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Current Affairs - 20 September 2017

General Affairs 

US Defence Firms Seek Key Assurance Over Make-In-India Plans
  • US defence firms offering to set up production lines in India to win deals worth billions of dollars want stronger assurances they won't have to part with proprietary technology, according to a business lobby group's letter to India's Defence Minister.

    These companies are also saying they shouldn't be held liable for defects in products manufactured in collaboration with local partners under Prime Minister Narendra Modi's Make-in-India's drive to build a military industrial base.

    Lockheed Martin and Boeing are both bidding to supply combat jets to India's military, which is running short of hundreds of aircraft as it retires Soviet-era MiG planes, and its own three-decade long effort to produce a domestic jet is hobbled by delays.

    Lockheed has offered to shift its F-16 production line to India from Fort Worth, Texas, and make it the sole factory worldwide if India orders at least 100 single-engine fighters.
     
    The US firm has picked Tata Advanced Systems as its local partner under the defence ministry's new Strategic Partnership model under which foreign original equipment manufacturers (OEMs) can hold up to a 49 percent stake in a joint venture with an Indian private firm which will hold the majority of shares.

    The US-India Business Council (USIBC) wrote to India's Defence Minister last month seeking a guarantee that US firms would retain control over sensitive technology - even as joint venture junior partners.


    "Control of proprietary technologies is a major consideration for all companies exploring public and private defence partnerships," the business lobby, which represents 400 firms, said in the August 3 letter, reviewed by Reuters and previously unreported.

    "To allow foreign OEMs to provide the most advanced technologies, the partnership arrangement between an Indian owned 'strategic partner' company and a foreign OEM needs to provide an opportunity for the foreign OEM to retain control over its proprietary technology," it said, noting this wasn't explicit in the policy document.

    Technology Transfer

    Technology transfer is at the heart of PM Modi's drive to build a domestic industrial base and cut a reliance on imports that has made India the world's biggest arms importer in recent years.

    Without full tech transfer in previous arms deals, India's mainly state-run defence factories have largely been left to assemble knock-down kits even for tanks and aircraft produced under license from the foreign maker.

    PM Modi's advisers have vowed to change that, insisting on transfer of technology so that critical military equipment are designed and manufactured in India.

    Benjamin Schwartz, USIBC's director for defense and aerospace, said the new Indian policy offered a roadmap for establishing partnerships between US and Indian companies, but it raised some questions for the firms.

    He said he was not in a position to name those companies concerned by the Indian policy, but there was a "general desire to see increased clarity" on several aspects, including the control of proprietary technologies.

    Quality Issues

    The USIBC also opposed a clause in the new rules that held foreign firms jointly responsible for the quality of the platforms provided to the military, saying legal liability is a significant factor in business decisions.

    "We recommend the MoD (Ministry of Defence) affirm that foreign OEMs will not be liable for defects outside their company's control," the USIBC said.

    Lockheed did not respond to a request for comment. Boeing, which is bidding for a separate contract to sell its F/A-18 Super Hornets for India's aircraft carrier fleet, declined to comment on the USIBC letter, but the company's India president, Pratyush Kumar, said there were concerns about Indian private firms' lack of experience in the aerospace sector.

    Only state-run Hindustan Aeronautics Ltd had made planes under license, while some private players were starting from scratch, having never built even an aircraft component. Mr Kumar said he could not find a single example worldwide of a private enterprise with limited experience building out a plane under transfer of technology.

    "Look at Turkey, look at Japan, look at Brazil - look at multiple countries. In all cases there is a fine balancing act of co-opting the capabilities of both public and private enterprise," he said.

    India's Defence Ministry offered no response to the concerns expressed by the trade lobbying group on the strategic partnership model, which will also apply to building submarines and helicopters as part of a $150 billion modernisation drive.

    But an official, referring to sensitive technology, said the government has made clear in the past that foreign firms can be allowed to increase their stake beyond 49 percent if the technology they bring in is state-of-the art.

    "It can be done on a case-to-case basis," the official said.

    Mukesh Aghi, president of the US-India Strategic Partnership Forum, said that despite the starting problems, defence manufacturing looked set to be a breakthrough area in ties between India and the United States.

    "It's the next big thing. There is strong support from the (US President Donald) Trump administration to take this forward."

