Prelims-Pinpointer-for-06-12-2025 Current-Affairs Notes

Prelims Oriented

Director General of Civil Aviation (DGCA)

About DGCA

• Regulatory body in civil aviation primarily dealing with safety issues ensuring air transport security nationwide.
• Attached office of Ministry of Civil Aviation functioning under administrative control for policy implementation.
• Headquarters: New Delhi serving as central hub for civil aviation regulation in India.

Mandate

• Responsible for regulation of air transport services to/from/within India and enforcement of civil air regulations.
• Enforces air safety and airworthiness standards ensuring compliance by airlines and aircraft operators comprehensively.
• Coordinates regulatory functions with International Civil Aviation Organisation (ICAO) for global aviation standards alignment.

Functions and Responsibilities

• Safety Oversight

• • • Main function: ensure safety of passengers and crew members on all flights operating in India comprehensively.
    • Investigates incidents/accidents within Indian airspace; takes appropriate action to prevent similar incidents in future ensuring accountability.

• Industry Development

• Crucial role in growth and development of Indian aviation industry working closely with airlines and airport operators.

• Plays crucial role in developing new airports, modernizing existing facilities ensuring they meet growing aviation demands effectively.

• Air Traffic Regulation

• Responsible for regulation of air traffic in India; works closely with Airports Authority of India (AAI) ensuring coordination.

• Ensures air traffic managed safely and efficiently across Indian airspace preventing congestion and accidents comprehensively.

• Licensing and Certification

• Issues licenses and certificates to pilots, aircraft maintenance engineers, and other aviation personnel ensuring qualified workforce.

Repo Rate

Meaning of the Repo Mechanism

• The Repo Rate, or Repurchase Agreement Rate, denotes the interest charged by the central bank when commercial banks borrow short-term funds.
• It enables banks to address temporary liquidity shortages by pledging securities and agreeing to repurchase them later at an interest-inclusive price.

How Repo Adjustments Influence Borrowing

• When repo rates rise, banks face higher borrowing costs, prompting them to raise lending rates, which dampens loans to households and businesses.
• A lower repo rate makes credit cheaper for banks, leading to reduced EMIs, increased borrowing, and stronger consumption demand.

Repo Rate as a Tool of Monetary Regulation

• The repo instrument allows the central bank to modulate money supply, steer inflation dynamics, and stabilise overall economic activity.
• It influences the cost of funds across the financial system and shapes lending behaviour.

Consequences of a Repo Rate Reduction

• Growth Momentum

• • • Reduced interest costs facilitate business expansion, capital investment, and employment generation.
    • Affordable credit boosts consumer spending and production across sectors.

• Financial Market Behaviour

• • Lower deposit returns may shift household savings towards stocks, mutual funds, or real estate, affecting capital allocation patterns.

• Currency and Trade Effects

• • A lower repo rate may diminish investment returns, potentially causing capital outflows, weakening the currency, and raising import prices.
  • A softer currency can enhance export competitiveness.

• Inflationary Pressure

• • Increased borrowing and consumption can elevate prices, risking a breach of the 4% inflation anchor, with a permissible ±2% band.

Evolution of India’s 4% Inflation Benchmark

• Chakravarty Committee Insights (1982–85)

• • Established under RBI Governor Manmohan Singh and chaired by Sukhamoy Chakravarty.
  • It emphasised price stability as central to monetary policy.
  • Proposed 4% average WPI inflation as a balanced long-term target.
  • Called for market-based government borrowing, an active securities market, and monetary targeting (M3) for inflation control.
  • M3 = M1 (currency with public + demand deposits) + net time deposits.

• Urjit Patel Committee (2014)

• • Institutionalised flexible inflation targeting, endorsing the 4% ±2% band originally proposed by the Chakravarty Committee.
  • Its recommendations shaped the 2016 inflation-targeting framework, aligning India with global monetary norms.

Monetary Policy Committee (MPC)

Understanding Monetary Policy

• Monetary policy refers to the central bank’s use of interest rates, money supply tools, and credit regulations to influence economic activity.
• Under the Reserve Bank of India Act, 1934, the RBI is legally empowered to frame and conduct monetary policy.
• Its foremost objective is to ensure price stability, while also supporting economic growth.
• Price stability is viewed as essential for achieving sustained long-term expansion.

Evolution of India’s Inflation Targeting Framework

• In May 2016, the RBI Act was amended to give a statutory basis to the flexible inflation targeting system.
• The inflation target is finalized by the Government of India in consultation with the RBI, once every five years.
• This framework guides monetary policy by providing a numerical anchor for inflation expectations.

Role and Mandate of the Monetary Policy Committee

• The Monetary Policy Committee (MPC), established under Section 45ZB of the amended RBI Act, determines the policy interest rate needed to achieve the inflation target.
• Its central function is to set the benchmark repo rate, ensuring inflation remains within the prescribed band.
• The MPC replaced the earlier Technical Advisory Committee, creating a more structured decision-making mechanism.

