GS Analyst
Daily Current Affairs

As the inflation is increasing with higher pace reaching up to 9-10% even in most of the developed countries, banks are adopting fiscal and monetary measures to reduce inflation and its effects.

• Recently US- Fed has decided to increase interest rates by 75 bps to control inflation by 2%. However, experts said that this step can cause recession in market.

• In economics, inflation is a general increase in the prices of goods and services in an economy.
• When the general price level rises, each unit of currency buys fewer goods and services; consequently, inflation corresponds to a reduction in the purchasing power of money.
• Following the proliferation of private banknote currency printed during the American Civil War, the term "inflation" started to appear as a direct reference to the currency depreciation that occurred as the quantity of redeemable banknotes outstripped the quantity of metal available for their redemption.

How inflation and interest rates are linked?

• In a fast-growing economy, incomes go up quickly and more and more people have the money to buy the existing bunch of goods.
• As more and more money chases the existing set of goods, prices of such goods rise.
• In other words, inflation (which is nothing but the rate of increase in prices) spikes.

How interest rates dominate?

• To contain inflation, a country’s central bank typically increases the interest rates in the economy.
• By doing so, it incentivizes people to spend less and save more because saving becomes more profitable as interest rates go up.
• As more and more people choose to save, money is sucked out of the market and inflation rate moderates.

Impacts on the economy

• When growth contracts or when its growth rate decelerates, people’s incomes also get hit.
• As a result, less and less money is chasing the same quantity of goods.
• These results in either the inflation rate decline.
• In such situations, a central bank cuts down the interest rates so as to incentivise spending and by that route boost economic activity in the economy.
• Lower interest rates imply that it is less profitable to keep one’s money in the bank or any similar saving instrument.
• As a result, more and more money comes into the market, thus boosting growth and inflation.

Risks of altering interest rates

• If the Central bank cuts the interest rate, it may be fuelling retail inflation further.
• It must be remembered that inflation hits the poor the hardest.
• Can cause recession: Economic recession is the phase where economic activity is stagnant, contraction in the business cycle, over-supply of goods compared to its demand, a higher rate of the jobless situation resulted in lower household savings and lower expense.

Droupadi Murmu, former Jharkhand Governor, has been nominated for President election candidature.

Issues faced by tribal population

• The tribal communities have not received the full benefits of development processes undertaken over the past six decades.
• Plus, they are adversely affected by the developmental projects undertaken during this period.
• While tribes have a distinct culture and history, they also share commonalities with other marginalised sections of Indian society, such as the
  • lack of adequate political representation
  • economic deprivation
  • cultural discrimination

How tribal leadership can help India?

• Leaders of the tribal middle class. They are connected to the global indigenous people's network. They are a little more vocal about issues of land, water and forest, but are hardly involved in any sustained movement.
• The grassroots leaders: They know the issues better than anybody.

Government’s shifted focus towards tribals

• Pradhan Mantri Adi Adarsh Gram Yojana
• Eklavya Model Residential Schools for Scheduled Tribe students
• Scheme of Development of Primitive Tribal Groups
• Post Matric Scholarship (PMS) for ST students
• up gradation of Merit of ST students
• Vocational Training Centres in tribal areas
• establishment of ashram schools in tribal sub-plan areas
• schemes on marketing of tribal produce
• investment in TRIFED
• development of Primitive Tribal Groups (PTGs) etc.

The Earth observes its Summer solstice on June 21 in the Northern Hemisphere.

• June 21 is the day of the summer solstice in the northern hemisphere in year 2022.
• Solstices happen twice per year: one for the winter and one for the summer.
• It is the longest day of the year, happens on the day of the summer solstice since the earth receives the longest period of daylight during the day.
• On 21st June, the northern hemisphere is tilted towards the sun. The rays of the sun fall directly on the Tropic of Cancer. As a result, these areas receive more heat.
• The areas near the poles receive less heat as the rays of the sun are slanting.
• The north-pole is inclined towards the sun and the places beyond the Arctic Circleexperience continuous daylight for about six months.
• In Northern hemisphere: Since a large portion of the northern hemisphere is getting light from the sun, it is summer in the regions north of the equator. The longest day and the shortest nightat these places occur on 21st June.
• Southern Hemisphere: At this time in the southern hemisphere all these conditions are reversed. It is winter season there. The nights are longer than the days.

This position of the earth is called the summer solstice.

Why Earth experiences such phenomenon?

• Solstices occur because Earth’s axis of rotation is tilted about 23.4 degrees relative to Earth's orbitaround the sun.
• This tilt drives planet's seasons, as the Northern and Southern Hemispheres get unequal amounts of sunlight over the course of a year.
• From March to September, the Northern Hemisphere is tilted more toward the sun, driving its spring and summer.
• From September to March, the Northern Hemisphere is tilted away, so it feels like autumn and winter.
• The Southern Hemisphere's seasons are reversed.

