Today's Headlines

Today's Headlines - 12 September 2023

A new member in G20

GS Paper - 2 (International Relations)

The African Union (AU) was admitted as a new member of the G20, barely three months after India floated the idea of including the organisation. The development took place at the ongoing 18th G20 Heads of State and Government Summit in New Delhi.

What is the AU?

  • The AU is an intergovernmental organisation of the 55 member states located on the continent of Africa.
  • The grouping is guided by its vision of “An IntegratedProsperous and Peaceful Africa, driven by its own citizens and representing a dynamic force in the global arena.
  • Although the AU was officially launched on 9 July 2002, its roots go back to the 1960s when the Organisation of African Unity (OAU) was established.
  • The OAU was also an intergovernmental organisation and it aimed to bring African nations together and resolve common issues through collective action.
  • Its main focus, however, was to help liberate the colonised countries in the continent. To do so, OAU mustered diplomatic support and provided logistical aid to liberation movements across Africa.
  • Notably, the man spearheading the idea of the AU was the Libyan dictator Colonel Muammar Gaddafi.
  • He also did more than any other leader to ensure the creation of the African Union (AU) in 2002, hosting several meetings, and forcing Nigeria and South Africa to react to his frantic drive towards creating a federal body, an analysis published in The Guardian said.

What are the objectives of the AU?

  • Unlike the OAU, the AU concentrates its energy and resources on achieving greater unity and solidarity between African countries and their people.
  • It seeks to accelerate the process of the political and socio-economic integration of the continent.
  • Moreover, the AU addresses the multifaceted social, economic and political problems that the African nations have been facing.
  • Its key objectives also include promoting peacestability, and security across the region. Protecting and promoting human rights are also part of the agenda.

What are the notable achievements of the AU?

  • Many of the AU’s peacekeeping missions have helped governments tackle terrorism across Africa, from the Sahel to northern Mozambique. Over the years, the organisation’s interventions have prevented violence in countries like Burundi, the Central African Republic, Comoros, Darfur, Somalia, South Sudan, Sudan, and Mali.
  • AU’s diplomatic efforts have also resulted in resolving conflicts in Africa. Last year, it brokered a peace deal between the Ethiopian Government and the Tigray People’s Liberation Front (TPLF) in South Africa, almost two years after the two entities began fighting.
  • The establishment of the African Continental Free Trade Area (AfCFTA), which came into force in 2021, is yet another achievement of the organisation.
  • With 54 member countries as signatoriesAfCFTA is the world’s largest new free trade area since the establishment of the World Trade Organization (WTO) in 1994.

RBI to discontinue I-CRR

GS Paper - 3 (Economy)

The Reserve Bank of India (RBI) announced that it would discontinue the incremental cash reserve ratio (I-CRR) in a phased manner. The central bank will release the amount which banks have maintained under I-CRR in stages. The I-CRR was introduced on 10 August 2023, by the RBI to absorb the surplus liquidity generated by various factors, including the return of Rs 2,000 notes to the banking system. The regulator had said that I-CRR was a temporary measure, which will be reviewed on 8 September 2023 or before.

What has RBI said?

  • The RBI said that after a review, it has decided to discontinue the I-CRR in a phased manner.
  • Based on an assessment of current and evolving liquidity conditions, it has been decided that the amounts impounded under the I-CRR would be released in stages so that system liquidity is not subjected to sudden shocks and money markets function in an orderly manner.
  • The RBI will release the 25 percent of funds maintained by lenders under the I-CRR on 9 September 2023. Another 25 per cent of the amount maintained under I-CRR will be released on 23 September 2023 and the balance 50 per cent on 7 October 2023, the RBI said.
  • This will mean that banks will have sufficient funds to meet higher credit demand during the upcoming festival season.

When was I-CRR introduced?

  • On 10 August 2023, after announcing the monetary policy, RBI Governor Shaktikanta Das said that banks will have to maintain an I-CRR of 10 per cent on the increase in their net demand and time liabilities (NDTL) between 19 May 2023, and 28 July 2023. It came into effect from the fortnight starting 12 August 2023.
  • The RBI said it will review I-CRR on 8 September 2023, or earlier with a view to returning the impounded funds to the banking system ahead of the festival season. The regulator, however, left the CRR unchanged at 4.5 per cent.

Why was I-CRR needed?

