United Nations Security Council, then their support will be valuable for India. So in this regard, let us discuss some of the important developments in India-Central Asia relations. By understanding the importance of the region, India has launched Connect Central Asia Policy in 2012. This policy is an all comprehensive approach that covers political cooperation, economic cooperation, security cooperation, cultural connections and regional connectivity. In addition to this, India is a part of TAPI pipeline and TAPI stands for Turkmenistan, Afghanistan, Pakistan and India. And this TAPI is a 1814 kilometer trans-country natural gas pipeline. So it will bring natural gas from Galkanish gas field in Turkmenistan to India via Afghanistan and Pakistan. And this TAPI pipeline project is under development and it is expected to commence operation by this year. Then another significant development in India-Central Asia relations is the International North-South Transport Corridor. This corridor is a multi-mode transport network. It consists of ship routes, rail routes and road routes. This project is also under development. So once it is completed, then it will ensure connectivity from India to Russia and Europe through Afghanistan, Iran and Central Asia. Then the next important development is the Ashkabad Agreement. It is an international transport and transit corridor that facilitates the transportation of goods between Central Asia and the Persian Gulf. And the founding members of this agreement are Oman, Iran, Turkmenistan and Uzbekistan. And later, Kazakhstan and Pakistan have also joined this agreement and India joined this agreement in 2018 only. Now this agreement is important for India and the first and foremost importance of this agreement is that it will enhance connectivity within the Eurasian region. It will also synchronize the region with other regional transport corridors including the International North-South Transport Corridor. And also joining the Ashkabad Agreement has enlarged the operational and practical scope of Chabahar Port. So with additional investment, India can make Chabahar Port a gateway to the landlocked Central Asia. So it will further enhance the connectivity in the region. So in general, joining the Ashkabad Agreement will increase our accessibility to the mineral-rich Central Asia. It will also help our ally, Afghanistan, to reduce its dependence on Pakistan's Karachi Port for trade. So these are the reasons why this Ashkabad Agreement is important for India. So in this context, we need to know about the Chabahar Port also. And you know that India is developing Chabahar Port in Iran. And this Chabahar Port is a part of trilateral transit agreement that was signed by India, Iran and Afghanistan. And this agreement is aimed to link ports in the western coast of India to the Chabahar Port in Iran. And from there, a network of road routes and rail routes will ensure connectivity to Afghanistan. That is why we are saying that development of Chabahar Port will reduce the dependence of Afghanistan on Pakistan's Karachi Port for trade. And in addition to this, Chabahar Port also enables more access to Central Asia, among other importance. So this is the background about Central Asia and the India-Central Asia relations. Now today's news is that India's foreign minister has said that India is likely to establish air corridors with the Central Asian countries. So far we discussed about the trade routes that was ensuring India's Central Asia connectivity. And mostly these routes were ship routes, rail routes and road routes. And now the foreign minister of India has announced that India is likely to establish air corridors with Central Asian countries. Here air corridors are nothing but air routes with specific purposes such as boosting trade, etc. And these air corridors will have special clearing and customs facilities to ensure easy movement of goods. And you should also know that we have already established an air corridor with Afghanistan in 2018. So establishing air corridors with Central Asia will boost trade, especially it will boost the trade in perishable goods such as fresh fruits, food items and other agricultural produce. In addition to this news article also mentions that in the Union budget of 2020-21 the government has proposed an investment of 100 crore rupees for the further development of Chabahar Port. So this shows that India has committed to ensure connectivity from India to Iran, Afghanistan and the Central Asia. So we can conclude by saying that over a period India has reached out to its extended neighbour which is the Central Asia. So a focus development in the connectivity projects will boost the trade between India and the region. And this will take the total trade between India and Central Asia to another level. And currently the trade is just some 2 billion dollars and it is expected that developments like these will boost the trade between India and Central Asia to another level. So that is all about this news article. In this discussion we saw about Central Asia, the importance of Central Asia and what are the important developments in India and Central Asia relations. And we also discussed about some important agreements like Ashkibath Agreement etc. With this we come to the end of this discussion. That is the practice question will be discussed in the last session. Moving on to the next discussion. This discussion is based on this editorial. In this editorial the author shares his viewpoints on the government's apathy or unconcern towards the informal sector while framing the policies. The author of this editorial is a former member of Planning Commission. So his views are important. And the author notes that the thrust of the government's policies should not be to reduce the size of informal sector. Rather the policies must focus to improve the working conditions for the citizens who earn incomes in the informal sector. So in this regard today we will be seeing in brief about the informal sector. What are the positives of informal sector for Indian economy. And also we will see about the author's suggestion on how the government must reorient its policies so that informal sector could realize its growth potential. The syllabus that is relevant to this discussion is given here for your reference. See India is predominantly an informal economy. The informal economy employs the vast majority of workforce. Even the formal sector depends on goods and services from the informal sector. The informal economy contributes 90% of the overall economy. And this proportion remains the same since the last 50 years. So what constitutes the informal sector. Informal sector is also known as unorganized sector. It consists of all unincorporated private enterprises. It can be owned by individuals or households. The informal sector usually engages in the sale and production of goods and services. It operates on a proprietary or partnership basis. And normally it operates with less than 10 total workers. And more importantly these informal workers and firms in practice they are not subject to national labor legislations or laws. They are not subject to income taxation, social protection such as pension, health insurance. And also they are not subject to entitlements such as paid leave, sick leave and so on. So in short we can say that the workers in the informal sector do not have any job security, income security or social security. And therefore they are extremely vulnerable. For example a landless laborer, small farmers, traditional artisans are informal workers in the agricultural sector. Then construction workers, BD makers, workers in the bricklands are informal workers in the industrial sectors. Then straight vendors, domestic servants and garbage collectors are informal workers in the services sector. So these are some examples