Current Affairs Current Affairs - 25 November 2017 - Vikalp Education

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Current Affairs - 25 November 2017

General Affairs 

Northeast becomes the new hub for development, air connectivity projects on pipeline
  • As northeast becomes the new hub to perform and prove, the BJP government wouldn't leave any stone unturned. President Ram Nath Kovind on the occasion of North East Development Summit listed out the initiatives taken by the ruling government to improve the connectivity in the North eastern part of India.
    In a two day summit sources say the Manipur government has reportedly signed thirty nine memorandums worth Rs 4000 crores with various firms. Improved connectivity of the north eastern states with other parts of India can encourage economic and social integration.
    Union Civil Aviation minister Jayant Sinha announced few initiatives by civil aviation, among them 19 new airports or will be worked on underserved airports which include Rupsi airport in Assam, Meghalaya and Tura will be added to the aviation network of the country.
    Imphal will get a direct flight service to Delhi from 2018 January. 17 new heliports will be opened in the region.
    The DoNEAR Ministry is also planning to introduce a helicopter-based dispensary, OPD service in far-flung areas of the region by the beginning of the next year. It will start from Imphal and Shillong, places which have premier medical colleges from where doctors can move with equipments in remote areas in the whole region.
    "The Government of India's approach to the development of the Northeast is an urgent and speedy enhancement of connectivity. This is a multi-modal programme, across land, water and air," the president said.
    Assam Chief Minister Sarbananda Sonowal has suggested Bangladesh civil aviation Minister Rashed Khan Menon for initiatives to introduce a direct flight service from Dhaka to Guwahati.

Namami Gange funds to boost Yamuna cleaning as Nitin Gadkari takes charge
  • Soon after Nitin Gadkari took charge of the water ministry, National Mission for Clean Ganga approved projects worth nearly Rs 800 crore in seventh executive committee meeting, including a bumper package for cleaning Yamuna river in Mathura, UP.
    According to officials in water resource ministry, Namami Gange programme, PM Narendra Modi's pet project, includes cleaning of tributaries of Ganga as well.
    The Mathura project includes rehabilitation and renovation of sewerage scheme costing Rs 384.49 crore. It includes construction of one new 30 MLD (million litres per day) sewage treatment plant (STP) at Masani and rehabilitation of three STPs at different locations in Mathura.
    Other works are laying of sewer network, construction/renovation of sewage pumping stations, drain tapping and construction of tertiary sewage treatment reverse osmosis plant.
    An official said, "NMCG has taken a number of steps to clean river Yamuna, which is one of the main tributaries of Ganga and meets it at sangam."
    "While a special package for Mathura has been approved in the seventh executive meeting, projects to create adequate sewage treatment capacity in Delhi have also been approved. These projects would ensure that sewage water of Okhla drain and Najafgarh drain does not merge into Yamuna," the official added.
    In Delhi, the government has sanctioned seven STPs with total capacity of 94 MLD in Najafgarh at an estimated cost of Rs 345 crore under the 'Mail Se Nirmal Yamuna' project that was initiated on the directions of the NGT.
    A British-era sewage treatment plant dating back to the 1930s, Okhla drainage zone is also being replaced by a new treatment plant.
    The move has come in a bid to control the pollution-levels in the river Yamuna. These projects are being anchored by the NMCG as part of the Namami Gange programme.
    According to a senior official, the major task of keeping 2,525-km long Ganga clean is by ensuring that no polluted water enters the river. A major surveillance and monitoring plan has been drawn with various stakeholders through which all the polluting industries near the river banks will be regularly checked.
    The Clean Ganga Mission was allocated Rs 20,000 crore to be spent over five years. Out of which, about Rs 15,000 crore has been sanctioned so far, and out of this amount, only Rs 2,700 crore had been spent as of August 2017.

