Daily Current Affairs for 01st July 2022

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Deputy Chief Minister

GS Paper 2: Structure, Organization and Functioning of the Executive and the Judiciary—Ministries and Departments of the Government
Important for:
Prelims exam level: Deputy Chief Minister
Mains exam Level: Role and significance of a Dy CM in state government
Why in News
Recently, after a high voltage political drama, the politics of Maharashtra came into an end and the Office of Deputy CM came in news.

What does a deputy chief minister mean in a state government?

• The Deputy Chief Minister is a member of the state government and usually the second highest ranking executive officer of their state’s council of ministers.
• A deputy chief minister usually also holds a cabinet portfolio such as home minister or finance minister.
• In the parliamentary system of government, the Chief Minister is treated as the “first among equals” in the cabinet; the position of deputy chief minister is used to bring political stability and strength within a coalition government.

Constitutional status

• The deputy chief minister is not a constitutional post.
• The political parties often adopt the practice of appointing deputy chief ministers to appease their allies.
• As a matter of fact, the post of a deputy chief minister does not hold any more significance than that of a cabinet minister in the state.
Powers & perks
• It is equivalent to the rank of a cabinet minister (in the state) and enjoys pay and perks that a cabinet minister is entitled to.
• The cabinet ministers get tax-free pay and perks and so does a deputy chief minister.
Violative of Art 164
• Art 164 of the Constitution talks only about the Appointment of the Chief Minister and other Ministers.
• It has no mention of the office of a deputy chief minister.
• The appointment of Deputy Chief Ministers in government may undermine the authority of the Chief Minister; their swearing-in by the Governor appears to be in violation of Article 164 of the Constitution.
Classic case of Mr Devi Lal swearing in as Deputy PM
• There is an interesting story with regard to oath taking of late Mr Devi Lal in the VP Singh government in 1989.
• Mr Devi Lal was the second person to take oath after VP Singh. Then President R Venkataraman began administering oath to Devi Lal as a “mantri” (minister) but the powerful politician instead took oath as “upa pradhan mantri” (deputy prime minister).
• Venkataraman repeated the oath as a “mantri” but Devi Lal again said “upa pradhan mantri”. After a couple of interruptions, Venkataraman allowed him to take oath as he pleased.
• In 1989, Devi Lal’s oath was challenged in the Supreme Court known as K M Sharma vs Devi Lal case alleging that the leader had not taken oath as prescribed in the Third Schedule of the Constitution.
• Then attorney general Soli Sorabjee told the SC that since the PM was also a member of the council of ministers, he took the same oath as the other ministers, the only difference being the word PM in place of minister.
• He said, “Describing Devi Lal as deputy PM is descriptive only and for all purposes, he is a minister and there is no constitutional sanction for a deputy PM.”
• The SC on January 9, 1990, accepted the argument and said since the AG had termed Devi Lal to be just a minister though he was described as deputy PM, “the post did not confer on him (Devi Lal) any powers of the PM”.
• So, even though various politicians being appointed as Dy CM, they will function only as a minister.
ISRO’s ‘POEM’ platform
GS Paper 3: Awareness in the fields of IT, Space, Computers, Robotics, Nano-technology, Bio-technology and issues relating to Intellectual Property Rights.
Important for

Prelims exam level: POEM

Mains exam Level: Not Much

Why in News

Besides placing three Singaporean satellites in precise orbit, the Indian Space Research Organisation (ISRO) also achieved the feat of successfully launching the PSLV Orbital Experimental Module or ‘POEM’.

What is POEM?

• The PSLV Orbital Experimental Module is a platform that will help perform in-orbit experiments using the final, and otherwise discarded, stage of ISRO’s workhorse rocket, the Polar Satellite Launch Vehicle (PSLV).
• The PSLV is a four-stage rocket where the first three spent stages fall back into the ocean, and the final stage (PS4) — after launching the satellite into orbit — ends up as space junk.
• However, in PSLV-C53 mission, the spent final stage will be utilised as a “stabilised platform” to perform experiments.
• POEM is carrying six payloads, including two from Indian space start-ups Digantara and Dhruva Space.
• “It is the first time that the PS4 stage would orbit the earth as a stabilised platform
Features of POEM
• POEM has a dedicated Navigation Guidance and Control (NGC) system for altitude stabilisation, which stands for controlling the orientation of any aerospace vehicle within permitted limits.
• The NGC will act as the platform’s brain to stabilize it with specified accuracy.
• POEM will derive its power from solar panels mounted around the PS4 tank, and a Li-Ion battery.
• It will navigate using “four sun sensors, a magnetometer, gyros & NavIC”.


