Current Affairs - 9 August 2016

General Affairs 

Do What Atal Bihari Vajpayee Did To Win Hearts In Kashmir: Mehbooba Mufti To PM Modi

• NEW DELHI:  Pitching for an early start to a dialogue process with people of Kashmir, Jammu and Kashmir Chief Minister Mehbooba Mufti today asked Prime Minister Narendra Modi to seize the opportunity created by the unrest to "win the hearts" of the masses and solve their problems, the way Atal Bihari Vajpayee did.
  
  Emerging from a two-hour meeting with Home Minister Rajnath Singh with whom she discussed the situation in the Valley, large parts of which have been under curfew for over a month now, Mehbooba Mufti said that the Modi government had a huge mandate.
  
  "I am hopeful that the Prime Minister will take this as an opportunity to initiate dialogue with people in Jammu and Kashmir to address their problems. There is a need to take the same initiative of winning hearts of people, which was taken during (Atal Bihari) Vajpayee ji's tenure," she said.
  
  The meeting was called by Mr Singh to review the situation in the state and Mehbooba Mufti was asked to participate in the meeting which was attended by Defence Minister Manohar Parikar, National Security Advisor AK Doval and other senior officials of home, defence and finance ministries.
  
  Faced with difficulties in restoring normalcy in the Valley following the killing of Hizbul Mujahideen terrorist Burhan Wani on July 8, Mehbooba Mufti said the process of dialogue with the people of Kashmir can help improve the situation.
  

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  "I believe there is a need to heal the wounds of people, to initiate dialogue with the people of Jammu and Kashmir. These are our own people. If process of dialogue with J&K people can improve the situation in valley, we should do it," she said and added that her state could become a bridge between India and Pakistan. "There is a need to apply balm to the wounds of Kashmiri people," she said.
  
  The meeting took place on a day when the issue of continued curfew in the Valley echoed in parliament with Leader of Opposition in the Rajya Sabha Ghulam Nabi Azad raising the matter during Zero Hour and demanding a statement from the Prime Minister about the steps being taken by the government for restoring normalcy.
  
  "In such circumstances, we want to awaken the government ... We feel the government and the Prime Minister are watching the situation deteriorate like a silent spectator," he said, adding he wanted to know why PM Modi has not spoken on the grave situation in Kashmir so far.

Maruti To Transport Cars On Ganga From Varanasi To Kolkata, Says Nitin Gadkari

• NEW DELHI:  Maruti Suzuki is set to commence a pilot-run from August 12 under which its cars would be transported from Varanasi to Kolkata on National Waterway-I, Shipping Minister Nitin Gadkari said today.
       
  During Question Hour in Rajya Sabha, Mr Gadkari said an MoU has been signed between Inland Waterways Authority of India and Maruti Suzuki for transportation of cars through inland waterways.
       
  Cars are proposed to be transported from Varansi to Kolkata on National Waterway-I as a pilot run which would commence this month.
       
  Mr Gadkari also said that he would inaugurate two ships from Varanasi - one ferrying the Maruti cars and other carrying construction materials, on August 12.
       
  The minister said that the share of waterways in the country was mere 3.6 per cent and efforts are on to take it over 7 per cent by 2018. He gave a comparison saying the share of waterways in transportion in China was 47 per cent, in Korea and Japan it was above 40 per cent and it played a key role in European countries.
       
  He also gave details of the projects on river Ganga saying it was aimed that by 2020, 200 lakh tonnes of cargo for export would be shipped through waterways.
       
  The minister also gave details of various luxury cruises from seven-star to three and four stars which were operating on the river waters.
       
  As the minister gave details of plans to develop waterways, concerns were expressed about the impact it would have on the fishing communities.
       
  Mr Gadkari said he wanted to make it clear that it would have a positive impact as it would ensure that fishermen are able to increase their fishing output. With a river traffic system in place, fishermen will get better information about the possibility of floods through the GPS.
        
  A suggestion was also made in the House to develop waterways in Mumbai to decongest traffic, replying to which Mr Gadkari gave details of the initiatives being taken in Mumbai and Thane.

GST Delivers Us From Tax Terrorism, Says PM Narendra Modi In Lok Sabha

• NEW DELHI: Prime Minister Narendra Modi today described a national sales tax being cleared by the parliament as a major step "that will deliver us from tax terrorism."
  
