Current Affairs - 18 December 2015

General Affairs 

2008 Mumbai Attack Accused Used Fake Stamps To Attest ID Cards: Pak Witness

• ISLAMABAD:  Indian national Fahim Ansari, earlier accused of being a Lashkar-e-Taiba (LeT) member and co-conspirator in the 2008 Mumbai attack case, used fake Pakistani official seals to attest his false identity under which he travelled to Pakistan, a government witness told the anti-terrorism court.
  
  "Fake stamps of my department for attestation of the fake computerised national identity card (CNIC) of Hammad Hassan were used," Sadiq, an employee of the Parliament House, testified in the ATC Islamabad which held the hearing at the Adiala Jail Rawalpindi yesterday, according to a court official.
  
  

  "Subsequently on the same identity, a passport was issued (which was used by Fahim Ansari to travel to Pakistan under the name of Hassan before the attack)," said the official.
  
  Sadiq told the court that he would present the public record in this regard during the next hearing. The court adjourned the hearing till December 21.
  
  During External Affairs Minister Sushma Swaraj's visit earlier this month, Pakistan assured India of "steps being taken to expedite the early conclusion" of the Mumbai attack trial, something that India has been pressing for long.
  
  A Federal Investigation Agency (FIA) official was also to testify in yesterday's hearing but could not reach the court due to a delay in his flight from Karachi.
  
  According to the FIA, the Personal Identification Secure Comparison and Evaluation System (PISCES) of Karachi airport shows that Ansari, who has been acquitted by Indian courts, had travelled to Pakistan under the name of Hammad Hassan before the Mumbai attacks. Ansari allegedly made a map of targets in Mumbai.
  
  In August 2012, India's Supreme Court upheld the acquittal of Ansari and Sabauddin Ahmed, the two Indians accused of being co-conspirators in the Mumbai attack.
  
  The trial court and the Bombay High Court, too, gave a clean chit to the duo.
  
  Ansari allegedly obtained a Pakistani passport on November 1, 2007 by using forged documents. The passport was seized from him after his arrest in Uttar Pradesh in another case on February 10, 2008.
  
  The trial against LeT operations commander Zakiur Rehman Lakhvi, Abdul Wajid, Mazhar Iqbal, Sadiq, Shahid Jamil, Jamil Ahmed and Younas Anjum has been underway since 2009 for their alleged role in the Mumbai attack that left 166 people dead.
  
  Lakhvi, 55, secured bail in December last year and was subsequently released from the Adiala Jail on April 10 after the Lahore High Court set aside the government's order to detain him under a public security act.

Centre Killing Democracy In Arunachal Pradesh: Congress

• NEW DELHI:  The political developments in Arunachal Pradesh created heat in the Lok Sabha today with Congress members accusing the central government of "killing democracy" by attempting to split the state legislature party, a charge stoutly denied by the Centre.'
  
  Raising the matter in the Lok Sabha, Leader of Congress Mallikarjun Kharge said there was a "constitutional crisis" in Arunachal Pradesh and accused the Bharatiya Janata Party (BJP) of creating a divide among the Congress lawmakers in the state.
  
  "What is happening in Arunachal Pradesh in undemocratic, unconstitutional. They are killing democracy, destroying democracy... Can a Governor interfere in the internal matters of a government," Mr Kharge said making a scathing attack on the role of the Governor.
  
  

  Deputy Speaker M Thambidurai, however, ordered that all remarks against the Governor should be expunged.
  
  "Congress has two-third MLAs, 47 MLAs in the legislative assembly... This government is behaving in a way such that they divide the Congress... They have removed the Speaker...They want to form government in the state," Mr Kharge alleged.
  
  "Few days back Prime Minister (Narendra Modi) has said 'D' stands for disruption. But here 'D' stands for destroying democracy," Mr Kharge said, as the Congress staged a walk out from the House.
  
  Parliamentary Affairs Minister Venkaiah Naidu said "there is no role of the Central Government. On Wednesday, the Chief Minister went to meet the Governor for discussions, but there they accused and abused the Governor. They are bringing shame.
  
  "They have locked the Assembly, surprising things are happening. You may quit if you don't have majority. You cannot discuss the conduct of the Governor... Decision of Governor cannot be questioned. They are abusing Governor and accusing the Government, this is not acceptable... If they have any problem they should go to the Court," Mr Naidu said.
  
  He said the Governor has "acted within the Constitution and he has been informing the President (of the happenings)".
  