only. And apart from that the informal workers constitute garment makers, shoe makers, artisans, craftsmen, fishermen and so on. And it also includes self-employed entrepreneurs. Now since the informal sector consists of so many types and kinds of workers that is why it is said that the informal economy contributes 90% of the overall economy. And the informal sector and its workers plus the informal workers in the formal sector constitute the informal economy. The informal economy is where the government needs to focus and the government needs to boost the growth as vast majority of workforces engage there as we just saw. Over few last years in India the government has put massive efforts to boost the formal economy and it is said that they have a view that informal sector is corrupt and inefficient. And whenever it is pointed out that the government has not put any efforts to improve the informal sector immediately one argument arises that the informal sector should be formalized or the formalization of informal firms should happen. What does this formalization means? It means bringing the unorganized sector into the formal fold. For example you can take the example of GST. It makes the unorganized sector to come into formal fold by means of complying to the manufacturing laws and income tax laws. Here the formalization of informal firms is not the problem but the problem is who benefits from this formalization of informal firms. According to the author of this editorial formalization benefits the state first because if an informal firm is formalized then the state finds it easier to monitor the firms and the state can collect taxes on the firms once the informal firms adopt the formality. And secondly it benefits the formal sector because it makes easier for the formal sector to do business with the informal sector. As you saw earlier the formal firms depend on the goods and services from the informal sector or the informal firms. So not only the formal firms within the country but also the multinational companies depend on the goods and services from the informal firms and these informal firms are at the bottom of the pyramid. And why do they depend on the informal firms? It is because the supply of goods and services from these small firms are lower in costs. The lower cost firms at the end of the supply chain of any business are generally informal. Thus the push by the government to formalize the firms hinders the supply chain of the businesses which ultimately affects these small informal firms which are at the end of the supply chain. In addition to this informal sector plays an important role in employment. See as we know the unemployment in our country is at a 4 decade high. The periodic labor force survey noted that the unemployment rate is at 6.1 percentage. And it was noted that unemployment was higher in the urban areas as compared to the rural areas. So in this situation the informal sector provides the vast majority of opportunities for the country's youth population and also for the people who are coming out of the farm to earn income. So informal sector helps to tackle the situation of unemployment and additionally some economists say that informal sector contributes 50% of GDP and the informal sector is responsible for 80% of the total job creation in the country. Apart from these the informal firms also provide some benefits. First the small entrepreneurs gain soft skills such as how to form associations, how to manage enterprises, how to do mentoring and so on. So usually the small entrepreneurs cannot afford the loss of income by taking the time off for the training of these soft skills. So in an informal sector their skills are usually developed on the job itself by means of practice rather than by the means of paid training. So if the informal sector is formalized then it will take away these kinds of opportunities that is available for the people which the informal sector provides. So this is one of the reasons why formalization is not recommended by many economists. In addition to this a research paper by National Bureau of Economic Research shows that there is no strong evidence from the studies conducted in many developed countries that formalization improves business outcomes. So it is never proved that formalization improves the business outcomes. In addition to this there is another research by International Labour Organization and according to this research paper by ILO it mentions that formalization is an evolutionary process. The small firms and informal enterprises learn the capabilities in informal environment which is required to operate more formal global economy. So the formalization must be evolved. The small informal firms cannot be forced to formalize. This is what was noted by the ILO research paper. So we can say that globally also formalization of informal sector is not advised by the experts. So what should be done in this case? According to the author of this editorial instead of focusing on formalizing the informal sector the government policies must improve the working conditions of the citizens who earn incomes in the informal sector. The reform must focus on the workers safety dignity fair treatment by the employers and so on. In this regard the author notes that the government should get inspiration from the developed industrial countries where the informal sector is encouraged because in those countries the informal sector is growing with advanced technologies by using new business models etc. And these countries are not focusing on formalizing the informal sector rather they are developing the informal sector itself. So keeping this in mind the government needs to reorient its policies towards the informal sector. And the author has suggested some proposals for the policy makers to consider while framing the policies for the informal sector. And the first suggestion is that the government must stop denigrating the informal sector. That is the government must stop diminishing the informal sector by formalizing it. See if the informal sector is formalized then it will become a formal sector. So that means informal sector will decrease and the author is saying that government must stop doing this. And second suggestion by the author is that the policy makers must learn the language of informal enterprises. And they should make policies that are suitable for them instead of imposing their own versions of formality on them. It is because the informal enterprises provide the transition space as well as they provide learning space for people who have insufficient skills and assets to join the formal sector. So if the government will impose the already existing formality versions on the informal sector then the opportunities provided by the informal sectors for improving the skills and assets will be eliminated totally. Then the third suggestion by the author is that the voices of tiny entrepreneurs or small entrepreneurs in the rural areas and urban fringes of Indian societies must be listened by the government. Normally government listens about the big MNCs and large companies and the government frames policies to benefit these large companies. For example you can take the recent relaxation of policies such as corporate tax rate cut which was done for increasing the MNCs and large companies. Here the author notes that these kinds of relaxation of policies is necessary but that alone is not sufficient. The small enterprises at the bottom of the pyramid needs to grow and their incomes also need to grow. Then only the policies for large formal enterprises could reap the benefit because the formal enterprises depend on the informal small enterprises at the end of the day. So that is why author is suggesting that the voices of small entrepreneurs should be listened by the government and their voices must get reflected in