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Current Affairs - 26 October 2017

General Affairs 

Delay in Gujarat poll dates announcement was not to help Modi or BJP: Election Commission
  • Giving lengthy explanations about the delay in Gujarat poll dates, the Election Commission today finally announced the much awaited dates for the elections. The state goes to polls in two phases on December 9 and 14 and the counting will be held simultaneously for both Himachal Pradesh and Gujarat on December 18.
    Wednesday's announcement comes 13 days after dates for the Himachal Pradesh polls were announced. The term of the 182-member Gujarat Assembly comes to an end on January 23, 2017.
    Chief Election Commissioner AK Joti found himself on the backfoot when it was pointed out that the Modi government used the 12-day hiatus between the Gujarat and Himachal dates to announce a plethora of freebies worth thousands of crores of rupees.
    When asked if perhaps the EC had been "taken for a ride", the CEC said, "We had to take several things into consideration. The chief secretary sent us two letters, one on the 27th of September and the second on 2nd of October detailing the magnitude of the problem. It's an unprecedented situation in which 229 people died."
    On questions as to how much of relief work would the state government be able to achieve in 12 days, AK Joti said, "There is a distinction that should be made between short term and long term relief measures. Long term work will still go on."
    Clearly on the backfoot and uncomfortable at questions that rehabilitation work does not get affected because of the model code of conduct that comes into effect immediately, an evasive Joti reeled off details of relief work done by the state government.
    When it was pointed out that on ground, queries by India Today had revealed that the state government was actually on a five days extended Diwali break even in the flood-affected Banaskantha and Pattan districts, Joti said, "that could be your point of view".
    On whether the Election Commission would in the future make an independent assessment of the ground situation rather than depend on the state government's inputs, Joti said "due weightage is given to inputs of the state administration".
    Reeling off data, Joti said several villages would have to be relocated because of the devastation caused by 17 breaches in the Narmada canal, de-siltation work would have to be done in vast stretches and roads need to be repaired.
    However, no details were forthcoming on the specific work done in the 12 days interval. The explanation offered by the Election Commission for the announcement of the Himachal polls earlier was snowfall that begins mid-November, never mind the fact that snow falls around the same time every year in the state.
    Last week, Election Commissioner OP Rawat had told India Today that the dates were announced in a hurry.  "Had the EC had more time, perhaps it could have weighed other options," Rawat had said. Rawat had said the Election Commission had gone ahead with its decision of not announcing Gujarat polls knowing that it would face a lot of flak.
    "The EC felt the priority of the state administration would change if the polls were announced and relief work would take second priority. We did not want that to happen," he had said.
    Prime Minister Narendra Modi had in the intervening period announced a slew of freebies worth thousands of crores of rupees for the poll-bound state.
    Former Election Commissioner had trashed the decision of the EC.
    Ex-CEC SY Quraishi had pointed out that the floods happened in July-August and a 12-day delay wouldn't have made a huge difference to the state.