PM Modi To Meet Finance Minister Arun Jaitley Today, Review Economic Situation
  • Concerned about the slowdown in the economy, Prime Minister Narendra Modi will interact with Finance Minister Arun Jaitley and other top officials today to take stock of the situation and discuss remedial measures to bolster growth.

    Prime Minister Modi will threadbare analyse the economic situation with Mr Jaitley and secretaries of the finance ministry and explore options to stimulate the economy, official sources said.

    The meeting comes days after government data showed GDP growth in the first quarter of the current fiscal slumping to a three-year low of 5.7 per cent, from 7.9 per cent in April-June of 2016 and 6.1 per cent of January-March.

    GDP growth has declined steadily for six straight quarters and the Economic Survey-II predicts that the economy may not be able to achieve the targeted growth rate of 7.5 per cent owing to deflationary pressures.

    Exports are facing strong headwinds and the industrial growth is the lowest in five years.

    The current account deficit (CAD) in the April-June quarter has risen to 2.4 per cent of GDP, or USD 14.3 billion, mainly on account of increased trade gap.


    Current account deficit, the difference between inflow and outflow of foreign exchange, was 0.1 per cent ($0.4 billion) in the June quarter of last fiscal.

    The figure compares with 0.6 per cent ($3.4 billion) for January-March 2017.

    The teething troubles with the roll out of the Goods and Services Tax (GST), after-effects of demonetisation and the fiscal space available is likely to figure during the meeting.


    Till date, direct and indirect tax collections as well as projections for the year may be presented to the prime minister.

    Disinvestment proceeds may also be put before PM Modi to give a fuller picture of government finances.

    Inflationary pressures, along with reasons for the lacklustre manufacturing growth of 1.2 per cent in July, may also come up for discussion, they said, adding that the meeting may also take stock of spread of monsoon and its impact on agricultural economy.

    Both wholesale and retail inflation rose in August.

    With demonetisation said to have dealt a blow to black money, steps being taken to prevent its generation may also be discussed at the meeting.

    Sources said the interaction may focus broadly on what ails the economy and the fiscal space available with the government. Steps to boost economic growth, create jobs and reviving private investment may be part of the discussion, they said.

    The government is concerned at the stuttering growth despite a benign macroeconomic environment with easy money flowing in, global growth reviving, government revenues looking solid, deep foreign exchange reserves, reasonable oil prices and a decent monsoon keeping food prices in check.

    Increasing government spending, particularly on infrastructure, combined with quickly fixing the problems with GST may feature in today's deliberations.

In Madhya Pradesh, Family Fined Rs. 75,000 For Defecating In The Open
  • A panchayat at a village in Madhya Pradesh's Betul district has imposed a fine of about Rs. 75,000 on a family for open defecation.

    The panchayat of Rambhakhedi village also served notices to 43 other families there to stop defecating in the open.

    "About a month back, the family was advised to stop defecating in the open. However, they turned deaf ears to it. So, a fine of Rs. 75,000 was yesterday imposed on the family of 10 members," Rambhakhedi village panchayat's employment assistant Kunwarlal said today.

    "The fine was imposed for one month at a rate of Rs. 250 per day on each of the 10 members of the family under Madhya Pradesh Panchayat (Swachhata Tatha Nuisance Nivaran Tatha Upshaman) Rules, 1999. Besides, 43 other families were also served notices to stop open defecation," he said.



    The village sarpanch, Ramrati Bai, said action was taken as the family members were not ready to use the toilet constructed at their home despite repeated advice.

    "These villagers had been warned on several occasions, but they were not ready to use the toilets at home," she said.

NIA Arrests 2 From Jammu For Helping Terrorists
  • The National Investigation Agency today arrested two persons for allegedly providing logistical and material support to terrorists infiltrating from Pakistan into Kashmir for carrying out subversive activities, officials said here today.

    Zahoor Ahmed Peer and Nazir Ahmed Peer, both residents of Wahama, Kupwara, in North Kashmir, were arrested from Jammu in connection with a case registered by the NIA in July last year, an NIA spokesperson said.

    The NIA will seek their transit remand and bring them to Delhi for further questioning, he added.

    In July last year, police in Jammu and Kashmir arrested a Pakistani national, Bahadur Ali, from Handwara in North Kashmir and recovered a large quantity of incriminating material, including arms and ammunition, from him. The case was later handed over to the NIA.

