Career Launcher | Latest news about SSC, Banks, MBA | Page 169
Page 169

Daily PT Capsule Mar 10

0
Daily PT Capsule UPSC Civil Services
Daily PT Capsule UPSC Civil Services
 

Here is your daily dose of current affairs!

Amendment to President address in Rajya Sabha

The government in Rajya Sabha suffered a major embarrassment after the opposition got an amendment passed to the President’s address. It is second time in a row for the government and fifth time in independent India’s parliamentary history.

The amendment regretted that the President’s address did not support the rights of citizens to contest in panchayat elections, in the backdrop of restrictions imposed in Haryana and Rajasthan.

Analysis

What will happen to the motion of thanks next? – The motion of thanks will be sent back to the President with a mention of the amendments passed.

What is the motion of thanks? – The President makes a special address to a joint sitting of both Houses, at the beginning of the first session after an election, and at the first session each year (usually the budget session). The address is a statement of government policy, which has to be approved by the Cabinet. The President highlights the legislative and policy activities and achievements during the preceding year and gives a broad indication of the agenda for the year ahead.

The address is followed by a motion of thanks moved in each House by ruling party MPs, followed by discussions that last up to three or four days and conclude with the Prime Minister replying to the points raised during the discussion.

After the PM’s reply, MPs vote on the motion of thanks and some may move amendments to the address. The amendments may emphasise or add issues addressed by the President or highlight those that did not find mention. Changes proposed by MPs are not passed in Parliament.

When has an amendment been made in the past? – Such an amendment has been made five times including the present one. It has happened before in 1980, 1989, 2001, 2015, 2016. All the times it has been done in the Rajya Sabha.

Source: TheHindu, Indian Express

 

Law Commission reference on inter-parental abduction

The Law Commission has received a reference from the Punjab and Haryana High Court for examining multiple issues involved in inter-country and inter-parental child removal among families locked in disputes.

At present, India does not recognise such abduction of children as an offence. A recent case where a minor was taken away from the custody to United Kingdom on a fake passport. The removal or retention of a child in breach of custody rights is an offence under the Hague Convention on the Civil Aspects of International Child Abduction, 1980. Since India is not a signatory to the agreement, children are taken away with the courts and authorities not being able to take any action.

Analysis

What is the Hague Convention on the Civil Aspects of International Child Abduction? – The Hague Convention on the Civil Aspects of International Child Abduction or Hague Abduction Convention is a multilateral treaty developed by the Hague Conference on Private International Law (HCCH) that provides an expeditious method to return a child internationally abducted by a parent from one member country to another.

The Convention was concluded 25 October 1980 and entered into force between the signatories on 1 December 1983. The Convention was drafted to ensure the prompt return of children who have been abducted from their country of habitual residence or wrongfully retained in a contracting state not their country of habitual residence.

What is the Law commission’s view on it? – Law Commission’s recommended in its 218th report in 2009, that India has not signed the Hague Convention and no domestic law defines or governs law on inter-country and inter-parental child removal. It has recommended India to sign it.

Source: TheHindu, Wikipedia

 

Lok Sabha passes bill to amend Enemy Property Act

The  Lok Sabha has passed a bill to amend Enemy Property Act that was put in place to guard against claims of succession or transfer of properties left by people who migrated to Pakistan and China after the wars.

The Enemy Property (Amendment and Validation) Bill, 2016, which amends the Enemy Property Act, 1968, was passed by voice vote amid the government’s assertion that the measure should not be seen from the prism of religion or caste.

The amendments include that once an enemy property is vested in the Custodian, it shall continue to be vested in him as enemy property irrespective of whether the enemy, enemy subject or enemy firm has ceased to be an enemy due to reasons such as death. The new Bill ensures that the law of succession does not apply to enemy property; that there cannot be transfer of any property vested in the Custodian by an enemy or enemy subject or enemy firm and that the Custodian shall preserve the enemy property till it is disposed of in accordance with the Act. The amendments are aimed at plugging the loopholes in the Act to ensure that the enemy properties that have been vested in the Custodian remain so and do not revert to the enemy subject or firm.

Analysis

What is the Enemy Property Act? – The Enemy Property Act was enacted in the year 1968 by the Government of India, which provided for the continuous vesting of enemy property in the Custodian. The Central Government through the Custodian of Enemy Property for India is in possession of enemy properties spread across many states in the country. In addition, there are also movable properties categorized as enemy properties.

