What’s in today’s article?

• Why in News?
• About Comprehensive Nuclear Test Ban Treaty (CTBT)
• How did CTBT come into Being?
• Did CTBT Stop Nuclear Testing?
• Why has India Refused to Sign the CTBT?
• News Summary

Why in News?

• Russia indicated that it was moving swiftly towards revoking its ratification of the Comprehensive Nuclear Test Ban Treaty (CTBT) after President Vladimir Putin held out the possibility of resuming nuclear testing.

About Comprehensive Nuclear Test Ban Treaty (CTBT)

• The Comprehensive Test Ban Treaty prohibits “any nuclear weapon test explosion or any other nuclear explosion” anywhere in the world.
• The treaty was opened for signature in September 1996, and has been signed by 187 nations and ratified by 178.
• The treaty cannot formally enter into force until it is ratified by 44 specific nations, eight of which have yet to do so: India, China, Pakistan, North Korea, Israel, Iran, Egypt, and the United States.
• In order to verify compliance with its provisions, the treaty establishes a global network of monitoring facilities and allows for on-site inspections of suspicious events.
• Since the conclusion and opening for signature of the CTBT, nuclear testing has become taboo.
• Today, even those nuclear-armed states that have not signed or not ratified the CTBT, including India, Israel, and Pakistan, observe nuclear testing moratoriums.
• Only one country has conducted nuclear test explosions in this century, and even that country—North Korea—halted nuclear testing in 2017.
• Although the CTBT has not formally entered into force, the treaty has, for now, achieved its primary goal: ending nuclear weapon test explosions.

How did CTBT come into Being?

• Between 1945 and 1996, more than 2,000 nuclear tests were carried out — 1,032 of them by the United States and 715 of them by the Soviet Union, according to the UN.
  • Britain carried out 45 tests, France 210 and China 45.
• The radioactive fallout from those tests drew criticism from around the globe. The international community’s concern about the effects on health and the environment continued to grow.
• As a result, several attempts to curb the explosive tests were made.
• The 1963 Limited Nuclear Test-Ban Treaty (LTBT) was one of the first such attempts.
  • It prohibited nuclear testing in the atmosphere, outer space, and underwater, but underground tests were still permitted.
• A major breakthrough only came after the Cold War ended around 1990 and the disintegration of the Soviet Union.
• As the geopolitical tensions simmered down, the UN took advantage of the situation and adopted the CTBT, which put a blanket ban on the explosive testing of nuclear weapons.

Did CTBT Stop Nuclear Testing?

• Since the CTBT, 10 nuclear tests have taken place.
• India conducted two in 1998, Pakistan also two in 1998, and North Korea conducted tests in 2006, 2009, 2013, 2016 (twice) and 2017.
• The United States last tested in 1992, China and France in 1996 and the Soviet Union in 1990.
• Russia, which inherited most of the Soviet nuclear arsenal, has never conducted a nuclear test.

Why has India Refused to Sign the CTBT?

• India advocated a test ban years before it came into being.
• Prime Minister Jawaharlal Nehru made the first call for an “immediate standstill” agreement on nuclear testing between the United States and the former Soviet Union as early as 1954.
• However, this call was sabotaged by the nuclear weapons states (NWS) on the ground that it was “difficult to evolve a fool proof verification system”.
• Post the 1964 Chinese nuclear test, an Indian debate began on the pros and cons of advocating a test ban and nuclear disarmament.
• Subsequent developments including China’s attainment of ballistic missile capability and America’s attempt to intimidate India during the course of the 1971 War only reinforced Indian security concerns.
• India’s Stand on CTBT:
  • India’s decision to not sign the CTBT is primarily based on national security considerations.
  • India views nuclear weapons as a deterrent against potential security threats from neighbouring countries, especially Pakistan and China.
  • India also feels that signing the CTBT would undermine its national security and strategic autonomy, as it would constrain its ability to conduct nuclear tests.
  • India’s decision is rooted in its desire for equitable and universal nuclear disarmament, as well as its national security concerns.

News Summary

• Russia indicated that it was moving swiftly towards revoking its ratification of the Comprehensive Nuclear Test Ban Treaty (CTBT) after President Vladimir Putin held out the possibility of resuming nuclear testing.
• President Putin said that Russia could look at revoking ratification of the CTBT as the United States had signed but not ratified it.
• A resumption of nuclear tests by Russia, the United States or China could indicate the start of a new nuclear arms race between the big powers who stopped nuclear testing in the years following the 1991 collapse of the Soviet Union.
• Russia currently has around 5,889 nuclear warheads, compared with 5,244 for the United States, according to the Federation of American Scientists.