  • The RBI announced I-CRR as a temporary measure to absorb excess liquidity from the banking system. The level of surplus liquidity in the system surged because of the return of Rs 2,000 banknotes to the banking system, RBI’s surplus transfer to the government, pick up in government spending and capital inflows. The daily absorption of liquidity by the RBI in July was Rs 1.8 lakh crore.
  • Excessive liquidity can pose risks to price stability and also to financial stability. Hence, efficient liquidity management requires continuous assessment of the level of surplus liquidity so that additional measures are taken as and when necessary to impound the element of excess liquidity, Das had said in August after announcing the I-CRR measure.

What was the impact of I-CRR on liquidity conditions?

  • RBI Governor Shaktikanta Das had said the I-CRR measure will absorb above Rs 1 lakh crore of excess liquidity from the banking system.
  • The banking system’s liquidity turned deficit for the first time in the current fiscal on 21 August 2023 after the RBI’s I-CRR mandate.
  • The tight liquidity condition was also contributed by outflows on account of goods and services tax (GST) and the selling of dollars by the central bank to stem the rupee’s fall.
  • The liquidity, as reflected by the amount of money injected by the RBI into the system, stood at Rs 23,644.43 crore on 21 August 2023.
  • However, the banking system liquidity again turned to surplus from 24 August 2023. On 8 September 2023, the RBI absorbed Rs 76,047 crore of surplus liquidity from the system.

What is CRR?

  • The Cash Reserve Ratio (CRR) is the minimum amount of the total deposits which banks have to maintain as cash reserve with the Reserve Bank of India.
  • It is an essential tool to maintain the health of the banking system. Banks cannot use this amount for lending or for any investment purposes. Currently, CRR stands at 4.5 per cent.


G20 declaration on health

GS Paper - 2 (International Relations)

All three health priorities of India’s G20 presidency found a mention in the G20 New Delhi Leaders’ Declaration released. The declaration spoke of strengthening primary healthcarehealth workforce, and essential health services to better-than-pre-pandemic levels, ideally within the next two to three years. In addition to focusing on epidemics such as tuberculosis and AIDS, the G20 recognised the importance of research on long COVID.

More about declaration

  • The declaration also stressed the importance of one health approach — where diseases in animals, plants, and humans are tracked by the same mechanism — with focus on tackling antimicrobial resistance.
  • The G20 health track that concluded last month was one of the most successful under India’s presidency: not only did India manage to build consensus on all three of its priority areas, it also managed to launch a proposed repository of scalable digital health platforms.

What were the three priorities?

  • The three priorities kept in mind the economic and social disruption caused by Covid-19, and what could be done to prevent such losses in the future.
  • Building resilient systems for health emergency prevention, preparedness, and response
  • Strengthening cooperation in the pharmaceutical sector with focus on ensuring equitable availability and access to vaccines, diagnostics, and therapeutics during a pandemic
  • Creating a platform for sharing digital health innovations and solutions to ensure better and universal health coverage, like CoWIN and e-Sanjeevani
  • The consensus was reached with some compromises — India did not insist on countries contributing towards a $200-million fund for a digital health programme, or on a permanent platform for sharing knowledgeintellectual property rights, and resources for developing vaccines, diagnostics, and therapeutics.

What is this digital health programme?

  • With the pandemic highlighting the importance of digital health innovation, India committed to developing a platform for sharing scalable solutions under the World Health Organisation (WHO) that can be utilised by its member states.
  • This culminated in the launch of Global Initiative on Digital Health (GIDH), with four main pillars — an investment tracker, a repository of existing digital health solutionsknowledge sharing for implementation and country-specific adaptation of these solutions, and an ask tracker to monitor the needs of different countries.
  • While a $200-million fund proposed by India did not find consensus among countries, several non-profits have committed to the fund.
  • India has committed to offering its vaccine management platform CoWIN, its tele-medicine platform e-Sanjeevani, and its Ayushman Bharat Digital Mission platform as digital public goods to others.
  • This initiative, delegates present on the negotiating table said, may help in ending the “epidemic of pilots” where several similar initiatives are launched in different countries but aren’t scaled up.
  • A World Bank report released on the sidelines of the health ministers’ meeting took a look at the Ayushman Bharat Digital Mission, and said it was “an example of a concerted effort to fill in the health information gaps and connect health information dots.”
  • Around 44.2 crore unique IDs have been created and 110 digital health services integrated into the mission as of August 2023, the report said. However, it went on to add that there are concerns regarding data protection and privacy.

What is the role proposed for traditional medicine?

  • India’s G20 presidency also pushed for integration of evidence-based traditional medicine practices with modern medicine.
  • A global summit on traditional medicine was hosted on the sidelines of the health ministers’ meeting last month.
  • The outcome document said: “We acknowledge the potential of evidence-based traditional and complementary medicine practices in public health delivery systems, provided they are rigorously and scientifically validated.”

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