    Investigations revealed that the accused persons allegedly provided material and logistical support to Ali and his associates soon after their infiltration into Indian territory, the spokesperson said.

    In January this year, the NIA had charge-sheeted Ali, a member of the banned Lashker-e-Taiba terror outfit who had been arrested from Yahama village of Handwara on July 24 last year.


    The charge sheet highlighted gaps along the Line of Control (LoC) as Ali along with two other terrorists had walked undetected for seven days.



    The NIA said Ali alias Saifullah Mansoor along with two associates, Abu Saad and Abu Darda, all trained terrorists, infiltrated into Indian territory equipped with arms and ammunition, navigation equipment, combat material and other articles.

    The trio entered India during on the intervening night of June 12-13 last year and reached their destination only around June 20. The area is expected to be dotted by security personnel as part of counter-infiltration grid.

    On June 22, Ali's two associates left to get some food, leaving Ali on a hill top. Both were killed in an encounter.

    According to the NIA charge sheet, investigation had established that Ali, who is a school dropout and originally a resident of Jia Bagga Village of Raiwind in Lahore, Pakistan, was also provided a map depicting parts of Jammu and Kashmir and Pakistan-occupied-Kashmir (PoK).

    He was provided with Grid References (GR) that had been recovered from his possession. Ali plotted these GRs on the map which was sent for examination to the Surveyor General of India at Dehradun who affirmed that the terrorist had plotted them correctly.

    A pocket diary recovered from Ali, among other things, listed the names of several towns in Jammu and Kashmir.

Weeks After Schooling Pak On Terror, Donald Trump's New Warning At UN
  • US President Donald Trump today told world leaders that it is time to "expose" and "hold responsible" those countries that provide funding and safe havens to terror groups, weeks after he warned Pakistan for supporting "agents of chaos."

    In his maiden address to the United Nations General Assembly, Trump said that all responsible nations must work together to confront terrorists and "the Islamic extremist that inspires them." "We will stop radical Islamic terrorism, because we cannot allow it to tear up our nation and, indeed, to tear up the entire world," he said.

    "It is time to expose and hold responsible" nations that provide funding and safe havens to terror groups, Trump said without naming any country.

    He said countries must deny the terrorists safe havens, training, funding and any form of support for their "vile and sinister ideology".

    "We must drive them out from our nations. It is time to expose and hold those responsible those countries who support and finance terror groups like al-Qaeda, Hezabollah and the Taliban and others," he said.

    The US president said America and its allies were working together to crush the terrorists and prevent the re-emergence of safe heavens they use to launch attacks.

    Recalling his new strategy in Afghanistan and South Asia, Trump said it was aimed at defeating terrorists in war-torn Afghanistan. "From now onwards the security agencies will dictate the length and scope of military operations, not our betraying benchmarks and timetables set up by politicians," he said.

    Last month, Trump had issued the sternest warning yet by an American leader to Pakistan for providing safe havens to terrorists.

    Trump said another pillar of his new strategy in Afghanistan and South Asia was a change in America's approach to Pakistan, considered a long-time ally of Washington. "Pakistan often gives safe haven to agents of chaos, violence, and terror....," Trump had said.

    Trump had also slammed Pakistan for its continued support to terrorist groups and warned Islamabad of consequences if it continues to do so.

