What's the NEWS

• The Reserve Bank of India (RBI) released its fifth bi-monthly monetary policy statement for 2019-20 in which the Monetary Policy Committee (MPC), led by Governor Shaktikanta Das, decided to keep the policy repo rate unchanged at 5.15%.
• In 2019, the RBI has cut repo rate by 135 basis points so far to a nine-year low of 5.15%. Analysts were expecting another 25 basis points cut.

• The RBI has announced that it will launch a new type of prepaid payments instrument (PPI) which can be used only for purchase of goods and services up to a limit of ₹10,000.
• Transmission of interest rates is expected to improve soon as the share of base rate loans, interest rates on which have remained sticky, declines; and MCLR-based floating rate loans, which typically have annual resets, become due for renewal, RBI said.
• As against the cumulative reduction in the policy repo rate by 135 bps during February-October 2019, transmission to various money and corporate debt market segments ranged from 137 bps (overnight call money market) to 218 bps.
• RBI has lowered its real GDP growth forecast for 2019-20 from 6.1% in the October policy to 5%.
• The MPC decided to keep the policy repo rate unchanged and continue with the accommodative stance as long as it is necessary to revive growth, while ensuring that inflation remains within the target.
• In its report, the MPC has noted that economic activity has weakened further and the output gap remains negative.
• These decisions are in consonance with the objective of achieving the medium-term target for consumer price index (CPI) inflation of 4 per cent within a band of +/- 2 per cent, while supporting growth, the RBI said.
• The MPC has decided to continue with the accommodative stance as long as it is necessary to revive growth, while ensuring that inflation remains within the target.
• In its last bi-monthly policy statement, the RBI had maintained "accommodative stance" and cut its key lending rate to 5.15%.
• Easing of monetary policy could allow banks to reduce their lending rates and help both consumers and the industry to get cheaper finance.

• Situation that will make growth more difficult.

• Some condition or situation that will help move growth higher.

• It is the difference between actual output of the economy and its maximum potential.
• In recent times, India is facing the problem of negative Output Gap.

• It is a situation in which something is not controlled very strictly.

• Calibrated Tightening
• Calibrated tightening means rate cut is "off the table".
• Going forward, there can only be two actions, either MPC may increase the repo rate or keep them steady.

• It is the level i.e., neither expansionary nor contractionary.
• Neutral monetary policy is effective and appropriate, if the economy is at full employment with low inflation and steady sustainable growth.
• The interest rates can move in either direction.

• It is to expand the overall money supply to boost the economy, when growth is slowing.
• It is also known as "easy monetary policy".
• It is to encourage more spending from consumers and businesses.
• Monetary Transmission
• The repo rate is the interest rate, in which banks can borrow money from the RBI for short durations.
• Changing this rate usually influences interest rates across the economy and in the same direction. This is known as monetary transmission.

What's the NEWS

• France is considering a request for early delivery of Meteor air-to-air missiles that will give India the firepower to take on US supplied AMRAAMs used by the Pakistan Air Force to target its fighter jets the day after the Balakot airstrikes in February.

Know! more about the missile

• The beyond-visual-range (BVR) missiles, which will outgun all other air forces in the region, were to come by late 2020 but an Indian request for at least 10 missiles in advance with the delivery of the first set of Rafale fighter jets is under consideration
• The first four Rafale fighter jets are set to arrive in India by May 2020 after training of pilots and ground teams, besides extensive performance trials in France after the handing over ceremony in October this year.
• As per plans, these fighters were to be initially equipped with the Mica air-to-air missiles that are also operational on the Mirage 2000 fleet and supplemented later with the Meteor
• The beyond visual range air-to-air missile is considered to be the best in its class and can take out enemy aircraft at a range of much beyond 100 km, outranging the American origin AMRAAM being used by Pakistan.
• The Indian Air Force is also set to get an opportunity to engage its new Rafale jets with ace pilots of the French Air Force next year when a batch of Rafale fighters and A 400 M military transport aircraft head to India for a joint exercise.
• India has been keen to conduct a tri-services training exercise with France as well, and the air force war games have been scheduled for August 2020.
• Indian Rafale jets will also get the "game-changing" SCALP stand-off missiles that have a range of over 300 km and are designed to hit high value, strongly protected targets deep inside enemy territory.
• These missiles have been successfully used by French forces in Operational Chammal. Rafale jets can carry two of the missiles, making them capable of hitting almost any target in Pakistan.
• This ‘stand-off ' capability is becoming central to the Indian defence strategy, with the air-to-air and air-to-ground missiles being supplemented with the S-400 anti-air system being procured from Russia that will have the ability to take down airborne targets over the entire Pakistani airspace, if the need arises.

Know! more about Rafale and steps taken by Air Force to boost air - defence

• IAF says the operational dynamics for achieving "air dominance" will change with the induction of the Rafales armed with the greater-range Meteor missiles powered by Ramjet engines to fly at Mach 4 speed.
• The Meteor missiles are arguably the best in the world for air combat duels, with "a greater no-escape zone" for hostile fighters than any comparable BVR weapon. Pakistan and China do not currently have any missile of this class in their combat inventories.
• The omni-role Rafale jets, can also deliver nuclear weapons if required, in an environment of high temperatures.
• An IAF induction team of pilots, engineers and technicians is currently undergoing training in France, which has so far handed over three Rafales to India. Once this training is over, the first four Rafales will head for India in May 2020.
• All the 36 jets will arrive in India by April 2022, with 18 each to be deployed at the Ambala and Hasimara airbases for the western and eastern fronts with Pakistan and China.
• The Rafales, with a combat range of 780-km to 1,650-km depending on mission, come armed with a deadly weapons package, advanced avionics, radars and electronic warfare systems to prevent jamming by adversaries and ensure superior survivability in hostile contested airspace.
• Each Rafale, can also carry two fire-and-forget Scalp cruise missiles to hit high-value fortified targets well over 300-km away.

Prelims Factoids
Odisha CM Naveen Patnaik launches "MadhuApp" for school children
Relevance IN - Prelims ( about Madhu App)

What's the NEWS

• Chief Minister of Odisha, Naveen Patnaik launched a smart learning phone application "MadhuApp" for school children.

Know! more about it

• The app named after 'Utkal Gourab' Madhusudan Das, has been developed by the Ganjam district administration in accordance with the 5T initiative of the state government.
• This app is aimed at helping school students in learning their lessons through videos and tutorials.
• The application is equipped with video lectures and exercises in Odia language by leading subject experts and educationists. In the first phase, the study material has been created for Mathematics and Science Subjects of classes V to Vlll.

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