• The Indian Regional Navigational Satellite System (IRNSS) is a regional satellite navigation system owned by the Indian government.
• The system has been developed by Indian Space Research Organization (ISRO).
• NavIC (acronym for Navigation with Indian Constellation) is an autonomous regional satellite navigation system that provides accurate real-time positioning and timing services.

The free fall of the rupee

GS Paper 3: Indian Economy
Important for
Prelims exam level: Exchange rate and its management
Mains exam Level: RBI and its role in maintaining the demand and supply of Rupee
The story so far:
The Indian rupee hit an all-time low against the U.S. dollar this week weakening past the 79 rupees to a dollar mark and selling as low as 79.05 against the dollar on Wednesday. Many analysts expect the rupee to weaken further in the coming months.

What is happening with the rupee?

• The Indian rupee has been witnessing a steady decline against the U.S. dollar since the beginning of 2022.
• India’s forex reserves have also dropped below $600 billion, plunging by more than $50 billion since September 3, 2021, when forex reserves stood at an all-time high of $642 billion.

• As a matter of policy, the Indian central bank has usually tried to slow down or smoothen,

Reason behind drop in FOREX

• The drop in India’s forex reserves is believed to be largely due to steps taken by the Reserve Bank of India to support the rupee.
• RBI officials, however, have noted that the drop in forex reserves is due to a fall in the dollar value of assets held as reserves by the RBI.
• For instance, if a portion of the reserves are in euros and the euro depreciates against the dollar, this would cause a drop in the value of forex reserves.

rather than reverse or prevent, the fall in exchange value of the rupee against the U.S. dollar.

The RBI’s aim

• The aim of the RBI’s policy is to allow the rupee to find its natural value in the market but without undue volatility or causing unnecessary panic among investors.
• State-run banks are usually instructed by the RBI to sell dollars in order to offer some support to the rupee. By thus selling dollars in the open market in exchange for rupees, the RBI can improve demand for the rupee and cushion its fall.

What determines the rupee’s value?

• The value of any currency is determined by demand for the currency as well as its supply.
• When the supply of a currency increases, its value drops.
• On the other hand, when the demand for a currency increase, its value rises.
• In the wider economy, central banks determine the supply of currencies, while the

• In the forex market, the supply of rupees is determined by the demand for imports and various foreign assets. So, if there is high demand to import oil, it can lead to an increase in the supply of rupees in the forex market and cause the rupee’s value to drop.
• The demand for rupees in the forex market depends on foreign demand for Indian exports and other domestic assets. So, for instance, when there is great enthusiasm among foreign investors to invest in India, it can lead to an increase in the supply of dollars in the forex market which in turn causes the rupee’s value to rise against the dollar.

demand for currencies depends on the amount of goods and services produced in the economy.
What is causing the rupee to lose value against the dollar?
• Raising interest rates by US FED:
o The U.S. Federal Reserve has been raising its benchmark interest rate causing investors seeking higher returns to pull capital away from emerging markets such as India and back into the U.S.
• Current Account Deficit:
o India’s current account deficit, which measures the gap between the value of imports and exports of goods and services, is expected to hit a 10­year high of 3.3% of GDP in the current financial year.
o This means that India’s import demand amid rising global oil prices is likely to negatively affect the rupee unless foreign investors pour sufficient capital into the country to fund the deficit.
o But foreign investors are unlikely to plough capital into India when investment yields are rising on U.S. bonds.


o The rupee, it should also be noted, has consistently lost value against the U.S. dollar for several decades now.
o A major reason for this has been consistently higher domestic price inflation in India.
o Higher inflation in India suggests that the RBI has been creating rupees at a faster rate than the U.S. Federal Reserve has been creating dollars.
o The difference in the rates at which the U.S. Federal Reserve and the RBI regulate the supply of their currencies may play a much larger role in determining the value of the rupee in the long run.

What lies ahead?