  The national Goods and Services Tax or GST was approved today by the Lok Sabha where the government has a huge lead. It was sanctioned unanimously on Friday by the members of the Rajya Sabha, where the government is in a minority and has struggled to win the opposition's support on major legislation.
  

  "GST means a Great Step Taken by India, a Great Step of Transformation, Great Step towards Transparency," said the PM, flexing his practise of alliteration.
  
  Mr Modi thanked all parties for their cooperation in enabling what has been described as his biggest victory since election. The GST replaces a patchwork of central and state levies with a national tax, making trade easier and unifying India into a common marketplace. Finance Minister Arun Jaitley has said the GST, when implemented, could add upto two percentage points to economic growth. While some goods like electronics and two-wheelers are expected to become cheaper, services - like eating out or air travel - will become more expensive.
  
  Mr Jaitley has said he remains committed to introducing the GST on April 1, a deadline that requires non-stop action. Because the constitution is being amended to give the government new taxation powers, more than half of India's 29 states must approve of the change. The Finance Minister wants to accomplish that within a month. After that, a GST Council will be formed with Mr Jaitley and representatives of all state governments. Together, they must decide on the recommended rate of tax -as well as its scope.  Then, the parliament must sign off on separate legislation clearing the GST rate and how it is to be  applied.
  

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  The main opposition party, the Congress, has said a GST rate above 18% is unacceptable. The government has indicated that the rate will almost certainly be higher than 19%. Mr Jaitley has pointed out that the rate cannot be so low that the states incur vast losses. For five years, states that lose revenue will be compensated.  
  
  Because GST is applied at the time of consumption, it is producing states like Tamil Nadu that fear they will rack up losses.
  
  Before it agreed to clear the GST, the Congress had pointed out that Mr Modi, as Chief Minister of Gujarat, had vehemently opposed the reform. Mr Modi said today that he had unanswered questions then that have been resolved now through both a better understanding of the proposal as well as the changes made to the reform based on the feedback from different parties and states.

New Andhra Pradesh Capital Of Amravati Will Not Face Power Shortage: Piyush Goyal

• The Centre today assured that Andhra Pradesh's greenfield capital city Amaravati would not have any shortage of power transmission capacity.
  
  The Andhra Pradesh Power Transmission Corporation Ltd (APTRANSCO) has planned a transmission network of 3,830 MVA capacity around the capital city to meet the anticipated demand, it said.
  
  "I can assure that at no point of time, the new capital of Amaravati will have any shortage of transmission capacity," Power and Coal Minister Piyush Goyal said during Question Hour in the Rajya Sabha.
  
  The state government determines the requirement of power. Once the lines come up, they pick up the cost of transmission infrastructure of the state. So, the plans to set up power transmission corridors are co-terminus with the development of Amaravati, he said.
  
  The Central Electricity Authority (CEA) in consultation with APTRANSCO has planned 400/220 kilo Volt (kV) at Elluru, Chilakaluripet, Gudivada and Inavolu along with Associated Transmission System for meeting load demand in and around Vijayawada and proposed capital city of Amaravati, he added.
  
  Responding to a supplementary raised by TDP leader C M Ramesh on status of pending green projects in the state, the Minister said Andhra Pradesh is the first state to take up green energy corridor and solar power park concepts.
  

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  Almost 1500 MW transmission has been set up in and around Ananthapur and 250 MW has already been commissioned.
  
  The second phase of 750 MW transmission would be ready by March
  2017 and 500 MW will be ready by September 2017, thereby making this a vibrant solar power park, he said.
  
  "For other solar parks, the state government is in dialogue with the Ministry of Renewable Energy for procurement of adequate land which will help us implement the solar parks.
  
  As and when the land gets available, we will again plan the transmission infrastructure," Mr Goyal said.
  
  He also noted that the Centre cannot plan transmission in advance.
  
  "There has to be a potential buyer. That buyer has to enter into an agreement with transmission companies which will ensure the payment of transmission lines," he added.
  
  To a suggestion by RJD leader Prem Chand Gupta on easy permission norms for solar projects amid problems of acquiring land, the Minister said "more and more people should come forward to give land, lease or owned, so that we can expand the solar energy capacity in the country."
  