Q1) What is the objective of NPT?

The NPT is a landmark international treaty whose objective is to prevent the spread of nuclear weapons and weapons technology, to promote cooperation in the peaceful uses of nuclear energy and to further the goal of achieving nuclear disarmament and general and complete disarmament.

Q2) What is the role of IAEA in nuclear security?

The IAEA promotes a strong and sustainable global nuclear safety and security framework in Member States, working to protect people, society and the environment from the harmful effects of ionizing radiation.

Source:

• Russia may pull out of CTBT: How the treaty tried — and failed — to stop nuclear testing
• Print

What’s in today’s article?

• Why in news?
• What is Finance Bill?
• What is Money Bill?
• What is the difference between money Bills and financial Bills?
• Background of the present case

Why in News?

• Chief Justice of India said that a seven-judge bench will soon be set up to hear a batch of pleas challenging the Centre’s use of the money bill route to pass certain key legislations.
• CJI’s observation about setting up a seven-judge bench came during the hearing challenging set of amendments to the Prevention of Money Laundering Act (PMLA).

Background of the Present Case

Question regarding the validity of PMLA:

• In July 2022, a three-judge bench had upheld the PMLA and the vast powers of the ED. 
• However, the bench had left the validity of amendments to the PMLA through the Money Bill route open for a larger Constitution bench to hear.
• The Finance Acts passed in 2015, 2016, 2018 and 2019 brought in crucial amendments to the PMLA. 
• Finance Bills passed during the budget are introduced as money bills under Article 110 of the Constitution.

Aadhaar as money bill:

• The first major challenge on whether a bill qualified to be a money bill under the Constitution was in the Aadhaar case. 
• In a 4:1 majority, the Supreme Court in 2018, had ruled in favour of the government and had cleared the Aadhaar Act as a valid money bill under Article 110 of the Constitution.
  • Incidentally, Justice Chandrachud had been the lone dissenter in the Aadhaar ruling of 2018.
  • He had called it a “fraud on the Constitution” and “subterfuge”.

Tribunal reform:

• In November 2019, in Roger Matthew vs Union of India, the SC heard the challenge against tweaks in the service conditions of tribunal members which was also introduced as a money bill in the Finance Act, 2017.
• While a five judge bench of the court struck down the law as unconstitutional for interfering with judicial independence, it referred the money bill aspect to a larger constitution bench.
• In doing so, the court also expressed doubts over the correctness of a five-judge Constitution Bench’s 2018 verdict upholding the Aadhaar Act which had been passed as a money Bill.

Read More about the difference between Money Bill and Finance Bill here.

Q1) What is Money Laundering?

Money laundering is the process of hiding the source of money obtained from illegal sources and converting it to a clean source, thereby avoiding prosecution, conviction, and confiscation of the criminal funds. It is an illegal exercise that converts black money into white money.

Q2) What is Aadhar?

Aadhaar is a 12-digit unique identification number issued by the Unique Identification Authority of India (UIDAI). It serves as proof of identity and address anywhere in India.

Source:

• When can a bill be designated as a ‘money bill’: SC to hear challenge
• PRS
• Legal Service India
• Economic Times

What’s in today’s article?

• Why in news?
• What is Telecom Regulatory Authority of India (TRAI)?
• What is Telecommunications Dispute Settlement and Appellate Tribunal (TDSAT)?
• News Summary: TRAI can’t regulate OTT platforms
• In what context did TDSAT pass this order?
• Significance of this order
• Why is the IT Ministry disagreeing with DoT over OTT regulation?
• What is TRAI’s attempt at regulating OTT services?

Why in news?

• In a recent interim order, the Telecom Disputes Settlement and Appellate Tribunal (TDSAT) has clarified that OTT platforms are not subject to the jurisdiction of the Telecom Regulatory Authority of India (TRAI). 
• Instead, they fall under the governance of the Information Technology Rules, 2021, overseen by the IT Ministry.

What is Telecom Regulatory Authority of India (TRAI)?

• The entry of private service providers brought with it the inevitable need for independent regulation. 
• The Telecom Regulatory Authority of India (TRAI) was, thus, established by an Act of Parliament, called the Telecom Regulatory Authority of India Act, 1997.
• TRAI's mission is to create and nurture conditions for growth of telecommunications in the country in a manner and at a pace which will enable India to play a leading role in emerging global information society.
• Objectives –
  • To regulate telecom services, including fixation/revision of tariffs for telecom services which were earlier vested in the Central Government.
  • One of the main objectives of TRAI is to provide a fair and transparent policy environment which promotes a level playing field and facilitates fair competition.
• In pursuance of above objective TRAI has issued from time to time a large number of regulations, orders and directives to deal with issues coming before it.

