Current Affairs Current Affairs -26 December 2016 - Vikalp Education

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Current Affairs -26 December 2016

General Affairs 

Frequent Rule Change For People's Benefit: PM Modi On Notes Ban In Mann Ki Baat
  • Prime Minister Narendra Modi today said the frequent changes in rules that have been made following the currency ban were being questioned, but they were being made for the betterment of the people.

    "Those who can't come out openly in support of black money are trying to find fault with the government," PM Modi said. "One thing that they say that there have been far too many changes. I want to tell the people that it is not east to fight a 70-year-old corrupt system. As hoarders try to find out loophole in the system, we have to be two steps ahead of them. "

    Last week, Congress vice president Rahul Gandhi had made a jibe at  PM Modi over the Reserve Bank's latest rule on notes ban - the 52nd since November 8 -- saying the RBI "changes rules like Modiji changes clothes".

    Another senior Congress leader, P Chidambaram, posted a series of tweets, saying, in a series of tweets: "RBI makes new rule on deposit...FM contradicts... Who should the citizen believe? ...Neither has credibility."

    After the government banned 500 and 1,000 rupee notes on November 8, it said people could deposit the old notes in bank accounts till December 30. No limit was placed on the number of notes or the amount of banned currency that could be deposited. But December 17, the RBI had issued a gazette notification putting restrictions on deposits.

    Congratulating the people for bearing the difficulties following the ban on high denomination currency with fortitude, PM Modi today said, "I salute our people for their support and strength to curb the menace of corruption". The operators of black money, he added, were being caught by the participation of the people. 

    The people, he said had faced hardships and inconvenience but "answered back those who publicly tried to mislead them".

    The move to recall 86 per cent of the total currency in circulation was ostensibly aimed at to curb corruption and black money in the country.  But in the days since, block-long queues had formed outside banks and ATMs as people gathered to withdraw or deposit cash.

Entrance Test Likely For B.Com Admission In Delhi University
  • Delhi University is likely to conduct B.Com admissions through entrance test in the new academic session.

    Presently, DU holds entrance test for its Post Graduation (PG) and professional courses but admissions to undergraduate courses are made on the basis of Class XII marks.

    "Hopefully it (entrance) will start for commerce admissions. But we are also exploring possibilities in other subjects," said Dr Manoj Khanna, convenor of Admission Committee of DU.

    He said the university is exploring the possibility by consulting with all the stakeholders. It is likely to be as a pilot project.

    "We are exploring all the possibilities. We are taking all the stakeholders including college principals in confidence and consulting them. If we are successful in organising this competition for Commerce stream, one-third of the student population will be catered, to" Dr Khanna said.

    The university is also exploring the possibility of tie-up with CBSE which conducts all-India level exams in this regard.

    "We are exploring the possibilities of a tie up with CBSE that conducts all India-level exams, in this regard. But we are not in hurry lest any wrong step could lead to problems for the students," he said.

    DU is also assessing its potential like how to strengthen infrastructure for aniline admissions and preparations of entrance tests, with emphasis on evolving a "student friendly" admission system, he added.

Maharashtra Chief Minister Hits Out At Congress For 'Bhumipoojan' Of Pune Metro
  • Taking potshots at the opposition Congress for performing "bhumipoojan" of Pune Metro on Thursday, Maharashtra Chief Minister Devendra Fadnavis on Friday said people will never give them an opportunity to perform official foundation stone laying ceremonies.

    "Those who performed the 'bhumipoojan' on Thursday were not authorised to do so. Many years ago, when I was small, during a visit to Delhi's Red fort, I gave a speech like Prime Minister. This does not make me a Prime Minister," the Chief Minister said at the event here where foundation stone for Pune Metro was laid down by Prime Minister Naredra Modi.

    "Similarly, those who did the 'bhumipoojan' on Thursday will never get a chance to perform 'bhumipoojan' officially," Mr Fadnavis said.

    He said the file containing 256 queries regarding the project were pending at the desk of the previous (Maharashtra) Chief Minister.

    "There were issues of alignment which was resolved in our time, a new DPR was made. All issues related to the proposed second phase of Hinjewadi-Shivajinagar will be completed by March and in April next year. We will invite Modiji for the launch of the second phase," Mr Fadnavis said.

    He said the proposed International Airport in Pune and Metro will help the city to emerge as a start up capital in the country.

    NCP president Sharad Pawar, union minister Nitin Gadkari, Prakash Javdekar, Venkaiah Naidu were present on the occasion.