  Mr Naidu also attacked Congress for disrupting the Question House and said the party was bringing adjournment motions even on such topics like 'Tourism in Bihar'. "There should be seriousness, let us respect the Chair and the House".
  
  "Every time they create uproar in the House, they give such slogans 'Loktantra ki hatya ho raha hai' (murder of democracy), who is murdering?... They take the name of the Prime Minister... This is not right," Mr Naidu said.

Indian-Origin Member Of Britain's House of Lords Calls For Widows' Commission In India

• LONDON:  India must set up a commission to protect the well-being of its nearly 48 million widows, an Indian-origin member of Britain's House of Lords has said.
  
  Raj Loomba, founder of the Loomba Foundation which campaigns for widows' rights around the world, was speaking at the press launch of a new 'World Widows Report', which will be officially presented at a United Nations meeting in New York on Friday.
  
  "A commission for widows is an ideal forum to shelter and protect widows in India...it (a commission) will be a deterrent to people who abuse widows," said Mr Loomba, the 72-year-old founder-chairman trustee of the Loomba Foundation.
  
  

  Mr Loomba said he will be presenting the new report to UN Secretary-General Ban Ki-Moon, who has been a supporter of the foundation's efforts to put the plight of widows on the global map.
  
  The report highlights that discrimination against widows is not confined to India or South Asia but is "deep-rooted feature of gender discrimination all over the world, though its form and impacts differ".
  
  It calls for the issue to be addressed with specific action in order to meet the UN's Sustainable Development Goals.
  
  The Loomba Foundation, which led a mission for June 23 to be recognised as International Widows' Day by the UN, recently raised funds to empower 5,000 widows in Varanasi, which is home to an estimated 38,000 widows.
  
  In the first phase, the Loomba Foundation aims to provide for sewing machines and garment making training to the widows in Uttar Pradesh.
  
  "It is appalling to note that the largest percentage of widows of child bearing age and the largest percentage of widows under the age of 60, are in the 49 poorest or most under-developed countries identified by the United Nations as the Least Developed Countries (LDCs).
  
  "Their national priorities force them to further ignore the cause of marginalised widows, which is why the strategic focus for the Loomba Foundation will be to try and secure specific recognition for widows in the UN's post-2015 sustainable development agenda," said Mr Lamba.

Indo-Pak Foreign Secretaries Meet: Venue Yet To Be Decided, No Role for Hurriyat

• NEW DELHI:  India today said the date and venue for next month's meeting between Indo-Pak Foreign Secretaries are yet to be finalised and asserted that all bilateral issues are to be addressed mutually between the two countries.
  
  "Two Foreign Secretaries are in touch with each other but the date and venue are yet to be finalised... All the bilateral issues are to be addressed mutually between India and Pakistan and this was recently reiterated in a joint statement issued after the External Affairs Minister's meeting with the Pakistan Prime Minister and his Foreign Affairs Advisor in Islamabad," External Affairs Ministry Spokesperson Vikas Swarup said.
  
  

  He was asked if Pakistani delegation again met Hurriyat separatists or the Kashmiri separatist leaders tried to meet them here.
  
  In August, the National Security Advisor (NSA)-level talks were called off after New Delhi had made it clear that the then Pakistan NSA Sartaz Aziz would not be allowed to meet Kashmiri separatist leaders.

2 Suspected Al Qaeda Operatives Sent To 12-Day Police Custody

• NEW DELHI:  Two suspected Al Qaeda operatives, arrested for allegedly radicalising youth for terror activities, were today remanded to 12-day police custody by a Delhi court.
  
  Arrested accused Maulana Mohammad Abdul Rahman and Zafar Masood, were produced before Additional Sessions Judge Reetesh Singh and the Special Cell of Delhi Police moved an application seeking 12-day police remand.
  
  

  The police told the court that both the accused were required to be interrogated at length to unearth the entire conspiracy and to ascertain the identity of other persons in the module.
  
  "I am satisfied that custodial interrogation of both the accused for a period of 12 days is warranted. Both the accused are remanded to police custody for 12 days," the judge said.
  
  According to the police, Rehman runs a Madrasa in Uttar Pradesh (UP) where several students were enrolled and he was trying to radicalise them for terror activities. It said that Masood was also propagating terror agenda of the Al Qaeda among the youths and was trying to attract them towards the terror outfit.
  
  Besides these two, accused Mohammed Asif, who was arrested earlier, is already in police custody till December 28.
  