the policies that are developed by the government. And this will in turn enable the actual ease of doing businesses and eventually it will result in overall growth of the economy. Then the fourth suggestion by the author is to strengthen the efficiency of small firms and it has to be strengthened by forming networks and clusters of these enterprises. The networks of firms enable the sharing of resources, sharing of technologies and thus it will make them to improve the overall trade and it will enable them to reduce the costs for the enterprises. Then the fifth suggestion is the improvement of condition of the workers in the informal sector. It should be improved by means of simplified and efficient administration of labour laws. And the final suggestion is that the social security framework for all the citizens both in the formal sector and the informal sector must be strengthened. Like health insurances, availability of health services, disability benefits, old age pensions must be ensued to all including the informal sector. So these are some of the suggestions of the author to improve the informal sector rather than formalizing the sector. So the author concludes by saying that the small informal enterprises need other forms of support from the government rather than formalization to realize its growth potential. If it is done then they can contribute to the increase in employment and they can also contribute to the increase in incomes of the workers who are at the bottom level of the pyramid in the informal sector. So these are the information that you should know with respect to this editorial. In this editorial we saw about the informal sector and what should be done to attain the growth potential of this informal sector. With this we come to the end of this discussion. The displayed practice question will be discussed in the last session. Moving on to the next discussion. This discussion is based on the Jammu and Kashmir Public Safety Act of 1978. So in this discussion we will be discussing about this act and also about the important provisions in this act. This discussion can be linked to the syllabus that is given here for your reference. This news article mentions that the Jammu and Kashmir administration has extended the detention of former chief ministers of Jammu and Kashmir, namely Mehbooba Mufti and Omar Abdullah. And this extension has been done under the Jammu and Kashmir Public Safety Act of 1978. Here detention or detaining someone means keeping a person in official custody for questioning about a crime or keeping them in an official custody in a politically sensitive situation. And in our scenario with respect to the former chief ministers of Jammu and Kashmir, the reason for detention is the politically sensitive situation in the state. As recently the Jammu and Kashmir Reorganization Act was enacted and this act bifurcated the state into two union territories. So it created a politically sensitive situation in Jammu and Kashmir. And because of this situation the former chief ministers have been kept in detention. Now their detention is extended by three months and according to the news article it could also be extended further first up to six months and then to one year without trial. So how this can happen? This is happening based on the provisions of Jammu and Kashmir Public Safety Act of 1978. This act is a state act which was applicable to then state of Jammu and Kashmir. So now you may be thinking that if the state has been reorganized as two union territories then how does the law still applies? It applies based on the provisions of Jammu and Kashmir Reorganization Act of 2019. According to the section 92 clause 2 of this 2019 act all the laws in 5th schedule which is applicable to the existing state of Jammu and Kashmir immediately before the appointed day shall apply to the union territory of Jammu and Kashmir and union territory of Ladakh. And this Public Safety Act of 1978 is listed as one of the acts in this 5th schedule. And that is why it applies to the union territory of Jammu and Kashmir and union territory of Ladakh. This 1978 act was enacted in the interest of the security of the state and for the maintenance of public order. If you see under the 7th schedule of Indian constitution laws with respect to the preventive detention for reasons connected with the security of a state and the maintenance of public order comes under the concurrent list. And the preventive detention is nothing but the imprisonment of a person with the aim of preventing them from committing further offenses or imprisoning them with the aim of maintaining public order. Now since this subject comes under concurrent list the state legislature can also enact a law in this subject. And this is as per article 246 clause 2 of Indian constitution which provides power to the state legislatures to make laws with respect to any of the matters enumerated in the list 3 in the 7th schedule and this list 3 is nothing but the concurrent list. But you should be careful that the laws pertaining to preventive detention for reasons connected with defence, foreign affairs or security of India and persons subjected to such detention because of it these areas come under the union list. This means only the parliament has the power to make legislation for the subjects mentioned in this list. And this is as per article 246 clause 1 of Indian constitution. Now let us see the important features of this 1978 act. This act contains provisions for designating areas as protected areas and prohibited areas in this state. It has provisions for prevention of circulation of documents in the interest of communal harmony and other provisions. And in this act the section 8 of the act deals with the power of authorities to detain persons under this act. This section states that the government may make an order directing that a person be detained. If the government is satisfied that it can detain a person with a view to prevent him from acting in any manner which is prejudicial to the security of the state or which is prejudicial to the maintenance of public order. Then in such cases the government can detain a person and their prejudicial means harmful. And in this particularly acting in any manner prejudicial to the maintenance of public order means the action which is promoting, propagating or attempting to create the feelings of enmity or hatred or disharmony on the grounds of religion, race, caste, community or region is an act of prejudicial manner which hinders the maintenance of public order. Then making preparations for using a force or attempting to use a force or instigating, inciting or abetting the use of force which either directly disturbs the public order or is likely to disturb a public order is also an act that is prejudicial in manner. Then along with this attempting to commit or even committing or instigating, inciting, provoking or otherwise abetting the commission of mischief to either disturb or is likely to disturb the public order is also an act in the manner of prejudice. And finally attempting to commit or committing or instigating, inciting, provoking or otherwise abetting the commission of an offence that is punishable with death or imprisonment for life or if it is punishable with imprisonment for a term extending to 7 years or more and that act or the commission of such offence if it disturbs or if it is likely to disturb the public order then it is an act of prejudice. So all these acts constitute the action which are prejudicial to the maintenance of public order and according to the 1978 act the detention is ordered by the divisional commissioners or district magistrates and sometimes the authority to make detention orders was also given to the Home Department of Germany and Kashmir. Now when such order is made the official shall report the fact to the government