Current Affairs - 1 November 2015

General Affairs

India's Partnership With Algeria of High Importance: President Mukherjee

• NEW DELHI:  President Pranab Mukherjee today greeted the people of Algeria on their National Day and said the two countries share a partnership of "high importance".
  
  In a message to his Algerian counterpart Abdelaziz Bouteflika, President Mukherjee said: "It gives me great pleasure to convey to Your Excellency and to the people of Algeria warm greetings and felicitations on the occasion of your National Day."
  
  He said India attaches high importance to its partnership with Algeria.
  
  "The political, economic and commercial interaction between Algeria and India has grown satisfactorily. India and Algeria share similar goals of sustainable development and inclusive economic growth for our peoples," he said.
  
  "I note with satisfaction that many Indian companies are investing in Algeria and other important steps are being taken to enhance our mutually beneficial cooperation," he added.
  
  Algeria, a North African country, celebrates its National day on November 1.
  

PM Modi Should Work for Country's Unity Before Run for Unity, Says Congress

• NEW DELHI:  Congress today scoffed at what it called BJP's attempts to appropriate the legacy of its leader Sardar Patel, demanding that the government release the communique "banning" the RSS by the first Home Minister after the assassination of Mahatma Gandhi.
  
  Party's senior spokesman Anand Sharma also dismissed the 'Run for Unity' organised by BJP-led government on the occasion of 140th birth anniversary of Sardar Patel, calling it "hypocrisy" against the backdrop of protests by artistes, writers and scientists over alleged "rising intolerance" after the Dadri lynching, beef row and other incidents.
  
  He wanted the Narendra Modi dispensation to release the speaking order of Sardar Patel banning the RSS as also the correspondence he had with the then RSS chief MS Golwalkar and Syama Prasad Mookerjee of the Jan Sangh.
  
  "After they (those in the BJP and government) read it, they will start running in the opposite direction," Mr Sharma told reporters.
  
  Taking a jibe at the ruling dispensation, he said Sardar Patel was a stalwart of the Congress who worked along with Pandit Nehru, Maulana Azad and Rajendra Prasad in the freedom struggle.
  
  "They do not have heroes and icons and therefore they are borrowing them and borrowing them foolishly.... Sardar Patel had taken important decisions and one of them was banning the RSS."
  
  "Sardar Patel had given a detailed order banning the RSS... First they should read it, then they will run in the opposite direction," Mr Sharma said.
  
  He claimed the Prime Minister and the government had not paid homage to Indira Gandhi who died on this day for the cause of unity of the country.
  
  Mr Sharma claimed that the RSS during the correspondence with Sardar Patel had agreed to stay away from politics and to remain just a socio-cultural organisation.
  
  The Congress attack on the BJP and the Prime Minister came on a day when they invoked Sardar's work for national integration.
  
  The Prime Minister said "unity, peace and harmony" was the first condition if India has to move forward and attain new heights of development.
  
  At the National Unity Day to mark birth anniversary of India's first Deputy Prime Minister, Mr Modi flagged off 'Run for Unity'.
  
  The Congress leader said that the Prime Minister has shown his "petty mind" by not remembering Indira Gandhi on her death anniversary
  
  Mr Sharma downplayed Union Minister M Venkaiah Naidu's remarks that had Sardar Vallabhbhai Patel been the first Prime Minister of India things would have been different. Mr Naidu had also said that history has not done justice to the memory of the leader.
  
  "The decision to make Nehru the first Prime Minister of India was taken by a pantheon of leaders including Mahatma Gandhi and Sardar Patel. Naidu has not read what Sardar has written about Nehru. I will send it to him....Nehru was one of the tallest leaders in the world," Mr Sharma remarked.
  
  Asked about BJP's criticism of dynastic politics and the charge that the Congress does not see beyond Gandhi family, Mr Sharma noted, "We also had Prime Ministers like Lal Bahadur Shastri, Narasimha Rao and Manmohan Singh who were not part of the Gandhi family".