  While Asif, 41, was held from Seelampur in northeast Delhi, Rahman, 37, was arrested from Jagatpur area of Cuttack in Odisha, police had said. Rahman was arrested after a raid by a joint team of Delhi Police and Bhubaneswar-Cuttack Commissionerate Police at his house in Paschimakachha village in Jagatpur area.
  
  They have been booked under provisions of the Unlawful Activities (Prevention) Act.
  
  According to the special cell, Rahman is suspected to have international links in countries like Saudi Arabia, Pakistan and Dubai. Rahman, who is married and has three children, ran a madrasa at Tangi area near Cuttack.
  
  It said that Asif, along with two youths had left Delhi for Tehran in Iran in June 2013, from where they further headed towards the Iran-Pakistan border and crossed it.
  
  Police had said that Asif and the youths then reached Sumali in North Waziristan where Asif underwent training. Asif returned to Delhi in September 2014, allegedly scouting for more recruits, it had said, adding that on his way to Delhi, Asif was detained by Iranian security agency but the contacts of al Qaeda ensured he was transited to Turkey. Later, on expiry of his visa, he approached the embassy there and was sent to Delhi.

Business Affairs 

Interest rate to be based on marginal cost of funds from April 1

• To ensure better transmission of its rate cuts to borrowers, RBI on Thursday said all banks will have to follow a new and uniform methodology from April next year to calculate base rate as per the marginal cost of funds.

  Apart from helping borrowers reap the benefit of lower rates, the step will also improve transparency in the methodology followed by banks for determining interest rates on advances.

  The Reserve Bank said: "The guidelines are also expected to ensure availability of bank credit at interest rates which are fair to the borrowers as well as the banks.

  "Further, marginal cost pricing of loans will help the banks become more competitive and enhance their long run value and contribution to economic growth."

  As per the final guidelines: "All rupee loans sanctioned and credit limits renewed w.e.f. April 1, 2016 will be priced with reference to the Marginal Cost of Funds based Lending Rate (MCLR) which will be the internal benchmark for such purposes".

  Many banks currently follow average cost of funds or 'blended cost of funds (liabilities) method' for calculating the base rate, while a few already take into account the proposed measure of 'marginal cost of funds'.

  RBI said the MCLR will be a tenor linked internal benchmark and actual lending rates will be determined by adding the components of spread to the MCLR.

  "Banks will review and publish their MCLR of different maturities every month on a pre-announced date," the RBI said.

  Banks may specify interest reset dates on their floating rate loans.

  They will have the option to offer loans with reset dates linked either to the date of sanction of the loan/credit limits or to the date of review of MCLR. The periodicity of reset shall be one year or lower.

  "The MCLR prevailing on the day the loan is sanctioned will be applicable till the next reset date, irrespective of the changes in the benchmark during the interim period," the RBI said.

  Existing loans and credit limits linked to the Base Rate "may continue till repayment or renewal", the RBI said, adding that the existing borrowers will also have the option to move to the MCLR linked loan at mutually acceptable terms.

  It further said that banks will continue to review and publish Base Rate as hitherto.

Rupee climbs to 3-week high of 66.42 after historic US Fed rate hike

• The rupee surged to end at a three-week high of 66.42 against the American currency after the Federal Reserve's historic episode of monetary tightening measures triggered panic dollar unwinding.

  A spectacular rally in domestic equities further supported the sentiment.

  World financials and currency markets too reacted vehemently to the landmark outcome, ending months of lingering confusion and uncertainty.

  The most powerful central bank in the world - the US Federal Reserve announced a quarter-point increase in the target range for the federal funds rate to 0.25-0.5 per cent.

  This marks the end to the seven-year regime of near-zero interest rates and the Federal Reserve's first interest rate hike in nearly a decade aftermatch of global financial meltdown in 2008 - the worst economic disaster following Lehman's bankruptcy.

  The domestic unit opened firmly higher at 66.62 from Wednesday's close of 66.73 at the Interbank Foreign Exchange Market against the backdrop of overnight developments and continued its strong upmove till the final trade to end with a solid gain of 31 paise, or 0.46 per cent at 66.42 - the level not seen since November 24.

  It briefly touched an intra-day low of 66.6750.

  Frantic dollar selling by banks and corporates alongside unwinded long dollar positions by speculators helped the rupee to rally.

  Robust stockpile of forex reserves and improving macroeconomic environment alongside policy reforms by the Narendra Modi government and measures taken by governor Raghuram Rajan largely helped the indian currency to withstand the volatility and pressure, a forex dealer said.