In the wake of the Indo-Pak war of 1965 and 1971, there was migration of people from India to Pakistan. Under the Defence of India Rules framed under the Defence of India Act, the Government of India took over the properties and companies of such persons who had taken Pakistani nationality. These enemy properties were vested by the Central Government in the Custodian of Enemy Property for India.

After the 1965 war, India and Pakistan signed the Tashkent Declaration on 10.01.1966. The Tashkent Declaration inter alia included a clause, which said that the two countries would discuss the return of the property and assets taken over by either side in connection with the conflict. However, the Government of Pakistan disposed of all such properties in their country in the year 1971 itself.

Source: The Hindu

 

Price Cap on Bt Cotton seeds

The central government announced a maximum sale price for Bt cotton seed varieties in an attempt to bring about uniformity in cotton seed prices across the country.

Announced for the financial year 2016-17, the maximum sale price of Bt Cotton seed BG-I version has been fixed at Rs. 635 while for the BG-II version it is Rs. 800. The seed packets would be of 450 grams, including 120 grams refugia.

A nine-member committee was set up to recommend the maximum sale price of Bt cotton seeds.

Analysis

What is Bt-cotton? – Cotton and other mono cultured crops require an intensive use of pesticides as various types of pests attack these crops causing extensive damage. Over the past 40 years, many pests have developed resistance to pesticides.

The Bt cotton variety contains a foreign gene obtained from bacillus thuringiensis. This bacterial gene, introduced genetically into the cotton seeds, protects the plants from bollworm (A. lepidoptora), a major pest of cotton.

What is the need of a cap on price? – The Bt cotton seed market is dominated by Mahyco Monsanto Biotech Ltd (MMBL). There have been previously references made to Competition Commission of India for investigation of dominance of Mahyco Monsanto Biotech Ltd (MMBL) and abuse of monopoly in Bt cotton technology so as to ensure competition in the market.

Source: TheHindu

 

SC notice over advertisements

The Supreme Court has issued notice on a plea to initiate contempt action against the Delhi and Tamil Nadu governments for allegedly defying an apex court judgment barring the publication of Chief Ministers’ photographs in government advertisements.

The court had said government ads should feature only the photographs of President, Prime Minister and the Chief Justice of India, that too, if they wish so.

It had reasoned that publication of photographs of politicians and government functionaries, including CMs, defeated the public interest behind advertising welfare schemes and encouraged “personality cults.”

Attorney-General Mukul Rohatgi, appearing for both the Centre and Tamil Nadu, argued that Chief Ministers are as important a constitutional authority as the Prime Minister in a federal democracy.

Analysis

What were SC’s guidelines? – The Supreme Court in 2014 had set up a committee to consider various issues surrounding government advertisements and submit a report. The committee submitted a report to the court entitled the Government Advertisements (Content Regulation) Guidelines 2014.

The recommendations of the committee, which the court has accepted with four exceptions, mandated that government advertisements will not contain a political party’s symbol, logo or flag. Government advertisements are required to be politically neutral and must refrain from glorifying political personalities.

The court found advertisements on government functioning and achievements “permissible” as they help inform citizens. It added that the “achievements of a Government should not be a matter of publicity”. The court said any advertisement that provides information, if it’s in a proper format, will be allowed.The photographs of only three dignitaries should be allowed on government ads—the President, Prime Minister and the Chief Justice of India (CJI).

The court differed with the committee on recommendations for the appointment of an ombudsman to oversee the implementation of the guidelines, a special performance audit of government spending and an embargo on publication of advertisements on the eve of elections.
Source: TheHindu, Livemint

Take the Quiz below to know your preparation Level! 

Your Score:  

Your Ranking:  

JIGYASA: Daily Current Affairs Quiz of March 10, 2016

0
Daily Current Affairs Quiz
 

Your Score:  

Your Ranking:  

Daily Prelims Quiz Mar 9

1
Daily PT Capsule UPSC Civil Services
Daily PT Capsule UPSC Civil Services
 

Constitutional Bench to ponder on MP, MLA disqualification

A three-judge Bench, headed by Justice Ranjan Gogoi, referred to a Constitution Bench the question whether a legislator facing criminal trial should be disqualified at the very stage of framing of charges against him by the trial court. Should his disqualification be kept in abeyance till he is convicted?

The Supreme Court is pondering on the question referred to it by a smaller bench, under Article 145(3) to set up a Constitution Bench of five judges in case of a substantial question of law.