Business Affairs

GST transitional tax credit claims: Govt may send notice to 162 companies; ask for VAT returns
  • With Goods and Service Tax (GST) collections going for a toss, the government may soon be sending notices to several firms on transitional tax credit being claimed back. The indirect tax body Central Board of Excise and Customs (CBEC) had earlier issued a directive to tax commissioners to verify GST transitional credit claims of over Rs 1 crore made by 162 entities.
    According to a report in The Economic Times, such companies which collectively have claimed about Rs 65,000 crore in transitional tax credits, would be issued notices in the coming weeks.
    Notices would be issued to companies and explanations would be sought for the amounts claimed in transitional credits. The indirect-tax department has also asked some Hyderabad-based infrastructure businesses to produce last year's VAT returns, the report said.
    In the transitional credit form TRAN-1 filed by taxpayers along with their maiden returns for July, businesses have claimed a credit of over Rs 65,000 crore for excise, service tax or VAT paid before the GST was implemented from July 1.
    The government received a rude shock with a whopping Rs 65,000 crore of the Rs 95,000 crore collected as GST in July being claimed back as transitional credit by taxpayers.
    The Goods and Services Tax (GST) regime allows tax credit on stock purchased during the previous tax regime. This claim is available only up to 6 months from the date of implementation of GST.
    "The possibility of claiming ineligible credit due to a mistake or confusion cannot be ruled out. It is desired that the claims of input tax credit of more than Rs 1 crore may be verified in a time-bound manner," the CBEC letter states. It asked the chief commissioners to send a report to the CBEC by September 20 on the claims made by these 162 companies.
    The GSTN website had faced glitches last month as taxpayers flogged to the portal on the last day of the deadline of filing returns for July.
    A Reuters report claimed that the revenue shortfall on account of lower tax collection due to GST could be at least $12.5 billion if the current trend continues until the end of the year.
    Frequent changes in tax rates after the GST's launch have increased business uncertainty, resulting in many firms failing to register for the new tax.
    Under GST, the central government has to compensate states if their receipts fall below an annual growth of 14 percent in taxes for the next five years.

How Ford-Mahindra and Mahindra partnership could be a game changer
  • The strategic alliance announced by Indian carmaker Mahindra and Mahindra Ltd and Detroit-based Ford Motor Co. comes amid numerous environmental challenges faced by the global auto industry. The alliance, which was first forged in 1995 to make Ford cars in India under the banner of Mahindra Ford India Limited (MFIL), had led to Mahindra developing its first SUV Scorpio from scratch.
    The strategic partnership announced by two carmakers will leverage each others strength to deal with changing practices across global auto industry. For US-based Ford, it will ensure access to affordable electric technology used by Mahindra and a greater footprint in the Indian market where it currently holds less than 3 per cent market share.
    For Mahindra, this alliance holds the key to its international ambitions as it plans to expand its global distribution network. Also, the partnership comes close on the heels of policymakers announcing early phase out of petrol and diesel vehicles in India.
    Like other global auto companies, Ford faces a challenge in bringing affordable electric cars to developing markets like India and China. The alliance could help the duo take on India's largest carmaker Maruti Suzuki, which recently announced a tie up with Toyota for opening of a lithium ion battery plant in Gujarat to power its electric vehicles.
    In 2010, Mahindra had acquired a controlling stake in Bengaluru-based electric car manufacturer Reva Electric Car Co. The same year it bought a controlling stake in struggling South Korean carmaker SsangYong Motor Co. for Rs 2,100 crore.
    Mahindra's another big acquisition was in 2015 when the automaker bought Italian car designer Pininfarina SpA for $185 million. Pininfarina has designed cars from manufacturers like Ferrari, General Motors, Mitsubishi, Volvo, Hyundai, etc.
    At a time when global auto indutry is facing challenges from electric cars and driverless technology, the partnership is likely to boost Mahindra's US plans.
    Mahindra and Mahindra had earlier announced opening of its maiden greenfield auto manufacturing plant in Detroit this year. Mahindra will become the first Indian carmaker to own a plant in the US.
    "We are looking at opening (the plant) this year. That's a major milestone where an Indian automotive company is opening up manufacturing in a resurgent Detroit. I think that's a wonderful twist of history," Mahindra group chairman Anand Mahindra had said.
    The group has deployed $1.5 billion in the US to generate $2.5 billion revenue, employing 3,000 people. The plan is to double all three figures over the next two-three years.
    Last year, Mahindra group launched its first connected all-electric scooter GenZe in the US for $2999 per unit. Generation Zero Emission (GenZe) focuses on electric mobility.

