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Current Affairs - 22 January 2015

General Affairs 

Prime Minister Narendra Modi To Declassify Some Netaji Files On January 23
  • Prime Minister Narendra Modi To Declassify Some Netaji Files On January 23NEW DELHI:  Prime Minister Narendra Modi will declassify some of the secret files on Netaji Subhas Chandra Bose on January 23, the birth anniversary of the legendary freedom fighter.

    "Prime Minister Narendra Modi had announced that the files related to the life of Bose would be made public when he met Netaji's family members (on October 14 last year). This would be started by the Prime Minister on January 23," Tourism and Culture Minister Mahesh Sharma said.

    He said a "small gathering" of people, including family members of Netaji and some leaders, would attend the event.

    On October 14 last year, PM Modi had promised to declassify Netaji files when he met 35 members of Netaji's family at his official residence.

    "The process of declassification of files relating to Netaji will begin on January 23, 2016, Subhas Babu's birth anniversary," PM Modi had tweeted after an hour-long interaction with the family members who sought making public the documents, hoping questions about his mysterious disappearance seven decades back would be answered.

    The demand for declassification of secret files with the Centre had gathered momentum, especially after the Mamata Banerjee government in West Bengal had declassified 64 files in its possession.

Congress Announces Candidates For Uttar Pradesh Assembly Bypolls
  • Congress Announces Candidates For Uttar Pradesh Assembly BypollsLUCKNOW:  Congress today announced its candidates for three Assembly constituencies in Uttar Pradesh where bypolls are to be held on February 13.

    Uttar Pradesh Congress Committee (UPCC) president Nirmal Khatri has announced candidates for the bypolls to Muzaffarnagar, Deoband and Bikapur seats, party spokesman Virendra Madan said.

    Salman Saeed will be the party nominee from Muzaffarnagar while Maviya Ali will contest from Deoband and Asad Ahmed Ansari from Bikapur, he said.

    The notification for the polls was issued on January 20 and January 27 is the last date of filing nominations.

    Candidates can withdraw from the electoral race till January 30. Counting of votes will be held on February 16.

    All the three seats were held by the ruling Samajwadi Party and bypolls have been necessitated by the death of the legislators.

Pathankot Terror Attack: Expect Robust Action From Pak, Says India
  • Pathankot Terror Attack: Expect Robust Action From Pak, Says IndiaNEW DELHI:  Asserting that it was "closely" following the progress in the investigation in Pakistan on the Pathankot terrorist attack, India today said it expects "robust action" from Islamabad to bring the perpetrators to book.

    External Affairs Ministry spokesperson Vikas Swarup also dismissed as "baseless" the allegations that India was behind an attack at a university at Charsadda in Pakistan in which at least 20 people, mostly students, were massacred by heavily- armed suicide attackers yesterday.

    "The issue is also not been raised officially with us by Pakistan," he said.

    Maintaining that both National Security Advisors and Foreign Secretaries of the two countries were in touch with each other, he said a meeting between S Jaishankar and his counterpart Aizaz Ahmad Chaudhary will take at a "mutually convenient date" but refused to put any time frame.

    On the visit of a Pakistan Special Investigation Team (SIT) in connection with the terror attack, he said the government has not got any information after the first official statement by Pakistan government on a possible visit by an investigation team here and was awaiting for a "firm proposal".

    "In principle, we have welcomed the decision of Pakistan government to consider sending a SIT team... rest is matter of details. What they can see? Where they can go? What will be terms of reference? Those need to be worked out by agencies on both sides provided Pakistan government firms up its decision to send the team," Mr Swarup said.

    He was asked about comments by Defence Minister Manohar Parrikar that a Joint Investigation Team (JIT) proposed by Pakistan will not be allowed to visit the Pathankot airbase -the site of the terror attack.

    "The two NSAs have not met but they have been in touch. We continue to closely follow on the progress in the investigation in Pakistan on the Pathakot terrorist attack... We continue to expect robust action by Pakistan against all the perpetrators," Mr Swarup said.

    Reiterating that India has given actionable intelligence to Pakistan, he said, "We are looking for the credible and comprehensive action to bring all the perpetrators of Pathankot terror attack to justice."

    Asked if the attacks in Pathankot and near the Indian missions in Afghanistan were part of a coordinated planning by a terror group, he said it would be difficult to say but one thing was clear that terrorism was emerging as the greatest challenge. The distinction between good terrorism and bad terrorism should be removed, Mr Swarup added.