Meterological Department Forecast More Rain in Southern States Tomorrow

• CHENNAI:  The India Meterological Department (IMD) today said that the southern states of Tamil Nadu and Kerala recieved heavy rainfall in the last 24 hours, with the weatherman forecasting more showers on Sunday.
  
  "Heavy rainfall has been observed at isolated places over Tamilnadu and Kerala during last 24 hours ending at 0830 hours IST of today," IMD said in a bulletin.
  
  Meanwhile, the Regional Metereoogical Centre (RMC) in Chennai said that rain or thundershower would occur at most places over Kerala, at many places over Tamil Nadu, Puducherry, Lakshadweep, coastal and south interior Karnataka and at a few places over Rayalaseema on Sunday.
  
  Isolated rain or thunder shower may occur over coastal Andhra Pradesh and north interior Karnataka while dry weather will prevail over Telangana, it said in a forecast. Meanwhile, heavy rains lashed various parts of Tamil Nadu including Chennai.
  
  Srivaikuntam(Thoothukudi Dt) and Papanasam (Tirunelveli) recorded the maximum of 10 cm each while Thoothukudi (Thoothukudi dt) and Kolachel (Kanyakumari) received 9cm and 7 cm, respectively, according to the rainfall recorded at 8.30 am today.

Supply Standoff 'Fuels' Crisis, Nepal Turns to China for Help

• RAXAUL:  Hit by fuel-crisis with no supplies from India for over a two months, Nepal turns to China for help, diplomatic circles in India may be worried, but on the ground, in Bihar's border town of Raxaul, truckers like Jaylal Yadav say there's no other choice.
  
  Yadav's truck and 53 others from Nepal's oil corporation have been parked right opposite the Indian Oil Depot at Raxaul for over two months now. On a normal day, over 150 fuel trucks cross this border to Nepal, each carrying 10,000 to15000 litres of fuel, filling up from the Indian oil Depot. That's half of Nepal's daily fuel requirement.
  
  

  But Yadav and other truckers are stuck, as protesters from Nepal, angry over the country's new constitution, have occupied a crucial road bridge on no man's land between the two countries.
  
  "Sometimes I think about leaving the truck here and going home but it's really not possible because something might get stolen from the truck," says Mr Yadav, who lives close to Nepal's Birgunj town.
  
  India says it's up to the Nepalese government to find a peaceful way out of this crisis.
  
  Vikas Swaroop, Spokesperson for the Ministry of External Affairs, told media in Delhi, "Some border points are open, but yes Raxaul is the most critical. There is no blockade on the borders from our side. Fuel delivery has been halted due to 1 per cent of Nepalese people who are not happy with their Constitution."
  
  "India hopes the protesters and the Nepal government can reach a solution by dialogue," Mr Swaroop added.
  
  China says it will send in 1,000 tonnes of fuel immediately to Nepal, but fuel stations at Raxaul are the only hope for people like 41-year-old Sona Lal Patel, who works at a hospital at Nepal's Birgunj town, 8 kilometres from the border. Protesters have allowed bikers to travel across the border to fill up.
  
  "Sometimes I have to stand in line for four hours. I don't think China can help, it's really up to India to do something, it's up to them really," said Mr Patel.

Russian Plane Crash: Rescue Teams Say Can Hear Voices of Survivors

• CAIRO:  Egyptian search and rescue team members have heard voices in a section of a Russian plane that crashed in the country's Sinai peninsula today, an officer on the scene told Reuters today. The airliner was carrying 217 passengers and seven crew members.
  
  "There is another section of the plane with passengers inside that the rescue team is still trying to enter and we hope to find survivors especially after hearing pained voices of people inside," the officer, who requested anonymity, said.
  
  A rescue official at the site has said that over 100 bodies have been found so far.
  
  The Egyptian authorities have also located the black box which contains the flight data, security have said.
  
  After delays caused by poor weather conditions, Egyptian search and rescue teams located the site of the crash in the Hassana area 35 km (22 miles) south of the Sinai Mediterranean coastal city of Al Arish, the aviation ministry statement said.
  
