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Current Affairs - 29 December 2016

General Affairs 

Another train accident, another probe ordered: How can Indian Railways resurrect itself?
  • Just over a month after more than 150 people were killed and nearly 200 injured when Indore-Patna Express jumped off tracks near Kanpur, another train accident took place in central Uttar Pradesh today. Fifteen bogies of Sealdah-Ajmer Express derailed near Rura in Kanpur injuring over 40.
    The train was crossing a canal when the coaches toppled off the old bridge. Most of the passengers were asleep but luckily the slow speed of the train prevented casualties.
    Soon after the accident, the Railway Ministry did what it does after every such incident - "ordered a probe to ascertain the cause". What happens to reports of such probes is anybody's guess. While the number of files of such inquiries keep on increasing, the big question is why the Indian Railways, the third largest rail network in the world after US and China, has been struggling to improve its passenger safety record?
    According to NCRB data, 28,360 train accidents took place in 2014. What's plaguing the Indian Railways?
    The concerned authorities are going full speed to visualise PM Modi's ambitious scheme of running bullet trains in India. India and Japan have already agreed on a fully-elevated bullet train corridor between Mumbai and Ahmedabad. The project would cost nearly Rs 10,000 crore.
    Every Rail Budget, we see a long list of new trains being announced, keeping in view the 'sentiments' of the ruling party's vote bank. Sadly, passenger safety and security is last on priority.
    Country's rail infrastructure has failed to keep pace with the rate at which both passenger and freight traffic has increased substantially over the years. Be it the tracks or signalling system, the basic rail infrastructure in India is still what the Britishers left for us. Upgradation of signalling system, installing of anti-collision device in trains is something we have been hearing in every rail budget speech.
    In 1998, Justice HR Khanna committee had suggested some wide ranging steps regarding  rail safety. Most of the recommendations of Khanna committee were approved by Indian Railways - on paper it seems.
    One of the most important recommendations of the committee was to make all accident inquiry reports public. Railways is yet to put a stamp of approval on it.
    How to enhance revenue? The puzzle is Indian Railways' achilles heel. After several attempts at increasing revenue from passenger traffic railways it yet to figure out how to go about it. The latest attempt called - dynamic fare system - failed miserably.
    The focus should be on increasing revenue from freight traffic, which has always been Indian Railways' backbone. According to a data, railways operate more than 7,421 freight trains carrying 3 million tonnes goods every day. Increasing the speed of slow moving goods train can also provide the much needed impetus to revenue generation. More locomotives per freight train will solve the issue. Also, remote controlled locomotive technology could be an answer to several issues as far as freight train operations are concerned.  
    Similarly, increasing speed limit of passenger trains will not only reduce the total travelling time but also improve the overall schedule. Every winter, trains running indefinitely late due to fog has become a norm. Yet, nothing has improved. Countries like Switzerland, Japan, China can provide answer to railways' fog issue. At present only a limited number of trains have been fitted with technology to operate in foggy conditions.
    Indian Railways is indeed battling countless issues but it also certainly needs to address the right issue at the right time. It will need a herculean effort to resurrect things in railways, the lifeline of country's transport system, and things will start to improve only if it addresses the root cause - lackadaisical approach.
    November 20, 2016: Nearly 150 people died in one of the worst rail tragedies when 14 coaches of the Indore-Patna Express derailed near Pukhrayan station, 60 km from Kanpur, in Uttar Pradesh.
    August 4, 2015: As many as 25 were killed and 25 injured when bogies of Kamayani Express between Mumbai and Varanasi derailed and fell into Machak river between Khirkiya and Bhirangi stations in Harda district of Madhya Pradesh.
    March 20, 2015: At least 39 passengers were killed and 150 injured when Dehradun-Varanasi Janata Express derailed in Uttar Pradesh's Rae Bareli.
    May 4, 2014: Diva Junction-Sawantvadi passenger train derailed between Nagothane and Roha stations in Raigad district of Maharashtra, leaving 20 dead and 100 injured.
    May 26, 2014: At least 25 killed and over 50 others injured as Gorakhpur-bound Gorakhdham Express rams into a stationary goods train near Khalilabad station in Sant Kabir Nagar district of Uttar Pradesh.