  But the Centre cannot do the bidding unless the state government enters into power purchasing agreement, he said.
  
  "I encourage member wherever they can come up with land, solar parks can be set up. They can talk to respective states. If a state is willing to enter into an agreement, the central government will certainly facilitate the bidding process," Mr Piyush Goyal added.

Postgraduates Among 5 Lakh Candidates Applying For Sweepers' Posts In UP

• KANPUR: As many as five lakh aspirants, including graduates and postgraduates, have applied for 3,275 posts of 'safai karamchari' (sweepers) in Kanpur Municipal Corporation, an official said today.
  
  While no educational qualifications are required for the posts, municipal officials have been overwhelmed by the number of highly-qualified applicants so far and they are expecting the number of applications to touch seven lakh.
  
  According to officials, the corporation had released an employment notification for the post of sweepers on contractual basis, of which 1,500 are for general category and rest are meant for reserved categories.
  
  The process of screening the forms and uploading those onto database is on, the official said.

Business Affairs 

Sensex jumps 104 points, Nifty ends above 8,700 on strong global cues

• Extending gains for the third straight session, the S&P BSE Sensex on Monday settled the day 104 points higher, while the broader Nifty50 came off its 52-week high but ended above its key resistance level of 8,700.

  The headline indices rallied tracking positive trend seen in Asian markets after a stronger-than-expected July jobs report lifted confidence in the strength of the US economy, heightening expectations that the US Federal Reserve could hike interest rates this year.
  

  The 30-share index ended the day at 28,182, up 104.22 points, while broad-based 50-share index quoted 8,711, up 28.20 points at close.

  Although the strong July US payrolls data raised hopes for the world's biggest economy may have conclusively turned a corner after some volatile readings this year, investors expect the Federal Reserve will only raise rates in 2017 given that other countries are still cutting rates.
  

  
  

  Sentiment back home also remained supported by the passage of the long-awaited Goods and Services Tax (GST) Bill in the upper house of parliament last week, which paves the way for the rollout of the country's single biggest tax reform since independence.

  Still, analysts said further gains could be constrained on valuations. The broader NSE index is valued at 20.71 times its estimated 12-month earnings, versus a multiple of 13.46 for the Thomson Reuters Emerging Markets Asia Pacific Index.

  Investors are also likely to take a pause ahead of the Reserve Bank of India's policy review on Tuesday where it is expected to leave rates unchanged.

  "Today's gains are mainly due to positive US jobs report which has improved sentiment globally. Going ahead, we expect some consolidation or even correction as valuations have peaked-up," told Ambareesh Baliga, independent market analyst to Reuters.

  Among the gainers, miners Hindalco Industries and Vedanta rose 3.69 per cent and 0.27 per cent respectively, tracking gains in London copper prices after solid US jobs reports boosted appetite for metals.

  Oil refiner Hindustan Petroleum Corp rose 4.54 per cent after the central bank on Friday raised the limit for foreign shareholding in the company to up to 40 per cent from 24 per cent.

  Housing Development Finance Corp rose 1.70 per cent ahead of the Max Financial board meeting to discuss terms of planned merger with HDFC Life.

  But Union Bank of India fell 6.49 per cent after the state-run lender's first-quarter profit plunged 68 per cent on higher bad loans.

Raghuram Rajan likely to maintain status quo in RBI monetary policy

• The Reserve Bank of India (RBI) Governor Raghuram Rajan ran a tight ship at the Mint Road headquarters  when it came to taming inflationary pressures. 

  The 53-year old Rajan, a UPA appointee, didn't budge  even when the regime changed and he was suddenly surrounded by unfamiliar faces asking for faster easing of interest rates. Rajan, who famously said he was not expecting to win any votes or Facebook likes, reduced repo rates in a very measured manner by 150 basis points from 8 per cent in January 2014 to 6.50 per cent.  

  This came at a time when the  economy was facing challenges and Indian corporates were lobbying for lower interest rates to reduce their high interest burden and also leverage.

  The outgoing Governor would be now presenting his last monetary policy  review in the backdrop of inflation not showing any indication of calming down. The consumer price index (CPI) has been at over 5 per cent in 2016-the lone exception was in March when it fell to 4.83 per cent.

