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Current Affairs - 29 February 2016


General Affairs 

In an important development for India, state-run power goods manufacturer Bharat Heavy Electricals Ltd (BHEL) on 28 February 2016 sealed a contract to build a huge power plant in a neighboring country, beating out a Chinese competitor. This $1.6 billion contract was won for which country by BHEL?
  • BHEL-Projects-Bangladesh-2016
    Bangladesh
    After years of negotiations, BHEL finalized the contract to build the 1,320-megawatt (MW) thermal power station in Khulna in southern Bangladesh on 28 February 2016. This contract is worth $1.6 billion.
     It would be the biggest foreign project by an Indian power firm, eclipsing a plant already built in Rwanda and a planned one in Sri Lanka.
     China’s Harbin Electric International Company Ltd, which has power projects in Iran, Turkey and Indonesia among others, lost the bid on technical grounds.
     The Indian government’s external lending arm, the EXIM Bank, has backed up BHEL’s offer with nearly 70% funding of the project’s costs at a soft interest rate of around 1% above Libor, the leading global benchmark for pricing transactions.
     India and China have stepped up bids for infrastructure projects in the region in recent years, with Prime Minister Narendra Modi pushing for a greater engagement with smaller neighbours after years of neglect.

Which state was declared country’s digital state by President Pranab Mukherjee on 27 February 2016?
  • Kerala
    Kerala as first digital stateKerala became India’s first fully digital state after it was formally declared a digital state by the President Pranab Mukherjee on 27 February.
     Kerala has a mobile tele-density of 95% and Internet covered over 60% of the population. With broadband connectivity in every Gram Panchayat, Kerala has emerged as a truly digital State. The state now had over 600 e-governance applications covering almost all departments, and delivering e-services.
     The state has successfully linked all villages in the state with broadband connectivity under the National Optical Fibre Network (NOFN) project. It is first state in country to do so.

Which mine became India’s first gold mine to be auctioned after it was auctioned to Vedanta Resources Inc. on 26 February 2016?
  • Gold-Mine-2016Baghmara (Chhattisgarh)
    The Baghmara mine is spread across an area of 608 hectares in a densely forested pocket of the Balodabazar-Bhatapara district, about 130 km northeast of Raipur. Based on the exploration and available reports, the mine has an estimate reserve of 2,700 kg of gold metal.
     The mine, also known as Sonakhan, was put up for auction by the Chhattisgarh state government. London-listed Vedanta Resources Inc. bagged the rights for the mine after it quoted the highest price to get it.
     The company quoted the highest bid of 12.55% of the IBM price at Rs 74,712 per troy ounce (1 troy ounce = 31.10 gram) to win the gold mine. The auction would fetch Rs 80 crore to the state exchequer in addition to existing royalty.

Who was chosen as the new President of football’s global governing body FIFA on 26 February 2016?
  • Gianni Infantino (Switzerland)
    FIFA-President-2016Gianni Infantino, the President of UEFA, succeeded fellow Swiss Sepp Blatter as President of world football’s governing body FIFA after he won the election held for the post on 26 February 2016.
     Infantino polled 115 votes, 27 more than closest rival Sheikh Salman bin Ebrahim al-Khalifa. Prince Ali bin al-Hussein (four votes) and Jerome Champagne (0) were third and fourth respectively. Second round of election was held as the first round of voting failed to determine an outright winner.
     Infantino had entered the presidential race when it became clear that Michel Platini, boss of European football’s governing body UEFA, could not stand.

India’s first gender equality convergence centre (called ‘Gender Park’) was inaugurated by President Pranab Mukherjee in which city on 27 February 2016?
  • Kozhikode (Kerala)
    Spread over 24-acres, complex has been christened as the “Thantedam Gender Park”. The foundation stone of the park was laid on 8 March 2013.
     ‘Gender Park’, an initiative of Kerala’s Social Justice Department, was inaugurated on 27 February. It seeks to bring together the state, academia and civil society on a common platform to address gender issues.
     A dedicated gender Institute at the park would focus on research and capacity development in ensuring an inclusive society. The institute would cover issues pertaining to all three genders as per the 2015 gender and transgender policies of the state government.