Our Resolve To Fight Terror Getting Stronger Everyday: Nawaz Sharif
  • Our Resolve To Fight Terror Getting Stronger Everyday: Nawaz SharifDAVOS:  Recovering from a major terror attack back home, Pakistan Prime Minister Nawaz Sharif today said its resolve to fight terrorism is getting stronger every day and is taking very decisive action against terrorists.

    Speaking here at the World Economic Forum (WEF) Annual Meeting, Mr Sharif said his government has taken very decisive action against terrorists.

    "When I took over, terrorists were creating havoc all over the country. I called a meeting of all political parties. We discussed bordering areas near Afghanistan," he said.

    "We deployed huge troops and started operations. So far, we have been able to destroy the infrastructure and destroy their network. It started reducing and terrorists are now on run and are picking up soft targets like the one yesterday," Mr Sharif added.

    At least 20 people, mostly students, were massacred on Wednesday by Kalashnikov-wielding Taliban suicide attackers who stormed a prestigious university in restive northwestern Pakistan and opened fire.

    "Pakistan has paid a very heavy price in terms of lives. There is a huge economic loss also. But our resolve to fight against terrorism is getting stronger every day," Mr Sharif said.

    The Pakistani Prime Minister also said that revival of economy is very important for Pakistan.

    "We inherited three challenges - one is economic problems, second is power shortage and the third is terrorism. We have been successful on all three fronts," he noted.

    "We inherited GDP growth of 3 per cent and now we are 4.2 per cent and we expect 5 per cent this year. Unemployment is also decreasing very sharply," Mr Sharif said.

    Noting that revenue is increasing, he said a very good turnaround is taking place in Pakistan. "We also have China Pakistan economic corridor. This is going to benefit entire region, not just two countries. Pakistan is on right track," he added.

    Mr Sharif said that there is a huge programme in place for private sector projects including those being built with help from China. He said these projects would benefit not just Pakistan and China but other countries also in the region.

    "There are countries like India, Sri Lanka and all SAARC countries in this region... the future of the world lies here," Mr Sharif added.

Turkey 'Can Do More' In Anti-ISIS Fight: Ashton Carter
  • Turkey 'Can Do More' In Anti-ISIS Fight: Ashton CarterPARIS, FRANCE:  US Defence Secretary Ashton Carter said Turkey "can do more" in the fight against the ISIS group, particularly by tightening its border to stop the flow of resources and foreign fighters.

    "Turkey occupies a key position in the coalition -- it is hosting aircraft and making other contributions," Carter told reporters in Paris, where he has been meeting defence ministers from several countries involved in the anti-ISIS coalition.

    "I do believe that Turkey can do more, and therefore the kind of campaign plan I was discussing with other ministers... would very, very much benefit from a stronger effort by Turkey," he added.

    He said the priority for Turkey, a NATO member, was gaining greater control over its "long and difficult border" with Iraq and Syria.

    "The Turkish border is a place where ISIL fighters have gone back and forth, logistics and supplies for ISIL have been furnished," said Carter, using an alternative name for ISIS.

    "Just as I am asking everybody else in the coalition to step up and do more... just as the US military is doing more, so we would like to see Turkey to do more also."

Business Affairs 

Sensex ends 100 points down, Nifty below 7,300 as crude resumes slide; Axis Bank gains 5% post Q3
  • Sensex ends 100 points down, Nifty below 7,300 as crude resumes slide; Axis Bank gains 5% post Q3In a volatile trading session, the S&P BSE Sensex fell 100 points on Thursday to end below its crucial psychological level of 24,000, while broader CNX Nifty settled below its key 7,300-mark. 
    The benchmark indices scuttled between red and green as some sectors such as banks recovered from recent losses although sentiment remained weak as oil prices continued to fall, hitting Asian markets.  
    The 30-share index ended the day at 23,962, down 99.83 points, while broad-based 50-share index quoted 7,276, down 32.50 points.
    Market breadth turned negative with 17 of the 30 Sensex components ending the day in red.
    Sensex had gained as much as 289.79 points in the early trade, while Nifty also topped 7,350 level.
    International benchmark Brent was down 30 cents at $27.58, after hitting its lowest since 2003 in the previous session, over concerns that a weakening global economy would hit demand at a time of oversupply.
    Still, domestic managers are optimistic that India's economy is relatively better placed to withstand any global market shocks, and believe investors would return to domestic equity markets.
    "This is would be the best time to shift into equity as an asset class from a long-term perspective," said Arun Gopalan, vice president of research at brokerage firm Systematix Shares and Stocks.
    Axis Bank was the best performing stock on both the benchmark indices and gained 5.2 per cent after the bank reported a better-than-expected 14.5 per cent increase in third-quarter profit, although its bad loans shot up.
    Among Asian markets, China's Shanghai Composite ended the day 3.23 per cent down, while Hong Kong's Hang Seng shed 1.82 per cent. Japan's Nikkei also ruled 2.43 per cent lower.
    Overnight, Wall Street's recent selloff deepened, with the S&P 500 closing at its lowest in over a year as US oil prices plummeted to 2003 lows.
    A lowdown on markets today
    02:30 pm
    Sensex at 23,973, down 88.05 points
    Nifty at 7,284, down 24.50 points
    12:30 pm
    Sensex 23,918, down 144 points
    Nifty 7,270, down 39 points
    10:47 am
    Sensex at 24,025, down 36.97 points
    Nifty at 7,300, down 8.45 points
    9:24 am
    Sensex at 24,299, up 237.77 points
    Nifty at 7,378, up 69.60 points

