Current Affairs - 30 September 2015

General Affairs

US Welcomes the Role of Indians Abroad in Nations Development: Barack Obama

• NEW YORK:  US President Barack Obama has said they welcome the role of Indian-Americans sought by Prime Minister Narendra Modi for the development of India.
  
  "Prime Minister Modi has called on the Indian diaspora in the United States which is very large and very successful to contribute their talents to India's progress.
  
  

  "And that's something that we welcome," President Obama said yesterday after his hour-long meeting with PM Modi at the UN headquarters here wherein the Prime Minister spoke about his weekend trip to Silicon Valley and how this would help the development of India.
  
  "I was in Silicon Valley over the weekend. I experienced the strength of American innovation and enterprise that provide the foundation of American success.
  
  "I also saw the driving force of our relationship -- youth, technology and innovation -- and the natural partnership of Indians and Americans in advancing human progress," PM Modi said.
  
  Referring to his visit to California, PM Modi informed President Obama about the conversations he had relating to startups, renewable energy and how the visit would probably lead to many new technology partnerships between India and US.
  
  In this context he also referred to the Start Up Konnect event where 40 startups from India had come to basically benefit from the ecosystem that already exists in the Silicon Valley and how India would create a similar ecosystem where startups would eventually scale up to larger entities, External Affairs Ministry spokesperson Vikas Swarup said.
  

First India, US, Japan Ministerial-Level Meet Tomorrow

• NEW YORK:  The first foreign minister-level between India, the US and Japan would be held in New York tomorrow, reflecting alignment of the three Asia Pacific powers, which officials said was aimed at ensuring peace, prosperity and security in the region.
  
  External Affairs Minister Sushma Swaraj, US Secretary of State John Kerry and Japanese Foreign Minister Fumio Kishida are scheduled to meet on the sidelines of the UN General Assembly Session.
  
  This is the first ministerial-level meeting between the three countries which was decided during the last week's India US Strategic and Commercial Dialogue.
  
  Kerry-Swaraj-Kishida meeting comes a day after Prime Minister Narendra Modi met US President Barack Obama during which the current situation in the Asia Pacific region was discussed.
  
  

  "I welcome the progress in giving shape to our joint strategic vision on our Asia Pacific and Indian Ocean region, and also our joint engagement with regional partners like Japan," PM Modi said during his brief joint media appearance with Obama.
  
  "This will also strengthen our maritime security cooperation," PM Modi said.
  
  "To further increase our strategic engagement in the region, I look forward to work with the US for India's membership of Asian Pacific Economic Community," he added.
  
  Officials here said the trilateral meeting was aimed at ensuring peace, prosperity and security in the region.

Election Commission Allows Use of Same Symbols by Parties, But With Riders

• NEW DELHI:  Having the same election symbol can be a headache for political parties, but the Election Commission has simplified the process for Samajwadi Party (SP) and Panthers Party, Jharkhand Mukti Morcha (JMM) and Shiv Sena, who have common election symbols, for the Bihar assembly elections.
  
  SP and Jammu and Kashmir Panthers Party have bicycle as their election symbol in UP and Jammu and Kashmir respectively, while the JMM and Shiv Sena have bow and arrow as their election symbol in Jharkhand and Maharashtra respectively.
  
  

  The parties can contest on their election symbols as long as they are not pitted against each other in an assembly seat. If they are fighting against each other, then they will not be able to use their party symbols, and will be allotted 'free symbol' in those constituencies.
  
  In other words, if JMM pits a candidate against a Shiv Sena nominee on a particular seat, the two parties cannot use their 'Bow and Arrow' symbol.
  
  "The candidates of these parties in such constituencies shall be alloted 'free symbol' from the list of free symbols as per provisions of Para 12 of the Symbols Order, 1968," said a separate order from the Commission issued to these parties last week.
  
  While the JMM and Shiv Sena had approached the Commission to use their reserved symbol in all the 243 assembly seats in Bihar, the SP and Panthers Party had sought permission to use their respective symbols for all the 32 assembly seats going to polls in the second phase.
  
  As of now, BJP, Bahujan Samaj Party, Congress, CPI, CPI (M) and Nationalist Congress Party, are recognised as 'national parties'. There are 50 'recognised state parties' registered with the Commission.
  
  While national parties are free to use their 'reserved symbol' across India, the recognised state parties can use their symbols in their states. To use the symbol outside their state, they have to seek EC's permission.
  
