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Current Affairs - 8 June 2016

General Affairs 

'Development Only': BJP Chief Amit Shah Appears To Tick Off Some Leaders
  • With Uttar Pradesh about to hit election mode, BJP Amit Shah used a visit to Lucknow today to emphasize that the party must focus only on development as its pitch to voters.

    Mr Shah's comments appeared directed at those in the BJP who have expressed strong and controversial opinions about divisive issues.

    His biggest telling-off was for new Rajya Sabha member Subramanian Swamy, who, in strongly-worded letters to the Prime Minister, has championed the dismissal of RBI chief Raghuram Rajan, who he has described as "mentally not fully Indian".

    "The BJP has never said anything about it. It's someone's personal opinion," said Mr Shah.

    Foreign investors are watching closely to see if Mr Rajan, 53, a former professor at the University of Chicago, being praised for his policies and attempt to clean up state-run banks, will get a second term.

    In a state where the BJP is derided by political opponents for instigating communally divisive issues, Mr Shah red-carded two leaders, union minister Sanjeev Balyan and Sadhvi Prachi, for their recent remarks, describing them as individual takes unsupported by the party.

    Sadhvi Prachi, who lost the last parliamentary election, delivered a hate speech against Muslims yesterday in Roorkee.

    Recently, Mr Balyan, who belongs to UP, added to the tension in Dadri where 55-year-old Mohammed Akhlaq was lynched to death in September over suspicions that he had beef in his house. A lab report last week said the meat had been established as beef.  "A cow could not have been eaten by one family alone. The others must be identified and punished," he said, referring to the 30-odd other Muslim families who live Mr Akhlaq's village.  

    However, Mr Shah said there was no wrong done by local BJP leaders who defied police orders yesterday by holding a panchayat in Dadri demanding action against Mr Akhlaq's family for alleged cow slaughter.

    It is comments like this that are used by political opponents to accuse the BJP of tacitly showing support for the "fringe elements" from whom it claims to maintain a healthy distance.

Mathura Violence: UP Government Orders Judicial Probe
  • LUCKNOW:  Uttar Pradesh government today ordered judicial probe into last week's Mathura violence in which 24 people, including two police officers, were killed.

    The probe will be conducted by a retired judge of Allahabad High Court and the inquiry committee has been asked to submit its report within two months.

    "A judicial probe has been ordered into Mathura violence. Retired Allahabad High Court judge Imtiyaz Murtaza will conduct inquiry," an official spokesman said.

    The spokesman said the inquiry panel will go into the circumstances that led to the incident.

    It has been asked to make suggestions that would help in ensuring that such incidents do not recur.

    24 people, including two police officers, were killed during clashes between encroachers and police in Mathura last week. The violence had claimed the lives of Superintendent of Police (City) Mukul Dwivedi and SHO Santosh Kumar. Political parties had been demanding a judicial inquiry into the violence.

    BJP Member of Parliament from Mathura Hema Malini had demanded a CBI inquiry into the incident.

China's State-Run Channels Name Lashkar For Mumbai Attacks, Show Ajmal Kasab
  • In a rare rebuke to its "all weather" ally Pakistan, China's state-run channels have aired a documentary naming Lashkar-e-Taiba for the 2008 Mumbai terror attacks and even showed footage containing confessions of Ajmal Kasab, the lone Pakistani terrorist caught alive during the 26/11 carnage.

    The footage was first aired by the state-run Shanghai Television weeks ahead of President Pranab Mukherjee's visit last month and was subsequently shown by another state-run Chinese television channel as well, officials in Beijing said.

    The documentary containing vivid details of planning and execution of the Mumbai attacks by LeT militants caught Indian officials in Beijing by surprise as Chinese state media shows extreme care and caution in airing negative news about Pakistan.

    The state media largely refrained from allegations that terrorists of the East Turkistan Islamic Movement (ETIM) from Muslim-majority Xinjiang province had training bases in Pakistan's tribal areas.

    "We have to wait and see what is the significance of the documentary on LeT on Chinese state television," an Indian diplomat, who has seen the programme, told PTI.