  The Metrojet (formerly Kolavia Airlines) flight had 217 passengers and seven crew members on board. A senior aviation official said it was a charter flight operated by a Russian company.
  
  Most passengers on the flight are believed to be Russian tourists.

Business Affairs 

At 68%, fiscal deficit reveals strains to budget plans

• Country's fiscal deficit has reached 68 per cent of its full-year target at the halfway stage, revealing strains to Finance Minister Arun Jaitley 's budget as revenues from asset sales again fall short.

  Even though falling oil subsidy costs and curbs on spending should help Jaitley hit his borrowing target, he warned this week that it would be a challenge to collect the Rs 69,500 crore ($10.66 billion) from sell-offs he has budgeted for.

  The April-September fiscal deficit totalled Rs 3.79 trillion, or 68.1 per cent of the full-year target, data released by the Controller General of Accounts showed on Friday.

  Net tax receipts stood at Rs 3.7 trillion in the first half of the fiscal year to March 2016, while total spending touched Rs 9.1 trillion.

  That mismatch reflects that spending is typically front-loaded, while revenues peak late in the year. Still, weak proceeds from sell-offs of state assets are putting Jaitley's fiscal arithmetic to the test.

  So far he has raised only Rs 12,700 crore from the sale of shares in state companies, less than one-fifth of the annual target.

  Some finance ministry officials say the target could soon be slashed by half, and cash-rich state companies like Coal India pressed instead to pay higher dividends to plug the gap.

  Prime Minister Narendra Modi's government faces a revenue shortfall of up to Rs 50,000 crore in direct tax receipts, estimated at Rs 7.98 trillion for the 2015/16 year to March.

  Jaitley does expect to meet his target for indirect tax receipts of about Rs 6.5 trillion. That, say aides, is a sign that economic activity is picking up in Asia's third-largest economy.

  In February, he targeted a deficit at 3.9 per cent of gross domestic product in the current fiscal year. He aims to bring it down to 3 per cent of GDP in 2017/18.

  Fiscal deficit has declined from 5.8 per cent of GDP in 2011/12 to 4.0 per cent of GDP in 2014/15, mainly by reducing capital spending on infrastructure.

  Since taking power in May 2014, Modi has sought to bring about an investment-led recovery by shifting funds to big-ticket infrastructure projects and away from subsidies.

  But weak demand for exports and poor harvests caused by a second consecutive drought year have led the Reserve Bank of India to cut its growth forecast to 7.6 per cent, below the government's earlier estimates of more than 8 percent.

  On Thursday, the World Bank urged the government to continue its fiscal consolidation and collect more direct taxes such as on personal income and corporate profits.

  At 5.7 per cent of GDP, India's direct tax collection is among the lowest in the world, compared with 11.2 per cent in Russia and 7.4 per cent in Brazil.

  "Reducing deficits beyond 2015/16 will be challenging as oil prices are unlikely to fall further," it said in a report.

The Cracks Are Showing

• Exactly two years ago, the Reserve Bank of India (RBI) imposed lending restrictions on Kolkata-based United Bank of India. The reason: Its asset quality deteriorated massively, return on assets (RoA) turned negative and its capital adequacy ratio reached the bare minimum level. UBI has managed to stage a recovery of sorts but it is not out of the woods yet. Meanwhile, the RBI has clamped down on yet another state owned bank, Indian Overseas Bank. This Chennai headquartered bank has seen its capital adequacy plunging below nine per cent, NPAs ballooning to over 10 per cent and return on assets taking a hit, sliding below 0.25 per cent.

  The two-state owned banks in question witnessed considerable deterioration in their key performance parameters when the RBI took corrective measures. Are there more skeletons in the PSU banks' cupboard?

  "Possibly more," says a senior private banker on condition of anonymity. There are also legacy issues, according to Abizer Diwanji, National Head ( Financial Services ) at EY India. "What they (PSU banks) need urgently is a faster turnaround in their stressed assets portfolio. They need to create better credit management system and warning signals and also a robust recovery policy," says Diwanji. The banks who appear vulnerable include Central Bank of India, Dena Bank, Allahabad Bank, Andhra Bank and Bank of India. Allahabad Bank, for instance, has a capital adequacy ratio (CAR) of only 10.22 per cent. In contrast, leading private banks, including ICICI Bank, HDFC Bank and Axis Bank, have a CAR of over 15 per cent. 

