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CURRENT AFFAIRS 06-06-2018

Repo Rates Increased After 4.5 Years

Relevance:

  • GS Prelims 2019, GS Mains paper III
  • Economy, Repo rate, Monetary Policy Committee (MPC)

Why in news?

  • The six-member monetary policy committee (MPC) of the Reserve Bank of India (RBI) on 6th June, 2018 increased the repo rate by 25 basis points to 6.25%.
  • This is the first rate hike in four-and-a-half years; the last was in January 2014.
  • Repo rate now higher by 25 basis points; central bank maintains neutral stance

Why this increase in repo rate?

  • The MPC arrived at the unanimous decision as the outlook for inflation had become ‘uncertain’ following a surge in international crude oil prices.
  • What will be impact of hike in repo rate?
  • The banks may increase the interest rate on lending to the customers.

What forms the basis of this hike?

  • As per RBI, crude oil prices have been volatile and this imparts considerable uncertainty to the inflation outlook — both on the upside and the downside.
  • Consumer price index-based inflation, or retail inflation, rose to 4.6% in April from 4.28% in March.
  • This is majorly because; Indian crude basket surged to $74 a barrel from $66 since the last policy meeting in April.
  • While the central bank has increased the inflation projection, it has maintained the ‘neutral’ stance for monetary policy, meaning interest rates can move either way.

Highlights of the second bi-monthly monetary statement

  • RBI hikes key lending rate (repo) by 0.25 % to 6.25 %
  • Rate hike is the first in four-and-half-years
  • Reverse repo rate stands at 6 %, bank rate at 6.50 %
  • Growth projection retained at 7.4 % for 2018-19
  • Projects retail inflation at 4.8-4.9 % for April-September, 4.7 % in H2
  • Major upside risk to the inflation path as price of crude rose by 12 pc
  • Volatile crude oil prices adds to uncertainty to the inflation outlook
  • Investments recovering well; to get boost from swift resolution under IBC
  • Geo-political risks, financial market volatility, trade protectionism to impact domestic growth
  • Adherence to budgetary targets by the Centre and states will ease upside risks to the inflation outlook
  • All members of the monetary policy committee voted for 0.25 % rate hike
  • Next meeting of the MPC on 31 July and 1 August.

World Environment Day, 2018: Beat Plastic Pollution

 

“On World Environment Day, the message is simple: reject single-use plastic. Refuse what you can’t re-use. Together, we can chart a path to a cleaner, greener world.” — Secretary-General, António Guterres

 

Relevance:

  • GS Prelims 2019, GS mains paper III
  • Environment, World Environment Day, 5th June, Beat Plastic Pollution

Why in news?

  • The World Environment Day was conceived in 1974 and is celebrated on 5th June every year.
  • This year, India was the host to the World Environment Day

What was the theme this year?

  • The theme for the year 2018 is “Beat Plastic Pollution”, and is a call for individuals to take charge of their surroundings and realise the severity of using plastic in daily life.
  • If you can’t reuse it, then refuse it.
  • The main focus of this year’s Environment day is to “ban single use plastics”.

What are the types of plastics?

  • PET- Polyethylene terephthalate: This type of plastic is used for water or soda bottles, or into polyester yarn. They can be recycled for making textiles, if segregated at the source.
  • High density polyethylene (or HDPE): It is a tough, opaque plastic that is used for making shampoo bottles or grocery bags.  This can also be recycled if segregated at the source.
  • LDPE (Low Density Poluethylene), Polypropylene and Styrofoam: they are hardest to recycle.
  • If we were to classify plastic by use, there are single use plastics – straws, grocery bags, mineral water bottles and the like – and plastics that last a little longer, such as pencil boxes and plastic furniture.
  • The current campaign focuses on banning single use plastic.

Why is plastic such a danger?

  • With plastic making up ten per cent of the total waste generated, half of it used is disposable or single-use.
  • This presents a major problem as it is non-renewable and its manufacture and destruction exposes individuals and environment to many toxins, including carcinogens.
  • India is a major producer of plastic waste in the world.
  • It has been estimated by the centre government that over 60% of about 25,000 tonnes of plastic waste generated daily is collected.
  • This means that a staggering 10,000 tonnes of trash is being released into the environment, a lot of it going into the sea.
  • Ganga-Brahmaputra-Meghna river system is on the UN map of 10 rivers worldwide that collectively carry the bulk of the plastic waste into the oceans.
  • The effects are evident: they threaten marine life and the well-being of people, as microplastics are now found even in drinking water.
  • Oil is one of the main fossil fuels. If current trends persist, the plastics sector will account for 20 percent of the total oil consumption by 2050, and take up a significant chunk of our carbon budget in that time.
  • Experts estimate that there are over 150 million tonnes of plastic waste in the ocean today, and if we do little, there will be more plastic than fish in the ocean by 2050.
  • Plastics are lead to leaching of certain harmful chemicals such as Bisphenol A (known for bringing hormonal changes in humans) and phthalates, which are carcinogenic in nature.

What efforts have been made by the government in order to prevent plastic pollution?

  • Environment (Protection) Act, 1986 is the overarching law that enables anti-pollution rules to be framed and implemented.
  • The government has enacted Solid Waste Management Rules and the Plastic Waste Management Rules of 2016.
  • The State Level Monitoring Committees provided for under the rules have not been made accountable. The waste management framework is dysfunctional.
  • The laws should be implemented in their letter and spirit.

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