New India Assurance IPO receives Sebi's nod
  • State-owned New India Assurance Company Ltd has received Sebi approval to float initial public offer (IPO), as per the latest update by the capital markets regulator.
    The country's largest non-life insurer had filed draft prospectus with Sebi in August and received 'observations' from it on September 15 that are necessary for an IPO.
    According to the draft papers, the government will sell 9.6 crore shares, whereas the company itself will sell 2.4 crore shares through the IPO. Thus a total of 12 crore shares of the non-life insurer would be sold through the share sale offer, constituting around 14.56 per cent of the company's post issue share capital.
    The size of the forthcoming IPO of New India is likely to be over $1 billion, as per merchant banking sources.
    Axis Capital, YES Bank, Nomura, IDFC Bank and Kotak are managing the company's IPO. The public sector insurer is expected to hit the market in the current financial year to help the government meet its ambitious disinvestment target of Rs 72,500 crore.
    Besides, the initial share-sale offers of General Insurance Corporation of India and HDFC Standard Life Insurance are currently awaiting Sebi's approval to launch their respective pubic offers.
    The IPO of ICICI Lombard General Insurance Company is currently open for public subscription, while that of SBI Life Insurance Company will begin on Wednesday. In 2016, ICICI Prudential Life Insurance became the country's first listed insurer after its Rs 6,000 crore public issue.

Mumbai-Vadodara Express Highway to bring travel time down to two and a half hours: Gadkari
  • Union Minister Nitin Gadkari today said the construction work of Rs 44,000 crore Mumbai-Vadodara Expressway will begin in another one month, after which one can cover the distance between the two cities in less than three hours.
    "In one month, we are going to inaugurate construction work of Mumbai-Vadodara Express Highway, which is coming up at a cost of Rs 44,000 crore. After this is constructed, the distance between Vadodara and Mumbai can be covered in 2:30-2:45 hours. It will also be access control expressway (for high speed driving)," Gadkari, minister of Road Transport and Highways, said.
    The minister also said that the Rs 15,000-crore Easterly-Westerly Expressways will also be inaugurated in another two months.
    "We will begin construction work on this in another one month," he said, adding that work on Delhi-Meerut Expressway is also "on at fast pace."
    Gadkari was speaking at the 38th Transport Development Council (TDC) and Conference of State Transport Ministers being organised here by his ministry.
    The minister said his government is also working to add twelve Expressway projects and has announced construction of additional 1.7 lakh kilometres out of 4 lakh kilometres National Highway planned to help decongest existing roads.
    He urged state transport ministers present here to address the fast growing traffic on roads which are causing congestion and pollution by focussing on public mode of transport.
    "We will have to encourage public transport in the country. People use their own car to go from one place to another. They will visit between Vadodara to Mumbai in their own cars...Public transport should be cheap, pollution-free.
    So, public transport and electric vehicles are our priority," he said.
    He urged ministers to bring in new technology and innovations to address the issue and said his government at Centre has has decided to convert 111 rivers into inland waterway.
    "We have to find out different options and alternatives which are pollution-free, cost effective and could offer substitute for import (of oil)," Gadkari said.
    He urged transport ministers to think of constructing bus ports like bus terminus which have been developed in Gujarat. The terminus provides better comfort and facilities to people using state transport buses.
    "Should not the poor passengers get better services at bus stations, which are in a very pathetic condition in most states. We are ready to even grant funds for the same.
    "But we want you to take the initiative. We will provide you with any kind of assistance that you will need," he said, calling for better service standards in public transport system, many of which are loss making.
    The Council meeting saw discussions on the subject of Public Transport Reforms and way forward to bus ports.
    Gadkari said 2,000 driving training centres will be set up in the country to meet the requirements of around 22 lakh drivers.
    "This centres will give fitness certificate, pollution free certificate, train the drivers and conduct the examination. It will communicate results of the driving test to the Regional Transport Office (RTO) within three days," said the minister.
    He said, "We decided to hold this meeting in Vadodara on the suggestion of Prime Mminister Narendra Modi who wanted us to see how bus ports have been constructed in Vadodara and Ahmedabad as part of public transport reforms."
    Expressing concern over three lakh people losing their life in accidents every year, Gadkari said, "I will ask all states to prepare action plan to reduce road accident fatalities as part of road safety."

