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Recently, there have been multiple Naxal attacks on CRPF personnel in Chhattisgarh. Parliamentary Committees have previously examined the working of the Central Armed Police Forces (CAPFs). In this context, we examine issues related to functioning of these Forces and recommendations made to address them.
What is the role of the Central Armed Police Forces (CAPFs)?
Under the Constitution, police and public order are state subjects. However, the Ministry of Home Affairs (MHA) assists state governments by providing them support of the Central Armed Police Forces. The Ministry maintains seven CAPFs: (i) the Central Reserve Police Force, which assists in internal security and counterinsurgency, (ii) the Central Industrial Security Force, which protects vital installations (like airports) and public sector undertakings, (iii) the National Security Guards, which is a special counterterrorism force, and (iv) four border guarding forces, which are the Border Security Force, Indo-Tibetan Border Police, Sashastra Seema Bal, and Assam Rifles.
What is the sanctioned strength of CAPFs personnel compared to the actual strength?
As of January 2017, the sanctioned strength of the seven CAPFs was 10,78,514 personnel. However, 15% of these posts (1,58,591 posts) were lying vacant. Data from the Bureau of Police Research and Development shows that vacancies in the CAPFs have remained over the years. Table 1 shows the level of vacancies in the seven CAPFs between 2012 and 2017. 
The level of vacancies is different for various police forces. For example, in 2017, the Sashastra Seema Bal had the highest level of vacancies at 57%. On the other hand, the Border Security Force had 2% vacancies. The Central Reserve Police Force, which account for 30% of the sanctioned strength of the seven CAPFs, had a vacancy of 8%.
How often are CAPFs deployed?
According to the Estimates Committee of Parliament, the number of deployment of CAPFs battalions has increased from 91 in 2012-13 to 119 in 2016-17. The Committee has noted that there has been heavy dependence by states on central police forces even for day-to-day law and order issues. This is likely to affect anti-insurgency and border-guarding operations of the Forces, as well as curtail their time for training. The continuous deployment also leaves less time for rest and recuperation.
The Estimates Committee recommended that states must develop their own systems, and augment their police forces by providing adequate training and equipment. It further recommended that the central government should supplement the efforts of state governments by providing financial assistance and other help for capacity building of their forces.
What is the financial allocation to CAPFs?
Under the Union Budget 2018-19, an allocation of Rs 62,741 crore was made to the seven CAPFs. Of this, 32% (Rs 20,268 crore) has been allocated to the Central Reserve Police Forces. The Estimates Committee has pointed out that most of the expenditure of the CAPFs was on salaries. According to the Committee, the financial performance in case of outlays allocated for capacity augmentation has been very poor. For example, under the Modernization Plan-II, Rs 11,009 crore was approved for the period 2012-17. However, the allocation during the period 2013-16 was Rs 251 crore and the reported expenditure was Rs 198 crore.
What are the working conditions for CAPFs personnel?
The Standing Committee on Home Affairs in the year 2017 had expressed concern over the working conditions of personnel of the border guarding forces (Border Security Force, Assam Rifles, Indo-Tibetan Border Police, and Sashastra Seema Bal). The Committee observed that they had to work 16-18 hours a day, with little time for rest or sleep. The personnel were also not satisfied with medical facilities that had been provided at border locations.
In addition, the Standing Committee observed that personnel of the CAPFs have not been treated at par with the Armed Forces, in terms of pay and allowances. The demand for Paramilitary Service Pay, similar to Military Service Pay, had not been agreed to by the Seventh Central Pay Commission. Further, the Committee observed that the hard-area allowance for personnel of the border guarding forces was much lower as compared to members of the Armed Forces, despite being posted in areas with difficult terrain and harsh weather.
What is the status of training facilities and infrastructure available to CAPFs?
The Estimates Committee has noted that all CAPFs have set up training institutions to meet their training requirements and impart professional skills on specialised topics. However, the Committee noted that there is an urgent need to upgrade the curriculum and infrastructure in these training institutes. It recommended that while purchasing the latest equipment, training needs should also be taken care of, and if required, should be included in the purchase agreement itself. Further, it recommended that the contents of training should be a mix of conventional matters as well as latest technologies such as IT, and cyber security.
According to the Estimates Committee, the MHA has been making efforts to provide modern arms, ammunition, and vehicles to the CAPFs. In this regard, the Modernization Plan-II, for the period 2012-17, was approved by the Cabinet Committee on Security. The Plan aims to provide financial support to CAPFs for modernisation in areas of arms, clothing, and equipment.
However, the Committee observed that the procurement process under the Plan was cumbersome and time consuming. It recommended that the bottlenecks in procurement should be identified and corrective action should be taken. It further suggested that the MHA and CAPFs should hold negotiations with ordnance factories and manufacturers in the public or private sector, to ensure an uninterrupted supply of equipment and other infrastructure.