Business Affairs 

Budget 2016: PM Narendra Modi says 125 crore people to take his exam today
  • PM Narendra Modi"I have an exam tomorrow", said Prime Minister Narendra Modi on Sunday on the eve of presentation of General Budget in Parliament as he sought to motivate students appearing for board exams for which he even roped in icons like Sachin Tendulkar and Vishwanathan Anand.
    Modi, who admitted to feeling "tension" sometimes, said he was "full of confidence" ahead of his "examination" by 125 crore people, a trait which he wanted students to emulate when they appear for their examinations for Class X and XII starting Tuesday.
    In his monthly radio programme 'Mann Ki Baat', he emphasised that students should appear for the exams with a "positive approach" having free and calm mind without any anxiety. He also asked parents not to put pressure on them.
    In this context, he cited his example in the context of presentation of Budget which all the countrymen closely monitor and analyse.
    "Friends, your exams are starting. I too have exam tomorrow. The country's 125 crore people are going to take my examination," the Prime Minister said, while pointing out that Budget is being presented on Monday.
    "But you must have seen how healthy I am feeling, how full of confidence I am. Let my exams take place tomorrow and yours day after and may all of us succeed so that the nation succeeds...Move ahead with a free mind, without any tension of success or failure," he said in his 35-minute programme.
    To lay stress on a positive and tension-free approach, Modi roped in Sachin, the iconic cricketer, Anand, the world chess champion, besides Bharat Ratna scientist CNR Rao and spiritual leader Murari Bapu, whose messages were played during the programme. They gave their own examples of how they approached their exams in their respective fields, keeping tension aside.
    He also invoked Thomas Alva Edison, who invented electricity, and JK Rowling of Harry Potter fame, saying their success had possibly come after many failures.
    Underlining that "positive approach" and "positive frame of mind" help in all aspects of life, Modi talked about himself and said when he comes across some issues which he is not familiar with, he concentrates to deal with them.
    "Sometimes I feel tension within. Then I feel that I should relax a bit so that I feel good. So I have developed my own technique. I do some deep breathing. I take deep breath three times, five times. It may take a few seconds but my mind becomes ready to deal with the situation with a calm mind.
    This may be my experience but this may help you too," he told the students.
    Modi, a practioner of yoga, also referred to this art and mentioned how it helps in improving concentration and strengthening inner peace.
    "There is success in failure too" if there is a positive approach, he said, while asking students to have dedication, determination and diligence to achieve success. 

PM Modi's budget, in policy shift, to focus on rural India: Officials
  • Budget 2016, in policy shift, to focus on rural IndiaPrime Minister Narendra Modi wants the budget
    unveiled on Monday to appeal to India's rural poor, officials familiar with his thinking said, in a strategy shift that could boost his ruling party in coming state elections but disappoint investors.
    His government is expected to increase spending on agriculture, health and social sectors, a change from its focus on infrastructure spending and market reforms, they said.
    "We will have to reform the agriculture markets, invest more resources to deal with the agrarian crisis - all of this could be an integral part of this year's budget," said Ramesh Chand, a member of the planning body Niti Aayog that gave the finance ministry inputs.
    "The budget could provide resources to expand the coverage and effectiveness of schemes such as crop insurance, food and fertilizer subsidy, and irrigation," Chand told Reuters.
    On Sunday, a finance ministry spokesman could not be reached for comment on the budget themes.
    Modi's landslide election in 2014 raised hopes he would draw a line under India's socialist past, cut welfare and reduce the government's role in business.
    In its first two years in power, the government splurged on roads and railways at the expense of welfare programmes in the hope of creating economic stimulus.
    Modi's gamble was that infrastructure investment would eventually generate dividends for the poor and the rural community, which makes up most of India's 1.3 billion population.
    BACK-TO-BACK DROUGHTS
    But rising rural distress after back-to-back droughts and a recent heavy election defeat in a largely agricultural state have upset that calculus.
    It has also left the government open to attacks by the opposition, who use a Hindi phrase to deride Modi's administration as a "suit and boot" government that only works in the interest of the rich."He is starting all over again," an official familiar with Modi's thinking said. "The image of Modi as a supporter of big business has been damaging. This budget will change that narrative."
    The budget is expected to counter criticism ahead of key elections in heartland farming states such as West Bengal this year and Uttar Pradesh next year.
    But the switch in focus is likely to disappoint investors and markets.Increased social spending may hike India's closely watched fiscal deficit to 3.8 percent of GDP next financial year from a target of 3.5 percent, one official said. "The markets and rating agencies will be disappointed if the deficit reaches that level," said D.H. Pai Panandiker, president of RPG Foundation, an economic policy group in New Delhi.
    Last week, yields on India's most-traded bonds touched their highest level in 18 months and the rupee slumped on fears of a higher deficit level.
    'VILLAGES, POOR AND FARMERS'
    The Hindu nationalist Rashtriya Swayamsevak Sangh (RSS), the powerful ideological parent of Modi's Bharatiya Janata Party (BJP), has also been urging the government to do more to help distressed farmers.RSS officials last month told Finance Minister Arun Jaitley to do more for them in a four-hour meeting only scheduled for one, people familiar with the talks said.
    "It was for the first time we felt that Jaitley was keen to understand the crisis in farmlands," one RSS official said.
    One government official said the budget's focus will be on "gaon, garib and kisan (villages, the poor and farmers)."
    The government has been advised to double spending to about $1.2 billion on a crop insurance programme and boost irrigation expenditure, officials said.
    It may launch a programme to directly transfer fertilizer subsidies to farmers' bank accounts, they said. Another official said there may be a new $870 million programme for farmers, where scientists would test their soil and then recommend fertilizers to boost agricultural yields.
    The government has also been considering increasing the subsidy to fund the world's largest food for the poor programme by 13 percent to 1.40 trillion rupees ($20.4 billion).
    The administration already signalled it is ready to pursue a more populist path with last week's annual railway budget, when it shied away from raising passenger train fares.
    "The budget's central theme will be to merge voters' expectations with our political ambition," a senior BJP leader and a minister in the central government said.  