the facts should be given along with the grounds on which the order has been made and according to the section 8 clause 4 of this act no such order shall remain in force for more than 12 days and if this 12 days has to be extended then it has to be approved by the government. And further in every case where a detention order has to be made under this act then the government shall place the details about the order before the advisory board and this has to be placed within 4 weeks from the date of detention order and the details that should be included are the grounds on which the order has been made then the representation made by the person who is affected by the order then also the report by the officer who made the order under subsection 4 of section 8 all these details should be placed before the advisory board. Now this advisory board is constituted under section 14 of this act and such board shall consist of a chairman who is or has been a judge of the High Court and it also consists of two other members who are or have been or who are qualified to be appointed as judges of High Court and the chairman and the other members of the board shall be appointed by the government in consultation with the Chief Justice of the High Court. Now when these details are placed before the advisory board then after this the advisory board has to submit its report to the government within 6 weeks from the date of detention. The report of the advisory board has to specify whether there is sufficient cause for the detention of the person concerned or not and in any case where the advisory board has reported that there is sufficient cause for the detention of a person then the government may confirm the detention order and the government can continue the detention of the person concerned for a period which the government may think as fit but this does not mean that the government can order for detention for unlimited time period it is because the section 18 of this act provides for the maximum period of detention the maximum period for which any person may be detained if the person is acting in any manner prejudicial to the maintenance of public order is 3 months and this is in the first instance and this 3 months of detention period can be extended up to 12 months that is up to 1 year. Now this detention period is for the actions which are prejudicial to the maintenance of public order. Now when the person is acting in any manner that is prejudicial to the security of the state then the person shall be detailed for 6 months in the first instance and this detention shall be extended up to 2 years to the maximum. Now since in our today's news the detention was carried out based on the actions prejudicial to the maintenance of public order the detention period of former chief ministers of J&K has been extended by 3 months and later it could be extended up to 6 months or even to 1 year based on this section 18 of the act. So this act provides for the legal grounds on which any person can be detained by the government authorities. So these are the information that you should know with respect to this news article. In this news article we saw about the J&K Public Safety Act of 1978 and we saw some of the important provisions that is related to the detention of a person then the reasons for detention then about the advisory board that is to be constituted under this act and we also saw the maximum period for which any person can be detained under this act. With this we come to the end of this discussion. Moving on to the next discussion. In this discussion let us see few news articles and an editorial which cover the recent decisions taken by the Monetary Policy Committee of Reserve Bank of India. So in this analysis we will see about the instruments of monetary policy and we will try to analyze the concepts that link them with the decisions taken at the Monetary Policy Committee meeting. The syllabus that is relevant to this analysis is given here for your reference. So first what do we mean by monetary policy? Monetary policy refers to the use of monetary instruments to regulate matters such as interest rates, money supply and availability of credit and these are regulated with a view to achieve the ultimate objective of economic policy and the responsibility of conducting monetary policy rests with the Reserve Bank of India. The primary objective of monetary policy is to maintain price stability while keeping in mind the objective of growth and as we know price stability is a necessary precondition to sustainable growth and this monetary policy is adjusted by the Monetary Policy Committee which is set up as per the provisions of RBI Act of 1934. As per the provisions of this act RBI shall organize at least four meetings of the Monetary Policy Committee in a year but if you see every two months RBI issues the Monetary Policy Statement and the recent one that was issued by the RBI is today's news and it is the sixth bimonthly Monetary Policy Statement and it is also the last Monetary Policy Statement for this financial year 2019-20. So for implementing the Monetary Policy several instruments are used and the main instrument is the Reporate and Reporate is the fixed interest rate at which the Reserve Bank of India provides overnight liquidity to banks against the collateral of government securities and Treasury bills. So in simple words we can say that Reporate is the rate at which RBI lends money to the commercial banks and in 2019 RBI cut this Reporate many times and between February and October 2019 RBI reduced the rates by 135 basis points and in the last Monetary Policy Committee meeting which happened in December the Reporate was kept unchanged at 5.15 percentage and in the recent meeting also the Reporate has been kept unchanged at this same rate. So now what does this Reporate mean for the individuals and the businesses? In simple words we can say that the banks borrow money from RBI at cheaper interest rate which is the Reporate. Now the banks have to extend the same rates to the individuals and businesses who borrow money that is who take loans from the bank. Now this process of extending the same benefit of rates is called the transmission of rates and we just saw that RBI reduced the rates by 135 basis points between February and October 2019 but the same benefit of rate cut was not passed on by the banks to the individuals and businesses. And this graph also mentions the same as you can see that the lending rates on fresh loans by the banks is 9.28 percentage on average and this is quite higher than the Reporate of RBI. So we can see that the transmission of rate cuts by the banks is 4 and even the economic survey notes this point it mentions that only a quarter of the rate cuts by the RBI were transmitted by banks to the new borrowers. Now the Reporate cuts are an important measure of the RBI to increase the liquidity in the economy but it is not the only measure. There are other measures also which are taken by the Monetary Policy Committee in the recent meeting. So let us see the other decisions taken by this Monetary Policy Committee. RBI has taken two measures to ease the lending rates of the banks. The first measure is that it opened a window to extend 1 lakh crore rupees to the commercial banks at the Reporate and which is currently at 5.15 percentage. And the second measure is banks have been exempted from maintaining the cash reserve for home loans, auto loans and MSME loans that are extended from January 31st to July 31st of this year. Now let us see the first measure in detail. To understand this you need to know one more instrument of Monetary Policy which is the Liquidity Adjustment Facility which is in short known as LAF. This LAF consists of overnight repo auctions as well as term repo auctions that are conducted by RBI. And with respect to today's