    It was a surprise as China has earlier blocked India's bid to get a UN ban on LeT operational commander Zaki-ur-Rehman Lakhvi, the alleged mastermind of the Mumbai attacks.

    China had put a technical hold when India sought a ban on him after he was released from prison.

    In March, China had put a technical hold again on attempt to get UN ban on Jaish-e-Muhammad chief Masood Azhar, accused of being the mastermind behind the January Pathankot terrorist attack.

    China's attempts to block the UN listings against the two has cast a shadow on its relations with India and diplomatic efforts were on between the two sides to resolve the issue.

    Officials say the airing of the footage against LeT's involvement in Mumbai attacks comes at a time when technical holds put in by China in the UN sanctions committee on some of the LeT leaders was set to expire in a few days.

    It is to be seen whether there will be a change of stand in China's position in UN, officials said.

Assets Case: Supreme Court Reserves Verdict On Appeals Against Jayalalithaa
  • NEW DELHI:  The Supreme Court today reserved its verdict on a batch of appeals filed by Karnataka government and others against the High Court order acquitting Tamil Nadu Chief Minister J Jayalalithaa and others in a disproportionate assets case.

    A vacation bench comprising justices PC Ghose and Amitava Roy, which has been hearing the appeals of the state government and DMK leader K Anbazhagan against the acquittal, concluded hearing arguments.

    Senior advocate Siddharth Luthra, appearing for Karnataka government, dealt with the alleged roles of six firms and the evidence regarding assets and funds held by each of them.

    The firms, which found mention in the trial court records, are Lex Property Development, Meadow Agro Farms Ltd, Riverway Agro Products Pvt Ltd, Ramraj Agro Mills Ltd, Signora Business Enterprises Pvt Ltd and Indo Doha Chemicals and Pharmaceuticals Pvt Ltd.

    "The issue of the matter is that these companies were purchased (takeover of shareholding) by introduction of the accused persons (other than A-1 Jayalalithaa) as directors and removal of existing directors. The control of these companies were taken by the accused persons, after which bank accounts were opened and as large amount of cash was deposited into these accounts," the written note submitted by Mr Luthra said.

    The note also gave a chart showing cash flow and purchase of property.

    Dealing with the role of the firms, Mr Luthra claimed that "in essence these companies were used as receptacles of ill- gotten cash for which no explanation was given during investigation nor during the trial. Such cash becomes the basis for large scale properties being purchased where all negotiations were done at the house of A1 (irrespective of where the property situated in Tamil Nadu)."

    The senior lawyer also submitted an amended chart to give details of transaction of funds including the details of cash deposits.

    Senior advocate Harin P Raval, appearing for the companies, opposed the submissions made by Karnataka government.

    The senior lawyer further said "The trial court by order dated September 27, 2014, in the absence of the present respondent companies being arraigned as accused persons, without notice and without hearing, purported to exercise powers under section 452 of CrPC and directed confiscation of properties registered in the name of six companies to the state government...".

    The firms also disputed the locus of Karnataka government in filing the appeals in the top court.

    Dealing with the probable situations, the companies said that there was no question of "any attachment or disposal of their property" by the Karnataka government.

    Earlier, the top court had said that acquiring assets "per se" is not a crime unless the sources are found to be illegal.

    The court had outlined the three options available to it and said it may either uphold the High court verdict or reverse it or re-appreciate the entire evidence which may lead to fresh re-trial or it can also remand the matter to the High court for fresh consideration.

    Senior advocate Dushyant Dave, also appearing for Karnataka, had said, "The judgment of the High Court reflects violent miscarriage of justice and it is perverse beyond imagination. It is based on mere surmises and conjectures and none of the findings are based on evidence."

    The Karnataka government is arguing its appeal in the case as the trial was shifted from Tamil Nadu and a Bangalore court had convicted the accused including Jayalalithaa who later succeeded in her challenge before the High Court there. Besides Jayalalithaa, others acquitted by the High Court were her close aide Sasikala and her two relatives, VN Sudhakaran and Elavarasi.