    US resumes fast processing of H-1B visas after five months
    • The US has resumed fast processing of H-1B work visas in all categories subject to Congress-mandated limit, five months after it was suspended temporarily to handle the huge rush of applications for the work visas popular among Indian IT professionals.
      The H-1B visa is a non-immigrant visa that allows US companies to employ foreign workers in speciality occupations that require theoretical or technical expertise. The technology companies depend on it to hire tens of thousands of employees each year.
      Premium processing of H-1B visa was suspended in April to handle huge rush of new petitions.
      The US Citizenship and Immigration Services (USCIS) resumed premium processing yesterday for all H-1B visa petitions subject to the Fiscal Year (FY) 2018 cap, a media release said.
      The FY 2018 cap has been set at 65,000. Premium processing has also been resumed for the annual 20,000 additional petitions that are set aside to hire workers with a US higher educational degree, it said.
      When a petitioner requests the agency's premium processing service, USCIS guarantees a 15-day processing time.
      "If the 15- calendar day processing time is not met, the agency will refund the petitioner's premium processing service fee and continue with expedited processing of the application," the USCIS said.
      It said adding that the service is only available for pending petitions, not new submissions, since USCIS received enough petitions in April to meet the FY 2018 cap.
      In addition to resumption of premium processing for H-1B via petitions subject to the FY 2018 cap, USCIS previously resumed premium processing H-1B petitions filed on behalf of physicians under the Conrad 30 waiver programme, as well as interested government agency waivers and for certain H-1B petitions that are not subject to the cap.
      "Premium processing remains temporarily suspended for all other H-1B petitions, such as extensions of stay," the USCIS said, adding that it plans to resume premium processing for all other remaining H-1B petitions not subject to the FY 2018 cap, as agency workloads permit.

    General Awareness

    69th Primetime Emmy Awards 2017

    • On 17th September 2017, the 69th Annual Prime Time Emmy Awards ceremony took place at the Microsoft Theater in Los Angeles, California, United States.
      Emmy Awards 2017:
      i.The Annual Prime Emmy Awards honours the best US television programmes broadcasted from June 1, 2016 to May 31, 2017.
      ii.The award winners were chosen by the Academy of Television Arts & Sciences.The ceremony was hosted by Stephen Colbert.
      iii.The 69th Primetime Creative Arts Emmy Awards were held on 9th September 10th September 2017.
      The Handmaid’s Tale becomes first online series to win Outstanding Drama Series Award:
      i.The Handmaid’s tale produced by Hulu (online video streaming network) won the Outstanding Drama Series Award.
      ii.This is the first time in Emmy Awards’ history a series from an online streaming network wins the Outstanding Drama Series Award among television series.
      iii.The Handmaid’s tale is based on Margaret Atwood’s novel.
      Television programs were awarded under the following categories:
      Outstanding Comedy Series – Veep (HBO)
      Outstanding Drama Series – The Handmaid’s Tale (Hulu)
      Outstanding Variety Talk Series – Last Week Tonight with John Oliver (HBO)
      Outstanding Variety Sketch Series – Saturday Night Live (NBC)
      Outstanding Limited Series – Big Little Lies (HBO)
      Outstanding Television Movie – Black Mirror: “San Junipero” (Netflix)
      Outstanding Reality-Competition Program – The Voice
      Leading actors were awarded under the following categories:
      Outstanding Lead Actor in a Comedy Series – Donald Glover
      Outstanding Lead Actress in a Comedy Series – Julia Louis-Dreyfus
      Outstanding Lead Actor in a Drama Series – Sterling K. Brown
      Outstanding Lead Actress in a Drama Series – Elisabeth Moss
      Outstanding Lead Actor in a Limited Series or Movie – Riz Ahmed
      Outstanding Lead Actress in a Limited Series or Movie – Nicole Kidman
      Supporting actors were awarded under the following categories:
      Outstanding Supporting Actor in a Comedy Series – Alec Baldwin
      Outstanding Supporting Actress in a Comedy Series – Kate McKinnon
      Outstanding Supporting Actor in a Drama Series – John Lithgow
      Outstanding Supporting Actress in a Drama Series – Ann Dowd
      Outstanding Supporting Actor in a Limited Series or Movie – Alexander Skarsgard
      Outstanding Supporting Actress in a Limited Series or Movie – Laura Dern
      Directors and writers were also awarded under the following categories:
      Outstanding Directing/Writing for a Comedy Series, Outstanding Directing/Writing for a Drama Series, Outstanding Directing/Writing for a Variety Series, Outstanding Directing/Writing for a Limited Series, Movie, or Dramatic Special.
      Primetime Creative Arts Emmy Awards honour technical and other similar achievements in US television programming, including guest acting roles.
      About US:
      Capital – Washington DC
      Currency – United States dollar
      National language – English
      President – Mr.Donald Trump

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