Vasco Da Gama-Patna Express derails: 3 dead, Piyush Goyal orders probe
  • Thirteen coaches of Vasco Da Gama-Patna Express 12741 derailed near Manikpur in Uttar Pradesh today early morning at 4:18 am. At least three people have been killed and 12 injured in the mishap so far.
    The Patna-bound train was coming from Goa's Vasco Da Gama. The fifth and sixth bogey of the train (sleeper class) from the engine side are reported to be the most affected.
    All the injured have been rushed to Chitrakoot District Hospital.
    Uttar Pradesh Additional Director General (law and order) said, "Prima facie the cause of accident looks like fractured railway track as per local assessment."
    Assuring all possible help to the affected passengers and their kin, Public Relations Officer (Indian Railways) Anil Saxena said, "We have accommodated the passengers in other coaches and they are being taken to the Allahabad sub-station. The ministry is closely monitoring the situation."
    He added that Railway Minister Piyush Goyal has expressed his condolences and has ordered timely and effective medical dispensation to all.
    "People have also been given some refreshments", added PRO Anil Saxena.
    Uttar Pradesh Chief Minister Yogi Adityanath has expressed grief over the death of passengers in the Chitrakoot train derailment.
    He conveyed his sympathies to the families of the victims and wished speedy recovery to those injured.
    Compensation of Rs 5 lakh has been announced for the kin of the dead, grievously injured are entitled to Rs 1 lakh whereas other injured passengers will get Rs 50,000 each.
    The Commission of Railway Safety has been ordered to inquire the Manikpur derailment and the Chairman Ashwani Lohani is on his way to the accident site.

Parliament Winter Session to be held between December 15 and January 5
  • After almost a month's delay, the Government finally announced that the Winter Session of Parliament will be convened from 15 December, one day after phase II of the Gujarat assembly elections. The decision was announced after a meeting of the Committee on Parliamentary Affairs (CCPA) was held on Friday morning.
    The CCPA decided the Winter Session of Parliament will end on January 5.
    After a meeting of the CCAP headed by Home Minister Rajnath Singh on Friday, Parliamentary Affairs Minister Ananth Kumar said, "We request and seek cooperation from all parties, including the opposition, for the smooth functioning of both Houses to make this session fruitful." The schedule announced means that for the first time in recent history, the Parliament will take a Christmas break. The government has been strongly contesting the opposition's charge that the winter session was delayed as the NDA wanted to avoid tough questions from the opponents in the middle of the crucial Gujarat polls. The opposition claimed the winter session which normally starts from the third week of November was delayed by the Government. The Government's counter was that there were several instances in the past when the winter session had started in December. Ananth Kumar had on Tuesday rejected the Congress's allegations of a "delay", citing precedents of the winter session held in December in 2008 and 2013 during UPA-II's rule.
    The Government has also tried to answer queries on what happens to the president's address in Parliament on the first day of the first calendar session of the year, usually the budget session.
    When asked whether a session which begins in December can continue in January without the customary address of the president, Finance Minister Arun Jaitley said, "The issue was settled long ago. If the session spilled over to January, it was not considered a fresh session. The president addressed the first session of a calendar year."
    The first few days of the session starting in the wake of the bitterly-fought Gujarat poll are expected to be tumultuous. The opposition wants to corner the Government on the Rafale fighter deal. The Congress, during UPA-II's tenure, faced regular fire from the BJP camp over corruption cases and plans to present the fighter jets deal on the lines of the Bofors scam which led to the decline in Congress's fortunes after which the party could never return with dominating numbers
    The second phase of Government vs Opposition friction during the session will start from the December 18 when results for the Gujarat and Himachal Assembly polls are announced. A BJP win in both or even just Gujarat will put fresh wind in the Government's sails. In that scenario, the Government led by the BJP may get aggressive using the poll verdict as a rejection of the Opposition's politics. If the BJP loses Gujarat or even fails to get a clear majority, the Opposition will get fresh ammo to target the Government on its economic polices.
    The Government meanwhile has several key legislation's lined up for the session. Top of its legislative agenda could be the law against triple talaq outlawed by the Supreme Court.
    The govt also plans to push the crucial bill pending in Parliament on the constitutional status of the National Commission for Backward Classes. The Government will also likely legislate the amendments to the insolvency and bankruptcy bill which were promulgated as an ordinance on Thursday to check benefits that wilful defaulters receive through the new exit laws.
    Another important bill high on the Government's agenda is the legislation for the hike in judges' salary.
    The Opposition plans to derail the Government agenda realising that from now on the NDA will step into poll mode-legislating with an eye on 2019 polls. The first salvo will be on the delay in the session. The Government however is trying to build a narrative that the delay is not unprecedented.

