Current Affairs - 18 November 2015

General Affairs

Engagement with India is Key Element of Rebalance in Asia Pacific Region: US

• WASHINGTON:  Terming US engagement with India as an important element of its Asia pacific rebalance, the White House has said while welcoming India's positive role in ensuring a stable, peaceful and prosperous region.
  
  "US engagement with India in the Asia Pacific and Indian Ocean region is an important element of the Rebalance. We welcome India's positive role in ensuring a stable, peaceful, and prosperous region," the White House said yesterday as US President Barack Obama headed to the region for a week-long trip taking him to Malaysia and Philippines.
  
  

  "As affirmed in the US-India Joint Strategic Vision that the President announced with Indian Prime Minister Narendra Modi in January, expanding and deepening US engagement with India in the Asia Pacific and Indian Ocean region is an important element of the Rebalance," the White House said.
  
  As part of its rebalancing strategy, the US is revitalising and maturing its partnerships throughout the region.
  
  "We are working to strengthen cooperation among our allies and partners, leveraging their capabilities to address common regional and global challenges," it said.
  
  Since launching the 'Rebalance', the Obama Administration has strengthened its treaty alliances with Australia, Japan, the Republic of Korea (ROK), and the Philippines, while maintaining its long-standing alliance with Thailand.
  
  It has also deepened partnerships with Indonesia, Malaysia, Singapore, Vietnam and India, and strengthened its unofficial relationship with the people of Taiwan, it said.
  
  Welcoming the rise of a China that is peaceful, stable, prosperous, and a responsible player in international affairs, the White House said building a constructive relationship with Beijing that simultaneously supports expanding practical cooperation on global issues while candidly addressing differences between them is an important component of the rebalance.
  
  "We support China becoming an increasingly capable and active partner in addressing regional and global challenges, and in working with us and others to strengthen the existing international system of norms, rules, and institutions. The world benefits when China is invested in helping to resolve regional and global problems," the White House said.

Bihar Defeat Will Only Have Temporary Impact: Bengal BJP

• KOLKATA:  The big defeat of the BJP in the Bihar Assembly poll might have resulted in the cancellation of party president Amit Shah's much-touted rally in Bengal, but the party's state leadership asserted that the drubbing would only have a 'temporary' impact.
  
  The leadership is confident that it will not be long before the party workers will have their morale restored.
  
  

  "It is obvious that the Bihar poll verdict will have a temporary impact in Bengal. If we had won, it would have a temporary impact too. Politics in Bihar and Bengal are different cups of tea. In Bihar it is caste-based politics, but in Bengal it is development politics versus TMC's reign of terror," said BJP state president Rahul Sinha.
  
  Mr Shah's rally, scheduled to be held in Kolkata on November 30, was officially called off last Thursday, instead the party would organise a protest-march on that day to be attended by party leaders Siddarth Nath Singh and Kailash Vijayvargiya.
  
  BJP's national secretary, Mr Singh, too agreed that win or loss in a neighboring state might have a temporary impact. "We have been winning Bihar since 2005, but did that have an impact in Bengal? So how will it now make a difference?" he said.
  
  However, Mr Sinha had sung a different tune on October 28 when he claimed that the BJP would concentrate on West Bengal after the Bihar election.
  
  The BJP leadership had even claimed that after the party emerged victorious in Bihar Assembly elections, it would sound the death knell for the ruling Trinamool Congress in Bengal.
  
  A senior state BJP leader, considered to be close to party's ideological mentor, Rashtriya Swayamsevak Sangh, said on the condition of anonymity that the party in Bengal was in "complete disarray".
  
  "There are several factors at play right now. The central leadership right now doesn't want to jump the gun in Bengal," the leader said.
  
  The BJP leader also felt that there was a growing dissent in the rank and file over outsiders, who had joined the party in Bengal after 2014, being given important positions at the expense of old-timers.

Time is Right for Rahul Gandhi to Take Over as Congress President: Sachin Pilot

• HYDERABAD:  The demand for early elevation of Rahul Gandhi as Congress President grew louder today with the party's Rajasthan unit chief Sachin Pilot saying the time is right for the transition as the party needs to gear up for Assembly elections due next year.
  