    On July 27, last year the top court had issued notices on Karnataka government's appeal seeking stay of the High Court judgment to Jayalalithaa, Sasikala and her relatives V N Sudhakaran and Elavarasi, asking them to file their replies within eight weeks.

    The Karnataka High Court had on May 11, 2015 ruled that AIADMK chief's conviction by special court suffered from infirmity and was not sustainable in law, clearing decks for her return as Tamil Nadu Chief Minister.

    The special court had in 2014 held Jayalalithaa guilty of corruption and sentenced her to four years imprisonment and imposed a fine of Rs. 100 crore. Jayalalithaa and three others were accused of allegedly amassing disproportionate asserts to the tune of Rs. 66.65.crores during her first term as Chief Minister from 1991 to 1996.

US, Japan, India To Hold Major Naval Drill In Western Pacific
  • TOKYO:  A fleet of US, Japanese and Indian warships will hold a large-scale joint naval exercise over eight days from Friday in the Western Pacific, close to a Japanese island chain, part of which China claims.

    As China pushes its territorial claims in the neighbouring South China Sea, Tokyo and Washington worry it will look to extend its influence into the Western Pacific, with a growing fleet of submarines and surface vessels to ply distant oceans.

    The drill, dubbed Malabar, is an annual event between the US and India, and Japan is joining it this year for the first time since 2007, Japan's Ministry of Defense said in a statement.

    Among the Japanese warships, which will practice submarine hunting and anti-aircraft defence, will be the Hyuga, one of the country's three new helicopter carriers. Last year, the drill was held in the Bay of Bengal near India.

    Japan's southwestern island chain, which hosts the biggest concentration of US military personnel in Asia, blocks China's east coast access to the Western Pacific. Japan's military is reinforcing the islands with radar stations and anti-ship missile batteries.

    Lying around 220 km (137 miles) west of Taiwan are a group of uninhabited isles, known as the Senkaku in Japan and the Diaoyu in China, which are controlled by Tokyo and claimed by Beijing.

    On Tuesday, China told the United States it should play a constructive role in safeguarding peace in the disputed South China Sea, as US Secretary of State John Kerry called for talks and a peaceful resolution.

    China claims most of the South China Sea, through which $5 trillion in ship-borne trade passes every year. The Philippines, Vietnam, Malaysia, Taiwan and Brunei have overlapping claims, as well as close military ties with the United States.

Business Affairs 

India incurs $21.3 billion loss due to delay on roads: Study

  • India suffers a huge loss of $21.3 billion annually on account of delays and additional fuel consumption due to poor road conditions and frequent halts, says a study.
    "According to the estimates, the cost of delay was $6.6 billion per year and the cost of additional fuel consumption due to delay was $14.7 billion per year," the study conducted jointly by logistics firm Transport Corporation of India (TCI) and IIM-Kolkata said.
    "In India, the scope of multi-modal transportation remained limited, given that most of the freight was carried by roads and the rest by railways," the study said.
    The report, which was released by Road, Transport and Highways Minister Nitin Gadkari today, is based on joint survey of road freight transportation along 28 key routes in the country.
    "The share of waterways and airways in carrying domestic freight was almost insignificant. Road transportation was door-to-door, reliable and efficient, with vehicles available almost in real-time. Railways, on the other hand, suffered from inefficiency, poor service, loading delays and the unavailability of rakes," the study said.
    It said freight rate increased more than freight cost in the last three years with an increase in the contribution margin over the 2011-12 level on Delhi-Bangalore and Delhi-Mumbai routes.
    Among the remaining 26 routes, one common observation was that for routes covering the eastern and north-eastern parts of the country, average vehicle speeds were lower and average stoppage delays were higher than the corresponding national averages due to poor road conditions, more stops, long queues, delays at border check posts and on-road police intervention.
    "If the average statistics for the 28 major routes surveyed approximately represent the national average, it may be inferred that while average stoppage delays per km have remained almost the same as in 2011-12, average stoppage expenses per tonne-km worsened during the same period. The average contribution margin improved in 2014-15," the study said.
    The government should simplify and standardise the rules and regulations across different transportation modes to facilitate multi-modal transportation, it recommended.
    Also it stressed that the government should remove all infrastructural bottlenecks to boost the movement of domestic freight by inland waterways.
    "Despite India possessing a vast coastline and a significant inland waterways length, the share of waterways in carrying India s domestic freight is insignificant. Like railways, waterways are also an environment-friendly mode of transportation; sincere effort should be made to increase the share of inland waterways in domestic freight movement," the report recommended.