Analysis

What is Article 145(3)? – The minimum number of Judges who are to sit for the purpose of deciding any case involving a substantial question of law as to the interpretation of this Constitution or for the purpose of hearing any reference under Article 143 shall be five.

What are Supreme Court’s initiatives for Electoral Reforms? – The court has been tightening its grip on corruption in politics from 2013 when it first held that legislators, on conviction, would be immediately disqualified from holding membership of the House without being given three months’ time for appeal, as was the case before. Before this verdict, convicted lawmakers would file an appeal in the higher court and continue in the House.

In March 2014, the Supreme Court passed an interim order that criminal trials, especially those dealing with corruption and heinous offences, involving elected representatives should be completed in a year. This order prevented lawmakers from sitting in the House as their cases dragged on.

Section 8 of the Representation of the People Act deals with disqualification on conviction for certain offences: A person convicted of any offence and sentenced to imprisonment for varying terms under Sections 8 (1) (2) and (3) shall be disqualified from the date of conviction and shall continue to be disqualified for a further period of six years since his release.

Source: TheHindu

EPF Tax withdrawn

Union Finance Minister announced the withdrawal of the budget proposal on taxing Employee Provident Fund(EPF). The proposal had sought to make up to 60 per cent of savers’ corpus withdrawn from the EPF tax-free if invested in annuity. The period return on the annuity was to be taxable.

The 40 per cent exemption given to subscribers of the National Pension Scheme (NPS) at the time of withdrawal remains, the Finance Minister clarified. This would make the NPS, which gives returns of over 11 per cent, more attractive to pension savers than other options, Mr. Jaitley  told reporters. The objective of the reform was “not to get more revenue but to encourage more private sector employees to go for pension security after retirement instead of withdrawing the entire money from the Provident Fund account,” he said in the statement.

Analysis

What is EPF? – It is a compulsory contributory Provident Fund Scheme. It is run by The Employees’ Provident Fund Organisation (abbreviated to EPFO), a statutory body of the Government of India under the Ministry of Labour and Employment.

It is different from National Pension Scheme(NPS) which is a voluntary pension system under the Pension Fund Regulatory and Development Authority of India((PFRDA). It is authorized by the Department of Financial Services, Ministry of Finance.

Source: The Hindu, Wikipedia

 

Seoul Imposes Sanction on Pyongyang

South Korea is imposing unilateral sanctions on North Korea over its recent nuclear test and rocket launch, including a ban on financial dealings with 40 individuals and 30 entities.

The announcement came a day after North Korea warned of pre-emptive nuclear strikes in response to the start of U.S.-South Korean military drills it views as a rehearsal for invasion.

South Korea also said it will ban the entrance of any ship that has stopped at a North Korean port in the previous 180 days.

Analysis

What is the nuclear umbrella?Nuclear umbrella refers to a guarantee by a nuclear weapons state to defend a non-nuclear allied state. It is usually used for the security alliances of the United States with Japan, South Korea,the North Atlantic Treaty Organization (much of Europe, Turkey, Canada), and Australia, originating with the Cold War with the Soviet Union.

The North Korea carried out its fourth underground nuclear test on Jan. 6 2016 and followed with a multistage rocket launch a month later. While Pyongyang has claimed it developed nuclear weapons only for self-defense against a possible U.S.-led invasion and that its space program is peaceful, it also says it is developing a nuclear bomb small enough to fit in a warhead on a missile capable of reaching the U.S. mainland.

Source: TheHindu, Wikipedia

 

Bombay House first heritage building to get green rating

Bombay House, the Tata group’s headquarters, on Tuesday became the first heritage building in India to be awarded a platinum rating by the Indian Green Building Council (IGBC).

The building won under the EB (Existing Building) rating system for implementing measurable strategies and solutions in five categories: site & facility management, water efficiency, energy efficiency, health & comfort and innovation.

Analysis

What is the Indian Green Building Council(IGBC)? The Indian Green Building Council (IGBC), part of the Confederation of Indian Industry (CII) was formed in the year 2001. The vision of the council is, “To enable a sustainable built environment for all and facilitate India to be one of the global leaders in the sustainable built environment by 2025”.

The council offers a wide array of services which include developing new green building rating programmes, certification services and green building training programmes. The council also organises Green Building Congress, its annual flagship event on green buildings.

