Current Affairs - 20 November 2015

General Affairs

India Most Tolerant Country in the World: Union Minister Venkaiah Naidu

• JAIPUR:  Union Minister for Urban Development Venkaiah Naidu today dismissed the growing clamour against 'intolerance' in India as a "propaganda", while stating that India was the most tolerant country in the world.
  
  "There is a propaganda going on about so called tolerance and intolerance. I must say India is the most tolerant country in the world, we have never come to intolerance and that is the philosophy of the nation," he said at the Resurgent Rajasthan Partnership Summit's inaugural session in Jaipur.
  
  "Humara desh vasudhaiv kutumbakam mein vishwas rakhta hai (our country believes that the whole world is one family)", he said.
  
  Mr Naidu said that Indians are tolerant and that there might be some "stray incidents".
  
  The Union minister also stated that Prime Minister Narendra Modi was getting a tremendous response from the world and the country was doing well under his leadership.
  
  "People have given us the mandate for development. Public mandate is supreme. Do not create negative image, and country is moving fast and developing...World is seeing India. World has given tremendous response to Prime Minister, it means response to India...India is a destination for investment", he said.
  
  "The country witnessed politics of poverty, but now it has changed to politics of development under the dynamic Prime Minister Narendra Modiji," he added.
  
  Mr Naidu hailed Rajasthan Chief Minister Vasundhara Raje for her efforts of all round development of the state.
  
  "We support the Chief Minister to take Rajasthan ahead," he said.

India Moves up to 108th Spot in Global Gender Index: World Economic Forum

• GENEVA:  On the back of stronger representation of women in political leadership, India has improved its ranking to 108th position among 145 countries in the global gender gap index prepared by the World Economic Forum (WEF).
  
  Iceland has once again topped the rankings followed by Norway and Finland at second and third spots, respectively.
  
  

  Last year, India was ranked 114 among 142 countries. Even though its place has improved, India is still behind major economies including the US (28) and China (91).
  
  Other countries in the top ten are Sweden (4), Ireland (5), Rwanda (6), the Philippines (7), Switzerland (8), Slovenia (9) and New Zealand (10).
  
  With a score of 0.664, India is at the 108th spot. The rankings are based on a country's performance in terms of economic participation and opportunity, educational attainment, health and survival and political empowerment.
  
  "Having more than doubled the number of women in ministerial positions (from 9 per cent to 22 per cent), the country is now the most improved country in the region," WEF said in the report released today.
  
  The women ministers in Prime Minister Narendra Modi-led government include External Affairs Minister Sushma Swaraj, Human Resource Development Minister Smriti Irani, Women and Child Welfare Minister Maneka Gandhi and Minority Affairs Minister Najma Heptulla.
  
  There are women chief ministers in some states including Vasundhara Raje in Rajasthan, Anandiben Patel in Gujarat, Mamata Banerjee in West Bengal and J Jayalalithaa in Tamil Nadu.
  
  In terms of economic participation and opportunity, India is placed 139th, educational attainment (125), health and survival (143).
  
  Noting that the country's record in economic participation and opportunity leave as much to be desired, the report said India's position in this regard has slipped "another five places to 139 out of 145 in this year's report, putting it at the lowest position since we began measuring the gender gap in 2006," said the report.
  
  In health and survival, another of our four pillars, India has also regressed over the past decade - this year it ranks 143 out of 145, with the same (143) ranking for one of the sub-indicators, sex ratio at birth, ahead of only China and Armenia," it added.
  
  Among the BRICS grouping, India has the lowest rank, while South Africa is on top at the 17th position, followed by Russia (75), Brazil (85) and China (91).

Abolishing Planning Commission Has Been Harmful, Says Manmohan Singh

• NEW DELHI:  Former prime minister Manmohan Singh today said that the country's economic policy has "no sense of direction" after the Modi government decided to scrap the Planning Commission.
  
  Mr Singh also dismissed as "malicious" propaganda that no development had taken place during previous Congress regimes.
  
  "Economic policy has no sense of direction and this is largely because Planning Commission, with all its deficiencies....was a positive dynamic instrument of steering the country's economy," Mr Singh, known as the architect of economic reforms in the country, said.
  
