[Current] April-Week1-P1: Economy-Monetary Policy update,GI Tagging for Kanauj Attar,Predatory Pricing by Spicejet, BIS new labelling guidlines for electronicsDevendra Vishwakarma
- [Act 1] Economy
- E1: RBI: Monetary Policy April 2014
- E2: GI Tagging & EC model code
- #1: Dharmavaram Pattu Silk Sarees: Andhra
- #2: Kannauj Attar, UP
- #3: Muradabad Metal craft UP
- #4: Saharanpur woodcraft, UP
- #5: Firozabad Glassware, UP
- E3: Predatory pricing by Aviation Companies
- E4: BIS New labelling guidelines for Electronics
[Act 1] Economy
Current Affairs for April week 1 (1st to 7th April). Total three parts
- Part 1/3: Economy= You’re here. (bank license topic discussed separately)
- Part 2/3: Environment, Biodiversity, Polity and Culture click me
- Part 3/3: Diplomacy-international relations (click me)
E1: RBI: Monetary Policy April 2014
- Make sure you know the theory of repo, reverse repo, LAF, MSF, CRR, SLR, if not then click me
- 28th Jan 2014: Monetary policy (and Rajan said he’d update it after two months = Feb, March)
- 1st April 2014: monetary policy update
Key rates unchanged:
|Marginal standing facility (MSF)||9%|
|LAF||Repo rate (policy rate)||8%|
|Reverse Repo rate||7%|
|Reserve ratios||Cash Reserve ratio (CRR)||4%|
|Statutory liquidity ratio (SLR)||23%|
These rates are one and same like previous update (Feb 2014).
Rajan did not change the policy rate (repo rate) for the following reasons
- Yes, inflation has declined but not sufficient enough where repo rate should be reduced.
- Rajan fears that even in 2015, (CPI) inflation will not go below 8%, because…
- Geo-political developments (like Ukrain) and their (negative) impact on crude oil, gold & other international commodity prices.
- El Nino effect = less monsoon = less food production
- fuel, fertilizer and electricity subsidies = more money supply (from government’s side)
- MSP (Minimum support prices) on foodgrains. = more money supply (from government’s side)
- Accepted some recommendations of Urjit Patel Committee, like targeting CPI (combined) inflation. Detailed coverage of Urjit Patel, pros/cons discussed already in earlier article click me.
- KYC norms are being simplified for Foreign Portfolio Investors. (FIIs)
- To reduce volatility of FII investment in Government securities (G-Sec), Rajan made new rule- those FIIs can only invest in G-sec only with maturity of one year or above.
- will allow more companies /entities to get Banking correspondence (BC) license.
Rajan’s other projections:
|GDP growth rate%||5||5-6|
|CAD as % of GDP||–||2%|
- Rajan asked banks not to levy penal charges on customer, if he doesn’t maintain minimum balance. (but bank may suspend his facilities on until he puts money)
- Counter argument:= since banks have to incur expenses for record maintenance, staff salary even on such non-minimum balance dormant accounts. So banks will raise the charges on ATM, Debit card etc. on all customers, to cover those losses and keep profit margin same.
Table: Penalty rates at the moment:
|Bank||Min. Balance necessary (monthly)||penalty (Urban)||Penalty (rural)|
E2: GI Tagging & EC model code
- What is Geographical indicator tag, what benefit does it offer? = already covered in my old article Click ME
- Geographical indications (GI) registry is one type of quasi-judicial body.
- But as per Election commission’s model code of conduct, even they had to pause giving new GI-registration.
- Following is the list of product awaiting GI registration:
|Dharmavaram handloom silk sari||Andhra|
|Moradabad metal craft||UP|
These places/items become important at two places
- MCQ : theory / static content
- GS Mains Paper 1: (Geography) location factor of various industries.
#1: Dharmavaram Pattu Silk Sarees: Andhra
- Climate: semi-arid tropical = less rainfall = good because silk yarn breaks easily in rainy weather.
- Water quality-soft = best suited for “degumming” and dying the silk.
- Raw silk as such as harsh and unsuitable for dye treatment.
- Hence it is subjected to degumming treatment= soak in boiling water with soap and soda ash.
- But if water is hard, then soap/soda won’t dissolve easily. That’s why soft water essential.
- >1000 ft. above sea level = temperature ~25-40 degree = good atmosphere for labor. Because Dharmavaram silk is essentially handloom woven and not power loom.
- This town is ~50 kms away from Anantapur in the Rayalaseema region of Andhra Pradesh= good transportation facilities
- 100% pure mulberry silk only. (no mixing with cotton etc.)
- Zari brought from Surat. (lightweight, non-perisable) hence silk industry doesn’t need to be setup near Surat’s zari. PS: Surat Zari also enjoys GI status.
- Lepakshi temple murals (near Anatapur)
- various flora, fauna and epic scenes.
Acid Dye (theory)
- Acid dyes can easily color protein fibres like silk and wool. (Hence acid dyes used in silk industry and not alkaline dyes).
- Acid dye colors highly durable and can last upto 50 years.
- Applied generally in the presence of an organic or inorganic acid and hence are called acid dyes.
- After dyeing phase is over, workers mix Sodium Hydroxide to remaining dye => acid neutralized=> effluent discarded in the drainage. Hence the process eco-friendly. No chemical diseases reported in the region.
- Silk Pattu Sarees And Paavadas for grand occasions
- also for Bharath Natyam and Kuchipudi dancers.
#2: Kannauj Attar, UP