Gujarat Assembly election: BJP govt announced projects worth Rs 11,000 crore in 13 days
  • Congress vice-president Rahul Gandhi had, on October 16, sent out a "weather report", stating that it would rain "jumlas" on that day in Gujarat ahead of the Assembly election in the state. While the MeT office's forecast may not always be correct, that of the Nehru-Gandhi scion seems to have been bang on target.
    Rahul's 'forecast' came four days after the Election Commission had, on October 12, announced the poll schedule for Himachal Pradesh. Taking a dig at Modi's visit on October 16, Rahul had tweeted "Mausam ka haal: Chunav se pahle Gujarat me aaj hogi jumlon ki baarish (Weather report: It will rain jumlas today in Gujarat ahead of election)."
    Since then, Prime Minister Narendra Modi has visited Gujarat twice and announced several sops for the state.
    Modi visited Gandhinagar and addressed the 'Gujarat Gaurav Mahasammelan' organised by the state BJP to celebrate the conclusion of the saffron party's 'Gujarat Gaurav Yatra' (march for Gujarat's honour). The march covered a distance of around 4,471 kilometres, spread over 149 of the 182 Assembly constituencies in the state.
    Several projects have been rolled out since the Election Commission had announced the poll schedule for Himachal Pradesh. Modi inaugurated and laid the foundation stones for Rs 3,600-crore smart city projects for Vadodara. The Prime Minister also inaugurated the Rs 600-crore roll-on, roll-off (RoRo) Ghogha-Dahej ferry service.
    The Phase II of the Ahmedabad-Gandhinagar Metro was cleared and Rs 10-crore Ambardi Lion Safari Park was inaugurated.
    Besides, 'Robotics and Aquatic' galleries in Ahmedabad worth Rs 275 crore were given a nod and the flyover in Bhavnagar has been approved. Shetrunjay, Khodiyar and Kadubhar dams have been included under SAUNI Yojana.
    Apart from these, the Gujarat government has announced projects worth about Rs 11,000 crore. Farmers would get loans at zero per cent interest up to Rs 3 lakh. Cases against 326 Patidars in Hardik Patel's agitation have been withdrawn.
    The government announced 11-day extra CL, TA/DA, 90 days' maternity leave and Rs 2 lakh ex-gratia amount on the death for contractual workers employed in government offices. It gave Rs 150-200 overtime allowance for fixed-pay staff.
    The state government has announced permanent jobs for sanitary workers. It has increased salaries of assistant electricians and waived off tolls on SP Ring Road in Ahmedabad for private vehicles.
    Teachers in unaided schools with 10 years of service would be regularised in grant-in-aid schools.
    The BJP government in Gujarat has announced Diwali bonus for Class IV employees besides giving 1 per cent hike in Dearness Allowance for 8.20 lakh government staff. It has also hiked the salary of teachers, ITI and municipality staffers.
    The state government increased the income limit to Rs 2.5 lakh for Ma Vatsalya medical insurance scheme. It regularised 15,000 houses, over four-decade old, in Kaliyabit Bhavnagar and gave 50 per cent hike in incentive income to 43,000 ASHA health workers.
    The government announced that it would reimburse 18 per cent GST paid by farmers on drip irrigation equipment. Besides, the income criterion for OBC, SC and ST students has been raised from Rs 47,000 per year to Rs 1.30 lakh in rural areas and Rs 65,000 to Rs 1.50 lakh in urban areas.

Mumbai: Fadnavis takes officials to task after government left red-faced on disbursal of loan waiver
  • After the Maharashtra government left red-faced on the issue of transferring loan waiver amount into the farmers' bank accounts, the Chief Minister Devendra Fadnavis on Wednesday took on the bankers and the officials of the departments of Cooperation and Information Technology for bungling in the disbursal of loan waiver amount.
    Fadnavis on Wednesday addressed a meeting of State Level Bankers Committee (SLBC) and took the bankers to task for errors in the list of beneficiaries of loan waiver. He has ordered to set up join teams of officials and bankers to sort out the errors in the list. "The CM also has ordered to transfer the loan waiver amount from Thursday into the accounts of farmers who have provided accurate information," a statement from Fadnavis' office said.
    In a candid admission, Minister for Cooperation Subhash Deshmukh said haste in implementing the loan waiver amount disbursal led to the goof-ups. He claimed that some farmers and their family members have one and the same Aadhaar number which led to many farmers getting more than the prescribed limit of Rs 1.5 lakh amount.
    The error came into light after it became clear that the IT Department has shown same Aadhaar number (100000000000) in name of 180 farmers. In another case, Aadhaar numbers of two farmers Dilip Kachale and Balkrishna Ghangali have been shown as 11111111111.
    Deshmukh pinned the blame on the bankers for providing erroneous data. He argued that the farmers did not give any erroneous data. It was due to the technical glitches that the Information Technology department and the banks faced that led to the problems. "Many farmers have their accounts in banks for more than 40 years. While executing such a mammoth task, some mistakes are bound to happen. However, we will not let public money go waste," Deshmukh said.
    Agriculture Minister Pandurang Fundkar held nationalised banks and IT department responsible for the mess up. He claimed that district co-operative banks did nice job while transferring the loan waiver amount whereas nationalised banks did not cooperate with the state government in implementing the scheme.
    According to sources about 56.59 lakh farmers had applied for the loan waiver. Out of the 26 lakh farmers list, discrepancies were found in 4 lakh account details of the farmers. If that is not enough, discrepancies like multiple beneficiaries having same Aadhaar number in about 2 to 2.5 lakh farmers accounts have been found out. Several farmers have given the same Aadhaar number which became hurdle to transfer the amount in such farmers account. Nationalist Congress Party (NCP) called the government's idea of 'Digital Maharashtra' a dud.
    "While the government is asking banks to pay farmers financial institutions are not ready because they don't trust the government. Even after four months, farmers suicides continue unabated," said NCP spokesperson Nawab Malik.