Notes Ban A 'Firebombing' On Cash Economy, Poor: Rahul Gandhi
  • Escalating the attack on Prime Minister Narendra Modi over demonetisation, Rahul Gandhi on Saturday accused him of dividing the country between the rich and the poor and dubbed the move as "firebombing" on cash economy and farmers and labourers.

    Addressing a public rally here, the Congress Vice President said the Prime Minister with his note ban decision has removed the "hat" of Himachal Pradesh as it has hit hard the state's horticulture, agriculture and tourism sectors.

    "Himachal's brave soldiers carried out the surgical strikes, but Modiji thought of launching a new drama. He launched the surgical strike on corruption.

    "On one side the brave give away their blood and life, but here he did surgical strike on black money and corruption.

    Modiji this is not a surgical strike on black money and corruption. This is a firebombing and economic-bombing on the poor, farmers and labourers," he said.

    Accusing PM Modi of dividing the country between the rich and the poor, Mr Gandhi said, "Modiji you have tried to divide India into two parts."

    "On one side are the one per cent rich comprising 50 families who have private aircraft and big buildings and on other side, there are 99 per cent honest people of India -- the farmers, labourers and the middle class who built this country with their sweat and blood. You tried to divide the people of the country," he said.

    He said that in the Second World War, a new way was evolved to do firebombing in 25 minutes and more people died in Tokyo firebombing than in Hiroshima bombing.

    "The same way Modiji has done firebombing on the poor, farmers and labourers. You have done firebombing on India's cash economy. Not on 94 per cent of black money where it was to be done. Not on one per cent people possessing black money, but on 99 per cent poor people of the country," he said.

    Showing the traditional Himachali cap, Mr Gandhi accused PM Modi of putting it down and destroying it.

    "Modiji you have removed the Himachal's 'hat' through the note ban -- horticulture, agriculture and tourism. Note ban has caused a major dent on horticulture, agriculture and tourism. You have burnt the fields of honest Himachal farmers, and you did so with a smile on your face.

    "This note ban step was against all of you, against the honest people of India. In two-and-a-half years, the Modi government has attacked the poor of the country," he told the crowd.

    Besides Mr Gandhi, the Congress rally was addressed by Himachal Pradesh Chief Minister Virbhadra Singh and other state leaders. Himachal Pradesh goes to Assembly polls in the latter part of 2017.

BJP Will Bring Back Development, Good Governance To Uttar Pradesh, Says Rajnath Singh
  • Development and good governance have been ousted from Uttar Pradesh by the successive governments of BSP and SP and these will be brought back if BJP is voted to power, senior party leader and Union Home Minister Rajnath Singh said on Saturday in Lucknow.

    Mr Singh, while participating in the last of the party's four 'Parivartan Yatras' which had started on November 5, said there were clear indications that people of the state want a change.

    The state is currently ruled by Samajwadi Party and the next Assembly elections are due in few months. "Development and good governance which were exiled by the SP and BSP will be brought back through the BJP government after the coming Assembly polls in the state," said the Lok Sabha member from Lucknow.

    "Parivartan yatras are ending in Lucknow..I too have got a chance to take part in public meetings during the yatras..on the basis of the information I have got from different sources, I can say that the amount of love people of UP have given to these yatras had never come BJP's way in any of the yatras in the past," he said.

    He added, "The surging crowds in these yatras have clealy indicated that people of the state want a change."

    Justifying demonetisation, Mr Singh said Prime Minister Narendra Modi took this decision in national interest and increased its respect at the global level.

    Accompanied by drum beaters and slogan shouting supporters, the yatra took form of a road show in the state capital on Saturday with partymen setting up raised platforms and dais all along the route.

    Besides Singh, other senior leaders including Kalraj Misra, Uma Bharti and Keshav Prasad Maurya also took part in the roadshow.

    They also garlanded the statues of Mahatma Gandhi, Dr. Ambedkar and other leaders as a mark of respect and took a resolve to uproot SP government and install BJP government in the coming elections.

Business Affairs 

Money Has Lost Its 'Anonymity' After Demonetisation: Finance Minister Arun Jaitley
  • Describing the currency being deposited in banks following last month's demonetisation of high-value notes as money that has lost its earlier "anonymity", Finance Minister Arun Jaitley on Sunday said these funds now available with the banks have strengthened the Indian banking system.

    "The money that is being deposited in cash form after demonetisation... now the anonymity of that money is gone," Mr Jaitley said at the DigiDhan Mela event here to promote cashless transactions.

    "When this money comes into the system, the banking system becomes stronger and there are funds available for rural development, social welfare programmes," he said. 