  The capital issue was partly addressed by the government when it announced the 'Indradhanush' framework for transforming PSU banks in August. On the cards is a capital infusion of Rs 70,000 crore over the next four years. The other measures under the 'Indradhanush' initiative, such as appointing professional CEOs and board members, are also expected to yield results over the longer term.
  

  In the short run, banks have no option but to preserve capital and arrest NPAs. The bad loans in the system have jumped from 2.36 per cent four years ago to a high of 4.62 per cent. Similarly, restructured assets have grown to 6.44 per cent. Together, the total stressed assets in the system (NPAs and restructured portfolio) have reached 11 per cent of the total advances. "There are also no robust systems for screening of projects, their viability, industry trends and also promoters' background check," says another banker.

  In fact, the RBI has taken a number of steps to address the problem including early detection of stress, encouraging sale of NPAs by banks to Asset Reconstruction Companies (ARCs), strategic debt conversion into equity, joint lenders' forum etc. "Our ways of dealing with distress have been very, very slow , murky and to some extent unfair. We have taken some steps, but government is probably taking bigger steps by bringing the bankruptcy code. If that happens, we have a proper system of redress," RBI Governor Raghuram Rajan told Business Today in an exclusive interview last month.

  The present state of affairs gives the government another reason to push ahead with consolidation in the PSU banking space by merging smaller banks with larger entities.

Worry in order inflow; L&T earnings fail to impress market

• Nothing has changed at the end for Larsen and Toubro (L&T), the largest private engineering and construction company in the country, despite the rising positivity of the economy. The company has posted a revenue of Rs 23,393.22 crore, up by 10.55 per cent, in the second quarter, while profit rose (before extra ordinary loss) by 31.5 per cent to Rs 1105.40 crore. The profit after minority interest, and share in profit of associates has increased by 16 per cent to Rs 996 crore.

  The company's overall performance was better, reducing the costs in proportion to revenues. However, L&T shares slumped 4.1 per cent to their lowest close since May 2014 (closing at Rs 1411.15 a share), while the S&P BSE Sensex tumbled 0.7 per cent. The cut in its order inflow guidance from 15 per cent to 5 to 7 per cent for the year has affected the stock, say analysts.

  Analysts often see L&T as a corporate proxy of broader economy and they expected resurgence in revenue, rising nearly 15 per cent. But the numbers inside the profit and loss statement indicate a few weaknesses. The average dollar price has appreciated to $65 in the second quarter as against $60 a year before. For L&T, which generated about 30 per cent of its net sales from abroad or Rs 6,421 crore, the benefit of dollar - rupee difference will be around Rs 490 crore in the second quarter. In addition, the company has taken into account an exceptional gain of Rs 309.57 crore from the sale of shares in L&T Finance.

  In the second quarter, the company had to take an inventory hit (changes in inventories of finished goods, work-in-progress and stock-in-trade) of Rs 1,575.72 crore. In the comparable year-on-year quarter, it had an inventory gain of Rs 699.94 crore. Thus, the overall impact came to about Rs 2,275 crore in the quarter. It may be because of the delay in payments or project completion, say analysts. "What are the reasons for the delay? Is it the economy still lurking in darkness?" analysts ask.

  SN Subrahmanyan, L&T's recently appointed deputy managing director and president says things are moving at the government's side. However, there are issues still in land allotment and clearances because of the multiple power centers like governments and agencies, he said. Despite these issues, he added, the defence and railways ministries tender out many projects.

  L&T's order inflow reached at Rs 55,000 crore in the first half of the year, 25 per cent lower than last year. In Q2, the order inflow was down 28 per cent to Rs 28,600 crore. The company's total order book, however, was up 14 per cent year-on-year at Rs 2,44,100 crore as on September 30. 