• Over the long run, the rupee is likely to continue to depreciate against the dollar given the significant differences in long­run inflation between India and the U.S.
• At the moment, as the U.S. Federal Reserve raises rates to tackle historically high inflation in the country, other countries and emerging markets in particular will be forced to raise their own interest rates to avoid disruptive capital outflows and to protect their currencies.
• It should be noted that inflation in the U.S. hit a 41­year high of 8.6%. The RBI too has been trying to rein in domestic consumer price inflation, which hit a 95-month high of 7.8% in April, by raising rates and tightening liquidity.
• As interest rates rise across the globe, the threat of a global recession also rises as economies readjust to tighter monetary conditions

Windfall Tax on Oil Producers

GS Paper 3 : Indian Economy
Important for
Prelims exam level: Windfall tax
Mains exam Level: Not Much

Why in News

The government has announced taxes on windfall gains made by crude oil producers. The government slapped a ₹23,230 per tonne additional tax on domestically produced crude oil to take away windfall gains accruing to producers from high international oil prices.

What has the Government announced?

• The government has introduced export duties for petrol, diesel and aviation turbine fuel (ATFs) to help boost domestic supplies, while also imposing a windfall tax on oil producers that have benefitted from higher global crude oil prices.
• It has also mandated exporters to meet the requirements of the domestic market first.
How will it help?

What is windfall tax?

A windfall tax is a higher tax rate on sudden big profits levied on a particular company or industry.

• The move will help ease shortages as India has been forced to step up imports of the fuels, with gasoline imports rising to about 13,000 barrels a day in the first half of June, a seven-month high.
• The indirect import and export curbs by duty tweaks aim to reduce the impending pressure on the current account deficit (CAD)

Bharat New Car Assessment Programme (BNCAP)

GS Paper 3: Government Policies and interventions
Important for
Prelims exam level: BNCAP
Mains exam Level: Not Much

Why in News

India’s road transport ministry is working on a proposal to prepare a plan to test and validate star ratings of cars under the Bharat New Car Assessment Programme (BNCAP).

What is Bharat NCAP?

• Bharat NCAP is a new car safety assessment programme which proposes a mechanism of awarding ‘Star Ratings’ to automobiles based upon their performance in crash tests.
• BNCAP standard is aligned with global benchmarks and it is beyond minimum regulatory requirements.
• The proposed Bharat NCAP assessment will allocate Star Ratings from 1 to 5 stars.
• The testing of vehicles for this programme will be carried out at testing agencies, with the necessary infrastructure.

How will it be implemented?

• BNCAP will be rolled out from April 1, 2023.
• It will be applicable on type-approved motor vehicles of category M1 with gross vehicle weight less than 3.5 tonnes, manufactured or imported in the country.
• M1 category motor vehicles are used for the carriage of passengers, comprising eight seats, in addition to driver’s seat.
Significance of Bharat NCAP
• BNCAP rating will provide consumers an indication of the level of protection offered to occupants by evaluating the vehicle in the areas of:
1. Adult occupant protection
2. Child occupant protection
3. Safety assist technologies
• It will serve as a consumer-centric platform, allowing customers to opt for safer cars based upon their Star-Ratings.
• It will also promote a healthy competition among original equipment manufacturers (OEMs) in India to manufacture safer vehicles.
• It will ensure structural and passenger safety in cars, along with increasing the export-worthiness of Indian automobiles.
Why does India need to crash-test vehicles?
• Indian vehicles have historically not been crash-tested in the country.
• Despite being home to only 1% of the world’s vehicles, India shoulders 11% of the global road crash fatality burden.
• Many international automakers have been found to sell products in India which score much lower on safety and structural performance parameters.
• Safety is moving up nowadays the list of key purchase criteria in India as well.

What about existing testing standards?

• India’s Central Motor Vehicle Rules (CMVR) mandates a safety and performance assessment, including a basic conformity crash test by agencies like the ARAI and ICAT.
o This does not involve a crash test rating.
Comparing with Global NCAP (GNCAP)
• The government wants the two tests to be in congruence with each other.
• It intends to design the BNCAP to resemble the GNCAP, the global gold standard, as closely as possible, including the speed for crash testing at 64kmph.
• Central Motor Vehicle rules encompass standards with respect to pedestrian protection and seat belt reminders among others and will be retained in the testing under the BNCAP.

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