Certification is applicable to the following rating systems:

  • IGBC Green New Buildings
  • IGBC Green Existing Buildings
  • IGBC Green Homes
  • IGBC Green Schools
  • IGBC Green Factory Building
  • IGBC Green Townships
  • IGBC Green SEZs
  • IGBC Green Landscapes
  • IGBC Green Mass Rapid Transit System

Source: TheHindu, IGBC.in

Ad revenue for Indian Railways

Indian Railways has appointed a global consultancy firm to help the utility mop up advertising revenues worth over Rs.5,000 crore in the next few years.

Indian Railways is initiating a large-scale significant exercise to identify and leverage pan-India advertising opportunities at railway stations and trains,

Analysis

What is the need for ad revenues? – In his Budget speech, Railway Minister Suresh Prabhu had said that the utility will look to increase revenues from non-tariff sources and do away with conventional approach of increasing passenger and freight fares. He had not announced any increase in passenger fares and hinted at bringing down freight fares.

We earn less than 5 per cent of our revenues through non-tariff sources. Many of the world railway systems generate 10 per cent to 20 per cent of their revenues from non-tariff sources.

The public utility had decided to create two new directorates tasked with increasing the speed of trains and boosting non-fare revenues by monetizing land along the tracks and advertising.

Source: TheHindu

 

Take the Quiz below to know your preparation Level!

Your Score:  

Your Ranking:  

JIGYASA: Daily Current Affairs Quiz of March 9, 2016

0
Daily Current Affairs Quiz
 

Your Score:  

Your Ranking:  

JIGYASA: Daily Current Affairs Quiz of February 29, 2016

1
Daily Current Affairs Quiz
 

Your Score:  

Your Ranking:  

Inflation Demystified

0
 

For those of you who follow the economy section of the news and newspapers, the word that attracts all eyes, and captivates all ears is INFLATION‘. It is very important to know what exactly inflation is and how does it affect the economy. Inflation is one of the most essential and talked about factor that drives a nation’s basic banking policy and also its economy. Here is a detailed description for you:

WHAT IS INFLATION?

It is necessary to be clear with the basic meaning of inflation. A layman definition of inflation is a sustained increase in the general price level of goods”. Simple it is to comprehend but a few things should be noted:

  1. It is a sustained increase in price, i.e. the prices of goods keep on increasing over a period of time. For example: usually during the months of July-September, there is a sustained increase in the price of onions, this can be termed as inflation. On the other hand, there are times when the price of goods increase for a day or two due to a sudden surge in demand, for ex.: during festivals there is a huge demand of milk near temples and holy places, so the local vendors sell the same quality at a higher price for that day, however they return to the standard price from next day onwards. Here, the price rise lasts for a day and thus, cannot be called inflation.
  2. There are two factors of inflation, one is MONEY, as and when the money supply increases in an economy, people demand more and hence, the prices of goods go up, causing inflation. Second is DEMAND, sometimes, demand for certain goods go up without any change in the money supply of the economy and hence, prices of goods go up, thus causing inflation. Both the schools of thought have been explained in detail below.
  3. Another term that is encountered often is deflation, which is sustained decrease in the level of prices over a period of time, often cause by imbalances in money supply or demand.

TYPES OF INFLATION:

  1. Low inflation: This is a slow and predictable inflation. Also called as creeping inflation, the increase in price is small and gradual.
  2. Galloping inflation: This type of inflation is usually abysmally high and reaches double or triple digit over a year.
  3. Hyper-inflation: Large and accelerating inflation. This type of inflation covers a long range in a short period of time.
  4. Bottleneck inflation: This type of inflation is caused due to supply side hazards or because of some malfunctioning in the supply chain.
  5. Core inflation: Core inflation measures inflation of the eight core manufacturing industries which are responsible for supplying raw material to other industries. These eight industries are: Coal, Refining, Fertiliser, Electricity, Crude Oil, Natural Gas, Steel, and Cement. Any increase in inflation in these industries has a trickle-down effect on the economy at large. Ex: If the prices of oil keep on increasing over a period time, then, the effects trickle down into the economy and everything else also becomes expensive.

CAUSES OF INFLATION:

There are two primary schools of thought which describe the causes of inflation. They are:

KEYNESIAN IDEA: As per the Keynesian theory, average demand has a bigger role in increasing inflation than increase of money in the economy i.e. inflation increases when the average demand increases. For them, money is only one determinant of demand. As money supply increases, people have more disposable income and demand more and because of this inflation creeps in. However, according to Keynes, if money supply increases but does not affect the demand in anyway, i.e. people earn more but start saving that extra income without changing the pattern of demand then, inflation will stay the same.