discussion you need to know about the term repo. The aim of term repo is to improve transmission of Monetary Policy because a term will be fixed where the policy rate will be same. So if a commercial bank is getting money from RBI based on a term repo then it will be charged a fixed repo rate for that particular period of time. So this setup will minimize the shocks to the banks that arise out of repo rate changes which happens regularly. So this is how the term repo helps to improve the transmission of Monetary Policy. And according to the news article RBI has decided to conduct term repose of one year and three year tenors. And it is for up to a total of rupees one lakh crore at the present policy repo rate. So this move is aimed at improving the Monetary Transmission. Now let us see the second measure. To understand this measure you need to know one more instrument of Monetary Policy which is the Cash Reserve Ratio. As the name suggests Cash Reserve Ratio deals with the cash reserves that have to be kept by the banks. And this cash reserve ratio is the average daily balance that a bank is required to maintain with the Reserve Bank of India. And this cash reserve ratio is countered on the amount of money which a bank receives. But if you see a bank receives a lot of money, it receives money from depositors, it receives money through the commission that is charged on giving a demand draft then it is getting money through the commission that is charged on online money transfer etc. So like this in many ways a bank receives money. So how does a bank exactly count the cash reserve ratio requirements? It is calculated based on the net demand and time liabilities which is in short known as NDTL. And in this net demand consists of the demand liabilities and these demand liabilities include the bank accounts from which you can withdraw your money at any time. For example savings account, current deposits etc. And time liabilities consist of the accounts from which you cannot just withdraw money at any time but you have to wait for a certain period like in the case of fixed deposits, cash certificates, gold deposits etc. So based on the net demand and time liabilities this cash reserve ratio is calculated. The formula is not important from the examination point of view, just know that it is calculated based on the NDTL. So what is the present cash reserve ratio? At present the Reserve Bank of India has mandated a CRR of 4 percentage for all the banks. See the actual aim behind having cash reserve ratios that the Reserve Bank of India will have a control over the bank's credit such that the banks do not lend the entire money which they have. So if the cash reserve ratio is increased then it has to deposit more money with RBI. So the resource that is available for the banks for lending will come down and hence the money supply in the market will come down. Now if the cash reserve ratio is decreased then less money has to be deposited with RBI by the banks. It means that more money is present with the banks and the banks can lend this money to the market. So the money supply in the market will increase and in turn the production activities will be growing healthily. So these are the nuances behind the cash reserve ratio. Now what RBI has done is that it has exempted the banks from maintaining the cash reserve ratio for certain types of loans like for home loans, auto loans and MSME loans that is micro, small and medium enterprises loans. And the selective exemption is given by RBI from January 31st to July 31st only. Now because of this move the business activities in the home sector, in the automobile sector and the MSME will pick up and the production is likely to increase because the banks can lend more money to these particular sectors. So it will contribute towards India's economic growth. In this regard the news article mentions that demand has not met commensurate supply. So this move by RBI will help to increase in the production activities. So there will be an increase in the supply also so that supply will be met with the demand. So these are the two important measures of RBI that was taken in the recent Monetary Policy Committee meeting. Now in addition to this there is another news article in which the RBI governor has interacted with the media and one of the questions asked to the RBI governor was on the objectives of operation twist and the RBI governor has said that the objective behind operation twist is to ensure better monetary transmission. So what is this operation twist and how does it ensure better monetary transmission? See operation twist is not an official term which has been used by RBI. It is actually a move which was taken by US Federal Reserve which is the central bank of USA. In 2011-2012 US conducted operation twist to make long term borrowing cheaper for the government. So this operation twist means buying and selling of government securities that is G6 at one go. The ultimate objective of this operation is to make the borrowings of the government cheaper by buying back the long term government securities and also earning some extra money by the way of selling some short term government securities. Informally we can say that operation twist is a form of rotating the debt and earning some extra money. The government can use this extra money for other economic activities. Usually if you see RBI will perform buying and selling operations of government securities separately. This process of buying and selling of government securities to open market is called as open market operations and RBI conducts open market operations to adjust the liquidity conditions in the market. We have discussed about the government securities and the operation twist on our 20th December Hindi news analysis. You can view it for better understanding. Now the news is that the RBI governor has said by operation twist the yields of government securities soften. So how does it soften? If you remember during our 20th December analysis we saw that one of the objectives of operation twist is to reduce the cost of a particular government security. Usually RBI buys back high coupon securities in this case. Here coupon means interest rates so high coupon means the interest rates are high. So the returns or the yield will be high for those who purchase government securities. Now this is the reason why RBI buys back high coupon government securities to reduce the cost. So by operation twist yields of the government securities are softened and the liquidity conditions in the market are adjusted. The intent behind this is to moderate high long term interest rates for government securities in the market and to bring them closer to the report apart from making the borrowings of the government cheaper. Here you should know one more thing. In September 2019 RBI introduced external benchmark based lending. RBI decided that all new floating rate personal loans or new floating rate retail loans like housing loans, automobile loans etc and the floating rate loans to micro and small enterprises which are extended by the banks from October 1st of 2019 shall be benchmarked to one of the rates that are mentioned here. It can be benchmarked to the RBI's reportage or the government of India's 3 months treasury bill yield which is published by the financial benchmark India private limited or the government of India's 6 months treasury bill yield which is published by FBIL or any other benchmark market interest rate that is published by FBIL. Here RBI decided that banks are free to offer such external benchmark linked loans to other type of borrowers as well. In order to ensure transparent standardization and ease of understanding of loan products by borrowers, RBI mandated that banks must adopt a uniform external benchmark within a loan category. In other words the adoption of multiple benchmarks within