  Bihar Assembly polls will be held in five phases on October 12, 16, 28, November 1 and 5. Counting of votes will take place on November 8.

States Should Formulate Own Strategies to Combat Terrorism: Rajnath Singh

• PANAJI:  States will have to formulate their own strategies to combat terrorism, Union Home Minister Rajnath Singh said at the Western Zonal Council meet in Panaji today.
  
  "Terrorism is a major challenge to the country, and to counter it is our prime responsibility. As such, every state should take up this issue seriously and formulate their strategy to combat this menace," Mr Singh was quoted as saying in an official statement.
  
  The meeting, attended by top politicians and bureaucrats of Gujarat, Goa, Maharashtra, Daman and Diu, was also informed that at the federal level, several measures were initiated post-Mumbai terror attack in November 2008 to ensure an effective counter terrorism response, including streamlining of the Multi Agency Centre besides setting up of subsidiary Multi-Agency Centres (SMACs) in all state headquarters.
  
  The meeting was also informed that several State Police forces have set up specialised Counter Terrorist (CT) units called Anti-Terror Squads to develop Counter Terrorist-related intelligence leads and neutralise the threats in time.
  
  Also stressing on the need for state-centre co-operation, he said, unless all the states in the country develop, India will not be able to compete with the advanced countries.
  
  "India today is one of the developed countries among top 10 nations in the world. And that we would lead the world in the 21st century, with a good Centre-State co-operation," Mr Singh said.

Intelligent People's Brains Wired Differently

• LONDON:  Intelligent people have brains that are wired differently, according to a new Oxford study which suggests 'smart minds' are more likely to be happy, well educated and earn more.
  
  A team of scientists led by Oxford University's Centre for Functional MRI of the Brain studied the connections in the brains of 461 people and compared them with 280 different behavioural and demographic measures that were recorded for the same participants.
  
  They found that variation in brain connectivity and an individual's traits lay on a single axis - where those with classically positive lifestyles and behaviours had different connections to those with classically negative ones.
  
  The team used data from the Human Connectome Project (HCP). The HCP is pairing up functional MRI scans of 1,200 healthy participants with in-depth data gained from tests and questionnaires. So far, data for 500 subjects have been released to researchers for analysis.
  
  

  The researchers took the data from 461 of the scans and used it to create an averaged map of the brain's processes across the participants.
  
  "You can think of it as a population-average map of 200 regions across the brain that are functionally distinct from each other," said lead author Stephen Smith, from Oxford University.
  
  "Then, we looked at how much all of those regions communicated with each other, in every participant," he said.
  
  The result is a connectome for every subject - a detailed description of how much those 200 separate brain regions communicate with each other, which can be thought of as a map of the brain's strongest connections.
  
  The team then added the 280 different behavioural and demographic measures for each subject and performed a 'canonical correlation analysis' between the two data sets - a mathematical process that can unearth relationships between the two large sets of complex variables.
  
  They found one strong correlation that relates specific variations in a subject's connectome with their behavioural and demographic measures.
  
  The correlation shows that those with a connectome at one end of scale score highly on measures typically deemed to be positive, such as vocabulary, memory, life satisfaction, income and years of education.
  
  Meanwhile, those at the other end of the scale were found to exhibit high scores for traits typically considered negative, such as anger, rule-breaking, substance use and poor sleep quality.
  
  The researchers point out that their results resemble what psychologists refer to as the 'general intelligence g-factor' - a variable used to summarise a person's abilities at different cognitive tasks.
  
  The study was published in the journal Nature Neuroscience.

Business Affairs 

BSE Sensex closes 162 points higher on RBI rate cut

• From opening deep in the red, key equity indices staged a marked recovery on back of an unexpectedly high interest rate cut by the Reserve Bank of India. The Indian equity markets provisionally closed 162 points up on Tuesday.

  Uncertainty over the rate cut decision, fears of a hawkish economic outlook and bank's ability to transmit the easing of monetary policy had subdued the two major bellwether indices of the Indian equity markets.

  Even the negative cues from the Asian markets dented sentiments. Japan's Nikkei index plunged by 4.05 percent. Hong Kong's Hang Seng index declined by 2.97 percent, while China's Shanghai Composite Index receded by 2.06 percent.

  Both, the 30-scrip sensitive index (S&P Sensex) of the Bombay Stock Exchange (BSE) and the wider 50-scrip Nifty of the National Stock Exchange (NSE) were trading more than one per cent down just before the policy announcement was made by the Reserve Bank of India (RBI).