  He was speaking at the inauguration of a National Convention here organised by the Indian Youth Congress on the occasion of Indira Gandhi's 98th birth anniversary.
  
  Mr Singh asked his party workers to tell people how government's decision to abolish the planning body has been "harmful" for the country.
  
  The senior Congress leader said that as Indira Gandhi followed Jawaharlal Nehru's path of planned development, she always emphasised the need of Planning Commission for a country as diverse as India and one which faced multifarious challenges.
  
  Recalling her contribution in various fields, including the Green revolution and the birth of Bangladesh, he said that Indira Gandhi believed that the plan body was necessary to address the development needs of all the parts of the country with a strong sense of vision and commitment.
  
  Mr Singh dubbed as "malicious" propaganda that nothing was done for the development of the country during the Congress regimes, including those of Jawaharlal Nehru and Indira Gandhi.
  
  The former Prime Minister asked the Youth Congress and the Seva Dal to work together in reaching out to people when the party will be facing several state elections followed by the Lok Sabha polls in 2019.

Chhattisgarh: BJP Pips Congress to Bag Mayor's Post in Birgaon Civic Poll

• 

  RAIPUR:  The BJP today won the post of Mayor in the newly-formed Birgaon Municipal Corporation in Chhattisgarh pipping its nearest rival Congress.
  
  However, the main opposition Congress in the state has put up a good show in contest for corporators, clinching 20 out of 40 wards of the corporation followed by the BJP who managed to bag 13 while independent candidates emerged victors in rest of the seven.
  
  "BJP's nominee Ambika Yadu has won the Mayor post of Birgaon Municipal Corporation by a margin of 5,202 votes against Congress' Sunita Vedprakash Dewangan," a state election official told PTI.
  
  Ms Yadu has received 22,135 votes followed by Ms Dewangan in the second position of the tally with 16,933 votes, he added.
  
  Besides, out of 40 wards, 20 were won by Congress, 13 by BJP and 7 by independent candidates, he added.
  
  The polling for a single municipal corporation in the state was held on November 16 in which about 65 per cent of the 78,707 voters had exercised their franchise.
  
  The victory comes as a relief for the BJP who had suffered a setback in the urban body election for 10 municipal corporations held in 2014-15.
  
  Congress had won four out of 10 corporations while the ruling BJP reduced to four, two less than from last time in that election.
  Besides, rest of the two seats were won by independent candidates.

Off-Duty French Police Allowed to Carry Guns During State of Emergency

• PARIS:  French police officers will be allowed to carry their weapon while off duty to protect civilians as long as France maintains the state of emergency following the Paris shootings, police said today.
  
  French police spokesman Jerome Bonnet told BFM TV that police officers who volunteer would be able to carry their handgun in order to "protect themselves and the population in public places".
  
  Police authorities have sent a note allowing this to all units, France Inter radio said today.
  
  

  "This will allow off-duty police offers to be an additional force outside their hours," police union official Jean-Marc Bailleul said on ITELE television.
  
  He added that off-duty policemen carrying their gun would have to wear an arm band to identify them as such.
  
  The French government declared the state of emergency after a wave of attacks killed 129 across the French capital last Friday. It plans to extend it by three months.

Business Affairs 

Sensex ends 359 pts up, Nifty ends at 7,842 on Fed comments

• The domestic markets posted biggest percentage gain in about 7 weeks in trade on Thursday tracking positive trend seen in Asian markets as Federal minutes of the October 27-28 meeting signalled at high probability of December rate hike but a gradual tightening going ahead.

  The S&P BSE Sensex settled at 25,841.92, up 359.40 points, while the broader CNX Nifty ended just a tad below its key 7,850-mark, at 7,842.75, up 110.95 points.

  Market breadth remained fairly positive with 26 of the 30 Sensex components ending the day in green.

  "US Fed comments, Paris attacks being contained and since we were oversold there is some selective buying going on," told Alex Mathews, head of research at Geojit BNP Paribas to Reuters.

  All sectors except healthcare closed the day in the green with strong gains made by financial and IT stocks that were beaten down in the previous session.

  Bajaj Auto was the best performer among Sensex stocks and ended the day 3.2 per cent higher.