Congress in panic over overwhelming support to demonetisation: Venkaiah Naidu
  • Union Information and Broadcasting Minister M Venkaiah Naidu on Wednesday said the Congress is in panic over overwhelming support by the people to Prime Minister's demonetisation move. Therefore, it is trying to create confusion, he said.
    Speaking to mediapersons, Naidu said:
    1. Why don't they (Congress leaders) muster courage and openly say that there is no black money in the country?
    2. When Congress says there is not much black money, it means there is not much corruption in country. Is this the stand of Congress?
    3. On the issue of black money haunting Congress, Naidu said it is time for them to introspect. Congress ruled the country for most of the 69 years after independence.
    4. Rahul Gandhi's mind and body language today clearly indicated that there is no black money left in the country. Everyone knows the close link between black money and corruption.
    5. The people are supporting the move of the PM. Congress is in panic after seeing all this. Hence, they are spreading confusion.
    6. The Congress vice president is feeling rattled because no one is taking him seriously.
    7. Only some political parties have got completely shaken by the demonetisation move.
    8. What is the explanation by Congress on their foundation day? You have not done anything to curb black money. You have no respect for the Supreme Court order.
    9. Demonetisation is only the beginning. We will not rest till we take the last step to curb black money.
    10. On Suresh Kalmadi and Abhay Chautala being appointed as life presidents of Indian Olympic Association, Naidu said what happened was really disgraceful. I don't know what happened to their wisdom.
    11. The Centre has no role in the development. The Sports Ministry has issued a notice on this.
    12. Congress created Kalmadi but is questioning the BJP-ruled Centre now. First you explain why did you create these people?

Don't strip public in name of exposing benami properties: Uddhav Thackeray to PM Modi
  • In yet another attack on the Bhartiya Janata Party (BJP), ally Shiv Sena today asked Prime Minister Narendra Modi not to "yank off the undergarments of the public" in the name of exposing "benami" properties in the country.
    "After demonetisation, now the Prime Minister has targeted 'benami' properties and this is an extremely laudable move... But like demonetisation, it should not crush the poor and the middle class under the guise of weaning out 'benami' properties," Sena President Uddhav Thackeray said in a sharp edit in the party mouthpieces, Saamana and Dopaharka Saamana.
    When Thackeray hit out at PM Modi
    1. Uddhav Thackeray pointed out that many political leaders, businessmen, NRIs and the mafia have already invested their black monies hugely in properties, but ironically, the common public were labelled "dishonest" after demonetisation.
    2. "Modi had promised to bring back ill-gotten wealth stashed in foreign banks, but the fact is not a dime was recovered, nor did the hoarders suffer a paisa's loss. The common masses bore the brunt of demonetisation and still continue to suffer," rued Thackeray.
    3. He added that post-demonetisation, the people's woes have increased, but not a single hoarder of black money or industrialist has been put behind the bars.
    4. He called upon the government to ensure inconvenience to public is prevented in the proposed action against "benami" properties. "However, we unequivocally appreciate Modi's fight against the dishonest crooks in the country," Thackeray said in his edit.
    5. On the Narendra Modi government's "surgical strike" on terror launchpads in Pakistan, in September, Thackeray said the neighbour (Pakistan) continues to play truant with terror and that has resulted in the deaths of over 50 Indian soldiers so far.
    6. "That 'surgical strike' was trumpeted as a major victory for the government, but they have failed to protect our soldiers... Now, the question is: Who is really dishonest," asked Thackeray.
    7. Referring to the plight of displaced Kashmiri Pandits, he said that before thinking of striking "benami" properties, the government should take steps to help the displaced Kashmiris get back their legally-owned estates.
    8. "Will the government carry out a surgical strike for these displaced Kashmiris? We only hope that there is no manipulation in the rights of the Kashmiri Pandits to recover their legally-owned properties," Thackeray said.