  The markets were elated after the monetary easing announcement, and zoomed into the positive territory, seconds after RBI Governor Raghuram Rajan's announcement of a 50 basis points reduction in key lending rates.

  Notwithstanding the more-than-expected easing, the markets fell on the concerns over the diminished prospects of future rate cuts and disappointing outlook on domestic and global economic scenario.

  The RBI revised its growth forecast to 7.4 per cent from 7.6 per cent and gave cues about firming up of inflationary trends.

  However, both the indices soon paired their losses and were back in the green.

  The wider 50-scrip Nifty of the National Stock Exchange (NSE) closed the day's trade with gains of 47.60 points or 0.61 percent at 7,843.30 points.

  The S&P BSE Sensex which opened at 25,496.38 points, provisionally closed at 25,778.66 points - 161.82 points or 0.63 per cent higher from the previous day's close at 25,616.84 points.

  The Sensex touched a high of 26,054.37 points and a low of 25,287.33 points in the intra-day trade.

  Market observers cited that the markets welcomed the 50 basis points "booster dosage" coupled-with a dovish outlook given by the apex bank.

  "The rate cut has been widely welcomed. The markets have perceived it to have come at the right time given the inflation window," Anand James, co-head, technical research desk with Geojit BNP Paribas Financial Services, told IANS.

  "The 50 basis point cut is expected to support growth and provide the needed credit boost to the economy."

  Nitasha Shankar, vice president of research with YES Securities, said that the markets were elated by the fact that the RBI charted out ways to smoothen transmission of earlier rate cuts by the banks.

  "The markets welcomed the fact that the RBI talked about ways for smoothening of transmission of rate cuts by the banks. It mentioned some steps that it can take and the others that the government has to initiate," Shankar told IANS.

  "The comments that the future rate cuts will depend on the ability of the banks to transmit rate cuts and that RBI will maintain accommodative stance also cheered investors."

  An easing of key lending rates is expected to restore investors' confidence, prop up sales of interest in sensitive sectors like automobile, capital goods and real estate.

Sensex to end this year at 27,500 and reach 29,000 by mid 2016: Reuters poll

• The BSE Sensex is set to rise slightly over the next year but remain well below the record highs expected just three months ago, a Reuters poll found.

  Tracking the sell-off in global stocks, Indian shares have lost about 9 per cent since August and are nearly 7 per cent lower so far in 2015.

  The poll of more than 35 equity analysts conducted over the past week forecast the Sensex would rise slightly to end this year at 27,500 and reach 29,000 by mid 2016. The index closed on Monday at 25,616.84.

  A similar poll in June had foreseen the index hitting record highs by the end of both periods. Although equity analysts are generally bullish on India, the rise now forecast for this year is the smallest in any Reuters poll.

  The trimmed forecasts come despite expectations the Reserve Bank of India will cut its repo rate on Tuesday by another 25 basis points to stimulate the economy, which is usually good news for Indian shares.

  Last year the Indian stock market rose almost 30 per cent and was one of the best performers in the world. The BSE Sensexis forecast in the poll to hit a record high of 32,000 by end-2016, which would be 25 per cent higher from where it is now.

  Recent turmoil in financial markets on global growth fears, led by weaker-than-expected data from China, has pushed investors out of emerging markets, however, and put a dent in analysts' expectations for Indian shares.

  That sell-off in emerging markets was one of the reasons why the US Federal Reserve kept rates unchanged last week.

  But expectations the US Fed will raise rates this year and a lack of promised reforms from Prime Minister Narendra Modi's government has made foreign institutional investors to dump Indian shares.

  "The policies (reforms) are holding out and the window for the government to act is getting narrower. It is clear that the world will not wait for India for too long," said Ambareesh Baliga, an independent market analyst.

  A majority of analysts were of the view that key reforms like a goods and services tax and land acquisition bill will be passed, however, which should lift Indian shares over the coming year.

  Modi, who took office in 2014 on promises of introducing reforms that were widely thought to be the missing leg of the Indian growth story, has so far failed to deliver. But 24 of 35 analysts expected the present government to pass those reforms.

  RBI Governor Raghuram Rajan, who has cut interest rates three times this year to boost growth, stated in an interview that India is in a better position to withstand a Fed rate hike compared to any other emerging economy.