    "Money in the system becomes part of the taxation system too. The long-term benefit of this move is that the shadow, the parallel economy, which was not taxed, of which there was no accounting, which was not answerable, that is now becoming part of the economic system," the finance minister told a jam-packed Vigyan Bhavan hall.

    On November 8, the government announced that currency notes of Rs. 1,000 and Rs. 500 were no longer legal tender, saying the move was aimed against black money, counterfeit currency and terror financing. Citizens have till December 30 to deposit their old currency in banks.

    Mr Jaitley insisted that digitisation of economy would lead to a better, bigger and cleaner economy.

    Underlining various measures taken by the government to encourage digital transactions, Mr Jaitley clarified that even after December 31, consumers would have to pay no extra charge for using debit/credit card to pay bills.

    He said only merchants would have to pay 0.25 (below Rs. 2,000) and 0.5 per cent (Rs. 2,000 and above) charges, instead of earlier one per cent.

    At the event, the transaction codes of the 15,000 winners of the Lucky Grahak Yojana were made public.

    The winners, who made digital transactions between November 9 and December 21 using RuPay, UPI, AEPS or USSD code, would get the prize money credited to their bank accounts in the next 72 hours.

Foreign Investors Pull Out $3.5 Billion From Capital Markets In December
  • Foreign investors have pulled out a massive $3.5 billion from the capital market this month so far following a rate hike by the Federal Reserve.

    Most of the outflows by the foreign portfolio investors or FPIs have been witnessed in the debt markets during the period under review.

    The latest FPI outflows took place following a withdrawal of over Rs. 49,700 crore on a net basis from the capital market (equity and debt) in last two months (October-November). 

    Prior to that, FPIs had poured in Rs. 46,000 crore in the capital market in preceding three months (July-September).

    "The US Federal Reserve's rate hike was certainly one of the reason for the outflow as the week leading to the announcement saw the maximum outflows as investors exited, expecting lower spread with a US rate hike."

    "But independent of that, it appears that the sharp rally in November in Indian gilts could have also led to profit booking by FPIs in the debt segment," head of mutual fund research Vidya Bala said.

    Net withdrawal by foreign portfolio investors (FPIs) from equities stood at Rs. 3,744 crore during December 1-23, while the same from the debt market was Rs. 19,027 crore, translating into a total outflow of Rs. 22,771 crore ($3.35 billion), data from the depositories showed.

    The pullout by FPIs started in October 2016 following uncertainty over the US election results and similar trend was observed in other emerging markets.

    This year, so far, FPIs have invested a net sum of Rs. 24,998 crore in stocks, while they pulled out Rs. 43,737 crore from the debt market, resulting in a combined net outflow of Rs. 18,739 crore.

    "As of December 23, equities still remain positive on inflows for the 2016 calendar. It was the debt market that was witness to massive FPI outflows in December."

    "The net outflows in the month of November and December alone accounted for 92 per cent of the net outflows in debt market, thus far this calendar," she added.

Finance Minister Arun Jaitley Clarifies On Capital Gains Tax After PM Modi's Speech
  • Finance Minister Arun Jaitley on Sunday clarified that there is no intention of the government to impose tax on long-term capital gains from share transactions.

    Referring to the speech by Prime Minister Narendra Modi in Mumbai the previous day, the finance minister said the interpretation being given to the speech was not correct.

    "The speech has been misinterpreted in some sections of the media which have started speculating that this is an indirect reference to the fact that there could be long-term capital gains (tax) on securities transactions," Mr Jaitley said. 

    "Now, this interpretation is absolutely erroneous, the Prime Minister has made no such statement directly or indirectly," he added. 

    Asking the regulators and taxmen to think about the contribution of market participants to the government, PM Modi had on Saturday said, "The low contribution of taxes may be due to the structure of our tax laws. Low or zero tax rate is given to certain types of financial income."

    Securities transaction tax features among the various levies in the financial markets, and currently, long-term capital gains on stock market profits are tax-free. This means that if a stock traded on an exchange is held for more than a year, gains from it are exempt from capital gains tax.

    The PM's remarks assume much significance ahead of the Budget to be presented in the first week of February, analysts said.

    "Those who profit from the financial markets must make a fair contribution to nation-building through taxes. For various reasons, the contribution of tax from those who make money on the markets has been low," PM Modi had said without mentioning about any particular tax.

    "...therefore I wish to absolutely clarify that there is no occasion or opportunity for anybody to reach such a conclusion because this is not what the Prime Minister said, nor is the intention of the government as has been reported," Mr Jaitley added.