a particular loan category is not allowed for the bank. Now what RBI has done is that it plans to bring all rates more or less same. We just saw that the intent of operation twist is to moderate high long term interest rates for government securities in the market and bring them closer to the reportage. So such moderation is actually beneficial for those who take loans from the banks. But here the banks must actually perform the transmission of rates properly but it is doubtful since it is the wish of the banks to fix a benchmark rate as per the external benchmark based lending policy and mostly the banks fix at higher rates like how we saw initially when we discussed about the reportage. So these are some of the important monetary policy instruments and the related decisions taken by the RBI that you need to know from the examination point of view. Now you should know that by introducing these measures the RBI's ultimate aim is to make the loans cheaper for the corporate so that more money is available in the market. More money in the market means more economic activity more job opportunities and more economic growth. This is what mentioned in the three articles. Now based on this let us discuss the editorial. In this editorial the author has welcomed the decisions of monetary policy committee. Author also notes that he had hoped that the banks will pass on at least a part of the money that is saved and they will transmit them to the borrowers as lower rates. So the signal from RBI is for the transmission of lower rates but according to the author this depends on various factors other than the demand for credit by the corporates. In addition to the measures RBI has given the outlook of India's economic growth RBI has projected that inflation will be at 6.5 percentage in the current quarter that is from Jan to March of financial year 2019 to 20 and the inflation will reduce to 5.4 percentage to 5 percentage in the first half of financial year 2020 to 21 and RBI has also projected that GDP growth for financial year 2020 to 21 will be 6 percentage. So based on these projections author notes that the projections show the current realities and the targets appear to be achievable. So there are signs that economic recovery will sustain and by introducing such measures RBI has come forward to boost growth through this monetary policy committee announcements and it has been announced after the conservative budget that was presented by the government last week. So author hopes that these steps by RBI will change the sentiment noted by the author. In this discussion we saw the outcomes of the monetary policy committee meeting of RBI we discussed about some economic terms like report rate, liquidity adjustment facility, cash reserve ratio, operation twist, external benchmark based lending etc. And finally we also saw the editorial which has welcomed the decisions taken by the RBI and the monetary policy committee meeting. With this we come to the end of this discussion the displayed practice question will be discussed in the last session. Moving on to the discussion, this news article talks about the recently adopted Lucknow declaration. So in this discussion we will be discussing some key points that are mentioned in this declaration. The discussion can be linked to the syllabus that is given here for your reference. This Lucknow declaration was adopted between India and African nations yesterday. It was adopted on the sidelines of Defence Expo 2020. This Defence Expo 2020 is a flagship biennial event of the Ministry of Defence. This is the 11th edition of this Defence Expo and it is being held at Lucknow Uttar Pradesh for the first time. And the main team of this Expo is India the Emerging Defence Manufacturing Hub. So the focus in this year's Defence Expo is on the digital transformation of Defence. So on the sidelines of this Defence Expo India African Defence Ministers Concleave was conducted yesterday and it is the first ever India Africa Defence Ministers Concleave. During this event, India and around 50 African nations jointly adopted Lucknow Declaration. So what is this Lucknow Declaration? The Lucknow Declaration appreciated the first ever Africa India field training exercise which was named as AF Index 19. This training exercise focused on exchange of best practices among the participating nations and its focus was to strengthen the cooperation and defence preparedness and security. Then this Lucknow Declaration recognizes the African Union team for 2020. This 2020 team aims to achieve conflict free Africa without wars conflicts and human rights violation. The theme is silence the guns creating conducive conditions for African development. Also the declaration mentioned the joint efforts of India and Africa in peacekeeping and anti piracy operations. Just know that India has participated in almost all peacekeeping operations in Africa. Apart from that the declaration also focuses on terrorism and maritime security. It recognized terrorism, extremism, piracy and organized crimes such as human trafficking, drug trafficking and weapons smuggling. And this declaration recognized these crimes as the common security challenges to both the African nations and as well as to India. So to counter these challenges the declaration calls for the fighting against the growing threat of terrorism and to ensure that no territory under their control is used to launch terror attacks on other nations. In addition to this the declaration calls for strengthening of the UN counter terrorism mechanisms and also to ensure strict compliance with the United Nations Security Council sanctions on terrorism. If you see the UNSC 1267 resolution it encourages the countries to share intelligence on terror groups and it urges the countries to take firm action against terrorism by disrupting terrorist networks by eliminating financing channels and by halting cross-border movements. So this Lucknow declaration has called for the strengthening of UN counter terrorism mechanisms. Then the declaration also urged the international community to look into the adoption of comprehensive convention on international terrorism or CCIT. This mechanism was suggested by India way back in 1996 but despite even after two decades still this mechanism is in the proposed stage or is in the drafting stage. So this declaration has urged the international community for the adoption of this CCIT and for the drafting of the CCIT soon by the United Nations General Assembly. Then after this the declaration also concentrates on maritime security for which the declaration mentioned that the oceans and seas are important to the livelihood of the most of the people and maritime security is essential for the development of blue economy or ocean economy. To ensure maritime security both India and African nations they should mutually cooperate in securing sea lines of communication. They should cooperate in preventing maritime crimes disaster, piracy, illegal and unregulated fishing etc and all these should be done through sharing of information through proper surveillance. So this was one of the provisions in the declaration on maritime security. Then the declaration also calls for the cooperation of India and Africa on the evolving concept of Indo-Pacific. The declaration even welcomes the African Union's vision for peace and also India's vision of Sagar which is short for security and growth for all in the region and the declaration is of the opinion that both these visions are coinciding. So as a whole the joint declaration revolves around the security relationship between India and African nations and it aims to strengthen the relationship further by sharing information, by sharing intelligence, by proper surveillance and mutual cooperation. So these are the information that you should know with respect to this Lucknow