UP will celebrate another Diwali if BJP wins all municipal seats: CM Yogi Adityanath
  • With the second phase of UP Municipal elections to be held soon, the UP Chief Minister Yogi Adityanath is sparing no efforts to target Samajwadi Party and Bahujan Samaj Party.
    Addressing an electoral meeting in Firozabad, Yogi Adityanath said that in the Samajwadi Party rule, the Municipal Corporations of UP had become bases of corruption. Now these industries of corruption, Gundaraj, anarchy and kidnappings won't function.
    He said that the SP and BSP misused the power they had been entrusted with and illegally acquired land and religious sites. Now the Anti Bhoo-Mafia Task Force has been established and 1,63,000 cases have been registered under this task force on which action will be taken after the Municipal elections. Not only the Mafias will be forced to vacate the land, but the expense of this action will be also taken from them.
    CM Yogi told India Today that the BJP has governments in the centre and the state and if the BJP also wins the seats of Mayor, Corporator and Municipal Council Chairmans, the funds allocated for city development will be used judiciously and there will be no friction between the Mayors and Corporators. He said that if the entire Municipal board is formed of BJP supporters, the development will be on a fast-track.
    Yogi said that Firozabad will be going into Municipal Corporation elections for the first time and every vote will be instrumental in changing the destiny of Firozabad. If the BJP forms the local government of UP cities, then every city will celebrate this win like the Diwali celebrated in Ayodhya.
    Answering a question, he said that he had inherited a dying economy in UP. His government waived off farming loans of 46 lakh farmers as soon as they formed a government, which cost the exchequer 36 thousand crores. He said that in 2022 everyone in UP will have a personal residence. His government is forming a street vending policy in UP.
    Commenting on Yogi's electoral campaign senior Congress leader from Firozabad Saeed Patel said that it is surprising how the Chief Minister is using the state's resources for the campaigning of his party candidates in municipal elections whereas earlier, senior leaders of the state did not campaign in municipal elections. Patel said that senior politicians should not interfere in the local governance issues. He said that in 2019, the voters will bring the BJP down on the streets with the first blow being dealt on 1st December, when the Municipal results are announced in UP.

Business Affairs

2018 likely to see close to dozen states unfurl retail policies
  • It is no brainer when we say the retail industry has undergone a huge transformation. Look at the various channels through which it reaches you. There are mom and pop stores, malls, super markets, online platforms for e-commerce, door-to-door selling and even tele-shopping. Most also recognise that retail involves huge investments and employment. Consider this, a typical 500,000 sq ft shopping mall entails an investment of around Rs 500 crore, and there are least over 200 of them in the country. Include all the other sizes and categories of retail and the investments are huge. In terms employment, retail employs 43 million people in the country. These numbers, shared by Kumar Rajagopalan, chief executive officer, Retailers Association of India (RAI), only go to underline why this sector's growth could be critical for the economy and for enriching an ecosystem to attract top talent to any geography. 

    But then, as things stand, the regulations in this space have not kept pace with the changes the sector is undergoing in tune with consumer expectations. The sector needs more than the archaic laws like the Shops and Establishments Act. Fortunately, today, there are about a dozen states in the country that seem to have realised this and are working on state-specific retail policies. Three states - Andhra, Maharashtra and Karnataka have all taken a lead and announced policies - Andhra and Maharashtra in 2015 and Karnataka last year. Now, Telangana, which also has readied its policy, is expected to have it in place by early 2018. There are at least seven other states and includes states like Rajasthan, Gujarat and Uttar Pradesh, Uttarakhand, Goa, Harayana and Kerala that are also working on a retail policy. 