    Rajan's Unfinished Agenda: Five takeaways from RBI's monetary policy
    • Even as there is a raging debate over Raghuram Rajan's extension of tenure, the Reserve Bank of India (RBI) Governor, who  is completing three years in September this year, has listed out short term and long term reform agenda at the second bi-monthly monetary policy 2016-17 on Tuesday.
      Development Of Corporate Bonds Market: RBI Governor Raghuram Rajan on Tuesday listed development of corporate bonds market. "We intend to move as fast as we can  to remove the impediments," said Rajan.  The corporate bond market is big globally and in the emerging market, but  in India, the debt market is dominated by the sovereign papers especially central government paper and state development loans (SDL). As per the CRISIL statistics, sovereign  paper contributes 72 per cent of the outstanding debt as on December 2015. The corporate bonds have a share of 28 per cent. In fact, this small share in the market puts a large burden on the banks as corporate have no option but to go to the banks for their funding needs.
      Financial inclusion: Rajan said we need to do more  in the financial inclusion area. In fact, the payments banks model is all set to roll out  with eight players to make their debut. Rajan would be keen to watch their progress  and fine tune the guidelines for better institutional framework to address the financial inclusion issue. In fact, the full scale banking model hasn't achieved the desired results.

      Make lending to SME  more effective: 
      His focus is on making lending more effective to small and medium enterprises. The small finance bank initiative  is expected to reach out to the semi-urban and rural areas as most of the micro finance  lenders would be transporting their MFI model to banking.  
      Move inflation to a comfort level: In  the short term, Rajan wants to move inflation towards more to a comfort level in the band as suggested by the Urjit Patel committee report. In fact, the CPI is already in the bank of below 6 per cent. The target is 5 per cent by March 2017. Rajan wants inflation to remain in a low band  for a sustainable long term growth in the economy.
      Cleaning up the banks' balance sheet: His another short term agenda is to fast clean up the banks' balance sheet so that they can fund growth. Rajan has already set the March 2017 deadline for banks to make the provisions for potential bad assets. The process is already on as many banks are  reporting losses. He is open to ideas for other funds taking over the stressed assets. In fact, that's a decision banks have to take, but Rajan wants a clean balance sheet and is no mood for any forbearance.   

      Sensex ends above 27,000-mark, Nifty at 8,266 after RBI policy; SBI stock top gainer
      • The S&P BSE Sensex on Tuesday settled the day 232 points higher, while the broader Nifty50 ended above its key support level of 8,250 after Reserve Bank of India (RBI) kept the policy rates unchanged in its bi-monthly monetary policy review.
        The headline indices also took cues from Asian shares which hit a five-week high after Federal Reserve Chair Janet Yellen said US interest rate hikes are likely on the way, though she held back any reference to the timing.
        The 30-share index ended the day at 27,009, up 232.22 points, while broad-based 50-share index quoted 8,266, up 65.40 points at close.
        The RBI kept its policy interest rate unchanged at a five-year low of 6.50 per cent, while cautiously signalling it could cut rates later this year if monsoon rains, and other factors, dampen upward pressure on food prices.