declaration between India and African nations. With this we come to the end of this discussion. This news article is about the report prepared by an ad hoc committee of the Saba. The committee was formed few months back to study the alarming issue of pornography on social media and its effect on children and society as a whole. We have discussed in depth about the concept of ad hoc committee and parliamentary committees in our 13th December Hindi News Analysis. Have a look at it for better understanding about these ad hoc committees and parliamentary committees. Today we will be focusing on the important measures that is suggested by the members. The syllabus that is relevant to this discussion is given here for your reference. The ad hoc committee has focused on two main issues. First they are focused on the access of children to pornographic material on the social media and second they are focused on the circulation of pornographic material on social media in which children are abused and for making this report the ad hoc committee has consulted various stakeholders and based on the consultation by various stakeholders the ad hoc committee has given its recommendations and this recommendation are in five dimensions. The dimensions are legislative measures, technological measures, institutional measures, social and educational measures and then finally state level initiatives. So now let us discuss some of the important suggestions in these dimensions. First under the legislative measures the committee has suggested that some important amendments to the IT Act of 2000 should be made. The important amendments suggested are the widening of the definition of child pornography then to include provision to penalize the cyber grooming. See this cyber grooming is a process of establishing a relationship with a child either in person or through the use of internet or through other digital technologies and this relationship is established to facilitate either online or offline sexual contact with the child. So this committee has suggested to penalize cyber grooming and appropriate provisions should be included in the Poxo Act of 2012 and in the IT Act of 2000 also. Another measure which is suggested is to ensure protection for the individuals who report child sexual abuse material. So that means individuals who download, store or possess child pornographic material solely for the purposes of mandatory reporting they will not be punished. In addition to this the report also suggests to prepare a code of conduct for social media platforms. This code shall contain the general principles and practical guidelines for maintaining child safety online then ensuring appropriate age content and curbing use of children for pornographic purposes. So for these measures the code shall contain the principles and practical guidelines. So these were some of the legislative measures suggested by the committee. Next let us see the technological measures. The first suggestion under technological measures is to proactively monitor and removal of child sex abuse material by the internet service providers. The internet service providers must also report these proactive measures to the Indian authorities under the national cyber crime portal. Just know that this portal is maintained by the Ministry of Home Affairs. It facilitates the victims or complainants to report the cyber crime in the online mode. Then after this the report also suggests another technological measure like breaking up of end to end encryption facilities that is provided by platforms such as WhatsApp. So we know that there is an end to end encryption facility in WhatsApp and this technology in communication allows only the sender and the recipient to read the messages. So by breaking the end to end encryption it will allow the investigating agencies to trace the distributors of child pornography. Then after this the report also encourages the development of applications which can monitor children's access to pornographic content. Now currently we have one such example which is the Google's family link app. By using this app parents are able to monitor the internet usage of their minor children. So like this other apps could be developed. Then another suggestion by the committee is to develop technological solutions for proactive monitoring of child pornography and sexual abuse material in the dark web. We often hear news of sale of child pornography in the dark web and it is done using cryptocurrencies. So in addition to the industry partners who will develop the technological solution for proactive monitoring the blockchain analysis companies can also help to trace the identities of users who are engaging in cryptocurrency transactions for purchasing the child pornography online. So these were some of the technological measures suggested by the committee. Next comes the institutional measures. Under institutional measure first suggestion is to create a national nodal agency to combat child pornography in social media. See already we have National Commission for Protection of Child Rights that is NCPCR. This report suggests that the NCPCR should be given more authority and it should be designated as the nodal agency to deal with child pornography and NCPCR should also work closely with other investigating agencies of the state governments and the central government. Then another suggestion under the institutional measure is that the Ministry of Women and Child Development should engage in a major awareness campaign on the initiative that are taken to combat the menace of child pornography. They should spread awareness about platforms such as Poxo E-Box and about the National Cyber Crime Reporting Portal. See in this the Poxo E-Box is an online complaint box for the reporting of child sexual abuse and the Poxo E-Box is maintained by NCPCR. Now next comes the social and educational measures. First measure under this dimension is a nationwide campaign for parental awareness. This campaign will enable the parents to recognize early signs of child abuse. It will help them to identify online risks and it will help them to improve online safety for their child. Then another suggestion is to provide proper training to agencies who are conducting child abuse investigations and also training to the public prosecutors and the judges who are involved in such child abuse investigations. The next suggestion is developing guidelines for media for reporting child exploitation. This guideline should involve measures like not revealing the identity of the child and not revealing the identity of the child's parents etc. And any violation to these kinds of measures should be reported and action should be taken against such media houses. This is what suggested by the committee. Then another important suggestion is to prepare a guideline which will provide advice to schools. It will provide advice on how to deal with harmful effects of pornography on children and it will provide advice for the treatment of children who have online addiction etc. And this guideline will also recommend every school to have at least one male and one female counselor so that children can share their personal experiences of child abuse if they are subjected to any fear. So these are some of the social and educational measures suggested by the committee. Next comes the state level implementation measures. The first step under this dimension is to carry out a comparative analysis among the important measures that are taken by different states. If this comparative analysis is done then it will help to adopt better practices that are carried out by different states. Then another measure is the appointment of an e-safety or internet safety commissioner at state level and that particular officer shall ensure implementation of social media and website guidelines which are related