Union Budget 2016: Top five fundamentals that market will look at
  • Top five fundamentals that market will look at in Budget 2016As Finance Minister Arun Jaitley gets ready to head towards Parliament to present the much-awaited Budget 2016, the S&P BSE Sensex opened on a flat note. Among spate of announcements coming out of his budget briefcase later today, marketmen will broadly look at following five key economic figures that would make or mar the market movement post Budget and will also set the course for stock specific actions:
    1) Fiscal deficit
    The government had revised its fiscal deficit target for fiscal year 2015-16 from 3.6 per cent of the gross domestic product (GDP) to 3.9 per cent in the Budget 2015. In all likelihood, Jaitley will meet the fiscal deficit target of FY15. Market would, however, be on the precipice to find out fiscal number for FY16. The fiscal deficit figure beyond the projected 3.9 per cent of the GDP may throw market in a tizzy.

    Shrey Jain, Founder and MD, SAS online.com believes rating agencies will closely monitor the government's actions. Any adverse comment on fiscal deficit will trigger rating downgrades, which will impact bond and equity market alike. Jain advised government to avoid going down the path of fiscal adventurism and set realistic targets for the coming years.
    Independent market analyst Ambareesh Baliga, however, said global rating agencies have appreciated the possibility of slight deviations from targets.
    "Slippage in fiscal deficit could be negative in the short run but positive in the longer run if it results in asset creation," Baliga said.
    "Despite the multiple challenges up ahead, we expect the government to stick to its 2016-17 fiscal deficit target of 3.5 per cent as a share of GDP. We see limited scope of the government deviating from its long-term fiscal consolidation efforts given the heightened risk aversion in the markets," said HDFC Bank in a pre-budget note.
    2) Capital Expenditure
    While government expenditure is required to revive investment cycle in the economy, excess of the same may turn out to be inflationary. In spite of this, a high capex commitment in infrastructure will help market sentiment in the in short term
    "The consequences of pump-priming should be weighed seriously. Heavier expenditure by the government could be inflationary, undoing the good work that the RBI has done on this count over the past couple of years. If inflationary pressures mount, that will shrink the room for rate cuts by the central bank," said Jain.
    However, the expert added some specific stocks may even react positively on capex announcement. "If a stimulus package for rural India is announced, stocks of companies with rural markets-FMCG, tractor, two-wheelers, fertilisers and seeds-may react positively," added Jain.
    3) Tax revenue target
    Market is keeping its fingers crossed if the government will meet the tax revenue target of Rs 9,19,842 in the current fiscal year . More important will be the number which Jaitley puts for the next fiscal year. It is important from the market perspective because this figure is based on budget's growth assumptions and also indicate likely scenario of GDP and inflation. A realistic tax revenue target will make the budget more credible in the eyes of market players.
    Independent market analyst Sudip bandyopadhyay believes revenue target, particularly from disinvestment and strategic sale, will be hiked in the Budget 2016 with specific proposals and timelines to ensure bringing credibility to projects.
    4) Divestment
    Divestment is the process through which government raises non tax revenues via selling its stake in public sector undertakings. The capital, thus generated, is used in funding various infrastructure projects. The government has set the divestment target of Rs 69,500 crore for the current fiscal year, which is the highest set by any government since the disinvestment process began.
    The government, however, looks set to miss the target for the sixth consecutive year in FY16, mainly on account of protests by trade unions and unfavorable market conditions.

