TOPIC-1:Right step on savings schemes.
The 25-basis points reduction in
interest rates on short-tenure small savings schemes from April 1 may have come
as a huge disappointment for countless savers. For the middle class, especially
for millions of retired persons, these schemes are risk-free, and provide safe
parking slots for their hard-earned money. The returns these schemes offer also
help them balance their budget. Read in this light, the decision to pare the interest rates on these schemes, even if
only by a small measure, is bound to put the National Democratic Alliance
government at the Centre in an uncomfortable position vis-à-vis a crucial
component of society, the middle class, which is considered the core
constituency of the Bharatiya Janata Party. The decision, however, must be
viewed in the context of the big picture that is emerging
on the national economy. The Reserve Bank of India cut the key policy rate by a
total of 125 basis points in 2015, and it has only been partially transmitted
to end-borrowers. In fact, a little less than half of this reduction had been
passed on by banks to their clients. The problem, in a way, lies in the peculiar predicament
the banks find themselves in. It is easy to put banks on the mat for not passing
on the rate reduction to customers. Already under huge stress, they can do so
only if they could correspondingly cut their deposit rates. But there is a
catch here. The deposit mobilisation exercise of banks often encounters
competition from these small savings schemes. By reducing the interest rates on
short-term savings schemes, the government has sought
to erase the ‘return advantage’ they currently enjoy over similar-tenure
government securities. Indeed, it has set the stage for a uniform interest rate
regime — at least from a short-term perspective — and cleared a major roadblock for banks in cutting their deposit
rates, and eventually the lending rates as well. Viewed from this perspective,
the move is a welcome one.
By leaving the interest rates on
long-term and certain special category savings schemes unchanged, the
government has sent out the message that it has in mind the larger good of
society as a whole, and that it is keen to encourage people to save for the
future. A distorted interest regime is
the principal cause for driving the economy into a costlier zone. For
individuals, no doubt, the impact of the interest rate cut on small savings
schemes could be immediate and visible in terms of lower returns on their
savings. However, the effect of such a cut will have a cascading effect on the entire value chain, and
will inevitably bring the cost structure down for the economy. Surely, that is
the right way to go. The government has indeed done well to take this
less-than-popular step.
VOCABULARY:
1.pare : reduce
(something) in size, extent, or quantity in a number of small successive
stages.
2.emerging : move
out of or away from something and become visible.
3.peculiar :
different to what is normal or expected; strange.
4.predicament : a
difficult, unpleasant, or embarrassing situation.
5.sought : being
searched for.
6.regime : the
organization that is the governing authority of a political unit.
7.roadblock :any
condition that makes it difficult to make progress or to achieve an objective.
8.perspective : a
way of regarding situations or topics etc.
9.distorted : so badly formed or out of shape as to be
ugly.
10.cascading : a
succession of stages or operations or processes or units.
TOPIC-2:J&K
needs a government
Jammu
and Kashmir needs an elected government in place without further delay in order
to address the discontent that has been
mounting since the death of the Peoples Democratic Party patriarch, Mufti
Mohammad Sayeed. A spike in violence has worsened an already fragile political situation. In the five weeks since
Governor’s Rule was imposed in the State after his death, three civilians have
been killed, falling to the bullets of the security forces in two separate
incidents. A dramatic downturn has been visible in the last few weeks. In Pulwama
on January 20, a civilian, Parvez Ahmad Guroo, got caught in the crossfire
between the security forces and militants; and hundreds of people from
neighbouring villages pelted the security
forces personnel with stones, shouting anti-India slogans, impervious to the teargas
shells that were being lobbed back. In
the melee, one militant was killed, but two escaped with the help of
sympathetic locals. And the arrest on Monday in the national capital on
sedition charges of former Delhi University teacher S.A.R. Geelani — who had
been acquitted in the 2001 Parliament
attack case — for organising an event in Afzal Guru’s support, has added to the
sense of uncertainty and confusion in the Kashmir Valley. This is especially so
because simultaneously Jawaharlal Nehru University Students’ Union president
Kanhaiya Kumar was also arrested on sedition charges, for alleged involvement
in campus events where anti-India slogans were raised and the hanging of Afzal
Guru was questioned. Given that the PDP has previously also voiced concerns
about the quality of justice Afzal Guru got, the party’s position too has
become complicated in striking an understanding to revive
its alliance with the Bharatiya Janata
Party.
If the growing disaffection in the
Kashmir Valley is to be arrested and the concerns of the people addressed, it
is best done politically by an elected government, and not through direct rule
from Delhi. Given that a PDP-BJP coalition
remains the most likely outcome from the current Assembly, the two parties need
to come to an understanding very quickly, or indicate definitively that their
coalition is no longer possible. This should enable the Governor to explore
government-formation with other parties, or look at the possibility of
dissolving the Assembly and advancing elections. The framework of the Agenda of
Alliance — the common minimum programme that the two parties agreed to last
March — already exists. The PDP has specific complaints about the BJP-led
Centre not delivering on development funds to the State adequately and on time.
There is also unease about the fallout of Hindutva issues in Jammu and Kashmir,
especially over the issue of consumption of beef and the use of the State flag.
The slapping of ‘sedition’ charges on various people in Delhi has also cast a
shadow on the Valley. Far too much is at stake in Jammu and Kashmir for the BJP
and the PDP to ignore the grave situation
on the ground and to seek to use the interregnum of Governor’s rule to maximise
their respective negotiating positions.
VOCABULARY:
1.discontent :a longing for something better than the present situation.
2.spike :
a sharp rise followed by a sharp decline.
3.worsened : changed for the worse in health or fitness.
4.fragile
: easily broken or damaged or destroyed.
5.pelted
: body covering of a living animal.
6.impervious : not admitting of passage or capable of being affected.
7.teargas
: a gas that makes the eyes fill with tears but does not damage them; used in
dispersing crowds.
8.lobbed
: throw or hit (a ball or missile) in a high arc.
9.acquitted : free (someone) from a criminal charge by a
verdict of not guilty.
10.revive
: cause to regain consciousness.
11.alliance
: an organization of people (or countries) involved in a pact or treaty.
12.coalition : the union of diverse things into one body or form or group; the
growing together of parts.
13.grave
:a place for the burial of a corpse (especially beneath the ground and marked
by a tombstone).