We must give SP Tyagi his due till charges are proved, says Air Force chief Arup Raha
  • Indian Air Force chief Arup Raha has again defended his predecessor SP Tyagi who was arrested by the CBI in the AgustaWestland defence scam but released by courts on Monday.
    Talking to mediapersons on Wednesday, the Air Chief Marshal said, "Till charges are proved we must give him (Tyagi) his due. Former Air Force chief is like an extended family member and we should stand by them."
    The Air Force chief said he believed that Tyagi was taken into custody in the AW101 case where investigation agencies found evidence against him. "We believe that law of the land should be followed. Once the probe is complete we will abide by whatever the court decides," he said.
    However, Air Chief Marshal Raha said, if the charges are proved then the force would have no sympathies for Tyagi.
    A day after Tyagi was released from jail on bail, Raha described him a "sound professional" and said he should not have been treated like a "common criminal".
    According to the Air force chief, Pathankot was the first setback. However, he said the Air Force has learnt lessons and is better prepared now. The second setback was missing of the AN32aircraft. "Despite efforts we could not trace it. We are helping the families of the missing people. It is one of worst memories in my career," he said.
    But Raha expressed satisfaction over the Force's performance in traditional fields. "We have done reasonably well in looking after the sub conventional threat like terrorism and other conventional threats," he said.
    He said the Force's main focus is on capability building and operational preparedness. "We have been able to sign various cases in the first two-and-a-half years, including Rafale which will be built in India. It will become operational within next three years to five-and-a-half years," he said.

For its female employees, Central government issues strict rules to check sexual harassment at workplace
  • To make female employees of Central government departments feel safer, existing guidelines have been made stringent to prevent sexual harassment at workplace.
    In an order issued by the Department of Personnel and Training (DoPT), the Centre has reduced the deadline for completing inquiries into complaints from 90 days to 30 days.
    Protection of victim
    The Centre has also ordered departments to ensure that complainants are not victimised. Departments have been told to watch out for the well-being of women whose complaints are proven. This, it said, was to be done for five years to ensure she was "not subjected to vendetta".
    Intervention of WCD Ministry
    Under the sexual harassment at workplace law, the inquiry committee must give its report within 90 days. The move to bring it down to 30 days comes after Union Minister for Women and Child Development Maneka Gandhi expressed disappointment with the way sexual harassment inquiries were getting held up. In October, Gandhi promised to ensure that complaints were dealt with in a "timely and sensitive manner".
    Not posted under the accused
    The DoPT in its directive has gone a step further. "She (the complainant) should not be posted under the respondent (who is facing the complaint) or any other person where there may be a reasonable ground to believe that she may be subjected to harassment," DoPT director Mukesh Chaturvedi said in the memo.
    Guarding against victimisation
    The memo stated that in "case of any victimisation, the complainant may submit a representation to the secretary in the ministry. These representations should be dealt with sensitively and a decision taken within 15 days".
    Under-reporting of sexual harassment cases
    Sexual harassment cases are generally under reported. Sources said only eight departments reported the figures in the previous financial year. The Department of Atomic Energy reported the highest number of cases (15). According to the order, departments must maintain a record of the complaints registered and action taken, and submit the findings in an annual report. 

Business Affairs 

Sensex, Nifty close flat after market erases gains
  • Market washed out earlier gains as S&P BSE benchmark Sensex and NSE 50-share Nifty ended steady at 26,210.68 and 8,034.85 due to fag-end selling pressure from operators ahead of the expiry of futures and options December contract on Thursday, amid mixed trend in global market.
    The market sentiment was boosted initially after data showed that domestic institutional investors made substantial purchases of Indian stocks on Tuesday.
    Domestic institutional investors (DIIs) bought shares worth a net Rs 1502.41 crore on Tuesday as per provisional data while foreign portfolio investors (FPIs) sold shares worth a net Rs 712.17 crore Tuesday.
    The Sensex resumed higher at 26,243.19 and shot up further to 26,415.05 on initial buying. However, it fell afterwards to 26,191.72 before ending at 26,210.68, showing a marginally loss of 2.76 points or 0.01 pct.
    However, the NSE 50-share Nifty inched up by 2 points or 0.02 pct to 8,034.85 after moving in a range of 8,100.55 and 8,028.40.
    Overseas, European and Asian stocks were trading on a mixed note. Among economic data in Asia, Japanese industrial production rose 1.5 pct in November on a seasonally adjusted basis. Key Asian indices like Japan, China and South Korea ended lower by 0.01 pct to 0.87 pct while Hongkong, Singapore and Taiwan firmed up by 0.43 pct to 1.01 pct.
    Key European indices such as France and Germany moved down by 0.06 percent to 0.09 percent while UK's FTSE was quoted up by 0.36 percent.