  The party's good show in the recent Bihar assembly elections has rejuvenated it and boosted the morale of the rank and file and the outfit is now showing signs of recovery after the drubbing it received in Lok Sabha polls last year, the former Union Telecom minister said.
  
  

  Mr Pilot sought to give full credit to Rahul for the party's performance in Bihar, where it won 27 seats of the 41 contested, and even for forging Grand Alliance with JDU and RJD which trounced that BJP-led NDA, winning 178 of 243 seats.
  
  "We were not the main player in Bihar for 25 years. But because of Rahul Gandhi's efforts... our seat tally went up to 27 from four (in the previous Assembly)... Rahul Gandhi was the one who first approached and he had a meeting with Nitish Kumar who was then projected as CM candidate and then of course, Lalu Yadav joined the alliance," he said.
  
  Asked if the poll outcome would hasten the elevation of Rahul Gandhi as party President, Mr Pilot said its timing depends on the Congress Working Committee, party President Sonia Gandhi and Rahul himself.
  
  "As far as we are concerned, both of them (Sonia and Rahul) are giving able leadership. But.. Rahul... yes...there are demands...for example at CLP meeting in Bihar, there was a demand from newly elected MLAs that Rahul should take over as Congress President. And we all believe that. (But) the decision is up to them (CWC, Sonia and Rahul)," he said.
  
  "But we will like it (elevation of Rahul) to happen as soon as possible because now the party is steadily (growing in strength again) and we have elections in Assam, Tamil Nadu and West Bengal etc.(next year)", Mr Pilot said.
  
  The lawmaker from Amritsar, Captain Amarinder Singh, who is also Congress Deputy Leader in Lok Sabha, said yesterday that time has come for the party Vice-President to take over the reins of the party, echoing views of party leaders who are pushing for such a move, particularly after the Bihar election outcome.

Ganga to be One of the Cleanest River by October 2018: Uma Bharti

• NEW DELHI:  Union Water Resources Minister Uma Bharti today dismissed concerns over alleged slow progress in the Centre's Namami Gange programme saying the NDA Government has resolved to make the river as "one of the cleanest" in the world by October 2018.
  
  "If you think we have stopped taking steps towards clean Ganga, it is not so. Before any big race, a sprinter stops a bit, assesses the destination and then sprints towards it. So, our destination is October 2018 when we will show it to the world that Ganga is one of the cleanest rivers in the world," Ms Bharti said, stressing the Government does not want to work on the programme with an "agitated mind".
  
  

  The Minister said the Government is faced with two challenges while working on the project: one is to clean the river using technology and the other is to ensure public participation to see it remains so in time to. The latter, she noted to be a bigger challenge.
  
  She also sought participation from CII to support for maintenance system to ensure Ganga remains clean Speaking at Water Innovation Summit 2015 organised by Confederation of Indian Industry (CII) Triveni Water Institute, Ms Bharti stated work on first river-linking project of connecting Ken-Betwa rivers will begin in January-February and preparations for the same have been completed.
  
  On the linking of Ken-Betwa rivers, Ms Bharti said the Central Government enjoyed "complete" protection from Supreme Court over concerns raised by environmentalists.
  
  "For the first time inter-linking of rivers will take place, which will involve two big states Uttar Pradesh and Madhya Pradesh. And we have all the protection from SC in this regard," she said claiming local residents to be affected are in support of the project.
  
  Ms Bharti further said the Centre will move ahead with Damanganga-Pinjal and Par-Tapi-Narmada river-linking projects soon with Maharashtra and Gujarat governments.
  
  She also allayed apprehensions of neighbouring countries saying that India's river-linking projects will not harm their resources and expressed Government's resolution that it was committed towards Brahmaputra flood management.
  
  Among other issues, the Minister invoked Prime Minister Narendra Modi saying newspaper and TV channel headlines are not the barometer to assess India and asserted the country as "quite liberal and tolerant".
  
  She claimed majority of Muslim populace chose to stay back in India had faith in that "they might be troubled by Muslim neigbhours in Pakistan but not those in Hindus in India."

DMK Extends Full Support to Ruling AIADMK for Relief Measures

• CHENNAI:  In a show of solidarity, arch rival DMK today extended full support towards relief and rehabilitation efforts undertaken by ruling AIADMK in rain ravaged Tamil Nadu and also launched two helplines for the people.
  