MONETARIST SCHOOL: As per the Monetarist school of thought, money supply is the factor that controls inflation in an economy. According to their theory, if money supply increases then inflation will increase. They advocate that, more money simply means more purchasing power and thus, higher demand, for them no other factor can increase demand as much as money and hence, inflation increases.

While the Keynesian idea was being followed till 1970, the world at large has accepted the monetarist idea since 1970 and most of the policies to control inflation actually control the money supply in an economy.

HOW TO MEASURE INFLATION?

Inflation in India is measured on two scales:

  1. WHOLESALE PRICE INDEX: Wholesale price index is an index that measures inflation based on the changes in wholesale price of a basket of 676 articles, which include:

(a) Manufactured products chemicals, metal and food

(b)  Primary articles like food (cereals, pulses, milk etc.), non- food articles (oilseeds, flowers etc.) and minerals (crude oil, petrol)

  • Fuel category i.e. cost of production of electricity, coal, mineral oil, LPG

Each category has a weight assigned to it and makes respective contribution in the final number. Manufacturing has the highest weight followed by primary articles and fuel.

Manufactured products>Primary articles> Fuel category

 These categories have internal weights too:

Manufacture products: Chemicals>Metal>Food

Primary articles: Food>Non -food>Mineral

Fuel: Mineral oil>Electricity>Coal

The following illustration will make it easier to remember:

wholesale

Also another thing to be noted is, WPI used to be India’s national parameter for inflation till 2014, however on the recommendations of the Urjit Patel Committee CPI (Rural+Urban) became the new national inflation indicator as it covers inflation from the consumer’s point of view and also accounts for the service sector variations which WPI doesn’t.

  1. CONSUMER PRICE INDEX: Consumer Price Index inflation or CPI is India’s national inflation indicator from 2014 onwards; also the base year for the calculation of the same has been revised to 2012 from 2010 i.e. calculations for CPI are done with respect to the inflation in 2012.

CPI is calculated in three different ways: (1) Rural (2) Urban (3) Combined (R+U)

The components are (from highest to lowest weight):

food

The number that you get from the combined average of these is Headline CPI and,

Headline (food+fuel) = Core CPI

With the change in the base year another change that was incorporated based on the consumer expenditure survey is that, weightage of food items was reduced and non-food was increased, however, food items still top the list.

Latest CPI numbers look like this: [provisional data for January 2016]

  1. Rural 6.48
  2. Urban 4.81
  3. Combined 5.69
  1. CONSUMER FOOD PRICE INDEX – A third type of index is the consumer food price index, which measures inflation in food in rural and urban areas. This index also has three parts: Rural, Urban and Combined.

The food price index basket consists of:

  • Cereals and products (Highest weight)
  • Milk and products
  • Vegetables
  • Oils and fats
  • Egg, fish and meat
  • Pulse and products
  • Sugar etc.
  • Fruits
  • Condiments and spices

If you look at the above list carefully, this is nothing but the first factor i.e. food of CPI. So, what exactly happens is along with CPI, a separate data for food from within the CPI is also released to keep a separate track of food inflation. This accounts for 52% of the CPI.

A look at the provision data available for January 2016 [provisional data for January 2016]

  1. Rural 6.93
  2. Urban 6.50
  3. Combined 6.85

 

Apart from this, there is also some additional information that should be kept in mind while going for exams:

  1. The formula used to calculate inflation in all the three indexes is called Laspayer’s formula, in which weighted average of the products is taken to arrive at the final answer.
  2. Secondly, base year for CPI and CFPI is 2012, whereas for WPI it still is 2004.
  3. The numbers for CPI and CFPI are released by the Central Statistics Office (CSO) under the Ministry of Statistics and Program Implementation

For WPI, the data is released by the Economic Adviser, Department of Industrial Policy and Promotion (DIPP) under the Ministry of Commerce.