Equalization Levy Detrimental To Start-Up Ecosystem: Experts
  • Equalization levy, which the government is imposing on online advertising revenue by non-resident e-commerce companies earned in India, is expected to adversely affect the start-up ecosystem going forward, according to tax experts.

    The levy, which is at 6 per cent currently, became effective on June 1. If passed on to start-ups, the applicable tax is expected to be in excess of 22 per cent, including the 15 per cent service tax and could further increase if Goods and Services Tax or GST comes into effect.

    "The fact that the levy has been notified in addition to taxes payable by a businessman on imported online services unduly increases the cost of doing business for start-ups which in turn stifles innovation," Nishith Desai, managing partner of Nishith Desai Associates, said here. 

    A white paper released by the Internet and Mobile Association of India (IAMAI) and law firm Nishith Desai Associates, states that small scale technology driven companies generally do not have enough capital to engage employees inhouse for all necessary business activities.

    "It is safe to assume that many of the auxiliary services that a start-up needs to function like advertising, marketing, accounting etc are typically sourced from third-party online service providers," the report said.

    The paper further noted that emerging start-ups burn a lot of cash in the first few years before becoming profitable and when the levy is expanded to include a vast number of other digital services the burden is set to multiply exponentially, hampering even more serious cost to innovation.

    Further, industry experts believe that the levy could be increased to 8 per cent from the present 6 per cent along with the scope, which could be exacerbated when GST becomes applicable, the report said.

    The white paper urges that a cap should be placed on the rate of taxation at the very least, and the number of notified services subject to the levy should not be expanded until there is an impact study undertaken by the government.

Restrictions On Cash Withdrawals May Continue Beyond December 30: Report
  • Restrictions on withdrawal of cash from banks and ATMs are likely to continue beyond December 30 as currency printing presses and the Reserve Bank of India have not been able to keep pace with the demand of new currency notes.

    As the 50-day deadline for completion of demonetisation process draws near, there is a growing consensus among bankers that the restrictions on withdrawal would have to continue even in the New Year so as to maintain orderly working at the banks.

    Banks at many places are not in a position to disburse even the current limit of Rs. 24,000 per week due to cash crunch and are rationing the valid currency depending on cash availability.

    If this limit is withdrawn for individual and businesses from January 2, it is unlikely that banks would be able to disburse the higher demand for valid currencies given the current cash position.

    "Most of us think that the withdrawal limit would not be completely withdrawn. It is a possibility that it could be relaxed if the cash situation improves," said a senior public sector bank official.

    At a time when banks are struggling to meet the demand of individual customers, it would be impossible to service MSME and big corporates which requires cash in large quantity, the official said, the practical way would be to relax it gradually.

    Recently, SBI chairperson Arundhati Bhattacharya had also indicated that restriction on withdrawals cannot be lifted entirely unless more cash is made available to banks.

    After the demonetisation of high value Rs. 500/1000 notes, the government has fixed a limit of Rs. 24,000 per week on withdrawal from bank accounts and Rs. 2,500 per day from ATMs in view of the currency crunch that followed.

    The government and the RBI have not specified when the restrictions will be withdrawn. Finance Secretary Ashok Lavasa had said the withdrawal cap would be will be reviewed after December 30.

    Even bank unions are also of the opinion that the restrictions cannot be done away with in one go. In all likelihood, the restriction on withdrawal would continue for some more time in the best interest of banks as well as customers at large, said All India Bank Officers' Confederation (AIBOC) General Secretary Harvinder Singh.

    The situation of currency supply is known to everyone and it would be difficult to lift the limit from January 2, Mr Singh said, adding that SME and small businesses are waiting for cap to go so that they can withdraw as per their requirement.

    The Reserve Bank of India has infused Rs. 5.92 lakh crore in the banking system between November 9 and December 19 against Rs. 15.4 lakh crore of scrapped notes.

    According to the RBI, banks had received deposits of Rs. 12.4 lakh crore defunct notes by December 10.