The Monetary Policy Committee (MPC) has decided to conduct an off-cycle meeting today to discuss the failure to meet the inflation target under Section 45ZN of the Reserve Bank of India Act, 1934. As per the Reserve Bank of India Act (RBI), 1934, MPC is required to meet at least four times each year, to discuss the macroeconomic issues in the country, and take policy decisions to address those. This is the second time MPC has conducted an off-cycle meeting in 2022-23. The meeting is scheduled in light of inflation being consistently high for nine consecutive months.
In this blog, we discuss what the inflation targeting framework is, examine retail and wholesale prices, and the divergence between them.
What is the inflation targeting framework, and what happens if inflation is persistently high?
In 2016, Parliament amended the RBI Act, 1934 to change the monetary policy, and introduce an inflation targeting framework. This framework prioritises price stability to achieve sustainable GDP growth. Price stability allows investors to confidently invest their money for productive activities, without worrying about it losing value. Price stability also maintains the purchasing power of consumers, i.e., the ability to purchase a good (or service) with a given amount of money.
As per the new framework, the central government, in consultation with RBI sets: (i) an inflation target, and (ii) an upper and lower tolerance level for retail inflation. The target has been set at 4%, with an upper tolerance limit of 6% and a lower tolerance limit of 2%. The upper and lower limits indicate that although it is desirable for inflation to be close to 4%, deviation between these limits is acceptable. The target and bands are revised every five years. In March 2021, the existing targets were carried forward.
Retail inflation has been above 6% for the past nine months, and it has been above 4% from October 2019 onwards (See Figure 1).
Figure 1: Consumer price index (year-on-year; in percentage)
Sources: Database on Indian Economy, Reserve Bank of India; PRS.
If inflation is above or below the prescribed limits for three quarters, RBI must submit a report to the central government explaining why prices have been rising (or falling) persistently, what will be done to correct that, and an estimate as to when the target will be achieved.
The MPC uses tools such as interest rates to control the level of inflation in the economy. One such rate is the policy repo rate, which is the rate at which RBI lends money to banks. An increase in the policy repo rate makes borrowing money more costly, and hence is expected to control inflation by reducing the money supply. MPC increased this rate from 4% in April 2022 to 4.4% in May 2022, to 4.9% in June 2022, to 5.4% in August 2022, and to 5.9% in September 2022.
Breaking down the Consumer Price Index and the Wholesale Price Index
Consumer Price Index (CPI) measures the general prices of goods and services such as food, clothing, and fuel over time. Retail inflation is calculated as the change in the CPI over a period of time. Goods and services such as petrol, food products, health, and education are considered for its calculation, which are assigned different weights (See Table 1). Between February 2022 and August 2022, the average annual inflation was 6.9%. The rise in prices of subcomponents of the CPI during this period is indicated in Table 2.
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Table 1: Assigned weights for the calculation of CPI
Sources: MOSPI; PRS. |
Table 2: Average inflation of some CPI components
Sources: Database on Indian Economy, RBI; PRS. |
CPI is not the only index that measures inflation in an economy. The Wholesale Price Index (WPI) measures the wholesale prices of goods. A change in wholesale prices reflects wholesale inflation. Table 3 indicates the weights assigned to goods for calculating the WPI. Manufactured goods include metals, chemicals, food products, and textiles.
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Primary articles (23%) include food articles, and crude petroleum and natural gas. Fuel and power (12%) include mineral oils, electricity, and coal. WPI has remained above 10% from April 2021 onwards. It reached an all-time high of 17% in May 2022. This was driven by the inflation in metals, kerosene and petroleum coke, fruits and vegetables, and palm oil. |
Table 3:Assigned weights for the
Sources: Ministry of Commerce and Industry; PRS. |
Why has WPI inflation been consistently above CPI inflation?
Movements in the WPI have an impact on the CPI. For almost a year and half, CPI inflation has remained below WPI inflation. However, as per the design of the indices, it is expected that CPI would remain above WPI, and that any increase in WPI would reflect in the CPI after a time lag. This is because retail prices include taxes (as a percentage of price), while wholesale prices do not. Additionally, some of the goods in WPI act as inputs in the goods considered in CPI. An increase in input prices would lead to higher retail prices after a time lag.
We discuss possible reasons for why CPI has remained below WPI for a year and a half.
Figure 2: Consumer Price Index and Wholesale Price Index
Sources: Database on Indian Economy, Reserve Bank of India; PRS.
Composition of indices
As indicated in Table 2 and 3, the composition of the two indices varies. For instance, prices of manufacture of basic metals, chemicals, and machinery grew at an average rate of 13% between February 2021 and September 2022. They contribute 7% to the WPI. These are input goods for producing final goods and services such as automobiles, which are included in the CPI. The rise in prices of transport vehicles, communication devices, fuel for transport, and housing (CPI components) rose by 6% during this period.
The Ministry of Finance has observed that wholesale prices did not feed into retail prices (from March 2021 onwards) as wholesalers absorbed the rising input costs and did not pass them on to retailers. In August 2022, it noted that as retail prices are rising now, the pass-through may occur.