  Indeed, a majority of the analysts polled expect stock markets in China and Brazil to be the most vulnerable to such a move, which Fed Chief Janet Yellen has signalled is coming this year but which many in financial markets still doubt.

  Indications of relatively good economic growth compared to that of rival countries will make India more attractive to foreign and local investors, analysts said.

  The economy grew 7 per cent in the three months to June this year, similar to China. But recent data shows China is slowing down much more sharply than previously expected.

  That should help Indian shares but a lot would depend on the ability of the government to push through key reforms.

Raghuram Rajan's Diwali gift: A 50 bps cut in repo rate

• The RBI Governor Raghuram Rajan on Tuesday surprised with a 50 basis points cut in the policy rate - the short  term lending (repo) rate - from 7.25 per cent to 6.75 per cent. The expectations in the market was for a quarter basis points.
  
  This is in all probability the last reduction  for 2015 year. 

  The trigger for  higher than expected  cut is the sustained fall in the headline consumer price index (CPI) inflation, which has  reached its lowest level in since November last year.

  The RBI, however, says the inflation is likely to go up from September for a few months as favourable base effects reverse. "There are risk to inflation from monsoon outcome and also global developments. There are also risks to inflation from services sector," cautioned Rajan.

  The RBI's estimates  for inflation is around 5.8 per cent by January 2016. The CPI target set by RBI under the new monetary policy framework was at 6 per cent  by January 2016. This, according to RBI,  has been achieved and hence a further accommodation in the policy rate.
  In the bi-monthly policy statement of August last month, the RBI has indicated that further monetary policy accommodation will be based on further easing of inflationary pressures, the full monsoon outturn, possible Federal Reserve actions and greater transmission of its front-loaded past actions.

  The RBI says, "Since then, inflation has dropped to a nine-month low, as projected. Despite the monsoon deficiency and its uneven spatial and temporal distribution, food inflation pressures have been contained by resolute actions by the government to manage supply. The Federal Reserve has postponed policy normalisation."

  On the transmission of lower rates to borrowers,the  RBI has said that the markets have transmitted the past policy actions via commercial paper and corporate bonds, but banks have done so only to a limited extent. "The median base lending rates of banks have fallen by only about 30 basis points despite extremely easy liquidity conditions.....further transmission is possible," hoped RBI.

  "We want to encourage faster transmission. We are going to work very hard on this (transmission) with the government," Rajan said.  

Four reasons why RBI cut repo rate to lowest in 4 years

• The Reserve Bank of India (RBI) cut the repo rate by 50 basis points in its fourth bi-monthly policy review held on Tuesday.

  Repo rate, currently at 7.25 per cent has been cut to 6.75, the lowest in four years. It is the rate at which RBI lends short-term funds to commercial banks.

  Cash reserve ratio (CRR) has been kept unchanged at 4 per cent. It is the money commercial banks must keep with RBI.

  RBI so far this year has cut the interest rates by 75 basis points. This is the fourth rate cut by the apex bank.

  The reverse repo rate has fallen to 5.75 per cent.

  Raghuram Rajan said, "RBI stance will continue to be accomodative but at the same time vigilant. Policy growth has to be steady and predicatable."

  The apex bank cut the FY16 GDP growth target to 7.4 per cent from 7.6 per cent while projecting retail inflation at 5.8 per cent for January.

  "Focus should now shift to bringing inflation dwn to 5% by FY 17 end," he said.

  Factors that affected RBI's decision:

  • Retail inflation dropped to a record low of 3.66 per cent in August. Plummeting global oil prices analysts say, restrained the inflation. RBI Governor Raghuram Rajan had said that much depends on the monsoon, which could play a spoilsport.
  • Finance Minister Arun Jaitley has been pressing for a rate cut as the economy is growing below the targeted 8-8.5 per cent for the year ending March. 
  • The GDP however slowed to 7 per cent in the June quarter as compared to the 7.5 per cent in the March quarter.
  • US Federal Reserve kept the interest rates unchanged.

SBI cuts benchmark lending rate by 0.4 per cent to 9.3 per cent

• State Bank of India (SBI) on Tuesday cut its benchmark lending rate by 0.4 per cent to 9.3 per cent.

  SBI chairman Arundhati Bhattacharya told a television channel that the bank will reduce its base lending rate by 40 basis points to 9.3 per cent.

  She said the bank will also reduce its deposit rates by 25 basis points to 9.75 per cent.