        Analysts said the RBI would likely be open to at least one more 25 basis point rate cut this year after easing the repo rate by 150 bps since January 2015. "Going by the track record of the RBI, they would perhaps wait for the clarity on monsoons," said Ravi Gopalakrishnan, head of equities at Canara Robeco Mutual Fund.
        "Post-monsoon, we expect 25 basis points cut and by the end of the year another 25 basis points."
        Apart from needing a good monsoon, Rajan's statement said inflation risks could also be offset by astute management of stocks by the government, and by companies increasing supply capacity.
        Consumer price inflation rose at a faster-than-expected pace, to 5.39 per cent in April, from 4.83 per cent in March.
        Banking stocks hogged the limelight with S&P BSE Sensex being the top sectoral gainer (1.63 per cent). Federal Bank stock (5.49 per cent) contributed the most to the index followed by SBI (5.40 per cent).
        Dhanlaxmi Bank rose as much as 12.4 per cent, its highest since January 11, after The Economic Times reported the lender may become a takeover target, citing two unidentified bankers familiar with the developments.
        A lowdown on markets today
        12:54 pm
        Sensex at 27,063, up 286.27 points
        Nifty at 8,289, up 88.65 points
        11:37 am
        Sensex at 26,898, up 121.27 points
        Nifty at 8,241, up 40.80 points
        09:20 am
        Sensex at 26,873, up 96.43 points
        Nifty at 8,231, up 30.50 points

      Rate cut would have helped restore investment cycle India Inc
      • Disappointed with the RBI's decision to leave policy rates unchanged, India Inc on Tuesday said a rate cut would have helped restore the investment cycle as the industry continues to battle a slump in demand.
        Experts said a future rate cut would depend on the inflation trajectory, behaviour of monsoon and global factors.
        "At this time when credit demand is still flat and industry is facing a demand crunch, a rate cut would have done much to restore the investment cycle.
        CII is hopeful that RBI will resume the rate cutting cycle and support growth impulses in the economy in the next monetary policy," CII Director General Chandrajit Banerjee said.
        RBI Governor Raghuram Rajan today kept the key policy rate unchanged citing higher upside risks to 'inflation trajectory' but said the central bank will remain accommodative provided data are supportive. Accordingly, Rajan retained the short-term lending rate at 6.5 and the cash reserve requirement of banks at 4 per cent.
        "This has lowered the chance for any reduction in interest rate in the medium term. Any reversal in CPI trajectory led by good monsoon, improvement in transmission and the effect of the US Federal Reserve policy meet on the USD/Rupee will guide future measures from RBI," the Head of Research at Geojit BNP Paribas Financial Services, Vinod Nair, said.
        "The timing of the next rate cut would take a cue from whether a well-distributed monsoon in 2016 dampens inflationary concerns, the pace of improvement in transmission and the extent of volatility post any major geo-political events such as the Brexit," ICRA MD & Group CEO Naresh Takkar said.
        "It appears that the uncertainties on the global horizon with Fed policy overhang and UK Brexit vote tipped RBI's decision in favour of a status quo. With its accommodative stance still in place, I now see high probability of a rate cut in August by at least 50 bps," YES Bank MD & CEO Rana Kapoor said.
        Motilal Oswal Financial Services CEO Motilal Oswal said the central bank will maintain a status quo unless in the next couple of months data sharply reverses the inflation trajectory.
        "While we continue to believe that there is some more scope for monetary easing, clarity on this will emerge only with incremental food inflation data, effect of monsoon on the disinflationary path of inflation, and degree of volatility from global factors," Oswal said.
        By choosing to retain the benchmark policy interest rate at 6.5 per cent, the RBI has not given any surprise to the industry since the central bank wants to wait and see the impact of Monsoon along with certain global factors such as rising commodity prices on inflation, Assocham President Sunil Kanoria said.

        He observed that the tight inflation targeting done through an institutional mechanism by the Finance Ministry should be done away with. After all, when the RBI has been mandated to target inflation of 5 per cent (CPI) by March, 2017, it is bound to be biased towards achieving that target, Kanoria stated.