Gujarat Assembly election 2017 dates: 2-phase poll to be held on December 9, 14; counting on 18th
  • The Election Commission today announced the schedule for Gujarat Assembly elections.The two-phase poll will be held on December 9 and December 14 respectively.
    With the announcement, the model code of conduct will come into force from today. This comes within a week of the poll panel declaring the poll schedule for Himachal Pradesh on October 12.
    While Himachal Pradesh goes to polls in a single phase on November 9, elections in Gujarat may be held in two phases, starting from the first week of December.
    The counting for Himachal Pradesh Assembly elections will be held on December 18. The counting for Gujarat Assembly elections may also be held along with those of Himachal Pradesh.
    • Counting of both Gujarat and Himachal Pradesh on December 18.
    • Gujarat Assembly election 2017 dates announced, to be held on December 9 and December 14.
    •  Banks and FIU told to report suspicious transactions: AK Joti
    • Candidates will have to open new bank accounts for election spending: CEC AK Joti
    • Ceiling for poll expenses per candidate is Rs 28 lakh: AK Joti
    • Expenditure will be monitored by tax and excise dept. Also, will monitor flow of liquor too from outside: AK Joti
    • Model Code of Conduct comes into force in Gujarat with announcement of poll schedule: AK Joti
    • 102 all-women operation poll stations introduced: AK Joti
    •  All candidates have to file affidavits: AK Joti
    • Special drive to enroll left out voters launched: Joti
    • VVPAT will be present, height of voting compartment increase: AK Joti
    • EC begins briefing on poll schedule.
    • The announcement comes within a fortnight of declaring the poll schedule for Himachal Pradesh.
    • Election Commission to make announcement shortly.
    • We are in touch with AAP candidates who may join us. Talks with NCP also on: Vaghela
    • Vaghela's Jan Vikalp joins hands with All India Hindustan Congress Party that was launched in Jaipur last year.
    • Vaghela who launched outfit 'jan Vikalp' in run up to Guj assembly polls after quitting Congress to fight on tractor symbol.
    • Shankersinh Vaghela makes announcement that his Jan Vikalp Morcha will fight Gujarat polls on tractor symbol of All India Hindustan Congress.
    In 2012, the Assembly elections in Himachal Pradesh were held in one phase on November 4. The elections in Gujarat were held in two phases, on December 13 and December 17. The results for both the states were announced on December 20.
    In 2012, the Election Commission had announced the poll schedule for both Himachal Pradesh and Gujarat on the same date. The then chief election commissioner VS Sampath had announced the poll schedules for both the states on October 3, 2012.
    The Opposition leaders have raised objections over Chief Election Commissioner AK Joti delinking the poll schedule of Gujarat with Himachal Pradesh this year.
    Though Himachal and Gujarat went to the polls almost together in 2012, the results of the two states were different. In Gujarat, the BJP retained power, having won for the fifth consecutive term since 1995.
    The BJP government led by the then chief minister Narendra Modi romped home comfortably, having won 116 out of the 182 seats in Gujarat. Under Modi, it was BJP's third straight win for the third consecutive term - in 2002, 2007 and 2012.
    The total voters' turn out in Gujarat both phases was 71.32 per cent. It was the highest turn out since 1980.
    For the first time in 15 years, Gujarat would be facing Assembly elections without Modi at the helm. It will be a crucial litmus test for the BJP in the western state, considered to be the Hindutva laboratory of BJP's parent organisation RSS.
    While the Congress won Himachal Pradesh while BJP was victorious in Gujarat in 2012, an India Today-Axis My India opinion poll said BJP is likely to win both the states this year.