Composition and Decision-Making Structure

• The MPC consists of six members:
  • The RBI Governor (Chairperson).
  • The Deputy Governor responsible for monetary policy.
  • One RBI Board nominee.
  • Three external members nominated by the Central Government.
• External members serve a four-year term.
• The quorum requires at least four members, including the Governor or, in his absence, the Deputy Governor.
• Decisions are based on majority voting; in the event of a tie, the Governor exercises a casting vote.
• MPC decisions are binding on the RBI and guide monetary operations.
• The Monetary Policy Department (MPD) of the RBI provides analytical support for policy formulation.
• The MPC must convene a minimum of four times annually.

Open Market Operations (OMO)

Context: RBI announced OMO purchases of ₹1 lakh crore G-Secs and $5 billion USD-INR swap this month for liquidity injection; Governor Malhotra says tariffs’ impact minimal.

Open Market Operations (OMO)

• Meaning and Purpose

• • Open Market Operations (OMOs) refer to the central bank’s sale or purchase of government securities in the open market.
  • They serve as a key monetary policy instrument for regulating money supply, liquidity, and inflation in the economy.
  • The Reserve Bank of India (RBI) conducts OMOs to manage rupee liquidity on a durable and long-term basis.

How OMOs Function

• OMO – Sale of Government Securities

• • RBI sells securities when it assesses excess liquidity in the financial system.
  • Sale of securities withdraws money from circulation, reducing banking system liquidity.
  • Lower liquidity pushes interest rates upward, making borrowing costlier for businesses and households.
  • Higher interest rates slow economic activity by discouraging credit growth.
  • Bond market impact: Increased supply of government securities raises bond yields, as investors demand higher returns.

• OMO – Purchase of Government Securities

• • When liquidity is tight, RBI purchases government securities from banks and market participants.
  • This injects funds into the economy and increases liquidity.
  • Additional liquidity lowers interest rates, making loans cheaper for consumers and firms.
  • Lower borrowing costs stimulate investment and consumption, supporting economic expansion.

Significance for Monetary Policy

• OMOs help RBI maintain price stability by controlling inflation through liquidity management.
• They support smooth functioning of financial markets by modulating liquidity shocks.
• OMOs influence bond yields, credit conditions, and investment climate, shaping broader macroeconomic outcomes.

Foreign Institutional Investors (FIIs)

Context: Foreign institutional investors are showing renewed interest in Indian markets with $414 million inflow (six-month high) as US flows lose steam, and focus shifts to emerging markets.

Foreign Institutional Investors (FIIs)

• FIIs constitute a category within Foreign Portfolio Investors comprising large global institutional entities.
• These include mutual funds, pension funds, insurance companies, hedge funds, and similar institutions.
• They follow structured, research-driven investment strategies in foreign markets, supplying long-term capital.
• Their inflows strengthen emerging economies, while sudden withdrawals can destabilise financial markets.
• Hence, FIIs remain subject to strong regulatory oversight to preserve macro-financial stability.

Regulatory Architecture in India

• FIIs are governed primarily under FEMA, 1999, and SEBI’s FPI Regulations.
• The RBI supervises sector-wise foreign investment limits and monitors compliance daily.
• The framework ensures transparency, market discipline, and controlled exposure to foreign capital.

Investment Limits and Eligibility Rules

• A single FII may invest up to 10% equity in one Indian company.
• Combined FII/NRI/PIO holdings are capped at 24%, unless raised by shareholders.
• Eligible entities include university endowment funds, charitable trusts, and long-standing institutional organisations.
• FIIs may deploy proprietary capital and also invest in unlisted securities within permitted norms.

Macroeconomic Factors Influencing FII Flows

• Increased FII participation recently correlates with a weaker U.S. Dollar Index, falling from 104–105 to around 99–100.
• A softer dollar improves the relative strength of the rupee, attracting foreign investors.
• The RBI’s stable policy stance and macroeconomic resilience boosted FII interest in banking and financial services.
• Conversely, FIIs reduced exposure to IT sectors due to concerns over a possible U.S. slowdown affecting tech revenues.

Digital Hub for Reference and Unique Virtual Address (DHRUVA)

Overview of DHRUVA

• DHRUVA is a national-level Digital Address Digital Public Infrastructure (DPI) designed to standardise, digitise, and virtualise physical addresses.
• It introduces a UPI-style addressing system, allowing citizens to share address “labels” such as name@entity instead of full physical addresses.
• The initiative is proposed through a draft amendment released by the Department of Posts in 2025.
• It expands upon the existing DIGIPIN digital geocoding framework.

Objectives

• To build a unified, interoperable, and secure digital address ecosystem for India.
• To treat address-data management as a core public infrastructure, similar to Aadhaar, UPI, and DigiLocker.
• To enable Address-as-a-Service (AaaS) for government agencies, businesses, and citizens.
• To support seamless address sharing for delivery, verification, and governance services.