India has emerged as the fourth largest recycler in the world and the country has recycled 75 tonnes in 2021, according to a World Gold Council (WGC) report.

Key highlights of the report

• Top Rankers:
• China topped the global gold recycling chart as it recycled 168 tonnes
• Italy at the second position with 80 tonnes and,
• The US in the third rank with 78 tonnes in 2021.
• The report was titled as 'Gold refining and recycling’.
• India’s stand in the report:
• India's gold refining capacity increased by 1,500 tonnes (500 per cent) in 2021.
• The gold refining landscape in the country has changed over the last decade, with the number of formal operations increasing from less than five in 2013 to 33 in 2021.
• Due to the government's tightening of pollution regulations, the scale of unorganised refining has fallen.
• Tax advantages have underpinned the growth of India's gold refining industry like the import duty differential.

Significance for India

• India has the potential to emerge as a competitive refining hub if the next phase of bullion market reforms promotes responsible sourcing, exports of bars and consistent supply of the scrap. 
• Gold scrap’s share of overall imports has risen from 7 per cent in 2013 to around 22 per cent in 2021 which is a sign of growth to India’s market.

Advantages for India

• Modernisation and changing scenario: Holding periods of jewellery will continue to decline as younger consumers look to change designs more frequently, a trend that could contribute to higher levels of recycling.
• Higher incomes and economic growth: Stronger economic growth will reduce outright selling and consumers will find it easier to pledge their gold rather than sell it outright.

Suggestions for India

• Governmental support: The domestic recycling market is relatively less organised but should gain support from initiatives such as revamped GMS (Gold Monetisation Scheme).
• Role of Currency: The various policy measures sync to make it attractive to bring surplus gold mainstream and liquidity is enhanced via bullion exchanges.
• Organised recycling:  It is necessary to support organised recycling with better incentives and tech-based solutions encompassing the gold supply chain end-to-end.

Concerns for India

• Low domestic recycling: India recycles little of its own stock of gold - about 8 per cent of the global scrap supply.
• Economic fluctuations: Recycling is driven by current gold price movements, future price expectations and the economic backdrop.

The government recently inaugurated a seismological observatory in Udhampur, Jammu and Kashmir.

• The National Centre for Seismology (NCS) in the Ministry of Earth Sciences (MoES) has initiated several new measures to upgrade and strengthen the infrastructural facilities.
• They aim to provide better scientific inputs required for improving disaster mitigation and preparedness measures.
• It has installed 152 permanent observatories throughout the country with and plans to install 100 more in the next five years.

Need for Earthquake Observatories:

• The occurrence of an earthquake is a natural process, beyond human power. Hence, preventionis the only way.
• Further, the Indian subcontinent is considered as one of the world's most disaster-prone areasin terms of earthquakes, landslides, floods, cyclones, and tsunamis.

Objective of the project

• It is part of an effort titled Seismic Microzonation, which aims to generate vital geotechnical and seismological parameters for developing earthquake risk resilient building design codes for structures and infrastructures.
• It has initiated actions for the setting up of an earthquake early warning system (EEWS) on a pilot basis for a small area in the Himalayas. 
• It has a precise mandate of collecting, collating and integrating various data sets to provide site-specific risk maps as per user needs.

Significance of the region

• Jammu and Kashmir is the westernmost extension of the Himalayas.
• Udhampur district lies between the two major seismogenic faults, namely Main Frontal Thrust (MFT) and Main Boundary Thrust (MBT), which are among the potential factors for generating earthquakes in the J&K region.
• The new seismological observatory will help further strengthen the region’s earthquake monitoring.

Earthquakes in India

• The earthquake is characterized bysevere shaking of the ground and severe shaking of structures above the ground.
• According to the National Disaster Management Authority, this happens due to the release of the transmitted pressure of moving lithospheric or crustal plates.
• According to seismic zoning mapping, earthquake zones are divided on the basis of the estimation of the intensity of the earthquake.
• India is divided into 4 zones: Zone 2, Zone 3, Zone 4, and Zone 5.
• While Zone 2 is the least dangerous, Zone 5 is the most dangerous.
• Nearly, 59% of India’s land area is under a moderate to severe seismic hazard warning, which means that India is prone to earthquakes of magnitude 7 and above.
  
  

Other earthquake observatories in India

• Currently, India has only 115 earthquake observatories.
• Some of them are:
• National Geophysical Research Institute (NGRI), Hyderabad
• Wadia Institute of Himalayan Geology (WIHG), Dehradun
• North East Institute of Science & Technology (NEIST), Jorhat