  The largest public sector lender is the latest one to follow the suit after Raghuram Rajan surprised everyone by slashing repo rate by 50 basis points. Before this, Andhra Bank announced 0.25 per cent cut in its lending rates, with effect from today.

  The Reserve Bank of India (RBI) in its fourth bi-monthly monetary policy review today cut its policy interest rate to a 4-1/2 year low of 6.75 per cent. The bigger-than-expected move with inflation running at record lows, is expected to boost the economic growth.

  In the policy review, RBI Governor Raghuram Rajan said, "the focus would now be to work with the government to ensure that banks pass on rate cuts further".

  Finance Minister Arun Jaitley welcomed RBI's move and said, "the government would like to see commercial banks reciprocating with own interest rate cuts."

  The reduction comes on the back of interest rates being cut thrice earlier this year by 25 basis points each.

General Awareness

“ASTROSAT” MISSION LAUNCHED BY ISRO’s WORKHORSE PSLV – C30

• • ISRO launched India’s first dedicated multi wavelength space observatory satellite ASTROSAT for astronomical research from the Satish Dhawan Space Centre, Sriharikota along with six foreign satellites by ISRO’s trusted Launch Vehicle PSLV – 30 in its 31st flight.

    FOREIGN SATELLITES
    6 kg LAPAN-A2 of Indonesia
    14 kg NLS-14 (Ev9) of Canada
    4 identical LEMUR satellites of USA together weighing about 28 kg

    PERIOD OF MISSION – 5 years

    ASTROSAT OBJECTIVE

    • To help scientists develop an understanding of highly energetic physical processes at work in binary systems consisting of a star and either a neutron star or a black hole
    • To determine the properties of magnetic fields produced by neutron stars
    • To study regions of stellar birth in other galaxies
    • To detect new short-lived interstellar x-ray sources
    • To conduct a partial ultraviolet deep-field sky survey

    

    ABOUT ASTROSAT

    KEY FEATURES

    Mass	1513 Kg
    Type of orbit	Near-equatorial
    Orbit height	650 km (400 mi)
    Orbit period	5 years
    Wavelength	Multi-wavelength

    INSTRUMENTS/PAYLOADS

    UVIT (Ultraviolet Imaging Telescope) Observe sky in the visible, near or far ultraviolet regions of the electromagnetic spectrum and has an imaging resolution of 1.5 to 1.8 arc seconds.	Developed by Indian Institute of Astrophysics, Inter University Centre for Astronomy and Astrophysics(IUCAA) in collaboration with Canadian Space Agency and ISRO
    SXT (Soft X-ray telescope) Study how coming from distant celestial bodies varies with time	Tata Institute for Fundamental Research (TIFR) in collaboration with the University of Leicester, UK and ISRO.
    LAXPC (Large Area X-ray Proportional Counter) Study the variations in the emission of X-rays from different sources	TIFR Mumbai and Raman Research Institute (RRI), Bengaluru
    CZTI (Cadmium Zinc Telluride Imager) Extends the capability of the satellite	TIFR and IUCAA in collaboration with ISRO.
    SSM (Scanning Sky Monitor) Monitoring, detection and location of sources that become bright in X-rays for a short duration of time.	ISRO Satellite Centre at Bengaluru and IUCAA

    GROUND COMMAND AND CONTROL CENTRE
    ISRO Telemetry, Tracking and Command Network (ISTRAC), Bangalore, India.

    ABOUT PSLV – C30

    • The 320 tonne, 45 m tall PSLV-C30 carried seven satellites together with total payload weight of 1631 kg.

    PSLV-C30 is the tenth flight of PSLV in its ‘XL’ Configuration. The earlier 9 of PSLV – XL were

    1	PSLV-C11/Chandrayaan-1
    2	PSLV-C17/GSAT-12
    3	PSLV-C19/RISAT-1
    4	PSLV-C22/IRNSS-1A
    5	PSLV-C25/Mars Orbiter Spacecraft
    6	PSLV-C24/IRNSS-1B
    7	PSLV-C26/IRNSS-1C
    8	PSLV-C27/IRNSS-1D
    9	PSLV-C28/DMC3

    • Through 30 successful flights during 1994-2015 periods, PSLV has launched atotal of 84 satellites.
    • With this, a total of 51 satellites belonging to global customers from 20 countries including Germany, France, Japan, Canada, U.K, have been launched successfully by ISRO so far.