Cabinet clears ordinance to penalise persons holding scrapped Rs 500 and Rs 1,000 notes
  • The Union Cabinet has cleared an ordinance to extinguish the liability of the government and the RBI on the demonetised high denomination notes.
    The ordinance was brought as it was found to be necessary to prevent future litigations against the government for junking Rs 500 and Rs 1,000 notes.
    Seeking to prevent harassment and any ambiguity, a proviso has been added to ensure that certain category of people can still deposit the old notes in RBI branches between December 31 and March 31 next, they said.
    According to reports, there could be a cap of holding no more than 10 notes of each after December 30 and violation of the rule could draw a fine of a minimum of Rs. 50,000 or 5 times the amount in question -- whichever is higher.
    The category may include people in armed forces, people who were abroad and ordinary citizens who can explain that the money is part of their legitimate income and they could not deposit it in banks due to some reasons.
    The government has also imposed penalty on people for possessing certain quantity of old notes after December 30.
    In 1978, a similar ordinance was issued to end the government's liability after Rs 1,000, Rs 5,000 and Rs 10,000 notes were demonetised by the Janata Party government under Morarji Desai.
    The government had, while announcing the demonetisation of the old currency on November 8, allowed holders to either exchange them or deposit in bank and post office accounts.
    While the facility to exchange the old notes has since been withdrawn, depositors have time till Friday to deposit the holding in their accounts.

US University professor Viral V Acharya appointed as RBI Deputy Governor
  • Viral V Acharya, an economics professor at New York University, has been appointed as the new deputy governor at the Reserve Bank of India. 
    The post was vacant for the suitable candidate after the elevation of Urjit Patel as the Governor in September, this year.
    The decision was announced by the government after a cabinet meeting on Wednesday.
    Acharya has also been a part of the Committee of Financial Sector Legislative Reforms Commission and had served on the International Advisory Board of Securities and Exchange Board of India.
    Acharya did PhD in Finance from New York University Stern School of Business in 2001. He also holds B Tech degree in Computer Science and Engineering, from Indian Institute of Technology.
    Currently, RBI has three deputy governors including N S Vishwanathan, S S Mundra and R Gandhi.