  In June this year, CPI was at 5.77 per cent.  There is a strong possibility of Rajan maintaining status quo in the policy. The outlook for inflation remains uncertain as two years of drought and unseasonal rains have already played havoc with food prices. The advantage of lower commodity prices is also waning as the cycle is taking an upturn.

  The task of lowering interest rates further will be left for the next RBI Governor, who will  take over the  reins in September.  There is already a monetary policy committee (MPC ) whose six members (three each from the RBI and the government) would decide the future course of interest rates.

  The RBI Governor gets a casting vote in case of equality of votes. But, whatever the decision, the RBI Governor is held responsible by the public. Yet another challenge is inflation targeting. The government and the RBI have agreed to keep inflation targeting at 4 per cent for five years with a plus and minus range of 2 per cent. So, the comfort zone is between 2 per cent to 6 per cent.  Any deviation from 6 per cent will have to be explained to parliament.

  While many say that, with the MPC in place, the friction between the RBI and the government will reduce as interest rates were the main bone of contention. The MPC ensures that the decision on interest rates will be joint.

  But many experts disagree. 

  D. Subbarao, former RBI Governor, recently told BT that the RBI tends to take a long term view to maintain price stability, which is a necessary condition for growth, while the government typically has a short term horizon because of electoral politics. Some suggest this difference in outlook will come to haunt the MPC with the government trying to influence the RBI.

  The 4 per cent target itself is a challenging one. "Reducing inflation from 5.5 per cent to 4 per cent is going to be much bigger challenge especially in an  economy where inflation is driven, by more often than not, supply side pressures," said Subbarao. High fiscal deficit is yet another reason for a push to inflation.  

  The chances are that the new Governor will be more dovish (than hawkish). So, there is still hope for higher doses of interest rate cuts .

Regulatory hurdles, land acquisition delay 112 NHAI projects

• As many as 112 projects of the National Highways Authority of India (NHAI) are running late on account of factors like delays in land acquisition and regulatory hurdles, Parliament was informed on Monday.

  One hundred and twelve projects of NHAI are delayed beyond the scheduled date of completion. These include projects currently under implementation also, Minister of State for Road Transport and Highways Mansukh Lal Mandaviya told the Rajya Sabha in a written reply.

  The reasons for delay are land acquisition, utility shifting, non-availability of soil/aggregates, poor performance of contractors, delay in statutory clearances, public agitations and disputes, Mandaviya said. The government has permitted one-time funds infusion to revive and physically complete languishing national highway projects under public-private partnership mode and also approved rationalised compensation to concessionaires in cases of delays not attributed to them to address funds crunch, he said.

  With a view to ameliorating the shortage of equity and improving liquidity, the government has also securitisation of future cash flow, deferment of premium... harmonious substitution in financially stressed highway projects and 100 per cent equity divestment after two years of construction of all highway projects under PPP mode, he said. 

Cargo traffic in June grew by 5.8 per cent

• The cargo traffic at all ports in the month of June grew by 5.8 per cent year-on year (y-o-y) with 51.5 million tonnes of cargo during the month. It showed an improvement of around 2.5 percentage points compared to the preceding month. This growth in cargo traffic was primarily led by a healthy rise in volumes of coal and iron ore.

  The coal cargo volumes stood at 11.1 million tonnes in June and grew by 16.4 per cent on a y-o-y basis. This is an improvement as compared to the traffic in the preceding ten months. Cargo traffic of iron ore jumped up from one million tonne in June 2015 to 1.7 million tonnes in June 2016. This translates into a growth of 65.6 per cent. The growth was mainly driven by a multi-fold increase in iron ore exports to China.

  Container cargo volumes grew by 7.4 per cent to 10.5 million tonnes. Other products which registered an increase in cargo traffic during the month were edible oil, fertilisers, other liquids and other ores.

  Cargo traffic of petroleum, oil & lubricants (POL), the largest contributor to total cargo traffic, remained sluggish for yet another month. It fell by 0.2 per cent to 15.9 million tonnes. This was the second consecutive month wherein the commodity's volumes fell.

  Among the remaining commodities, cement cargo traffic declined by 7.7 per cent. Cargo volumes of fertiliser raw materials, iron & steel and sugar plunged in the range of  20-35 per cent. Foodgrains cargo traffic dipped around  54 per cent during the month.