to removal or restriction of content and guidelines which are related to ensuring age verification and warnings etc. So these are some of the measures under five dimensions that are suggested by the ad hoc committee formed by Rajesh Saba. These measures are the main's perspective as it provides a list of suggestions that should be carried out by the government to tackle the problem of child pornography. So you can make use of these points and you can incorporate them in your main's answer writing. So not only these measures are just helpful for main's answer writing, these measures should be implemented by the government and that too as soon as possible so that it will help to save our children from the menace of child pornography and it will also enable India to project itself as a leading country when it comes to the protection of child rights. So these are the information that you should know with respect to this news article. In this discussion we discussed about the different types of measures that were suggested by an ad hoc committee which was formed by Rajesh Saba to study the alarming issue of pornography and social media and its effect on children and society as a whole. With this we come to the end of this discussion. The displayed practice question will be discussed in the next session which is the practice questions discussion session. This question is with respect to the Ashkabad Agreement. The first statement states it is an international transport and transit corridor facilitating transportation of goods between landlocked Afghanistan and Persian Gulf. Now this statement is wrong. See it is true that it is an international transport and transit corridor which facilitates transportation of goods but it is not between Afghanistan and Persian Gulf rather it is between Central Asia and Persian Gulf. Afghanistan is not a part of this agreement. So this statement is wrong. The second statement is India and USA are founding members of the agreement. This statement is also wrong because the founding members of this agreement are Oman, Iran, Turkmenistan, Uzbekistan and Qatar. But know that this agreement was signed in 2011 and in 2013 Qatar withdrew from this agreement. And later Kazakhstan and Pakistan joined this agreement and India joined this agreement only in 2018. So even though India is a member of this agreement, India is not the founding member and USA is not at all a member of this agreement. So this statement is also wrong. Here the question asks for the correct statement. Here both the statements are incorrect that is neither first statement is correct nor second statement is correct. So the correct answer to this question is option D neither 1 nor 2. Now this question is based on cash reserve ratio. The first statement cash reserve ratio is the average daily balance that the bank is required to maintain with the reserve bank. This statement is correct as the name suggests it is the cash reserve that has to be maintained by the bank with the reserve bank of India. And it is calculated as a share of commercial banks net demand and time liabilities. So this statement is correct. The second statement is the current cash reserve ratio for banks is fixed by RBI at 3 percentage. This statement is wrong because currently the CRR for banks is 4 percentage not 3 percentage. And as we know the actual aim behind having the cash reserve ratio is that the reserve bank of India will have a control over the bank's credit such that the banks do not lend the entire money. So if CRR is increased then the bank has to deposit more money with the RBI. So the resource that is available for the banks for the lending will come down and hence money supply in the market will come down. Now if the cash reserve ratio or CRR is decreased then less money has to be deposited with RBI by the banks. It means that more money is with the banks and the banks can lend this money to the market. So the money supply in the market will increase and the production activities will be growing healthily. Now since first statement is correct don't mark the answer as option A1 only because here the question asks for the incorrect statement. Here statement 2 is incorrect. So the correct answer to this question is option B2 only. Now this question asks the term F index 19 recently seen in news is related to A cyberattacks B defence cooperation C economic partnership D humanitarian assistance. The correct answer to this question is option B defence cooperation and this F index 19 is the first ever African India field training exercise between Indian army 16 African nations. It was focused on the exchange of best practices amongst the participating nations and also to strengthen the cooperation in defence preparedness and security. Now let us see one main question based on GS paper 3. What do you understand by the term formalization of economy? How formalization affects the informal sector in India? Suggest some measures to realize the growth potential of informal sectors in Indian economy. For answering this question you have to first give the definition of formalization of economy. Then you have to mention the effects of formalization on informal sector. So you can mention the points like there is no benefit for the informal sector in a formalization because it benefits the state and formal sector. Then you can mention that the opportunities that are available in an informal sector like developing skills and asset are eliminated if that formal sector is transformed into a formal sector. Then you can add other points also. Then you have to finally suggest the measures to realize the growth potential of informal sectors in Indian economy. For this you can suggest that our policies should be focused on the development of the informal sector rather than on the formalization of the informal sector. And the concerns of the small entrepreneurs should be addressed and it should be reflected in the policies that is developed by the government. Then you can mention that the efficiency of small firms must be strengthened by forming networks and clusters of the small enterprises which will enable sharing of resources, sharing of technologies etc. Then workers condition should be improved and for that efficient administration of labour laws is required. Then social security framework should be applicable to the informal sector workers also. So like this you can mention your own viewpoints and you have to answer this question in 250 words. Let's see another main question based on GSB paper 3. The alarming issue of child pornography has huge impact on children and the society as a whole. This can be eliminated only through a comprehensive strategy. Discuss some of the measures that can be adopted by government of India to prohibit child pornography. Now for answering this question as an introduction you can say that impact of child pornography on children results in exploitation of children. It results in mental and physical trauma for the children. It will have impact on children. So the increasing demand for child pornography is worrying. So child pornography is a social menace. Then for the main answer you can mention the measures that is suggested by the ad hoc committee of Rajya Sabha. You can mention all the measures which are mentioned under the five dimensions such as legislative measures, technological measures, institutional measures, social and educational measures and then state level initiatives. Then you can conclude the answer by saying that the menace of child pornography should be eliminated and there is a need for international collaboration for that purpose. With this we have come to the end of our today's sessions. If you like the video don't forget to like, comment and share and do subscribe to Shankar IS Academy YouTube channel for more updates on civil service examination preparation.