MISCELLANEOUS INFORMATION ON INFLATION:

  1. Demand Pull Inflation: Demand-pull inflation is a term used inKeynesian economics to describe the scenario that occurs when price levels rise because of an imbalance in the aggregate supply and demand,e. this is a situation wherein demand increases and supply remains the same, because of which the general level of prices of good increase. A very relatable example of the same would be rise in the prices of onion during the months of July-September.
  2. Cost Push Inflation: Cost-push inflation is a phenomenon in which the generalprice levels rise (inflation) due to increase in the cost of wages and raw materials. this is a situation in which the general balance between supply and demand remains the same, but, there is a rise in the prices of single or few components of the supply chain, and thus, the price of the end product also rises. Any increase in the wages of the employees will also have an effect on the price of goods.
  3. Disinflation: Disinflation is the rate of change of inflation over a period of time. For example: If India registered an inflation of 5% in January of a particular year and 4% in March, then the country is said to be experiencing disinflation in that quarter. This is not to be confused with deflation which is a general drop in the prices of goods over a period of time.
  4. Stagflation: Stagflation is a condition of slow economic growth and relatively high rate of unemployment (economic stagnation). Usually accompanied by rising prices (inflation), or a decline in GDP (Gross Domestic Product).
  5. Recession: Recession is a significant decline in the activities of an economy lasting for more than a few months. It is visible in industry, employment, real income and wholesale retail trade. The technical indicator of recession is two consecutive quarters of negative economic growth as measured by the country’s GDP.
  6. Depression: Severe and prolonged downturn in an economy. Also defined as extreme recession that lasts for more than two years. It is characterised by: sustainable increase in unemployment, drop in available credit, diminishing output, bankruptcy, sustained volatility in currency prices and reduced trade and commerce. In times of depression, consumer confidence and investments reduce, causing the economy to shut down.

CURRENT TREND:

  1. The current trend is that the WPI numbers are continuously decreasing and are in the negative growth from the last one year. CPI on the other hand is increasing gradually.
  2. Secondly, on a whole inflation in India has been under control owing to a lot of factors like:
  • Heavy downfall in the international crude oil prices
  • Increase in food and agricultural production as reported by FAO
  • FCI’s open sale of grains has helped in maintaining proper stock and transparent allocation
  • Stockholding has reduced
  • Tight monetary policy was followed by RBI throughout the year

Let us conclude by saying that inflation is a necessary evil. While abnormally high inflation harms the economy and economic activities slowdown indicating a very high price rise and resulting in lower demand, abysmally low inflation (also called deflation) too is bad for the economy and is considered to be an indicator of a dying economy. Deflation indicates dying demand either due to collapse in supply chain or scarcity of free flow of money in the market. And, that is why even the Urjit Patel Committee recommended that for India to grow at 10%, inflation should stay within the bracket of 2-6%.

Daily PT Capsule Mar 7-8

1
Daily PT Capsule UPSC Civil Services
Daily PT Capsule UPSC Civil Services
 

Here is your daily dose of current affairs!

Germany to help with three Smart Cities

State Secretary Gunther Adler of the German Ministry of Environment and Nuclear Safety, announced that Kochi, Bhubaneswar and Coimbatore would be the first three cities to receive Germany’s support under the Smart City project.

Germany’s expertise could be used at smart planning for urban centres. Germany with the help of its companies would provide technology to make life in cities easier.

Analysis

What is a Smart City? –  A city equipped with basic infrastructure to give a decent quality of life, a clean and sustainable environment through application of some smart solutions.

A few of the features of a smart city are assured water and electricity supply, sanitation and solid waste management, efficient urban mobility and public transport, robust IT connectivity, e-governance and citizen participation, safety and security of citizens.

What is the Smart City strategy of India? – The strategic components of area based development in the Smart Cities Mission are of four types.

1) Retrofitting will introduce planning in an existing built up area to achieve smart city objectives, along with other objectives, to make the existing area more efficient and liveable. In retrofitting, an area consisting of more than 500 acres will be identified by the city in consultation with citizens.

2) Redevelopment will effect a replacement of the existing built up environment and enable co-creation of a new layout with enhanced infrastructure using mixed land use and increased density. Redevelopment envisages an area of more than 50 acres, identified by Urban Local Bodies (ULBs) in consultation with citizens.

Eg. East Kidwai Nagar in New Delhi being undertaken by the National Building Construction Corporation.

3) Greenfield development will introduce most of the Smart Solutions in a previously vacant area (more than 250 acres) using innovative planning, plan financing and plan implementation tools (e.g. land pooling/ land reconstitution) with provision for affordable housing, especially for the poor.

One well known example is the GIFT City in Gujarat.