  Cumulative cargo traffic in India during April-June 2016 stood at 159 million tonnes, registering a y-o-y growth of 6.2 per cent

Union Bank stock slumps over 6% as Q1 net profit falls 68%

• The Union Bank of India stock fell over six per cent after the lender reported a 68 per cent decline in net profit for the first quarter.

  Its net profit fell to Rs 167 crore in the first quarter ended June 30 on higher provisions for bad loans against profit after tax of Rs 519 crore for the same period last year.

  Following the muted earnings, shares of the state-run lender opened weak at Rs 132.75, then lost further ground and touched an intra-day low of Rs 127.20 on the BSE.

  The stock closed 6.49 per cent lower on the BSE. Its market capitalisation fell to Rs 8,816.43 crore. On NSE, the stock opened at Rs 133.10, then tanked 7.29 per cent to touch an intra-day low of Rs 127.10. The stock closed at Rs 128.35, down 6.38 per cent.

  The degrowth in profit was on account of increase in provisions, bank's chairman and managing director Arun Tiwari had said. The provision for bad loans increased to Rs 1,347 crore in the quarter from Rs 479 crore in the same period last year. The bank's asset quality worsened in the April-June quarter with gross non-performing assets doubling to 10.16 per cent from 5.53 per cent in the year-ago period.

General Awareness

Union Urban Development Minister Venkaiah Naidu Unveils Swachh Survekshan-2017 for 500 cities

• With an idea to make competitive environment to make the cities clean and expedite the Swachh Bharat Mission of Prime Minister Narendra Modi, Union Urban Development Minister Venkaiah Naidu launched Swachh Survekshan-2017 for500 cities in New Delhi on August 6.

  What is Swachh Bharat Mission?

  • Swachh Bharat Abhiyan is a national campaign by the Government of India, covering 4,041 statutory cities and towns, to clean the streets, roads and infrastructure of the country.
  • The programme has also received funding and technical support from the World Bank, corporations as part of corporate social responsibility initiatives, and by state governments under the Sarva Shiksha Abhiyan and Rashtriya Madhyamik Shiksha Abhiyan schemes.
  • Swachh Bharat Abhiyan is expected to cost over Rs.620 billion (US$9.2 billion). The government provides an incentive of Rs.12,000 (US$180) for each toilet constructed by a BPL family.
  • Total fund mobilised under Swachh Bharat Kosh as on 31 January 2016 stood at ₹3.69 billion (US$55 million). An amount of Rs.90 billion was allocated for the mission in 2016 Union budget of India.
  • Government and the World Bank signed a US$1.5 billion loan agreement on 30 March 2016 for the Swachh Bharat Mission to support India’s universal sanitation initiative.
  • The World Bank will also provide a parallel $25 million technical assistance to build the capacity of select states in implementing community-led behavioural change programmes targeting social norms to help ensure widespread usage of toilets by rural households.
  Swachh Survekshan:-
  On its second stand to cover 500 cities and towns with a population of one lakh and above, besides capital towns with less than one lakh population and towns known for heritage, tourism and hilly locations this Swachh survekshan has been extended to cover the growing population of the Indian cities.
  • Venkaiah Naidu addressed Mayors, Municipal Chairpersons, Municipal Commissioners and other concerned officials of 500 cities and towns to be surveyed via video conferencing and he informed the city officials that cities will be ranked based on the reports by urban local bodies on the progress made towards construction of toilets, feedback of citizens and independent observation of sanitation levels.
  In order to facilitate the reach of this scheme to the living population, the Central Minister launched several schemes such as,
  • Swachh Survekshan guide book,
  • Swachh Survekshan ideas book,
  • Manual of Municipal Solid Waste Management,
  • Self-Assessment Tool,
  • A short film on Swachh Survekshan,
  • Toll-free number 1969 and
  • A mobile Swachhta app.
  Shri Venkaiah Naidu also launched ‘Asli Tarakki’ campaign highlighting the need for construction of toilets.
  • The campaign was officially launched on 2 October 2014 at Rajghat, New Delhi, by Prime Minister Narendra Modi. It is India’s biggest ever cleanliness drive and 3 million government employees and school and college students of India participated in this event.