  DMK President M Karunanidhi said his party would support the government's relief and rehabilitation efforts "in this critical situation".
  
  He announced that people affected by floods could contact the DMK headquarters on 044-24320280 or 7810878108.
  
  "Similarly, DMK district officers can also be contacted for assistance," he said in a statement, adding that party workers would whole-heartedly involve themselves in relief work.
  
  As many as 71 persons have lost their lives in rain-related incidents so far in the state since the onset of the North East monsoon in October end.
  
  Tamil Nadu will witness Assembly polls in April-May next year.

Business Affairs 

Sensex ends 104 points up; Nifty holds 7,800; GAIL top gainer

• Extending gains for the second consecutive day, the domestic markets ended higher in a volatile trading session on Tuesday, as investors bought defensive stocks even though sentiment remained broadly cautious back home.

  The S&P BSE Sensex closed 104.37 points up at 25,864.47, while broader CNX Nifty held its key support level of 7,800 and settled at 7,837.55, up 30.95 points.

  Market breadth remained positive with 20 of the 30 Sensex components ending the day in green.

  Gains were also helped as Asian and European stocks rose across the board following a surge on Wall Street overnight as investors clawed back losses that came on the back of last week's Paris attacks.

  Still, caution prevailed after disappointing corporate earnings in the July-September quarter, while foreign institutional investors (FIIs) have been net sellers of $506.37 million worth equities so far this month.

  "Global backdrop and sell-side figures from FIIs are creating an overhang on the market," said Gaurang Shah, vice president at Geojit BNP Paribas.

  GAIL was the best performer among Sensex stocks and added 4 per cent in trade today.

  Infosys stock was the worst performer on Sensex and settled 1.9 per cent down after falling as much as 2.6 per cent after the IT giant warned of weaker margins in the December quarter and the second half of the current financial year.

  Meanwhile, domestic trade deficit data, released post market hours on Monday showed exports remained in the negative territory for the 11th month in a row by registering a dip of 17.53 per cent in October to $21.35 billion due to a demand slowdown, while trade deficit showed an improvement.

  Among Asian markets, China's Shanghai Composite ended the day with a downtick of 0.06 per cent, Hong Kong's Hang Seng index was up 1.15 per cent at close, while Japan's Nikkei settled 1.22 per cent up.

  Overnight, US markets opened in the red reacting to the deadly Paris attacks last week. However, markets changed direction and ended firmly in the positive with sizeable gains in energy shares.

  Lowdown on markets today

  01:00 pm

  Sensex at 25,754.93, down 5.17 points

  Nifty at 7,800.35, up 6.25 points

  12:00 pm

  Sensex at 25,867.2, up 107 points

  Nifty at 7809.70, up 3 points

  11:00 am

  Sensex at 25862.04, up 101 points

  Nifty at 7835.70, up 29 points
  

  9:27 am

  Sensex at 25,845.10, up 85.00 points

  Nifty at 7,830.30, up 23.70 points

Rebuffing critics, FM Arun Jaitley goes for growth, reform

• Finance Minister Arun Jaitley rebuffed Prime Minister Narendra Modi's critics on Tuesday and challenged the opposition to back a crucial tax reform, pledging also to put investments before budget savings to drive growth in Asia's No.3 economy.

  Jaitley, in an interview with Reuters, brushed aside senior leaders in Modi's ruling nationalist party who rebelled after a heavy election defeat this month in Bihar, the country's third most populous state.

  "People must have a sense of responsibility when they speak," he said over breakfast at his hotel in Dubai, where he was on a visit to attract investments from Middle Eastern sovereign wealth funds that would help drive growth.

  The setback in Bihar dealt a blow to Modi's prestige after he campaigned actively in the state, and has emboldened his opponents in Parliament who have used their control of the Upper House to delay his economic reform agenda.

  Jaitley said the government would prefer to use buoyant tax receipts to fund extra infrastructure spending than to slash its borrowing target for the current fiscal year that runs to March 2016.

  Achieving "high growth and depleting poverty" are top of the agenda of the government for the coming years, he said. Modi, elected in May 2014 with the strongest mandate in three decades, has set his ambitions to lead India for two five-year terms.