4) Pan-city development envisages application of selected Smart Solutions to the existing city wide infrastructure. Application of Smart Solutions will involve the use of technology, information and data to make infrastructure and services better. For example, applying Smart Solutions in the transport sector (intelligent traffic management system) and reducing average commute time or cost of citizens will have positive effects on productivity and quality of life of citizens.

Source: TheHindu, SmartCities.gov

 

Case of Money Laundering against Vijay Mallya

The Enforcement Directorate has registered a money-laundering case against Vijay Mallya and the CFO of Kingfisher Airlines A. Raghunathan in connection with the CBI’s probe into the alleged default of a Rs. 900-crore loan in collusion with IDBI officials. The ED is pursuing the case under the Prevention of Money Laundering Act to trace the transactions pertaining to a suspected diversion of funds.

In a case investigated by CBI it has alleged that the loan was sanctioned and disbursed to the company in violation of banking rules.

A preliminary enquiry into the allegations was initiated about four years ago. The agency found that bank officials “colluded” with Kingfisher Airlines’ promoters or directors and the chief financial officer to sanction the loan despite an adverse internal audit report highlighting the risks involved.

In fact, the firm had defaulted on repayment of loans from a consortium of 17 banks, of which IDBI was a part. The company owed about Rs.7,800 crore to the State Bank of India-led consortium.

Analysis

What is ED? – Directorate of Enforcement is a specialized financial investigation agency under the Department of Revenue, Ministry of Finance, Government of India, which enforces the following laws

a) Foreign Exchange Management Act,1999 (FEMA) – A Civil Law, with officers empowered to conduct investigations into suspected contraventions of the Foreign Exchange Laws and Regulations, adjudicate, contraventions, and impose penalties on those adjudged to have contravened the law.

b) Prevention of Money Laundering Act, 2002 (PMLA) – A Criminal Law, with the officers empowered to conduct investigations to trace assets derived out of the proceeds of crime, to provisionally attach/ confiscate the same, and to arrest and prosecute the offenders found to be involved in Money Laundering.

Source: TheHindu, EnforcementDirectorate.gov

 

Email Inventor Dies at age of 74

Ray Tomlinson, the U.S. programmer credited with inventing e-mail in the 1970s and choosing the “@” symbol for the messaging system, died at the age of 74. Mr. Tomlinson invented direct electronic messages in 1971. Before his invention, users could only write messages to others on a limited network.

Source: TheHindu

 

Great Indian Bustard spotted

A group of wildlife enthusiasts have spotted Great Indian Bustard on the banks of the Tungabhadra in Karnataka’s Sirguppa taluk. The semi-arid and arid grasslands in the interiors of Sirguppa taluk could potentially be a perfect habitat for the Bustard. However, the expanse of irrigation networks has seen the habitat shrinking through the years.

Analysis

What is the status of Great Indian Bustard?The Great Indian Bustard is a bustard found in India and the adjoining regions of Pakistan. A large bird with a horizontal body and long bare legs, giving it an ostrich like appearance, this bird is among the heaviest of the flying birds. Once common on the dry plains of the Indian subcontinent, as few as 250 individuals were estimated in 2011 to survive and the species is critically endangered by hunting and loss of its habitat, which consists of large expanses of dry grassland and scrub. These birds are often found associated in the same habitat as blackbuck.

Source: TheHindu, Wikipedia

 

Rethinking Fiscal Deficit

The Finance Minister in his budget speech made a statement that “There is a suggestion that fiscal expansion or contraction should be aligned with credit contraction or expansion respectively, in the economy.”

In the light of this statement the Finance Minister has proposed to set up a committee to look into the FRBM Act and the fiscal target of 3% set by it.

Analysis

What is the FRBM Act? – Fiscal Responsibility and Budget Management (FRBM) became an Act in 2003. The objective of the Act is to ensure inter-generational equity in fiscal management, long run macroeconomic stability, better coordination between fiscal and monetary policy, and transparency in fiscal operation of the Government.

The Government notified FRBM rules in July 2004 to specify the annual reduction targets for fiscal indicators. The FRBM rule specifies reduction of fiscal deficit to 3% of the GDP by 2008-09. However the global financial crisis led to breach of the target of 3% for fiscal deficit.

The target year has been shifted to 2017-18.

