← 4 October 2026's Current Affairs · Economy GA Prelims ★★★☆☆ Mains ★★★☆☆
5th Kautilya Economic Conclave begins in New Delhi
Why in News?
Light-touch yet risk-proportionate: the regulation idea from the Kautilya Conclave that GS3 reform answers need
The three-day conclave opened with calls for risk-proportionate regulation.
Why it matters: general awareness
What you need to know
2 min read
Vice-President C.P.
Radhakrishnan gave the inaugural address at the three-day 5th Kautilya Economic Conclave in New Delhi.
Speakers, including Rajiv Gauba, called for light-touch, risk-proportionate regulation, stronger institutional capacity and market-oriented reforms.
Sources: Topper IAS editorial (PIB / The Hindu / Indian Express)
Key facts
Remember these
- 5th Kautilya Economic Conclave: three-day event opened in New Delhi
- Inaugural address by Vice-President C.P. Radhakrishnan
- Rajiv Gauba was among the speakers calling for light-touch, risk-proportionate regulation
- Themes stressed: stronger institutional capacity and market-oriented reforms
- Named after Kautilya, author of the Arthashastra, the ancient Indian treatise on statecraft and economy
Prelims · Mains
How the exam will ask it
Prelims
- Risk-proportionate regulation means the intensity of regulatory oversight is scaled to the level of risk an activity poses, rather than applying uniform rules to all.
- Light-touch regulation relies on principles, disclosure and market discipline instead of detailed prescriptive controls.
- Kautilya's Arthashastra is an ancient Indian text on statecraft, taxation and economic administration.
Mains
GS3 Economy (Reforms): India's regulatory state faces the tension between protecting consumers and financial stability and avoiding over-regulation that stifles growth. Risk-proportionate, principle-based regulation backed by stronger institutional capacity, regulatory impact assessment and market-oriented reforms can raise ease of doing business. The way forward is to build skilled, independent regulators with clear accountability and periodic review of rules.
Quick recall
Answer before you reveal
The RBI conducts an Overnight Variable Rate Reverse Repo (VRRR) auction under the Liquidity Adjustment Facility when it wants to:
- inject liquidity into the banking system
- absorb surplus liquidity from the banking system
- raise the Cash Reserve Ratio of banks
- sell government securities to the public
Show answer
Answer: B — Correct: absorb surplus liquidity from the banking system — In a reverse repo the RBI borrows funds from banks against securities, which drains excess liquidity from the system. • inject liquidity into the banking system — wrong: Injecting liquidity is done through repo or variable rate repo operations, the opposite of a reverse repo. • raise the Cash Reserve Ratio of banks — wrong: The Cash Reserve Ratio is changed by a policy decision, not by an auction under the LAF. • sell government securities to the public — wrong: Selling securities to the public is an open market operation, separate from LAF auctions with banks.
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