Need private investments to boost economy further: FM Arun Jaitley
  • Finance Minister Arun JaitleyConfident of utilising the headroom available to the Indian economy, Finance Minister Arun Jaitley on Thursday said it needs some additional growth engines and the focus now is on reviving private investments.
    Inviting foreign players to invest in the infrastructure space, he exuded confidence that the stuck reform measures like GST would go through as the numbers in the Upper House will change favourably soon.
    No reform proposal has actually got stuck for long so far despite India being a 'noisy democracy', he said.
    Jaitley was speaking at a breakfast session on 'India - The next growth engine of the world', organised by industry body CII and consultancy BCG on the sidelines of the WEF Annual Meeting.
    "We have a very noisy democracy... But I am finding that there are more people who want to support the growth and the others are very minuscule minority... Any economy needs multiple engines of growth," he said.
    "In the past we had fewer such engines and we need a few more. Public investment is one that we are doing. We are concentrating on infrastructure and for the first time in history we have been able to rationalise the subsidies," the Finance Minister added.
    According to him, people are eventually going to pay for the goods and services they want to buy and for the weaker sections technology would be used to ensure that the benefits reach the right target group.
    Noting that a series of reform measures are pending, Jaitley said some of these become symbol of whether India would be able to cross this obstacle or not.
    "India is a noisy democracy but I am sure that we would be able to get all of them through. Some measures have got delayed but none of them have actually hit a complete road block," he added.
    In days to come India will have to focus on reviving private investments, Jaitley said, adding, "we are asking people from all over the world to become partners in India's infrastructure growth story".
    "I have always said the current rate of 7-7.5 per cent is not our real potential and we have potential to add 1-1.5 per cent. There is still head space that we have and I am sure we would be able to reach that," he said.

Idea Cellular Q3 net profit misses estimates on higher charges
  • Idea cellular Q3 net profit misses estimatesIdea Cellular Ltd, country's third-biggest mobile phone operator, said quarterly net profit fell 0.4 per cent, missing expectations, weighed down by higher finance charges.
    The company, which in December launched its 4G services in select cities, said it had raised its capital expenditure estimate for the fiscal year to March to Rs 7,500 crore ($1.1 billion), from Rs 6,000-6,500 crore guided previously.
    Idea, part of the Aditya Birla conglomerate and nearly a fifth owned by Malaysia's Axiata, said consolidated net profit fell to Rs 764 crore in its fiscal third quarter to December 31, from Rs 767 crore a year earlier.
    Analysts on average had expected a net profit of Rs 806 crore, according to data compiled by Thomson Reuters.
    Revenue in the December quarter rose 12.4 per cent from a year earlier to Rs 9,001 crore.
    Idea said it expected to roll out 4G services across 750 towns and cities in India by June this year.
    Mobile operators are bracing for tough competition in an already cutthroat market as Reliance Jio, the telecoms unit of conglomerate Reliance Industries, plans to launch nationwide 4G broadband services later this year.