India on right track but long way to go, says Nomura

• India's improvement in the ease of doing business ranking is a reflection of the series of small steps announced by the government but there is still a long way to go, says a Nomura report.

  According to the Japanese brokerage firm, India is on the right track, but has a long road ahead.

  Out of 189 countries ranked by the World Bank in its ease of doing business report, India's rank has improved to 130 this year. In 2015, India was originally placed at 142nd position and later the same was revised to 134th place.

  "The improvement reflects the series of small steps announced by the government to foster an investment-friendly environment," Nomura said in a research note.

  The report further noted that "with reform efforts ongoing, including the likely introduction of a bankruptcy law in winter session of the Parliament, this trend of improving the ease of doing business in India should continue."

  India's ranking on 'getting electricity' and 'starting a business' parameter has improved.

  Businesses can now get electricity sooner due to fast internal processing and the removal of redundant inspections.

  "In addition, starting a business has been made easier by eliminating minimum capital requirements through amendments to the Companies Act," Nomura said.

  "Compared to other emerging markets, India's ranking lags behind peers the most in dealing with construction permits, enforcing contracts and resolving insolvency," it said.

  As part of making the process easier for starting a business, the government has eliminated the requirements for a paid-in minimum capital and a certificate to commence business operations, significantly streamlining the process of starting a business.

  The government targets breaking into the top-50 ranking within three years (by 2017).

PNB Housing Finance hires banks for $385 million IPO: Report

• PNB Housing Finance has hired banks including Barclays, JPMorgan and Morgan Stanley for a Rs 2500 crore (about $385 million) initial public offering, IFR reported on Friday, citing two sources close to transaction.

  "Investment banks Kotak and JM Financial will also advise PNB Housing in the planned IPO, slated for the first half of 2016, IFR, a Thomson Reuters publication," said.

  State-run Punjab National Bank owns a 51 per cent stake in PNB Housing, while Carlyle Group owns the remainder. 

General Awareness

General Awareness Questions Asked in IBPS PO MAINS 2015 (First Shift)

• • 
    

    dear Aspirants

    These are the questions which are asked in today’s Mains Exam. We will update more questions with the answers…

    (1) Basel Committee is related with: Banking Industry
    (2) IBRD Head-qurter is located at- Washington DC
    (3) Where is the Head-quarter of Indian Bank?- Chennai
    (4) Shishu Kishor are a part of?- MUDRA BANK
    (5) DRDO Highest Reseach Centre in which state? Leh, Ladakh, J&K
    (6) Name the DSIB Banks? ICICI & SBI
    (7) Egypt currency – Pound
    (8) Rajiv Gandhi Khel Ratna award- Sania Mirza
    (9) Syria Capital? – Damascus
    (10) KVP lock period? 30 Months
    (11) What is not the function of a payment Bank?
    (12) Ist Micro Finance Company to change into Bank? Bandhan Bank
    (13) What is the portal launched by Finance Minister on Education Loan? www.vidyalakshmi.co.in
    (14) Physical Noble Prize Winners? Takaaki Kajita and Arthur B. McDonald
    (15) What is the time limit given to Small Banks to be in Operation? 18 Months
    (16) NPS focus on?
    (17) Housing for all till?- 2020
    (18) 25 DEC is observed as- Good Governance Day.
    (19) White label ATM- 100% FDI
    (20) Export risk insured by which financial institution-ECGC
    (21) Banking ombudsmen appoint by- RBI
    (22) Buxa national park- West Bengal
    (23) Literacy rate-74.04
    (24) Bank Bureau Board top official- RBI governor
    (25) NHB regulator- RBI
    (26) Frank Tyson cricketer country- England
    (27) 1st bharat ratna- C. Rajagopalachari, CV Raman
    (28) Sushma swaraj constituency- Vidisha
    (29) Bhartiya Maliha Bank CMD who recently became CMD of PNB? Usha Subramaniumam
    (30) Indian bank headquaters – Mumbai
    (31) Hosing for all scheme – 2022
    (32) Dare to Dream book author ?