  "The re-rating of India story and growing confidence in growth outlook which stands the best with a 7.4 per cent growth, also bolstered sentiment, he added.

  Incredibly long string of reasons including concerns over the strength of the global economy, worries about slowdown in the world's second-largest economy China and capital flight from emerging markets had prompted Fed to hold rates steady in recent past, despite bullish macro cues.

  On the global front, the dollar traded two-week highs against a basket of its major peers.

  The stock market flagship index Sensex shot up by 309 points to end at 25,803.78, while broader Nifty jumped by 93 points to finish at 7,844.35.

  Meanwhile, foreign investors once again turned net sellers and sold shares worth Rs 503.22 crore yesterday, as per provisional data.

  In forward market today, premium for dollar fell sharply due to sustained receivings from exporters.

  The benchmark six-month premium payable in May dropped to 188-189 paise from 192-194 paise and far forward November 2016 contract also slipped to 397.50-398.50 paise compared to 402-404 paise.

  The RBI fixed the reference rate for the dollar at 66.6488 and for the euro at 72.3273.

  In cross-currency trades, the rupee rallied against the pound sterling to end at 99.6133 from overnight close of 100.21 and rose against the euro to finish at 72.05 from 72.87 earlier.

  It also firmed up against the Japanese currency to settle at 54.25 from previous close of 54.70 per 100 yen. 

Markets will have to reconcile to new situation, says FM Arun Jaitley

• Finance Minister Arun Jaitley on Thursday said with the suspense about the US Federal Reserve's rate hike now over, markets will have to reconcile to the new financial situation.

  "The suspense is now over. Markets will now have to reconcile to the new situation," he said in his first reaction to the US Fed rate hike.

  Asked about the behaviour of the currency markets in the wake of the rate hike and how the government intends to tackle possible capital outflows, the Finance Minister said, "Let's watch for a few days."

  The US Federal Reserve had last night decided to raise the interest rate by 25 basis points, the first since 2006, after keeping them at near zero levels for a prolonged period.

  While the move was widely expected, there were concerns that Fed hiking interest rate could result in increased outflow of foreign funds from emerging markets like India.

  Markets, however, shrugged off any negative impact and the benchmark BSE (Bombay Stock Exchange) Sensitive Index (Sensex) gained over 300 points in Thursday's trade, which analysts attributed to markets having already factored in the Fed rate hike.

  Government has claimed that markets are "well fortressed" to deal with any major volatility and Fed rate hike will have minimal impact on the economy. It also does not expect any large-scale outflow of foreign funds.

Traders suspect RBI intervened to support rupee, bonds, ahead of Fed

• Traders suspect The Reserve Bank of India (RBI) bought bonds and actively intervened in the rupee to support sentiment ahead of the US Federal Reserve's decision to raise interest rates, several market participants told Reuters.

  The RBI was estimated to have sold $500 million to $1 billion on Wednesday to prop up the rupee in the lead-up to the Fed meeting.

  Traders also cited active buying of bonds in secondary markets over the previous few days.

  The suspected intervention was seen as unusual given that the rupee had already been trading stronger on Wednesday, tracking gains in local shares, while bonds had also been gaining.

  Traders interpreted the intervention as a signal from the RBI that it will continue to tackle acute currency volatility.

  "The idea was to show the RBI was there," said a trader from a state-owned bank.

  On Thursday the rupee was trading at 66.6250/6300 to the dollar, compared with its previous close of 66.73/74. The 10-year bond yield was down 1 basis point at 7.72 per cent.

  RBI Governor Raghuram Rajan has said previously India would be prepared for any Fed eventuality, with foreign exchange reserves of $352 billion at hand, near a record high hit in August.

  Traders had widely expected the RBI would actively intervene in rupee markets to prevent excessive volatility and to buy debt, including via open market operations.

  The central bank has been suspected of intervening in rupee markets more frequently since November as foreign investors have turned net sellers, making markets more volatile and sending the rupee to two-year lows.

  Meanwhile, in bond markets, the RBI also rejected bids at primary auctions in last two consecutive weeks to signal its discomfort with rising bond yields, with the 10-year bond yield up as much as 28 basis points since October.

Sensex ends at 2-week closing highs, Nifty at 7,844 post US Fed rate hike

• In a volatile trading session, the S&P BSE Sensex extended gains for the fourth straight session on Thursday to end 309 points higher, while the broader CNX Nifty settled the day just a tad below key 7,850-mark.