    "I think all states understand the importance of retail and the huge generator of employment that it. They also realise that retail is a public place where we deal with citizens and consumers. So, a good retail policy works out well," says Future Group CEO Kishore Biyani. He however, recognises that while most states have become proactive, "the policies across states will not be very different be it around opening and closing hours and about working for women."

    But the landcape is in for some major change. "By mid next year, at least a dozen states in India will have a retail policy each," says RAI's Rajagopalan. While most may make similar offerings, the shifts from the past seem quite fundamental and these have mainly to do with regulatory changes. According to Rajagopalan, the linknode running across most of the new state-specific retail policies is the focus on ease of doing business and enabling more women to work. What about the ease of doing business?  Consider this: if you are setting up a retail business, you typically need to get some 40 to 50 licenses or permission. He says, looking at the policies that the three states have announced so far. All have created a system wherein licences can be obtained much faster and with a guarantee with everything e-enabled now. So, from licence for trading to those relating to labour laws can be obtained in a hassle-free manner. The point is licencing has become much easier and most of it online. Second, there is relaxation in the opening and closing hours. The third change is recognition that women, who arguably understand products better and are more sensitive to customer needs, contribute substantially to the growth of this sector and therefore, while employee safety norms and standards are in place, the regulations have been changed to enable women to work also at later hours of the day. Earlier, they could at best work till only 8.30 pm.

    But what makes women so important for retail?  They are not only an important customer segment but they seem to be good at also handling retail business operations. Consider this: "Globally, over 50 per cent are women employees in retail. In India, it is still at around 20 per cent," says Rajagopalan. So, we have some distance to cover here. But we seem to be moving there. While announcing the launch of the experiential store in Hyderabad on November 22, Swedish home furnishing major IKEA, announced that 50 per cent of their employees in the Indian stores would be women. In Hyderabad, where the store is to open in spring next year, is to employ around 800 people in all.

Insolvency & Bankruptcy Code to help address NPA issue in banking sector
  • Insolvency & Bankruptcy Code is likely to play an important role in addressing the non-performing assets (NPA) of the banking sector. The banking sector is facing issues due to the bad loans on its books, which have created a risk of capital erosion. NPAs have also constrained the banks' ability to lend. Credit is an important ingredient of economic growth and the lack of credit could lead to economic contraction. It's not just public sector banks that are staring a mountain of NPAs - private sector banks are also taking a hit.
    As many as 21 listed PSU banks have a combined gross NPAs of Rs 7.3 lakh crore at the end of Sep 2017 quarter. They grew by more than 27% as compared to Sep 2016 quarter. SBI has the highest share of bad loans (25.4%), followed by Punjab National Bank (7.8%) and IDBI Bank (7%). The average Gross NPA ratio - the ratio of bad loans to total advances - of PSU banks has seen a spike, from 12.04% in Sep 2016 to 14.4% in September 2017.
    Although private sector NPAs do not seems to be that huge compared to public sector banks, in terms of growth they have surpassed public sector banks. As many as 17 listed private sector banks have combined gross NPA of Rs 1.06 lakh crore at the end of Sep 2017 quarter. That represents a growth in NPAs of more than 40%, compared to September 2016 quarter. ICICI Bank has the highest share of gross NPAs (41.8%), followed by Axis Bank (25.8%) & HDFC Bank (7.2%) at the end of Sep 2017 quarter. The average gross NPA ratio for private sector banks jumped from 3.6% in September 2016 to 4% in September 2017.