  Meanwhile, Dr Reddy's Lab shares recovered to end the day 2.3 per cent lower after falling as much as 6.8 per cent earlier in the day after the drugmaker said it followed all disclosure norms required by the US and Indian regulators.

  The stock fell after US law firm Lundin Law made a class action appeal over allegations of misleading statements from the Indian drugmaker. 

  Among Asian markets, China's Shanghai Composite settled the day 1.36 per cent up, while Hong Kong's Hang Seng added 1.29 per cent. Japan's Nikkei hit its three-month peak and closed 1.07 per cent higher.

  Overnight, US stocks closed higher after minutes from the Federal Reserve October meeting showed a solid core of officials rallied behind a possible December rate hike. The Dow Jones industrial average rose 247.66 points, or 1.42 per cent, the S&P 500 gained 33.14 points, or 1.62 per cent and the Nasdaq Composite added 89.19 points, or 1.79 per cent.

  Lowdown on markets today

  02:05 pm

  Sensex at 25,804.84, up 322.32 points

  Nifty at 7,829.75, up 97.95 points

  1:00 pm
  Sensex at 25793.79, up 311 points

  Nifty at 7823.45, up 91 points
  

  11:29 am

  Sensex at 25,736.58, up 254.06 points

  Nifty at 7,807.15, up 75.35 points

  9:25 am

  Sensex at 25,621.08, up 138.56 points

  Nifty at 7,771.35, up 39.55 points

PM Narendra Modi's gold deposit scheme attracts only 400 grams so far

• A gold deposit scheme launched amid fanfare by Prime Minister Narendra Modi two weeks ago has so far attracted only 400 grams, an industry official said on Thursday, out of a national hoard estimated at 20,000 tonnes.

  Modi has urged people to put gold stashed in homes and temples in the bank, offering modest rates of interest that earlier schemes have lacked. His government has also launched 'paper' gold in the form of gold-backed bonds.

  A shortage of centres to assay the gold being put on deposit is a problem that the government has agreed to address, said Anil Sankhwal, the northern regional chairman of Gem and Jewellery Export Promotion Council.

  "Only 400 grammes have been deposited so far," Sankhwal told reporters after meeting financial ministry officials. "The government has agreed to review the scheme and open more centres for gold testing and depositing in banks."

  Indians have a deep attachment to gold, which they value not just as a wedding gift but also as a way to keep wealth away from the prying eyes of tax collectors.

  That, say experts, will make it a challenge to wean them off the yellow metal and put the vast store of wealth to work in the country's undersized financial system, funding investments that Modi hopes would promote economic growth and create jobs.

  A finance ministry official said the government had agreed to increase the number of testing centres and refineries involved in the scheme. There are 29 testing centres and four refineries currently accredited to it.

  The number of testing centres would increase to 55, and refineries to 20, by the end of the year.

  Another scheme, to mint own series of gold coins, is going a bit better than the deposit scheme.

  Buyers have acquired 6,200 of the Ashoka Chakra coins - which carry the symbol of a 24-spoke circle that also graces the national flag and has its origins in Buddhism.

FM Arun Jaitley vows corruption-free governance, reasonable tax rates

• Seeking investments to boost growth, Finance Minister Arun Jaitley today vowed a corruption-free governance, reasonable tax rates and non-discretionary allotment of natural resources to make it easier for companies to do business in India.

  He asked the states to compete among themselves to provide most investor-friendly environment, saying ease of doing business is not merely a slogan.

  "For the actions that the Centre and states are taking, there is a huge amount of public support and the onus on all of us therefore is to open our doors wide for those investments," Jaitley said here at the Resurgent Rajasthan Partnership Summit 2015.

  Stating that difficulty in doing business can dis-engine investors, he said it is necessary to ensure that governance becomes corruption free and discretions were reduced to the minimum.

  Jaitley said it was essential to ease the systems under which, people can choose to do business and make sure that "governance becomes completely corruption free... scope for discretion is very little".

  He also underlined the need for making sure that tax rates remain at a reasonable levels "so that the rates of taxation are not so onerous or the policy of taxation is not so aggressive that it deters investors away".

  The minister said that it was necessary to make sure that all facilities from capital to land to natural resources are quickly made available in a non-discretionary and non-arbitrary manner to investors.