General Awareness

PM Modi Visits Maharashtra, lays foundation stone of Shivaji Memorial

  • Prime Minister Narendra Modi was on a-day-long visit to Maharashtra on December 24, 2016, where he laid the foundation stone of ‘Shiv Smarak’, the grand memorial of Maratha warrior king Chhatrapati Shivaji Maharaj in the Arabian Sea off Mumbai coast.
    • Modi took a hovercraft from Girgaum Chowpatty to the island and performed Bhoomi poojan and Jal poojan for the ambitious sea memorial dedicated to the great warrior in the Arabian Sea, around 1.5 km from Mumbai shoreline at Marine Drive.
    • Mr Modi immersed the soil and water collected from various forts and rivers across Maharashtra to mark the bhoomipujan of the memorial.
    • Along with PM Modi, Maharashtra Chief Minister Devendra Fadnavis, BJP ally Shiv Sena’s chief Uddhav Thackeray and Governor Vidyasagar Rao were also present on board the hovercraft.
    • The state government has secured 12 major permissions from the Centre including those from the Environment Ministry, Defence Ministry, Indian Navy, Indian Coast Guard and other.
    • The memorial project has been facing stiff opposition from fishermen and environmentalists, who have alleged that it would affect marine life and ecology of the Arabian Sea. The fishermen community leaders, however, decided not to protest further after meeting Maharashtra Chief Minister Devendra Fadnavis, who assured them that their concerns will be addressed.
    • The PM also inspected a float depicting Shivaji Maharaj’s coronation.
    Features of the Shivaji Memorial
    The Shivaji memorial is proposed to be build on around 15-hectare Island with as high as 192 metres tall statue of the iconic Maratha king.
    • The statue will be more than twice the height of the Statue of Liberty once completed and is expected to be the world’s tallest statue.
    • The total outlay of the project is Rs. 3,600 Crore.The project is expected to be completed by 2019.
    About Chhatrapati Shivaji Maharaj
    Shivaji Bhonsle, also known as Chhatrapati Shivaji Maharaj, was an Indian warrior king and a member of the Bhonsle Maratha clan. In 1674, he was formally crowned as the Chhatrapati (Monarch) of his realm at Raigad.
    • Shivaji was born in the hill-fort of Shivneri, near the city of Junnar in Pune district on 6 April 1627 or 19 Feb. 1630. The Government of Maharashtra accepts 19 February 1630 as his birthdate; other suggested dates include 6 April 1627 or other dates near this day.
    • As per legend, his mother named him Shivaji in honour of the goddess Shivai, to whom she had prayed for a healthy child.
    • Shivaji demonstrated great skill in creating his military organisation, which lasted till the demise of the Maratha empire. He also built a powerful navy.  He built new forts like Sindhudurg and strengthened old ones like Vijaydurg on the west coast.
    • Shivaji’s statues and monuments are found almost in every town and city in Maharashtra as well as in different places across India including Goa, Bangalore, Vadodara, Surat, Indore, Agra, Arunachal Pradesh, and Delhi.
    PM Laid the foundation stone of Mumbai Metro Projects & Pune Metro Rail Project
    The Prime Minister also laid the foundation stones for two Mumbai Metro projects.
    1. The Elevated Railway Corridors Project and
    2. The Mumbai Trans Harbour Link project (MTHL)
    He also addressed a public rally at the Bandra Kurla Complex in Mumbai at Metropolitan Region Development Authority (MMRDA) ground
    Later, the PM headed to Pune, where he laid the foundation stone of the Pune Metro Rail project at the Agriculture College ground. He was accompanied by the NCP leader Sharad Pawar.
    Prime Minister Narendra Modi inaugurates National Institute of Securities Markets (NISM) in Mumbai
    During his visit to Mumbai, PM Modi laid the foundation stone of a new campus of SEBI’s National Institute of Securities Markets (NISM) at Patalganga in Mumbai.
    • Prime Minister Narendra Modi arrived in Mumbai by an IAF aircraft. On his arrival at the Chhatrapati Shivaji Maharaj International Airport, Mumbai, he was received by Maharashtra Governor C. Vidyasagar Rao, Chief Minister Devendra Fadnavis and other senior officials.
    • From the airport, Modi proceeded to Raigad to inaugurate the new campus of the SEBI’s National Institute of Securities Markets which is situated on the Mumbai-Pune Expressway, around 70 km from downtown Mumbai.
    • The new NISM campus, spread over 70 acres at Patalganga, has a potential of accommodating 5,000 students and Securities and Exchange Board of India has invested more than Rs 400 crore in the institute.
    About NISM
    NISM is an educational initiative of capital markets regulator SEBI. NISM presently operates from its campus in Vashi, Navi Mumbai, but the existing infrastructure is inadequate to meet its growing requirements.
    • The institute carries out a wide range of capacity building activities at various levels aimed at enhancing the quality standards and increase the participation in the securities markets.
    About SEBI
    • The Securities and Exchange Board of India (SEBI) is the regulator for the securities market in India. It got statutory powers on 12 April 1992 through the SEBI Act, 1992.
    • Founded: 1992
    • Headquarter: Mumbai, Maharashtra
    • Chairman: U.K. Sinha

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