  "I would stick to my fiscal deficit target of 3.9 per cent this year and the priority will be to spend whatever resources the government has within the fiscal deficit target," said the 62-year-old Jaitley.

  The government is ready to discuss all issues with the opposition to pass a key amendment in the forthcoming winter session of parliament that would pave the way for a new nationwide goods and services tax (GST), Jaitley also said.

  It is not, however, willing to abandon the basic objectives of the tax, which would for the first time turn India into a common market and by some estimates add as much as 2 percentage points to gross domestic product.

  "Without compromising on the architecture itself, and keeping a general consensus between the states and the centre in mind, I think a discussion is reasonably possible," he said.

  Modi has been unable to pass the GST because his coalition lacks a majority in the upper house of parliament, where the country's states are represented. One controversy has been over a proposed state levy that some say would make the tax complex to administer.

  After the Bihar defeat, his chances of securing control over the chamber in this five-year term have evaporated, compelling him to seek dialogue with the opposition to implement his reform agenda. 

CAD to be 1 per cent of GDP in FY16, says Citigroup

• India's current account deficit (CAD) is likely to be about 1 per cent of the GDP in the current fiscal because of low crude prices and contained gold imports, says a Citigroup report.

  According to the global financial services major, CAD is likely to be about $20.6 billion (1 per cent of GDP) in 2015-16, as against $28 billion (1.4 per cent of GDP) last year.

  Though it's still early to call the bottom on export contraction, we maintain our view of India's current account deficit narrowing to around 1 per cent of GDP in FY16 due to low crude prices and contained gold imports, Citigroup said in a research note.

  According to official figures, trade deficit in the first seven months of the current fiscal (April-October) has shrunk to $77.76 billion as against $86.26 billion last fiscal.

  Citigroup said this figure reinforced its view of a likely compression in CAD, which is primarily the difference between the value of country's imports and exports.

  It also includes certain other components, which normally constitute a smaller percentage of the total. The report further noted that an improvement in exports, stable trend in non-oil non-gold imports, and an uptick in PMI new export orders augurs well for the economic activity in the near term.

  India's merchandise trade deficit narrowed for a third consecutive month to $9.8 billion in October largely due to a sequential increase in exports by 2.1 per cent on a month-on-month basis in seasonally-adjusted terms.

  The CAD in 2014-15 shrank to 1.3 per cent of GDP ($27.5 billion) from 1.7 per cent ($32.4 billion) in 2013-14.  

  Banking major HSBC in its research report said that the quality of funding in the form of higher FDI has improved. As seen over the last two quarters, we expect FDI inflows to alone fully finance the CAD, it said.

  We expect the CAD to be contained at 1 per cent of GDP this year and be fully funded by FDI flows, it added. Decline in oil and gold imports are the main reasons for continued improvement in the trade deficit, it said.

Oil and gas block auction policy to be ready in current fiscal yr: Govt

• Government expects to finalise the new policy for auction of oil and gas blocks during the ongoing financial year, Oil Minister Dharmendra Pradhan said.

  "We have brought this consultation paper and suggestions will come in by November 30. We will make the policy after considering all the views and take it to the Cabinet. It will be our endeavour to make the policy during this financial year only," Pradhan told reporters on the sidelines of Bio-Energy Summit 2015 organised by CII.

  On Monday, Oil Ministry had issued a paper on new fiscal and contractual regime for award of hydrocarbon acreages with a view to revive investor interest in oil and gas exploration by simplifying rules.

  It proposes to free natural gas pricing as well as replace the controversial Production Sharing Contract (PSC) with simpler revenue-sharing regime for all future field auctions in the backdrop of low gas prices not attracting investors in exploration and production sector.

  Global players like BP and domestic companies including RIL as well as state-owned ONGC have been seeking pricing freedom as the current rates make new investments unviable.

  "There were suggestion on the issue from institutions like CAG. In order to make new bidding round more progressive, transparent and market friendly, we have brought in this consultation paper," the minister explained.

  In September, the government had allowed pricing freedom for the gas produced from 69 small and marginal fields it plans to auction shortly.

  On the Indian basket crude oil price cracking below $40 barrel mark to touch $39.89, the minister said, "We have to accept the changing geopolitical scenario of the world. Let's see how things are coming up. But this kind of price is certainly favourable for the Indian market."