  "The ease of doing business... is not merely a slogan. It actually involves cutting down the time period between today, when all these investors have decided to invest in Rajasthan and the actual launch of their projects," Jaitley said.

  On state electricity boards, Jaitley said they are in huge debt and owe thousands of crores to banks.

  "Banks themselves are under stress and stress in banks has lead to a situation that banks find it difficult to lend to other sectors. So it has adverse impact on the national economy," he said.

  The minister also outlined the steps being taken by the government to improve the investment climate in the country and expressed confidence that states are competing with each other to attract investments.

  Appreciating Rajasthan government for pioneering in labour reforms, he said: "Rajasthan should now endeavour to become pioneer state in the ease of doing business where land is easily available, sanctions are easily granted and between the dates the decision to invest in the state and actual commencement of projects".

  Stating that the country is becoming aspirational, he said India of 2015 is not the India of 1971, it is not even the India of 1991.

  "The aspirational constituency which supports growth, reform, which in fact is now getting impatient and wants India to reform much faster, the support of that constituency for reform and growth has increased," he said.

7th Pay Commmission may propose 23% salary hike

• The 7th Pay Commission, in a bonanza for central government employees, is likely to recommend on Thursday a 22-23 per cent jump in salary and allowances, according to sources.

  The Pay Commission headed by Justice A K Mathur has suggested a 15 per cent increase over the basic salary plus DA for the central government staff, they said, adding that an increase in allowances like HRA has also been recommended.

  The total increase will be 22-23 per cent of the gross salary (basic plus DA plus allowances), the sources said.

  The recommendations of the 7th Pay Commission are scheduled to take effect from January 1, 2016.

  Besides Chairman, other members of the commission are Vivek Rae, a retired IAS officer of 1978 batch, and Rathin Roy, an economist. Meena Agarwal is secretary of the commission.

  The central government constitutes the pay commission every 10 years to revise the pay scale of its employees and often these are adopted by states after some modifications.

  The Commission was set up by the UPA government in February 2014 to revise remuneration of about 48 lakh central government employees and 55 lakh pensioners.

  The Union Cabinet had extended the term of the panel in August by four months, till December. The 6th Pay Commission was implemented with effect from January 1, 2006.

Betting On Foreign Funds

• Coming soon after the Bharatiya Janata Party's debacle in recent Bihar elections, and just before Prime Minister Narendra Modi's visit to Britain, it was only natural that the latest review of India's foreign direct investment (FDI) policy should be tagged to either or both of these developments.

  While these could have influenced the timing of the decisions, the changes - increase in FDI caps in a few areas, bringing of more sectors under the automatic approval route, opening up of new areas and easier rules in some - have been long in the making and will definitely boost investor sentiment. It is, though, doubtful whether the changes, which impact 15 sectors and cover 32 points or areas related to foreign investments, will result in opening the "flood gates" of fund inflows into India.

  Take the case of the defence sector, where the government has allowed up to 49 per cent FDI under the automatic route. It has also increased the limit for portfolio and foreign venture capital investment in defence manufacturing from 24 per cent to 49 per cent. Clearly, the move has made it easy for foreign defence companies to do business in India. But has it created an attractive business proposition? Experts say unlikely. The biggest hurdle to the entry of private companies in the defence sector, they say, continues to be the country's Defence Procurement Policy. Unless that becomes conducive enough, global defence players may not commit big-ticket investments in the country.

  ---

  THE NEW REGIME
  

  
  

  REAL ESTATE
  Restrictions of minimum 20,000 square metres floor area, capitalisation of $5 million removed

  DEFENCE
  No government approval required for foreign investment up to 49 per cent

  BROADCASTING
  FM radio operators, news channels can get 49 per cent FDI, after government approval

  PLANTATION
  100 per cent FDI allowed in coffee, rubber, cardamom, palm oil and olive oil plantations

  BANKING
  Full fungibility of investment in private banks. FIIs, FPIs, QFIs can invest up to 74 per cent

  SINGLE BRAND RETAIL
  30 per cent local sourcing requirement to kick off from opening of first shop, not the date of investment