Appointment of Kashmir interlocutor will not affect army operations: General Rawat
  • After Modi government announced its plan to initiate a dialogue between all stakeholders in the Valley to resolve crisis, Army Chief Bipin Rawat today said that appointment of interlocutor for Jammu and Kashmir will not impact army operations in the state.
    Rawat said that the government is speaking from a position of strength on Kashmir.
    He added that the situation in Kashmir has improved and infiltration has come down. "Government strategy on Kashmir has worked. We are negotiating from point of strength," said Rawat.
    Former IB chief Dineshwar Sharma has been appointed as the representative of the government to initiate dialogue in the insurgency-hit Kashmir.
    Talking about infiltration, Rawat said that security installations in the hinterland was becoming a cause for concern.
    "We are getting reports of Uri-like attacks well in depth (sic)," said the Army chief.
    "We are also looking at electronic warfare (EW) system to keep an eye not just on borders but in hinterland also," he said.
    He added that forces required intelligence, surveillance and reconnaissance to keep eye on adversaries on western and northern borders.
    Over 180 terrorist have been killed in Jammu and Kashmir - much higher than previous years - in counter-terror operations of the security forces this year. Equally, more terrorist have also infiltrated from Pakistan this year.
    Dineshwar Sharma is the fourth interlocutor to appointed. Earlier in 2002-2003 the Vajpayee led NDA government appointed K C Panth and former Home Secretary and current J&K Governor NN Vohra respectively as the centre's interlocutor.
    Subsequently the Manmohan Singh led UPA government appointed Senior journalist Dileep Padgaonkar, academic Radha Kumar and former information commissioner MM Ansari to mediate on behalf of the centre.
    The appointment of fresh mediator has evoked sharp political reactions. The opposition has claimed the fresh move to initiate a dialogue in Jammu and Kashmir shows the governments aggressive policy hasn't worked.
    The Modi led NDA government has followed a very aggressive policy in Jammu and Kashmir. It has not only refused to engage the separatist's leaders but has also given a 'free-hand' to the forces.
    The Indian forces have assertive when dealing with cease-fire violations from Pakistan and cross border infiltration. Counter-terror operations in the valley too have intensified.

Business Affairs

Narendra Modi govt's public sector banks' recapitalisation push puts Sensex, Nifty in party mood, PSB stocks lead gains
  • The Narendra Modi government's Rs 2.11 lakh-crore public sector banks recapitalisation plan led to a historic market rally today with the Sensex and Nifty touching their all-time highs led by Punjab National Bank,  Bank of Baroda, Bank of India, Union Bank and Canara Bank stocks which gained the most on BSE.
    The BSE Sensex, which breached 33,000 level in early morning trade, closed 435 points or 1.33 percent higher at 33,042 level.
    The Sensex for most of the day remained below the key 33,000 level but saw hectic buying in the nearly last three hours of trade to hover above the crucial level.
    Banking sector stocks rose up to 46 percent led by Punjab National Bank and Canara Bank among others.
    Punjab National Bank (46.20 percent), Bank of Baroda (31.47 percent), Bank of India (33.96  percent), Union Bank (34 percent ) and Canara Bank (38.05 percent) gained the most on BSE.
    Nifty too hit an all-time high of 10,340 on the PSB recapitalisation boost in early morning trade.
    The NSE index was up 0.86 percent or 87.65 points higher at 10,295 level.
    The government on Tuesday unveiled two-year road map for strengthening NPA-hit public sector banks, which includes re-capitalisation bonds, budgetary support, and equity dilution.
    Bank Nifty hit a new high of 25,035 level, rising 3.36 percent or 813 points. The BSE Bankex too hit a new high of 28,341 level, rising 4.71 percent or 1274.44 points.
    The capital infusion of PSBs entails mobilisation of capital, with maximum allocation in the current year, to the tune of about Rs 2,11,000 crore over the next two years, through budgetary provisions of Rs 18,139 crore, and recapitalisation bonds to the tune of Rs 1.35 lakh crore.
    Private sector lender Kotak Mahindra fell over 5 percent or 58 points to 1009 level even as the private sector lender reported a 19.81 per cent rise in consolidated profit after tax (PAT) at Rs 1,440.68 crore for the second quarter ended September 30. The bank had posted PAT of Rs 1,202.4 crore in July-September of the previous fiscal.
    HCL Technologies, which reported a 9.5 per cent rise in second-quarter net profit on account of higher revenue from its software services sector, was down 0.71 percent.
    Road sector stocks too closed higher after the government announced Rs 7 lakh crore plan for building 83,677 km of highways across the country over the next five years which will give a major push to the country's infrastructure and create more jobs.
    IRB Infrastructure (5.60 percent), Sadbhav Engineering (9.23 percent), ITD Cementation (1.84 percent), Ahluwalia Contracts (3.25 percent), and KNR Constructions (8.12 percent) were the top gainers in the road sector space.
    The Hindustan Unilever stock closed 0.18 percent higher minutes ahead of announcement of its Q2 earnings.
    Market breadth was negative with 1529 stocks falling against 1163 stocks rising on the BSE.

