Understanding Inflation Targeting

Inflation targeting is a monetary policy framework where a central bank sets a specific inflation rate as its goal and adjusts its policy instruments, such as interest rates, to achieve that target. This approach aims to maintain price stability, thereby fostering economic stability and growth.

Inflation Targeting Framework in India

India adopted the Flexible Inflation Targeting (FIT) framework in 2016, with the Reserve Bank of India (RBI) setting an inflation target of 4% with a tolerance band of ±2%. This means the RBI aims to keep inflation between 2% and 6%.

Recent Developments

• Inflation Trends: In December 2024, India’s retail inflation eased to 5.22%, down from 5.38% in November. However, food inflation remained high, with the Consumer Food Price Index rising by 8.39% in December.
• Economic Growth: The RBI projects a 6.2% GDP growth for the October-December quarter, indicating a rebound in economic activity.
• Monetary Policy Considerations: Despite easing retail inflation, the RBI faces challenges due to a depreciating rupee and persistent food inflation. These factors complicate the decision-making process for potential interest rate cuts.

Advantages of Inflation Targeting

• Transparency: Clearly defined targets enhance the credibility of the central bank.
• Predictability: Helps businesses and consumers make informed decisions.
• Accountability: Provides a benchmark to assess the central bank’s performance.

Limitations

• Rigidity: May limit the central bank’s flexibility in responding to unforeseen economic shocks.
• External Factors: Global events, such as oil price fluctuations, can impact domestic inflation, complicating policy implementation.

In summary, while inflation targeting in India has contributed to economic stability, it requires careful consideration of both domestic and international factors to effectively balance inflation control with economic growth.

India possesses significant reserves of natural gas hydrates, particularly in regions such as the Krishna-Godavari, Cauvery, and Kerala basins, as well as the Andaman Sea and Konkan basin. These hydrates represent a potential energy resource that could contribute to meeting the country’s growing energy demands.

The potential benefits of exploiting natural gas hydrates in India include:

1. Sustainable Energy Resource: Gas hydrates could serve as a less-polluting and abundant energy source, complementing traditional hydrocarbons.
2. Carbon Dioxide Sequestration: Hydrates can form complexes with CO₂, aiding in its sequestration and helping mitigate climate change impacts.
3. Gas Storage and Transportation: Hydrates offer an efficient means for bulk gas storage and transportation, enhancing energy security.

However, several challenges impede the exploration and utilization of these resources:

• Geophysical Challenges: Extraction can weaken seabed stability, leading to slope failures. Pressure changes during production may also cause reservoir depletion.
• Environmental Challenges: Disturbing hydrate sediments can harm marine ecosystems and potentially release methane, a potent greenhouse gas, exacerbating climate change.
• Economic Challenges: High extraction and shipping costs, coupled with the need for substantial capital investment, raise concerns about commercial viability.
• Technological Challenges: Existing extraction technologies may not be compatible with India’s specific hydrate formations, necessitating advanced research and development.

To address these issues, the Indian government has initiated the National Gas Hydrate Programme (NGHP) to explore and develop gas hydrate resources. Collaborations with countries like the USA, Canada, and Japan aim to advance research and technological capabilities. Institutions such as IIT Madras, in partnership with GAIL, are also working on projects to recover methane from hydrates while sequestering CO₂.

In conclusion, while natural gas hydrates present a promising energy opportunity for India, realizing their potential requires overcoming significant geophysical, environmental, economic, and technological challenges through sustained research, investment, and international cooperation.

Indian philosophy encompasses diverse traditions that explore the nature of existence, knowledge, and liberation. These traditions are broadly categorized into orthodox (Āstika) and heterodox (Nāstika) schools, based on their acceptance of the Vedas’ authority.

Orthodox (Āstika) Schools:

1. Nyāya: Founded by sage Gotama, this school emphasizes logic and epistemology, focusing on the means of acquiring valid knowledge.
2. Vaiśeṣika: Attributed to sage Kaṇāda, it proposes an atomistic metaphysics, suggesting that the universe comprises indivisible atoms and categorizing reality into distinct categories.
3. Sāṃkhya: Ascribed to sage Kapila, it presents a dualistic framework distinguishing between consciousness (Puruṣa) and matter (Prakṛti), aiming for liberation through discerning their separation.
4. Yoga: Linked to sage Patañjali, this practical discipline complements Sāṃkhya metaphysics, advocating for mental and physical practices to achieve spiritual liberation.
5. Pūrva Mīmāṃsā: Founded by sage Jaimini, it focuses on ritualistic aspects of the Vedas, emphasizing the performance of duties as a means to attain desired outcomes.
6. Vedānta (Uttara Mīmāṃsā): Associated with sage Vyāsa, it explores the philosophical teachings of the Upanishads, particularly concerning the nature of Brahman (ultimate reality) and Ātman (soul), leading to various sub-schools like Advaita (non-dualism) and Dvaita (dualism).

Heterodox (Nāstika) Schools:

1. Buddhism: Founded by Siddhartha Gautama (the Buddha), it teaches the Four Noble Truths and the Eightfold Path as a means to end suffering and attain Nirvana.
2. Jainism: Established by Mahavira, it emphasizes non-violence (Ahimsa) and asceticism, advocating for liberation through self-discipline and purity.
3. Cārvāka: A materialistic and skeptical school that rejects the afterlife and advocates for direct perception as the sole means of knowledge.

These philosophical systems have profoundly influenced Indian thought, offering diverse perspectives on metaphysics, ethics, and the path to liberation.

The League of Nations, created after World War I, aimed to promote international peace and cooperation. However, its effectiveness was limited due to several factors:

1. Lack of Participation: The United States, despite playing a key role in its creation, never joined the League, weakening its authority.
2. Inability to Enforce Decisions: The League lacked a military force and relied on sanctions, which were often ineffective.
3. Failure in Key Conflicts: The League struggled to prevent aggression, as seen in the invasions of Manchuria (1931) and Ethiopia (1935), where it failed to take decisive action.
4. Limited Membership and Influence: Major powers, including Germany and the Soviet Union, were initially excluded or left, reducing the League’s global influence.

Ultimately, the League was unable to prevent the rise of fascism or the outbreak of World War II, signaling its failure to preserve long-term peace.

Global atmospheric circulation refers to the movement of air in large-scale patterns across the globe, driven by the Sun’s energy. It involves three main cells in each hemisphere: the Hadley, Ferrell, and Polar cells.

• Hadley Cell: Air rises near the equator, cools, and descends at 30° latitude, creating tropical climates.
• Ferrell Cell: Moves air towards the poles, where it converges with cold air, creating temperate zones.
• Polar Cell: Cold air sinks at the poles, moving towards the equator.

These air patterns regulate global weather and climate, including jet streams and prevailing winds, which impact regional climates such as deserts and temperate zones​.