Year of exits at RBI: First Rajan, then old Rs 500 and Rs 1,000 notes!
  • First, it was outspoken Raghuram Rajan and then old Rs 500/1,000 notes, including those bearing his signature -- 2016 saw them exit the Mint Street riding such big waves of controversies that their ripple effect is bound to be felt in the new year.
    Rajan was replaced by a low-profile Urjit Patel as the new Reserve Bank Governor and the good-old Rs 500 banknotes made way for a new grey-colour replacement while a brand new pink Rs 2,000 note also entered the scene. A replacement for old Rs 1,000 notes is still awaited.
    In his three-year tenure at RBI that ended this September, Rajan stoked several controversies with his comments on almost all issues under the sun -- including on political, social, academic and obviously economic issues.
    In contrast, his successor Patel has often been criticised in some quarters for keeping mostly silent -- a trait which was initially seen as having gone in his favour after Rajan's vocal nature.
    In his first-ever interview, Patel was however forceful in his own way when he told PTI that the demonetisation was "once in a lifetime event" and he was taking all necessary steps to "ease the genuine pain of citizens who are honest and who have been hurt".
    From steering the monetary policy deliberations amid frantic calls for rate cuts to mounting the necessary mechanism for a daily monitoring of demonetisation move to keeping printing presses up and running to print replacement notes for scrapped ones -- it has been a bit too hectic for Patel since he took charge on September 4.
    While Rajan is known to have opposed the idea of demonetisation, especially to fight blackmoney, Patel urged the people to start using cash substitutes like debit cards and digital wallets, saying it will make transactions cheaper and easier and in the long term will help India "leapfrog into a less cash-use economy at par with more developed nations".
    But the joke, doing the rounds on social media and through WhatsApp, is that it is mostly the ATMs that have gone cashless and standing in queues to withdraw money is the new normal.
    If not for the note ban, the leadership change would have been the most dominant factor of 2016 for the Reserve Bank, but its 'advice' to the government to scrap high-value currency notes will keep it busy for a long time to come, and success of the move will determine its credibility as well.
    The final word is still to be said on the exact amount of the value carried by the scrapped notes and the estimates so far vary from about Rs 14.4 lakh crore to over Rs 20 lakh crore, even as the so-called '50-day' period of 'pain' and transition will end this week.
    The famous Amul cartoons have poked fun at RBI by calling it 'Reverse Bank of India', referring to the issuance and re- issuance of more than 60 circulars already since the demonetisation announcement on November 8.
    Rajan also unleashed an array of reforms -- either incremental or radical ones -- across the spectrum. Before his departure, Rajan introduced a slew of measures with an eye on solving long-term problems like NPAs (where he set a March 2017 deadline to clean the books), deepening of the bond market and also operationalisation of new banks.
    The NPA pain continued to be the biggest problem for the sector in 2016 as well, denting bank profits, but there was a slowdown in new bad asset formation.
    The policies introduced by Rajan included new regulations as well as tweaking of some of the old ones. RBI's tools like 5/25 and strategic debt restructuring (SDR) scheme to address stressed loans helped banks refinance and restructure a few accounts.
    It revised the SDR norms and asked banks going in for it to make sufficient provisions to the tune of 15 per cent of the loan value.
    The SDR scheme could not pick up as bankers were unable to find buyers due to which the conversion of debt into equity could not happen in the stipulated 210 days from the time the scheme was invoked in an account.
    To strengthen the lenders' ability to deal with stressed assets and put real assets back on track, RBI came out with a 'scheme for sustainable structuring of stressed assets' (S4A), which again is yet to find some currency with the lenders. And so far, banks could restructure only Hindustan Construction Company under the S4A scheme.
    For the better part of the year, RBI, which has so far lowered its key rates by 175 bps, was vocal about banks' reluctance to pass the benefit to borrowers and give the sagging economic growth a boost.
    But the lenders' defiance led RBI to devise a newer system of computation of lending rates called the marginal cost of funding-based lending rate (MCLR), which was introduced from April 1.
    The lenders have so far passed only up to 0.70 per cent to the borrowers and moreover, the existing borrowers continue paying higher rates.
    The era of differentiated banking finally became a reality during the year, with the first of the small finance banks and payments banks getting operational. RBI also started discussions on starting peer-to-peer lending.
    Despite its cajoling, RBI is yet to make progress on ensuring large foreign banks operate as locally registered subsidiaries. A few like the Singaporean lender DBS that have applied for WOS are yet to convert as they are awaiting the final go-ahead.

NSE exchange files for long-awaited IPO
  • National Stock Exchange (NSE), India's largest bourse, filed an application for an initial public offering on Wednesday, laying the ground for what could be India's biggest listing since 2010.
    The NSE has filed the so-called draft red herring prospectus with the capital markets regulator, the Securities and Exchange Board of India, an exchange spokesman said.
    Bankers had previously said the NSE could raise as much as $1 billion in a listing, making it potentially India's biggest since Coal India raised $3.5 billion in an IPO in 2010, according to Thomson Reuters data.
    Smaller rival BSE Ltd, formerly Bombay Stock Exchange, filed its application in September for an IPO expected to raise around $150 million, but it has not yet been given the go-ahead.
    Both IPOs come at a time when emerging markets have been under pressure as global investors have shifted funds towards the United States, though NSE Chairman Ashok Chawla sought to downplay concerns about the timing.
    "In my view, there is no bad time for a good issue," Chawla told Reuters in an interview earlier this month.
    NSE needs to appoint a new chief executive to replace previous head Chitra Ramkrishna, who unexpectedly resigned last month, citing personal reasons.
    NSE's listing is expected to be one of the most high profile in 2017. Indian companies raised more than $3.7 billion from IPOs this year, the most in six years, according to data compiled by Thomson Reuters.
    Some stakeholders accused the exchange earlier this year of moving too slowly, the company then committed to file an application for a listing by January. 

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