What is Telecommunications Dispute Settlement and Appellate Tribunal (TDSAT)?

• The TRAI Act was amended by an ordinance, establishing a Telecommunications Dispute Settlement and Appellate Tribunal (TDSAT) to take over the adjudicatory and disputes functions from TRAI.
• TDSAT was set up to adjudicate any dispute –
  • Between a licensor and a licensee, 
  • Between two or more service providers, 
  • Between a service provider and a group of consumers, and 
  • To hear and dispose of appeals against any direction, decision or order of TRAI.

News Summary: TRAI can’t regulate OTT platforms

• In an interim order, the TDSAT said that OTT platforms are outside the purview of the TRAI Act since they do not require any permission or a licence from the central government.

In what context did TDSAT pass this order?

• TDSAT’s findings came in a petition filed by the All India Digital Cable Federation.
• The federation alleged that free streaming of matches of the ICC Cricket World Cup on mobile devices by Star India through its platform Disney+Hotstar is discriminatory t the cable TV industry under TRAI regulations.
  • This is because, the matches can be watched on Star Sports TV channel only if the viewer has subscribed by making a monthly payment.
• The federation asked that: 
  • Star India should be restrained from permitting viewers to have Star Sports on their mobile phones for free, or 
  • they should also provide free access to Star Sports to AIDCF’s members, that is cable operators.

Significance of this order

• TDSAT’s rejection of the plea has broader implications in the ongoing debate over the regulation of OTT services. 
• At the heart of the matter is the clash between the TRAI and the Ministry of Electronics and Information Technology (MeitY) over who should oversee these platforms.
  • The had proposed a draft telecom Bill classifying OTT platforms as telecommunications services and seeking to regulate them like telecom operators.
    • DoT works under the Union Ministry of Communications.
  • TRAI, on the other hand, issued a consultation paper on regulating OTT platforms. 
  • This difference in approach has led to a contentious disagreement between two key government bodies.

Why is the IT Ministry disagreeing with DoT over OTT regulation?

• The IT Ministry believes that under the Allocation of Business Rules, Internet-based communications services are not part of DoT’s jurisdiction. 
• However, in this case, the conversation is centred around OTT communications services like WhatsApp.
• Time and again, MeitY made it clear that the DoT can only regulate the carriage layer, that is telephony, wireless communications, and private sector licences, etc.

What is TRAI’s attempt at regulating OTT services?

• Earlier TRAI had recommended against creating a specific regulatory framework for OTT communication services like WhatsApp, Zoom, and Google Meet.
  • In September 2020, TRAI had recommended against regulatory intervention for OTT platforms, saying that it should be left to market forces.
• Now, it has revisited its stance, and started consultations on how these services can be regulated.
• In the consultation paper released in June 2023, the regulator asked stakeholders to send suggestions about regulating services.
  • It also asked whether a selective banning of OTT services could be done as opposed to entirely shutting down the Internet.
• Regulating such services has been a long-standing demand of telecom operators, who have been advocating for years for same service, same rules.

Q1) What is OTT?

OTT stands for "over the top". It refers to any streaming service that delivers content through wireless internet. OTT bypasses traditional forms of media consumption, such as cable or set-top boxes.

Q2) What is Department of Telecommunications (DoT)?

The DoT is under the Ministry of Communications and Information Technology. It is headed by a secretary, who is a senior member of the Indian Administrative Services. The secretary of the DoT reports to the Union Minister for Communications and Information Technology. 

Source: TRAI can’t regulate OTT platforms like Hotstar, says tribunal. This is why it matters | Department of Telecommunication

What’s in today’s article?

• Why in News?
• What is Monetary Policy?
• What is the Monetary Policy Committee (MPC)?
• What are the Instruments of Monetary Policy?
• Why is the RBI in Pause Mode?
• What will Happen to Lending, Deposit Rates?
• What are the Risks Ahead?

Why in News?

• With retail inflation remaining a major risk to macroeconomic stability and sustainable growth, the 6-member Monetary Policy Committee (MPC) of the RB) has decided to keep the key interest rates unchanged for the 4th consecutive time.
• As a result, banks will not raise their lending rates, which means that the equated monthly instalments (EMIs) on home, vehicle and personal loans will remain steady.

What is Monetary Policy?