  Historic interest rate hike by US Federal Reserve cheered Dalal Street after the Fed Chief Janet Yellen signalled any further hike will be gradual. 

  The US central bank's policy-setting committee raised the range of its benchmark interest rate by a quarter of a percentage point to between 0.25 per cent and 0.50 per cent, ending a lengthy debate about whether the economy was strong enough to withstand higher borrowing costs.

  The 30-share index ended at 25,803.78, up 309.41 points, while the broad-based 50-share index quoted 7,844.35, up 93.45 points at close.

  Market breadth remained fairly positive with 25 of the 30 Sensex components ending the day in green.

  Tata Steel stock was the best performer on both benchmark indices and added 5 per cent.

  Gains tracked a rally in Asian markets, while India's volatility gauge VIX fell 15.02 per cent to log its biggest single-day fall since September 18 and raising the odds for a December or 'Santa' rally.

  Investors also booked profit, capping broader gains, given uncertainty about the outlook for Indian markets in 2016 as the government continues its attempt to pass key reforms bills in parliament and earnings remain lacklustre.

  "The markets had factored this (Fed hike) in, the Santa rally which we had predicted is now happening," said Kapil Khandelwal, director at Equnev Capital.

  "But directionally we see 2016 being a down year for the markets, there's no major trigger in terms of corporate earnings," the expert added.

  All Asian markets logged gains in today's trade with China's Shanghai Composite adding 1.81 per cent. Hong Kong's Hang Seng index finished 0.79 per cent higher, while Japan's Nikkei settled the day 1.59 per cent up.

  Overnight, US stocks made smart gains. The Dow Jones rose 224.18 points, or 1.28 per cent, the S&P 500 gained 29.66 points, or 1.45 per cent, and the Nasdaq Composite added 75.78 points, or 1.52 per cent.

  Lowdown on markets today

  3:15 pm

  Sensex at 25,807.65, up 313.28 points

  Nifty at 7,844.95, up 94.05 points

  2:00 pm

  Sensex at 25679.50, up 185 points

  Nifty at 7813.55, up 62 points 
  

  12:15 pm

  Sensex at 25,487.82, down 6.55 points

  Nifty at 7,749.50, down 1.40 points

  11.15 am

  Sensex at 25,473.89, down 20.48 points

  Nifty at 7,745.20, down 5.70 points 
  

  10:00 am

  Sensex at 25539.76, up 45 points

  Nifty at 7771.50, up 20 points

  09:22 am

  Sensex at 25,620.18, up 125.81 points

  Nifty at 7,790.10, up 39.20 points

General Awareness

India up 5 spots, ranks 130th in Human Development Index: UNDP

• • As per United Nations Development Programme (UNDP) report on account of rise in life expectancy and per capita income, India has been ranked among 130among 188 countries in 2014 in Human Development Report 2015 comparing to 135 in 2014 report.

    • The 2015 Human Development Report (2015 HDR) was on “Rethinking Work for Human Development”.
    • Between 1980 and 2014, India’s HDI value increased from 326 to 0.609showing an increase of 68.1% or an average annual increase of about1.54%.

    Toppers – Norway topped followed by Australia and Switzerland.

    What is Human Development Index (HDI)?
    The HDI is an average measure of basic human development achievements in a country. It is a summary measure for assessing long-term progress in three basic dimensions of human development:

    • Long and healthy life
    • Access to knowledge
    • Decent standard of living

    Report Highlights with reference to India

    Gender Development Index (GDI) – 2014 female HDI value for India is 0.525 in contrast with 0.660 for males, resulting in a GDI value of 0.795.

    Gender Inequality Index (GII) – India has a GII value of 0.563, ranking it 130 out of 155 countries in the 2014 index.

    Life expectancy – Data show that life expectancy at birth in India has over the past decade risen from 64.5 years (in 2005) to 68 years in 2014

    • For every 1, 00,000 live births, 190 women die from pregnancy related causes; and the adolescent birth rate is 32.8 births per 1,000 women of ages 15-19.

    Female participation – 12.2% of Parliamentary seats are held by women and 27% of adult women have reached at least a secondary level of education compared to 56.6% of their male counterparts.

    • Female participation in the labour market is 27% compared to 79.9% for men.

    The 2015 Human Development Report (HDR) Work for Human Development examines the intrinsic relationship between work and human development. Work, which is a broader concept than jobs or employment, can be a means of contributing to the public good, reducing inequality, livelihoods and empowering individuals.