Key Features

• UPI-like Address Labels

• • Each user receives a virtual address handle (e.g., name@entity) acting as a digital proxy for their physical location.
  • Eliminates repeated entry of full addresses across services.

• Consent-Based Data Access

• • Organisations may access a user’s geocoded or textual address only after explicit, time-limited consent.
  • Ensures strong privacy and data-protection safeguards.

• DIGIPIN Backbone

• • DIGIPIN is a 10-character alphanumeric geocode representing latitude–longitude.
  • It maps every 14 sq. metre unit of India, generating ~228 billion unique address points.
  • It is open-sourced, with high accuracy for rural and unmapped regions.

• AaaS Architecture

• • Provides secure APIs enabling integration of verified address data with logistics, e-commerce, fintech, and government platforms.
  • Widens adoption across public and private sectors.

• Institutional Framework

• • A Section 8 not-for-profit entity, similar to NPCI, will govern DHRUVA.
  • Address Service Providers (ASPs) will issue virtual labels.
  • Address Information Agents (AIAs) will manage user consent and authorisation workflows.
• Interoperability & Stakeholder Participation
  • The system is voluntary, encouraging participation by gig platforms, e-commerce companies, fintech networks, and logistics providers.
  • Designed to create a nationally consistent addressing standard for governance, service delivery, and commerce.

Vultures

Context

• BNHS will release six critically endangered vultures—slender-billed and white-rumped—in Assam in January 2026.
• The initiative is part of India’s long-term vulture population recovery strategy.

Slender-billed Vulture (Gyps tenuirostris)

• Profile

• • A critically endangered Old World vulture once widely distributed in South Asia.
  • Survives today in fragmented habitats across Assam, Gangetic plains, Nepal, Bangladesh, Myanmar, and Cambodia.
  • Prefers tall nesting trees near settlements, slaughterhouses, and riverine ecosystems.

• Status & Traits

• • IUCN Status: Critically Endangered with fewer than ~870 mature individuals.
  • Characterised by a narrow bill, long bare neck, grey body, and pale rump.
  • Wingspan ranges from 196–258 cm with body length between 80–95 cm.
  • Breeds slowly, producing only one egg per year; feeds mainly on carrion.

White-rumped Vulture (Gyps bengalensis)

• Profile

• • Once extremely common across India, now among the world’s fastest-declining birds.
  • Nests on large trees or cliffs, frequently roosting near human habitation.

• Status & Traits

• • IUCN Status: Critically Endangered due to diclofenac-contaminated livestock carcasses.
  • Displays a white neck ruff, dark plumage, and a prominent white rump patch.
  • Wingspan measures 180–210 cm, with weight reaching up to 7.5 kg.
  • Breeds between October and March, laying a single thick-shelled egg.
  • Feeds in mixed scavenger groups, relying heavily on carcass availability.

AstroSat is India’s first dedicated multi-wavelength astronomy satellite

About AstroSat

• AstroSat is India’s first dedicated multi-wavelength astronomy satellite, enabling simultaneous observations in UV, optical, soft X-ray and hard X-ray ranges.
• Launched in 2015 aboard PSLV-C30, it was placed in a 650 km orbit for long-duration astrophysical studies.
• Objective: To observe high-energy cosmic phenomena, study compact objects, map stellar evolution processes, and generate publicly accessible astronomical data.
• Payload Suite:
  • Five scientific instruments covering 0.3–100 keV and UV wavelengths, allowing integrated spectral analysis.
  • Unique capability for simultaneous multi-band observations, uncommon among global space observatories.
• Technical Features:
  • High pointing accuracy and stable attitude control allow extended exposure times.
  • Mission operations handled by ISTRAC, Bengaluru; data archived at ISSDC, Bylalu.
• Mission Life: Designed for 5 years, yet has significantly exceeded its intended lifespan, continuing to generate high-quality astrophysical data.

Ultra-Violet Imaging Telescope (UVIT)

• Overview

• • UVIT is a dual-channel ultraviolet imaging telescope mounted on AstroSat, capable of observing in far-UV (FUV), near-UV (NUV) and visible bands.
  • Marks India’s first UV space telescope, and globally, the second in FUV capability after the Hubble Space Telescope.

• Key Features

• • Provides spatial resolution better than 1.5 arcseconds, placing it among the world’s most precise UV imagers.
  • Comprises two co-aligned telescopes with FUV and NUV+Visible channels.
  • Developed through a national collaboration coordinated by the Indian Institute of Astrophysics (IIA) with major ISRO centres.

• Scientific Significance

• • Enabled major discoveries in stellar and galactic astrophysics, including:
    • Detection of hot companions of Be stars.
    • Identification of blue stragglers in clusters with high precision.
    • Mapping of UV disks in dwarf galaxies and novae in Andromeda.
    • Establishing correlations between AGN UV and X-ray emissions.
  • Celebrated 10 years of successful operation, marking a decade of significant contributions to global space science.