Key takeaways from what Raghuram Rajan said at World Economic Forum in Davos
  • Key takeaways from what Raghuram Rajan said at World Economic ForumAir of pessimism and anxiety has gripped investors world over as global markets continue their falling spree with no end in sight. While markets stare at growling bears, world's renowned business leaders and public figures kicked off the World Economic Forum's annual meeting in Davos to 'improve the state of the world'.
    Speaking at the first official session of the WEF's five-day annual meet, which started on Wednesday, RBI governor Raghuram Rajan in his calm demeanour assured that market turmoil is temporary and equities will find their base soon with foreign investors coming back to emerging markets.  
    We have compiled key takeaways from what Raghuram Rajan said at World Economic Forum: 
    1) Monetary policies alone cannot change the world
    Asserting that monetary policies alone cannot change the world, the RBI Governor said that there are various other tools to carry forward reforms and boost growth.
    "The good news across the world is that we have realised that monetary policies are not going to change the world and there are much more to the reforms. Not just enabling but also creating the underlying framework for growth is the one which will take us a long way," said Rajan adding that monetary stimulus has largely run its course.
    2) Investors will look at stable emerging markets, including India
    The RBI governor allayed concerns over volatility in currency and stock markets and said things would stabilise. expressing optimism that people will look at stable emerging markets, including India, Rajan said the falls in these economies are actually 'markets' problem' and not of the economy.
    "My sense is that after the initial volatility, things will stabilise, people will try and look for the good, stable emerging markets. India is one of them. Our growth is pretty good, all the other indicators seem to be going well," Rajan said.
    3) Tremendous changes are taking place in emerging markets
    Rajan said there have been huge flows in emerging markets but one should also understand that tremendous changes are taking place in emerging markets.
    "For example in India there is a massive online market which allows people in small towns and villages to buy things online. Real estate growth has been huge. A trader from Kashmir can sell his carpets to customers anywhere in the world," he said.
    4) Wars create growth opportunity but destroys GDP
    With terror attacks and war-like situation in various countries hogging the talk time at WEF Annual Meeting, Rajan said wars should never be seen as opportunities to push economic growth.
    "War does create opportunity for growth, but it certainly destroys your GDP. I am sure people would love to have bigger GDP rather than a higher growth. I don't think war is an option," said RBI Chief.
    He was replying to a question on whether the countries should create war funds to fight wars rather than printing more money.
    5) RBI's monetary policy and inflation
    On RBI's monetary policy stance next month, he said the rest of the world is facing a deflationary environment and "that will help India disinflate". He believes lower oil prices will help country meet January inflation target of below 6 per cent.  
    "Going forward, we have to disinflate a little more. So, at the meeting (on February 2), we will take all these factors into account and decide what the next step is, but broadly I would say we are on the right path," the central banker said.
    6) Rupee
    The rupee, Rajan said, has been "relatively strong" in the EM currency basket, but India is affected by the "same kind of jitters" impacting other world markets.
    7) We are in a world of make believe
    Stating that "we are in a world of make believe," Rajan wondered, "what exactly are the fundamentals?".
    "Perhaps it takes time for efforts to show up in terms of asset prices, productivity etc and then times have changed. Earlier we used to see movie in theatres but now we see on handheld devices," he noted.
    8) Central Banker on Central Banks
    RBI Chief has never been fond of easy liquidity policy that the global central banks have followed to promote growth. He in fact slammed International Monetary Fund once for staying on the sidelines and applauding accommodative policies of developed nations which create ripples in the emerging markets.
    At WEF, he noted, "It's not very clear whether we have benefitted from the way the rate tightening happened in the recent years at various central banks. Some central bankers in the past including in the US had indeed done a great job."