Linking Aadhaar with mobile numbers now possible through OTP, doorstep verfication
  • The process of re-verification of existing mobile subscribers using Aadhaar is set to become simpler and more convenient, according to an official source.
    The government has initiated a series of measures, including allowing re-verification at subscribers' doorstep and One Time Password (OTP) based authentication of existing users, to make the entire exercise easier for telecom subscribers.
    Telecom operators have been directed to offer facility for re-verification at the subscribers' doorstep for convenience of those with disability, illness or old age, the source familiar with the development told PTI.
    Operators have been asked to put in place an online mechanism (through website, and other means) for people to request for such service.
    It has also enabled Aadhaar OTP (One time password) based authentication for re-verification of the existing mobile users. Telecom service providers have been instructed to initiate a scheme to use OTP based re-verification of mobile subscribers using SMS or IVRS or on their mobile app.
    "This means that if one mobile number is registered in Aadhaar database, then the OTP method can be used for reverification of that number as well as other mobile numbers owned by the subscriber," the source pointed out.
    Nearly 50 crore mobile numbers are already registered in Aadhaar database, and the OTP can be leveraged for re- verification in all of these cases, the source added.
    In case of agent-assisted biometric authentication for SIM re-verification or issuance, telcos have been asked to ensure that full e-KYC details of subscribers are not made visible to the agent. Nor should data be stored on the agent s device, the source added.
    In the current dispensation, e-KYC data of the subscriber including photograph is visible to the agent of the telecom operator.
    The slew of measures being undertaken are aimed at improving ease of re-verification and its success rate, the official added.
    The source pointed out that some residents, especially senior citizens, found it difficult to verify their identity using fingerprint-based Aadhaar authentication. Also, there were cases where residents - those bed ridden, ill or physically challenged - were unable to visit the service points of telecom service providers.
    Telecom operators have also been directed to deploy iris devices at "appropriate number of service points" so subscribers have access to iris authentication "within a reasonable geographical distance".
    This will be useful for people who face problem with fingerprint authentication, owing to poor fingerprint quality, disability or old age, the source explained.
    Aadhaar-based e-KYC is essential for subscribers going for new SIMs. Further, the government has asked mobile operators to re-verify existing prepaid and postpaid customers, with the help of the 12-digit unique identity number. The re-verification exercise is scheduled to be completed by early 2018.
    The Indian telecom market with subscriber base of over a billion is second-largest in the world after China.

BJP to observe November 8 as 'Anti-Black Money Day': Arun Jaitley
  • Finance Minister Arun Jaitley today said the Bharatiya Janata Party or BJP will observe November 8 as 'Anti-Black Money Day'. Last year on November 8, Prime Minister Narendra Modi had demonetised old Rs 500 and Rs 1,000 currency notes. In a press conference, the Finance Minister said that the Congress and other political parties have not understood the object behind the demonetisation.
    The Finance Minister stated the main objectives of the note ban and said the government wanted to reduce the quantity of cash currency, increase the taxpayers base, squeeze the terror funding and digitise the commercial transactions. Jaitley said confiscation of money was never the object of demonetisation. He also hit out at the Congress for calling the demonetisation the single biggest money laundering scheme.
    Jaitley said: "The Congress has not understood the object of demonetisation. The ownership of cash is not known, it is in the hands of anonymous owner. So when cash gets deposited in banks, what was being laundered earlier, now gets into the law books. So for entry into the lawful system, you are liable to pay tax. Those who had never paid taxes in their life, were happy with the laundering system."
    Arun Jaitley also said that the Congress had the adequate opportunity to be in power and yet it did not take any significant action to remove black money. He said the ownership of money before demonetisation was not known to the system, however, after November 8, the money that has come into the banking system is accountable to the authority.
    When asked about the Election Commission's decision to delay the poll dates for Gujarat, the Finance Minister said: "Just a couple of weeks ago when Rajya Sabha election in Gujarat happened, the Congress was singing praises for the Election Commission. Therefore, the Election Commission should not be browbeaten by a disgruntled and losing politically party."

Reliance Communications shares slide over 3% on wireless business closure reports
  • Shares of Reliance Communications fell by over 3 per cent today following a buzz that the debt-ridden company is planning to shut down its wireless telephony business.
    The stock went down by 3.24 per cent to settle at Rs 16.45 on the BSE. During the day, it tanked 5 per cent to Rs 16.15.
    On the NSE, shares of the company lost 2.94 per cent to close at Rs 16.45.
    Reliance Communications plans to shut down its loss-making wireless telephony business by November 30 and concentrate only on 4G Internet services, according to sources.
    "As already announced on October 1, 2017, RCom has decided to adopt a 4G-focused strategy for profitable growth of its wireless business. Accordingly, RCom will be optimising its 2G and 3G footprint, and related infrastructure and human resources, with effect from November 30, 2017," the company said in a statement.
    RCom said its "4G-led strategy will be executed, as at present, on the back of capital-light access to India s most extensive 4G mobile network, through already operational spectrum-sharing and ICR arrangements with Reliance Jio".