  CIVIL AVIATION
  Along with scheduled air transport service/domestic scheduled passenger airline, regional air transport service will also be eligible for foreign investment  up to 49 per cent under the automatic route

  RAISING THRESHOLD FOR FOREIGN INVESTMENT PROMOTION BOARD APPROVAL
  Limit increased from Rs 3,000 crore to Rs 5,000 crore

  LIMITED LIABILITY PARTNERSHIPS (LLPs)
  No government approval needed for 100 per cent FDI in LLP firms

  ESTABLISHMENT AND TRANSFER OF OWNERSHIP AND CONTROL OF INDIAN COMPANIES
  No government approval needed for investment in automatic route sectors by way of share swap

  ---

  However, the reforms in the real estate sector seem to have a better chance of succeeding. The relaxation in thresholds related to floor area and capital investment could attract funds into smaller projects. Easier norms for exit and repatriation of investment before completion of the project should also make foreign investors happy. Removal of the lock-in period for investments in hotels & resorts, hospitals, special economic zones, educational institutions, etc, could also attract foreign funds into these segments. So, the norms will certainly help the cash-strapped real estate players, though it is too early to suggest that they will lead to a revival of the sector, which is troubled by land acquisition rules and sluggish demand.
  

  
  

  The third important sector that has seen a series of amendments is broadcast. News broadcast companies can now have up to 49 per cent foreign ownership, but after government approval. Non-news TV channels can get up to 100 per cent FDI through the automatic route. The changes can trigger consolidation in the industry but will not be enough for any fresh investments, at least for now, say experts.

  Similarly, the decision to allow 100 per cent FDI in the plantation sector, particularly coffee, rubber, cardamom, palm oil and olive oil, may also get a lukewarm response unless it is followed by politically-sensitive decisions such as reforms of land use and labour laws. It is precisely for these reasons that the tea plantation sector, where 100 per cent FDI is allowed since 2002, has not seen any major foreign investment.

  The decision to introduce full fungibility of foreign investment in the private banking sector is also being seen as an attempt to ease the norms for doing business in the country. It is not expected to have a major impact on investment inflows.

  While none of these reforms is expected to result in a rush of new investments, easing of conditions in general, such as 100 per cent FDI in limited liability partnerships, and raising of the threshold of investments cleared by the Foreign Investment Promotion Board from Rs 3,000 crore to Rs 5,000 crore, have been widely welcomed.

  By creating more space for FDI, the government is preparing itself to face the possible exodus of hot money from the country if the US Federal Reserve increases interest rates in December. Though India is not in a position to stop such outflows, it can definitely try and create more investment avenues for foreign money and hope for the best.

  To that extent, the latest revision in FDI norms will definitely help.

General Awareness

International fellowships awarded to 5 Indian startups

• • Five Indian tech startups have been bestowed by the 3rd edition of the Next Big Idea Contest. It was jointly hosted by the Government of Ontario, Canada, Zone Start-ups India, Bombay Stock Exchange Instituteand Amazon Web Services.

    Winners

    • Bengaluru based Lightmetrics Technologies Private Limited and Packal
    • Delhi based Neuron and Swift File Transfer
    • Thane based Survelytics
      
      

    Selection criterion
    The winners were selected based on three criterions:

    • Whether the business pitch has the potential to go global.
    • Whether the contestant already has a footprint in North America.
    • If the pitch sported an intellectual property with potential to go global.

    5 Winners receive
    The five companies win two-week incubation at one of the world’s finest centres at theRyerson University – the Digital Media Zone (DMZ). The DMZ is ranked 1st in Canada and 5th in the world by University Business Incubator Index. Instead of this they will get:

    • An all-expenses paid trip to Toronto.
    • A 2-week bespoke program in Toronto.
    • Opportunity to explore and discover Toronto’s Discovery District.
    • Special recognition at the Canadian Innovation Exchange and other startup forums in Toronto.

    About Next Big Idea Contest
    The contest was started in 2013, with the objective of identifying tech startups from India and showcasing them in Toronto. This third Edition of the Next BIG Idea Contest saw 308 applicants contesting for the top slots.

    • The Next Big Idea Contest 2015 was started July to discover India’s 5 most innovative technology companies looking to experience North America market and to develop valuable connections.