Today’s Important Prelims Bits 17-05-2022
In News: PM to address programme marking silver jubilee celebrations of TRAI on 17th May
- TRAI was established in 1997 through the Telecom Regulatory Authority of India Act, 1997.
- TRAI’s mission is to create and nurture conditions for growth of telecommunications in the country in a manner and at a pace which will enable India to play a leading role in emerging global information society.
- One of the main objectives of TRAI is to provide a fair and transparent policy environment which promotes a level playing field and facilitates fair competition.
- The TRAI Act was amended by an ordinance, effective from 24 January 2000, establishing a Telecommunications Dispute Settlement and Appellate Tribunal (TDSAT) to take over the adjudicatory and disputes functions from TRAI.
The Places Of Worship Act
In News: Today, the Supreme court will hear a petition on Gyanwapi Issue.
What is the Places of Worship Act, and what are its provisions?
- The Places Of Worship Act, 1991, seeks to prohibit the conversion of a place of worship and maintain its religious character as was at the time of India’s Independence on August 15, 1947.
- Section 4 (1) of the Act states: “The religious character of a place of worship existing on the 15th day of August, 1947 shall continue to be the same as it existed on that day.”
- The Act was brought about by a Bill introduced by the erstwhile Union Home Minister in the PV Narasimha Rao Cabinet, Shankarrao Bhavrao Chavan.
- The Act has been in force since July 11, 1991.
- Section 5 of the Act states that its provisions shall not apply to the Ram Janmabhoomi-Babri Masjid case.
- The Places of Worship Act, 1991, was challenged last year in the Supreme Court arguing that the law was a contravention of the principle of secularism as laid down by the Constitution of India.
What is Gyanwapi Masjid Row?
- In 1991, a group of priests in Varanasi petitioned in court, seeking permission to worship on the Gyanvapi premises.
- The Allahabad High Court in 2019 ordered a stay on an ASI survey that was requested by the petitioners.
- Last month, a Varanasi court ordered a videographed survey of the Gyanvapi Masjid complex after the five Hindu women filed pleas, seeking to worship behind the western wall of the premises.
In News: Repo rate is likely to reach the pre-pandemic level of 5.15% from the existing 4.4% by August, says an SBI report.
What is the repo rate?
- The repo rate is one of several direct and indirect instruments that are used by the RBI for implementing monetary policy.
- RBI defines the repo rate as the fixed interest rate at which it provides overnight liquidity to banks against the collateral of government and other approved securities under the liquidity adjustment facility (LAF).
- In other words, when banks have short-term requirements for funds, they can place government securities that they hold with the central bank and borrow money against these securities at the repo rate.
- Since this is the rate of interest that the RBI charges commercial banks such as State Bank of India and ICICI Bank when it lends them money, it serves as a key benchmark for the lenders to in turn price the loans they offer to their borrowers.
A crucial monetary tool
- The repo rate system allows central banks to control the money supply within economies by increasing or decreasing the availability of funds.
- Besides the direct loan pricing relationship, the repo rate also functions as a monetary tool by helping to regulate the availability of liquidity or funds in the banking system. For instance, when the repo rate is decreased, banks may find an incentive to sell securities back to the government in return for cash. This increases the money supply available to the general economy.
- Conversely, when the repo rate is increased, lenders would end up thinking twice before borrowing from the central bank at the repo window thus, reducing the availability of money supply in the economy.
- Since inflation is, in large measure, caused by more money chasing the same quantity of goods and services available in an economy, central banks tend to target regulation of money supply as a means to slow inflation.
Repo rate and inflation
- Inflation can broadly be: mainly demand driven price gains, or a result of supply side factors that in turn push up the costs of inputs used by producers of goods and providers of services, thus spurring inflation, or most often caused by a combination of both demand and supply side pressures.
- Changes to the repo rate to influence interest rates and the availability of money supply primarily work only on the demand side by making credit more expensive and savings more attractive and therefore dissuading consumption.
- However, they do little to address the supply side factors, be it the high price of commodities such as crude oil or metals or imported food items such as edible oils.