    Reliance Communications to 'call it a day' on its 2G mobile business; cut several jobs next month
    • Reliance Communications has decided to pull the brakes on its 2G mobile business within a month and show the door to several of its employees. Now, subscribers on 2G-network of the Anil Ambani-led telecom operator can either upgrade to 3G or 4G network or switch to a different operator.
      Reliance Communications will continue its 3G and 4G services till the time they remain profitable, industry sources told PTI. Employees of the debt-ridden telco have reportedly been told by RCom Executive Director Gurdeep Singh that the company has reached a "situation where we need to call it a day on our wireless business" and this means closing down the "wireless business 30 days from now".
      Reports indicate that Singh also talked about closing down company's DTH business once its license expires on November 21. The company will "continue to operate ILD voice, consumer voice and 4G dongle post paid services" and mobile tower business till the time they remain profitable and all the other business will be shut down, he has said.
      Reliance Communications was also looking for a buyer to take its DTH business off its hands. RCom shares tanked 5 per cent on the back of compnay's decision to close its DTH business. No comment on these matters has been received from Reliance Communications yet.
      The decision to can the 2G network comes on the heels of RCom's failure to close the merger deal with Aircel earlier this month. Burdened with a debt of around Rs 46,000 crore, the merger was expected to help lowering the debt. Back in September last year, RCom and Aircel had inked a binding agreement to merge their mobile businesses. But, on Sunday, RCom announced that the agreement had lapsed owing to legal and regulatory uncertainties, objections by interested parties and delays in receiving relevant approvals.
      While Aircel was one of the several possible transactions that Ambani was pushing for to reduce RCom's debt, the company said on Sunday that it will consider an alternate plan to cut debt, which includes sharing and trading of its spectrum or airwaves valued at about Rs 19,000 crore.
      Meanwhile, with Department of Telecom recently clearing merger of wireless business Shyam Sistema Teleservices Limited (SSTL) into RCom, the company stands to gain 30 MHz of 800/850 MHz band spectrum along with 2 million subscribers and additional annual revenue up to Rs 700 crore. The new spectrum will also allow RCom to accommodate existing users upgrading from 2G network to 4G.

    General Awareness

    Government to infuse Rs 2.11 lakh crore into PSU banks over 2 years

    • On October 24, 2017, Union Government announced to infuse Rs. 2.11 lakh crore capital over the next two years into public sector banks (PSBs). This announcement was made by Finance Minister Arun Jaitley post a cabinet meeting in which this recapitalisation plan was approved.
      Need for Recapitalisation of Public Sector Banks:
      On account of indiscriminate lending earlier, Indian public sector banks have accumulated high level of non-performing assets (NPS).
      • The NPA problem has been affecting the profitability of these banks and is thereby curtailing their ability to extend new loans.
      • Unavailability of fresh credit for private investment especially to small and medium enterprise is not only causing a slowdown in Indian economy but is also affecting employment generation.
      • Added to this woe was the demonetisation drive in November 2016 which sucked out 86% cash from circulation. This was followed by destocking by manufacturers ahead of Goods and Service Tax (GST) Implementation in July 2017.
      • Owing to these factors, in April-June 2017 quarter, Indian economy grew at 5.7% which is the weakest pace since 2014.
      • Thus the latest announcement of capital infusion in PSBs is a part of an attempt to boost up the economy and reinstate the growth momentum.
      Recapitalisation Plan – Breakup
      18000 crore out of Rs. 2.11 lakh crore will be funded through Government’s Indradhanush Plan. In 2015 Government had announced Indradhnush Plan to infuse Rs 70,000 crore in public sector banks over four years to meet their capital requirement as per Basel –III norms.
      • 35 lakh crore for recapitalisation will be raised through sale of recapitalisation bonds.
      • Balance amount will be raised by selling parts of Government stake in these banks.
      Expected Benefits:
      • The direct positive impact of this plan will be on banks’ balance sheets which may have to take a haircut post the ongoing insolvency proceedings.
      • MSME (Micro, small and medium enterprises) which are in Government’s priority list will now have access to enhanced credit facilities. This shall further help in creation of more job opportunities.
      • Post capital infusion, banks will become compliant with Basel – III norms of capital requirement.

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