        Govt may halt diesel imports, deal with private refiners
        • State refiners may halt diesel imports after working out a temporary mechanism to resume buying the fuel from private processors if global diesel prices remain at current levels, two refinery sources said.
          State refiners stepped up imports in recent months after private refiners refused to continue absorbing sales tax and coastal freight costs, making the domestic fuel more expensive.
          Indian imports were a factor behind the stronger Asian gasoil crack, which has been holding near $12 a barrel for the fifth straight session on Monday, after almost doubling to $11.74 on June 2 from this year's low on April 6.
          Under the latest arrangement, private refiners will pay the central sales tax and state-run marketing firms will pay coastal freight costs for interstate cargoes shipped from plants in Gujarat, the sources said.
          India's diesel use is rising along with an economy that grew by 7.6 per cent in the financial year to March 31. In the last fiscal year India's diesel demand grew 7.5 percent, its fastest pace in four years.
          To meet this soaring demand, the three state-owned firms last year bought some 12 million tonnes of diesel from the private oil processors.
          State-owned Indian Oil Corp, Hindustan Petroleum Corp and Bharat Petroleum Corp sell the bulk of diesel consumed in India.
          Diesel is used as a transport fuel but also for power generators and in irrigation systems and heavy equipment, including those for farming.

          The approaching Monsoon in parts of India could reduce the need for power generators as the weather cools.

        General Awareness

        Vice President Hamid Ansari visited Morocco and Tunisia from June 1 to June 3– Overview

          • Vice-President Hamid Ansari boarded on a five-day visit to Morocco and Tunisia to build on diplomatic gains from the India-Africa Summit and place platform for a future partnership.
            Maiden visit by an Indian Vice-President in 50 years to the two nations
            Hosted by: Prime Minister Abdelilah Benkairane, Morocco

            Venue: Rabat
            Focus: To discuss the issues of terrorism, UN Security Council expansion, investments in private sector and to strengthen Africa and regional matters.
            Memorandum of Understanding:
            MoUs are signed between the delegates in the fields like education, IT and communication technology sectors, focusing on capacity building and cultural exchange.
            Points delivered by Secretary, Ministry of External Affairs, Amar Sinha:
            • Will set up diplomatic profit from the India Africa Summit
            • First high-level visit to the African country after Prime Minister AtalBihari Vajpayee went there in 1999
            • Series of visits by Indian leaders to Africa in future
            Relationship between two countries with India:
            • The two countries are important for India as it shares economic relations with them and the visit will help in building relationship between these two countries and India.
            • Both the countries are placed to visit as they are key partners in food security and fertilisers and investments in private sector.
            India, Morocco launched Chamber of Commerce to boost trade:
            India and Morocco launched the India-Morocco Chamber of Commerce and Industry (IMCCI) to accelerate the pace of economic development between the two countries
            Delegates: Vice President Hamid Ansari and Moroccan Prime Minister AbdelilahBenkirane
            About IMCCI:
            • Vice President explained the need of IMCCI to the growing importance of commercial engagement between two nations
            • Focusing will be on the requirements of both sides
            • Morocco emerged as destination for investments by Indian firms adding that Indian companies have invested $320 million in Morocco, including in the project, the Indo-MarocPhosphore SA joint venture.
            • The last two decades of economic growth have strengthened India’s private sector and to expand its global operations
            Ansari visited the Mohammed VI Imam Training Centre:
            • Promotes the values of moderate Islam and is actively working on ideologiesand beliefs
            • The Centre trains a large number of preachers from the Arab world besides Africa, including women
            India and Morocco concluded five MoUs to enhance cooperation in various fields
            India and Morocco concluded five Memorandums of Understanding(MoUs) covering fields
            i. Water resources
            ii. Television broadcasting
            iii. Institutional cooperation
            iv. Cultural &Educational exchange
            v. Trading partnership
            The trading partnership between the two countries:
            • In 2014, trade between the two countries mounted at $1.36 billion
            • Exports to Morocco amounting to $500.5 million
            • Imports were valued at $855.8 million
            • Discussed wide range of Global and regional developments of mutual Interest.
            • Appreciated Morocco’s support for India’s application to the United Nations Security Council.
            India and Tunisia signed MoUs for co-operation in IT, handicrafts sector
            India and Tunisia have signed to enhance cooperation in combating terrorism, promotion of Handicrafts and Information Technology
            Delegates: Vice President Hamid Ansari and Tunisian Prime Minister HabibEssid
            • Range of issues of mutual and regional interests
            • Issue of dispersal of extremism and terrorism which are threats for both countries

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