    "We expect the government to be more aggressive on the disinvestment front in FY17, although the track record of past several years indicates a persistent shortfall relative to targets. In our base case, we expect FY17 disinvestment target to be approximately Rs 45,000 crore, providing a tailwind of just 0.1 per cent of GDP," brokerage Edelweiss Securities said in a pre-Budget note.
    5) Recapitalizing Public Sector Banks
    Another major focus area is how government plans to recapitalize public sector banks. Experts believe PSBs are in dire need of capitalization to the tune of Rs 1,00,000 crore to Rs 5,00,000 crore by fiscal year 2019.
    "In order to kick start the growth process, banking system needs to be adequately capitalised. Government had planned to infuse 70,000 crore by FY19, which in our view should be at least Rs 1,00,000 crore," told Alpesh Mehta, Analyst - Banking & Finance, Motilal Oswal Securities to Business Today online.
    Bandyopadhyay also said 4,00,000-5,00,000 crore capitalization is required for the PSBs.

    Now, it's over to Budget 2016 as to how much elbow room Jaitley gets to offer sufficient capitalization to the beleaguered banks.

Sensex trades on a flat note, Nifty holds 7,000 ahead of Budget 2016; ITC top loser
  • Sensex trades on a flat note, Nifty holds 7,000 ahead of Budget 2016; ITC top loserThe S&P BSE Sensex was trading on a flat note ahead of Budget 2016, while broader CNX Nifty slipped below its key 7,050-mark in trade on Monday. 
    The headline indices scuttled between red and green as Dalal Street does not seem much enthused about the big B-Day and keeps low expectations from the Finance Minister Arun Jaitley as he tables budget document later in the day. Negative trend seen in Asian markets also boosted bearish sentiment.
    At 09:20 am, the 30-share index was trading at 23,114, down 40.09 points, while broad-based 50-share index was quoting 7,014, down 15.75 points.
    Market breadth remained negative with 16 of the 30 Sensex components trading in red.
    "Going forward, if the Nifty manages to stay beyond 7052.90 then we may expect it to retest 7,200-7,252 levels. whereas, on the downside, 6,960 and 6,869 are seen as crucial support levels," said Angel Broking in a research note.
    ITC stock was the top loser on Sensex and shed over 2 per cent as market expects a blended excise duty increase of 10 per cent on tobacco products in the Budget 2016.
    Among Asian markets, China's Shanghai Composite index fell over 3 per cent, while Hong Kong's Hang Seng index shed nearly 1 per cent. Japan's Nikkei bucked the trend to gain 0.41 per cent.
    Wall Street ended lower on Friday after US economic data triggered concerns about the timing of future interest rate hikes.

Budget 2016: Rupee falls 12 paise to 68.74 against US dollar
  • Rupee falls 12 paise to 68.74 against US dollarThe rupee weakened 12 paise to quote at 68.74 against the dollar ahead of Union Budget 2016 that Finance Minister Arun Jaitley will present in the Parliament later today.
    A firm dollar against some global currencies overseas and a lower opening of the domestic equity market also weighed on the rupee.
    The rupee bounced back by 10 paise to end at 68.62 against the American currency in Friday's trade on fag-end selling of dollars.
    Globally, the dollar index, which tracks the greenback against a basket of six major world currencies, fell 0.09 per cent to 98.06.
    Dollar took a breather against the yen on Monday following a steep climb on upbeat US data, while reaction to a weekend meeting of G20 policymakers was muted as the outcome produced no major surprises.
    Among Asian currencies, the Malaysian ringgit dropped 0.37 per cent, the Korean won declined 0.35 per cent against the US dollar. The Thai baht (down 0.28 per cent), the Indonesian rupiah (down 0.19 per cent) and the Chinese yuan (down 0.10 per cent) also slipped in trade.

General Awareness

President inaugurates India’s first gender park in Kozhikode

    • The nation’s first gender park to come up in the India’s Digital state Kerala, and it will be inaugurated by President Pranab Mukherjee in Kozhikode.
      President inaugurates India's first gender park in Kozhikode
      • The Complex named Thantedam Gender Park will come up atVellimadukunnu in Kozhikode District, and the laid foundation stone put down on March 8 2013 by the Kerela Chief Minister Oommen Chandy.
      • The park is initiative mooted by Social Justice Department of KeralaGovernment to address social issues pertaining to all the three genders and to create an environment to share global Knowledge and Experience in Gender Inequalities.
      The Gender Park’s Timeline:
      • In 2012 Kerala Government declared as a state policy in the Governor’s address of inaugural of 13th Legislative Session and foundation stone laid by the
      • In Budget allocation the park gets 6 Crore for its Establishment.
      • In 2013 February 1 the park established, next year first Phase of the Park Buildings took shape.
      • The inauguration will be in 2016 February 27, 2016 by the President of India.
      Kerala:
      • Capital: Thiruvananthapuram
      • Chief Minister: Oommen Chandy
      • Governor: P sathasivam

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