Answers: Mains Marathon – UPSC Mains Current Affairs Questions – October 22, 2018


Q.1) The Reserve Bank of India (RBI) recently opposed the move by an Inter-Ministerial Committee for an independent Payments Regulatory Board. Discuss the viability of a payment regulator  independent from RBI.


Answer: Ratan Watal Committee recommendations(wrt payment regulator):

  1. Proposed to make regulation of payments independent from the function of central banking to give the entire digital payments boost.
  2. Give Board for Regulation and Supervision of Payment and Settlement Systems (BPSS) independent statutory status within overall structure of RBI.
  3. Called for amendments to the Payments and Settlement Systems Act, 2007 to provide BPSS explicit mandate for competition and innovation, consumer protection, open access and interoperability, regulations on systemic risks and data protection.

Inter Ministerial panel:

The committee, set up to finalise amendments to the Payment & Settlement Systems (PSS) Act, 2007, has proposed the establishment of an Independent Payments Regulatory Board (PRB) to foster competition and consumer protection, systemic stability and resilience in the payments sector, which is being driven by the digital payments in the country. The chairperson should appointed by the government in consultation with the RBI.

Arguments of RBI:

  1. Payment systems are a sub-set of currency, which is regulated by the RBI, and that the overarching impact of monetary policy on payment and settlement systems and vice-versa provides support for the regulation of payment systems to be with the monetary authority aka RBI.
  2. The responsibility of appointing should remain with the RBI Governor.
  3. It is not clear why the SAT is being brought in for resolving payment system-related cases and more so when exchanges and securities markets are not under the purview of the Payment Systems Bill.
  4. This will result in dual regulation and disturb the functioning of an otherwise well run organisation.
  5. Ratan Watal Committee on digital payments recommended the establishment of PRB within the overall structure of the RBI.
  6. There has been no evidence of any inefficiency in payment systems of India. The digital payments have made good and steady progress. India is gaining international recognition as a leader in payment systems. Given this, there need not be any change in a well-functioning system.
  7. There is an underlying bank account for payment systems under the purview of banking system regulation which is vested with the RBI.
  8. Settlement systems are finally posted in the books of account of banks with the RBI to attain settlement finality.


Q.2) The recent attack by Taliban in Kandahar, Afghanistan raises serious  concerns towards restoring normalcy in the region by democratic process of election. Discuss the reasons for such adamant attitude of Taliban against restoration of peace and how situation can be tackled to resolve the crisis.


UN report revealed a rise of Afghan civilians being intentionally targeted by the Taliban. This report shows the rise of complex bombing attacks deliberately targeting civilians in 2017. These attacks are referred to as the Taliban’s ferocious response to US President Trump’s new strategy of war, an increased pace of aerial bombardments targeting Taliban and Islamic State Militants, giving the message that the Taliban can strike at will.

American diplomats and Taliban representatives held direct talks for the first time in Qatar. Still, the insurgents would probably remain adamant on positions that the U.S. government would not accept, such as imposing sharia law on the country and removing all foreign troops.

They are scared that if they make a deal with the government, some of their fighters, who have no skills except pulling a trigger, may join Daesh.

How India can play a role:

  1. Work actively with regional groups and powers to negotiate peace.
  2. Continue economic and capacity building support to Afghanistan.
  3. Support democratic processes in Afghanistan.

US declared that India is Afghanistan’s most reliable regional partner and the largest contributor of development assistance in the region.


Q.3) What are the reasons for which India is experiencing an escalation in heat waves? Also examine the various strategies followed by states to address the consequences of heat waves.


As per NDMA, a Heat Wave is a period of abnormally high temperatures, more than the normal maximum temperature.

Reasons for increasing heat waves:

  1. Sparser pre-monsoon season showers leaves less moisture than normal to the area and thus making large parts of India arid and dry.
  2. El Nino is often responsible for increasing temperatures in Asia.
  3. Climate change is also responsible for increasing extremes in temperatures and rainfall.
  4. Urban heat island effect – Our city planning is responsible for replacing our green spaces and water bodies with concrete.
  5. Reduced span of winter and variability of seasons.

Strategies to address heat waves:

  1. Educating people about the measures they should take to avoid the ill effects of heat wave conditions.
  2. Forecast and Issuance of Heat Alert or Heat Warning.
  3. Acclimatization: People at risk are those who have come from a cooler climate to a hot climate. When such visitors arrive during the heatwave season, they should be advised not to move out in open.
  4. Preparation of Heat Wave Action Plan
  5. Mitigating Heat Wave through constructing shelters/ sheds, bus stands and provide drinking water points at worksites.


Q.4) Why do the prices of diesel and petrol increase in India frequently? What are the strategies adopted by India in controlling this increase in rate of fuel?


Fluctuation in prices:

  1. Excess dependence on imports. Thus any change in global production scenario affects Indian market.
  2. Changing value of rupee vis-a-vis the dollar. This is falling due to poor trade deficit and overall state of Indian economy.
  3. Changing production by the producer countries after continuous fall in oil prices.
  4. India’s petroleum subsidies are another matter of concern as they affect the real value of rupee on international trade.
  5. US’ exit from Iran nuclear deal – The United States’ decision to exit the Iran nuclear deal unilaterally and the sanctions that are expected to be imposed on Iran as a result, are some of the major factors behind the recent rally in crude prices.
  6. Rates also vary from state to state depending on the local taxes.

Strategies adopted to control the rise:

  1. Price control mechanisms – mostly subsidies.
  2. Interfering in the rupee-dollar market by infusing more dollars.
  3. Maintaining strategic reserves to shied economy from adverse price shocks.
  4. Cutting excise duties on the fuel.
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