Cheap oil, good for consumers, is slamming stocks. Why?
  • Cheap oil, good for consumers, is slamming stocks. Why?Wall Street is drowning in oil.
    Stocks are having their worst start to a year in history in part because of a rapid plunge in the price of oil. The price of crude is down 28 per cent this year already, which in turn has dragged down energy company shares in the Standard & Poor's 500 index by 13 per cent, which has helped pull the overall index down 9 per cent.
    This even though low oil prices - and the cheap prices for gasoline and other fuels that result - are wonderful for consumers and many companies.
    "It seems ironic that in the run-up to the global financial crisis we were worried about oil prices being too high in 2007 and 2008. Now we're worried about them being too low," said Julian Jessop, head of commodities research with London-based researchers Capital Economics Ltd.
    The drastic drop in oil and stock prices stands in contrast with a US economy that, on the whole, is doing pretty well. US employers created 292,000 jobs in December, and few economists see the economy sliding into recession.
    Here's what experts think is going on.
    Because there is so much of it.
    A long run of high oil prices inspired drillers to develop new techniques and to go to new places to find more oil, and they succeeded. In the US improved oil drilling technologies known generally as fracking have added more oil to the global market than the total production of any other nation in OPEC other than Saudi Arabia.
    Producers in the US and abroad haven't cut back production very much, despite the low prices, and now the lifting of international sanctions against Iran could send more oil flowing into markets that are already awash in crude.
    US stockpiles are at their highest level in at least 80 years, and the International Energy Agency predicts that during the first half of this year global oil supply could outstrip demand by 1.5 million barrels per day.
    Demand for crude has been growing steadily, but that may not last because economic growth in China, the world's second-largest oil consumer after the US, is slowing.
    Oil company profits are plummeting, so oil company shares are plummeting, and that is dragging down the whole market.
    Analysts estimate that profit for all S&P 500 companies in total are on track to be down a recession-like 5.8 per cent for 2015. But if energy companies were removed from that figure, S&P 500 profits would be up a very healthy 5.7 per cent for the full year.
    That profit drop directly leads to lower share prices that drag down entire indexes. Two of the biggest oil companies in the world, Exxon and Chevron, are part of the 30-member Dow Jones industrial average. Of the 20 biggest share price losers in the S&P 500 this year, 13 are energy companies.
    Investors are also selling shares of companies that may have exposure to the oil industry, like certain banks. And the price of oil has now fallen so low that investors are also worried that it could mean global economic growth is much weaker than expected, which could hurt all companies.
    It depends on why prices are lower.
    If they fall because new supplies have been found, it usually helps the broader economy, and markets held up fairly well during oil's big slide from over $100 a barrel in 2014 to under $50 a barrel last year.
    "In the long run, lower oil prices should be positive or at worst neutral for the world economy because all they're really doing is transferring income from oil producers to oil consumers," Jessop says.
    But this latest plunge in prices to under $30 a barrel has investors worried that oil prices are falling because global growth is slowing, as businesses and consumers in many developing countries, particularly China, cut back on spending. Bruce Kasman, chief economist at JPMorgan Chase, says that steep drops in oil prices have historically been a sign of a weakening global economy.
    Also, US consumers have remained cautious about spending the money they aren't putting into their gas tanks, which limits the benefit to the broader economy. Americans saved 5.5 per cent of their incomes in November, up nearly a full per centage point from a year earlier.
    Kasman estimates that US spending grew at a tepid pace of just 1.5 per cent in the final three months of last year. "There's no doubt that the consumer spending growth figures for the US, Europe and Japan have disappointed," he said.
    Some of that likely reflected a temporary drag from warm weather, as Americans spent less on winter clothing and utilities. That could turn around in the first quarter, giving the economy a lift, Kasman said.
    Delta Air Lines told investors this week that bookings for this spring are ahead of last year's pace because cheaper gasoline means consumers have more money.
    It is already having some ripple effects, but the energy market isn't nearly as big or far-reaching as the housing market.
    When oil prices were high, lots of banks, including some of the biggest on Wall Street, made loans to energy companies to finance drilling in North Dakota, Texas and elsewhere. Dealogic estimates that the oil and gas industry has roughly $500 billion in outstanding debt. According to the Federal Reserve, there is $11 trillion in outstanding residential mortgage debt.
    Still, some are feeling it. Oil company cash flow is slowing, and companies are finding it harder to repay their loans. Oil and gas company bankruptcies are rising, and the entire market for so-called junk bonds has been shaken as a result of energy company defaults.
    JPMorgan Chase, Wells Fargo, Citigroup and Bank of America all had to write down the value of energy loans or set aside more money to cover losses. BofA executives told investors this week that energy loans were roughly 2 per cent of its total loans. Smaller regional banks could to be more exposed relatively than the big Wall Street banks.
    Jessop thinks that a price of about $60 a barrel would do the trick. "High enough to keep the main producers in business but low enough to provide a real boost to the incomes of consumers," he says. He expects prices to return to that level by the end of next year as oil companies pare back exploration and the glut is worked off.

General Awareness

IBR: India stood as topper in Business Optimism

    • According to the Grant Thornton International Business Report (IBR)Indian business leaders have emerged as themost optimistic lot globally about economic recovery in 2016. The report has been made on the basis of quarterly global survey of 2,580 business leaders across 36 economies.
      • 89% of the respondents in India expressed confidence in the stable government and expect economic recovery.
      • India is followed by Ireland (88%) and Philippines (84%).
      IBR - India stood as topper in business optimismThe survey was conducted in the October-December quarter of 2015 and participants were askedhow optimistic they are for the economy in the next 12 months.
      • Reason behind optimism in Indians regarding economic recovery – A buzzing start-up space, easing foreign capital policy and significant legislative reforms, which are presently in the pipeline, are considered as the all positive indicators in lieu of economic recovery.
      What report have a say about globe:
      Globally, business optimism heading into 2016 stood at net 36%. The geopolitical tensions and the structural stress building up in the developed and emerging economies would continue to present both opportunities and inherent threats.
      About Grant Thornton International:
      Grant Thornton is the world’s 5th largest professional services network of independent accounting and consulting member firms which provide assurancetax and advisory servicesto privately held businesses, public interest entities, and public sector entities. It has no share capital.
      • Headquarters – London, United Kingdom
      • CEO – Ed Nusbaum

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