Correlation between credit expansion and fiscal deficit? – The logic of correlation between credit expansion and fiscal deficit has five sequential limbs. One, money is the blood of economic growth. Two, most money that fuels the economy is created by banks, not by government. Three, banks and financial institutions fund business and others, and it is that credit money which drives the economy. Four, if, for whatever reason including lack of business confidence, the bank credit to the economy does not adequately grow, like it did not in the last few years, economic growth will suffer for want of adequate money. Five, that is when the Budget needs to step in, to pump money into the economy by incurring deficit (spending more than the income), and, for the purpose, borrow the money lying with banks or even by printing more money, if that is needed. The fifth limb ensures that growth does not decelerate for want of enough money circulating in the economy. Otherwise, it will. The FRBM law has ignored the fourth and fifth limbs of the logic and fixed the 3 per cent fiscal deficit as inviolable.

How was the 3% limit decided? – The magic number made its debut in the famous Maastricht Treaty to form the European Union (EU) in 1992. The treaty prescribed four criteria which EU members had to comply to be eligible to adopt the Euro as the common currency. One criterion was the 3 per cent fiscal deficit limit — the others being limits on inflation, long-term interest rates and public debt. EU members like Greece and Italy were operating on high fiscal deficits while Germany and France had much lower numbers. In the tussle between prudent and profligate EU members, the limit emerged as a negotiated rate after give and take.

The explanation for coming up with the 3% limit for India was that the time-series household financial savings of India plus external savings was 13 per cent; out of that, 5 per cent would “go” to private sector corporates; of the balance 8 per cent, 2 per cent would “go” to public sector undertakings, “leaving” 6 per cent for Central and State governments to be shared between them (50:50), that is 3 per cent each, to fund their deficits.

Global theories on Deficit financing – The economic debate on the money-growth link dates back to the Great Depression of the 1930s. While the celebrated Nobel laureate, Milton Friedman, talked about inadequate money supply as the cause of the Great Depression, James Tobin pointed to inadequate demand for money (credit) as the cause. That is even if there is money, a lack of business confidence or high interest may reduce the demand for money. There is no doubt that both — lack of money supply as well as lack of demand for credit — weaken growth. From 2012-13 to now, i.e. 2015-16, the Indian economy seems to have been experiencing both the Milton and Tobin effects — shrinking money expansion and credit demand shrinking even faster.

What does it mean for India? – There is a need to Align the monetary and fiscal economies. If bank credit growth falls, fiscal deficit may need to go up. If bank credit growth rises, fiscal deficit should reduce. This is particularly true for a growing economy like India. Had the fiscal deficit not been above the FRBM ideal limit of 3 per cent in the last four years, the growth would have suffered even more.

Source: TheHindu Editorial

 

Consolidation of Public Sector Banks

At the ‘Gyan Sangam’ a bankers’ meet the idea of bank consolidation was discussed. Top finance ministry officials, bankers and Reserve Bank of India (RBI) officials were present during the discussions.

The Bank Board Bureau headed by former Comptroller and Auditor General (CAG) Vinod Rai, which was recently formed to select chief executives and board members of public sector banks, will also help in the consolidation process.

The financial performance of public sector banks reflected a sharp deterioration after the RBI conducted an Asset Quality Review (AQR). During the review, the central bank’s inspectors found that many accounts, which ideally should have been treated as non-performing, were not classified so by the banks. The RBI then directed the banks to classify those accounts as non-performing and provide accordingly during the October-December and January-March quarters.

Analysis

What are the anchor banks? – The government will identify six to ten public sector banks which will drive the consolidation process among the state-owned banks. These banks will be the anchor banks. Large lenders like State Bank of India (SBI), Bank of Baroda (BoB), Punjab National Bank (PNB) and Canara Bank could become the anchor banks.

There are 22 public sector banks in the country apart from five associate banks of State Bank of India. Merger between the banks will be based on geographical and technological synergies, human resources and business profile, among others.
Source: TheHindu

 

Take the Quiz below to know your preparation Level!

Your Score:  

Your Ranking:  

JIGYASA: Daily Current Affairs Quiz of March 8, 2016

0
Daily Current Affairs Quiz
 

Your Score:  

Your Ranking:  

JIGYASA: Daily Current Affairs Quiz of March 7, 2016

0
Daily Current Affairs Quiz
 

Your Score:  

Your Ranking:  

JIGYASA: Daily Current affairs quiz of March 6, 2016

0
Daily Current Affairs Quiz
 

Your Score:  

Your Ranking:  

Connect with our expert