  While addressing the conference, he made it clear that lower crude prices will not change India's stance on increasing share of renewables sources in its energy mix.

  He also indicated that as much as 20 GW of output from bio-energy will be achieved against the envisaged 10 GW under the total renewable energy target of 175 GW till 2022.

  On LPG gas subsidy to households, Pradhan said: "There should be a public discourse on the issue whether LPG subsidy should be given to higher income groups. We will take a decision on this."

  The government is planning to stop providing LPG subsidy to the consumers whose income is above Rs 10 lakh.

  On the issue allowing premium pricing on gas produced from difficult deep-water and ultra deep-water blocks, he said oil and finance ministries will take a decision on the issue after achieving consensus.

  Speaking at the same occasion, Railways Minister Suresh Prabhu said: "We are launching our first wind turbine in Jaisalmer by the end of this week. We need to invest in R&D in green power."

Gold price at 4-month low, tumbles Rs 450 on weak global cues

• Gold price on Tuesday plunged by Rs 450 to trade at almost four-month low of Rs 25,700 per 10 grams at the bullion market, tracking a weak global trend amid subdued demand from jewellers and retailers.

  Silver price also fell sharply by Rs 500 to Rs 34,100 per kg on reduced offtake by industrial users and coin makers.

  Apart from slackened demand from jewellers and retailers, a weak global trend where gold traded near the lowest level in over five years on expectations that the US Federal Reservewill soon hike interest rates, has cut demand for the precious metal as a safe-haven, leading to fall in prices.

  Gold in Singapore, which normally determines price trend on the domestic front, dropped by 0.4 per cent, to $1,078.07 an ounce on Tuesday, while it ended 0.17 per cent down at $1,082.10 an ounce in New York in Monday's trade.

  In the national capital, gold of 99.9 and 99.5 per cent purity tumbled by Rs 450 each to Rs 25,700 and Rs 25,550 per 10 grams, respectively, a level last seen on July 20. It had gained Rs 235 in Monday's trade.

  Sovereign, however, continued to be asked at previous level of Rs 22,200 per piece of eight grams.

  In tune with gold, silver ready fell by Rs 500 to Rs 34,100 per kg and weekly-based delivery by Rs 620 to Rs 33,640 per kg.

  Meanwhile, silver coins remained flat at Rs 48,000 for buying and Rs 49,000 for selling of 100 pieces.

General Awareness

AMRUT plan for 81 cities worth Rs. 5,748 cr

• • As per Ministry of Urban Development statement, 81 cities in five states (Tamil Nadu, Madhya Pradesh, Jharkhand, Odisha and Mizoram) will invest Rs. 5,748 crore to enhance basic infrastructure including water supply and sewerage connections under AMRUT action plans for the year 2015-16.
    (Minister of Urban Development – Venkaiah Naidu)

    • Central assistance will be provided to an extent of Rs. 2,440 crore while the rest would be contributed by five state governments and urban local bodies.
      
      
      

    Distribution of outlay

    • 4,290 crore of the total approved outlay would infuse in providing household water supply connections and enhancing water supply in 53 cities.
    • 1,133 crore would be spent on providing sewerage connections in 41 cities.
    • 92 crore would be invested in storm water drainage projects in 14 cities.
    • 80 crore for promoting non-motorised public transport in 22 cities.
    • 113 crore providing parks and green spaces in 76 mission cities.

    Investment by states
    An inter-ministerial apex committee headed by Urban Development Secretary Madhusudan Prasad has approved state annual action plans (SAAP) of these five states which account for 81 mission cities. Investment under SAAP by states:

    • Tamil Nadu with 27 AMRUT cities would invest 3,249 crore.
    • MP with 32 cities would invest 1,656 crore.
    • Odisha with 9 cities would invest 456 crore.
    • Jharkhand with 7 cities would invest 313 crore.
    • Mizoram will invest 73 crore in Aizawl.

    About AMRUT
    PM Modi had launched Atal Mission for Rejuvenation and Urban Transformation (AMRUT) in July, 2015 to ensure coverage of all urban households with water supply and sewerage connections.

    • Rajasthan was the first state in the country to submit State Annual Action Plan under AMRUT.