• Meaning: It is the demand side economic policy used to achieve macroeconomic objectives like inflation, consumption, growth and liquidity.
• Monetary policy in India:
  • In India, the monetary policy of the RBI is aimed at managing the quantity of money in order to meet the requirements of different sectors of the economy and to increase the pace of economic growth.
    • For example, liquidity is crucial to stimulate growth for an economy. The RBI depends on monetary policy to maintain liquidity.
  • The RBI implements the monetary policy through open market operations (OMOs), bank rate policy, reserve system, credit control policy, moral persuasion, etc.
    • For example, the RBI introduces the money in the economy and cuts the interest rate by buying bonds through OMOs.
  • The use of any of these tools will result in adjustments in interest rate or the money supply in the economy.

Classification of Monetary Policy

Monetary policy can be classified as expansionary (or accommodative) and contractionary (or tight) in nature.

• Accommodative monetary policy is triggered to encourage more spending from consumers and businesses by increasing money supply and reducing interest rates.
  • When firms can easily borrow money, they have more funds to expand operations and hire more workers, resulting in a lower unemployment rate.
  • On the other hand, if the money supply is loosened over an extended period of time, there will be too much money chasing too few goods and services, resulting in inflation.
• To avoid inflation, most central banks rotate between accommodating and tight monetary policy (decreasing the money supply and raising interest rates) to varied degrees in order to promote growth while keeping inflation under control.

What is the Monetary Policy Committee (MPC)?

• The Reserve Bank of India (RBI) Act, 1934 was amended by the Finance Act, 2016 to constitute MPC.
• MPC is responsible for fixing the benchmark interest rate in India, bringing more transparency and accountability in fixing India's Monetary Policy.
• The committee comprises six members - three officials of the RBI and three external members nominated by the Government of India (GoI). The RBI Governor is the chairperson (ex officio) of the committee.
• The current mandate of the committee is to maintain 4% (+/- 2%) annual consumer price index-based inflation (CPI) rate and the committee is answerable to the GoI if the inflation exceeds the range prescribed for three consecutive quarters.

What are the Instruments of Monetary Policy?

Why is the RBI in Pause Mode?

• While the MPC has retained the policy stance as ‘withdrawal of accommodation’ in a majority 5:1 decision, it has also retained the inflation projection at 5.4% for FY2024 in the wake of the high food inflation
  • While retaining the GDP growth at 6.50% for FY2024, the policy panel signals that a rate cut is unlikely in the near future.
  • The RBI has focused on its stance of ‘withdrawal of accommodation’ until all risks to inflation dissipate.
  • Withdrawal of accommodation will mean reducing the money supply in the system which will rein in inflation further.
• The pause in the Repo rate - the rate at which RBI lends money to banks to meet their short-term funding needs - is because the overall inflation outlook is clouded by uncertainty by
  • The fall in kharif sowing,
  • Lower reservoir levels,
  • Volatile global food and energy prices.

What will Happen to Lending, Deposit Rates?

• As the RBI has kept the policy rate unchanged, all external benchmark lending rates (EBLR) linked to the repo rate will not rise.
  • Notably, EBLRs - 81% of which are linked to the benchmark repo rate - now dominate the mix of outstanding floating rate loans.
• It will provide some relief to borrowers as their equated monthly instalments (EMIs) will not increase.
• Banks will also not increase fixed deposit rates in the wake of the pause in Repo rate.
  • The decision to hold deposit rates at the current levels will be driven by surplus liquidity in the banking system.
  • This is due to improvement in low-cost current account and savings account (CASA) balance (Rs 3.42 lakh crore) following the deposit of Rs 2000 banknotes.

What are the Risks Ahead?

• The RBI panel met against a backdrop of growing domestic as well as external economic challenges.
• These domestic challenges encompass growing risks to consumption demand amid high food inflation, an uneven monsoon adversely affecting kharif crops and higher interest rates.
  • Retail inflation eased to 6.83% in August from a 15-month high of 7.44% in July, however, it continues to remain above the RBI’s comfort zone of 2-%.
• The recent spike in crude oil prices (sitting above $85 per barrel) and global bond yields will keep MPC vigilant on inflation-growth dynamics.

Q.1) What is the meaning of the Bank Rate?

The Bank Rate is the quantitative instrument of RBI’s monetary policy, which acts as the penal rate charged on banks for shortfalls in meeting their reserve requirements - cash reserve ratio and statutory liquidity ratio.

Q.2) What is the meaning of the Open Market Operations (OMOs)?

OMOs is the quantitative instrument of RBI’s monetary policy, which include outright purchase/sale of government securities by the RBI for injection/absorption of durable liquidity in the banking system.

Source: RBI’s status quo and an indication that rate cuts would have to wait: What’s in store for borrowers, depositors | IE