Scooters script a renaissance as mobikes suffer a mid-life crisis
  • It is a classic case of history repeating itself. Nearly two decades after fast and fancy motorcycles spelled the doom of the humble scooter, the latter has made a resounding comeback and the motorcycles are getting a taste of their own medicine. Over the last decade, scooters sales in India have grown at a scorching 20 per cent compounded annual growth rate (CAGR), more than double that the sub 8 per cent rate of the motorcycles. In the process, their share has grown from a low of 11.95 per cent in 2006-07 to almost 34 per cent today while mobikes have seen a decline from 83 per cent to 62 per cent in the same period.
    These aren't the same Humara Bajaj vehicles that were ubiquitous in the 1980s and early 1990s though, but are much different creatures. The scooter of today is gearless, offering much more power, space and comfort. It is also a lot more stylish with modern features like an electric start ignition, pliant suspension and a fuel economy to rival any mobike.
    Largely spearheaded by the Honda Activa, country's largest selling scooter for over a decade, it is the commuter oriented "fill it shut it forget it" Splendor, which decimated scooters at one point of time, that is feeling the heat now. In 2016, Activa ended Splendor's long reign as the largest selling two-wheeler in the country and has quickly established such a lead--over 400,000 units in this fiscal so far, that the rivalry has fizzled out even before it could blossom.
    The growth of scooters has also been propped by favourable demography and improving per capita income in the country. Initially, scooters were the preferred mode of transport for urban women and students in big metros and cities. In 2008, women constituted 40 per cent of scooter consumers in the country. In the past few years however, a number of "male-specific" scooters like Hero Maestro, Honda Aviator, TVS Jupiter and Yamaha Ray Z were launched. At the sametime, scooters also established itself as the primary product for families due to its greater utility vis a vis a mobike. As a result, the ownership is more broad-based today and women constitute only 20 percent of sales.
    Further, better road infrastructure in hinterlands of the country has seen scooters penetrate in small towns and villages as well. While its attractiveness is congested and more cosmopolitan metros and state capitals remains high--share of scooters in big cities was 28 per cent in 2009-10, 40 per cent in 2012-13 and over 50 per cent in 2015-16, its tier I cities also it has grown from 26 per cent to 32 per cent to over 40 per cent in the same time. Similarly, in rest of the country the share has grown from 19 per cent in 2009-10 to 28 per cent in 2015-16.
    So, how far further will the scooter carry itself? In global markets except China, which is completely electric, scooters outsell motorcycles with a 55:45 split in sales. In Indonesia, world's third largest two wheeler market after China and India, step third and scooters account for 86 per cent of the market. Increased urbanisation, better infrastructure and improving economic gender parity are all factors that work in favour of scooters. There may be a case for scooters completely taking away the voluminous commuter segment that used to be the citadels of Splendor and Passion of the yore restricting mobikes for higher specification categories targeted at the enthusiasts and adventure seekers. The mobikes may be faster on the road, but for now, there is no stopping the scooter.

Bata India falls 3% intraday after Motilal Oswal downgrades stock to sell
  • The Bata India stock fell 3 percent intraday in trade on Friday after brokerage Motilal Oswal downgraded the stock to 'sell'.  The brokerage has given target of Rs 578, a downside of 23 percent compared to the current price.
    At 11:49 am, the stock was trading 1.86 percent or 14 points lower at 734 level on the BSE. The stock closed 0.92 percent lower at Rs 741 on the BSE. The stock is up 82.74 percent on an yearly basis. It rose 65 percent since the beginning of this year
    The brokerage said Bata India is banking on premiumization of products to raise average realisation.
    "The intent is to expand average realization through premiumization and increase the revenue contribution of premium products from 30% to 45% in FY18. However, with subdued growth in 1HFY18, we expect the ramping up of premium products' contribution to get pushed to FY19, with marginal margin expansion of 70bp in FY18 to 12% and 100bp thereafter to 13% in FY19," the brokerage said in a report.
    It also commented on the revenue growth of the firm during the first half of FY18.
    "Considering subdued revenue growth in 1HFY18, we cut our revenue estimates by 4% for FY18 and by 6% for FY19. We keep our earnings estimates unchanged. We expect revenue CAGR of 9% and PAT CAGR of 19% over FY17-19," the brokerage's report added.
    The stock hit a fresh 52-week low of 400 on November 25, 2016 on the BSE. On November 1, 2017, the stock hit a 52 week high of 833 level on the BSE.

    7th Pay Commission: No minimum pay hike for central government employees?
    • Central government employees vying for increase in their minimum salaries may be left disappointed if reports of Ministry of Finance sources saying the government has no plans to increase their minimum basic pay are true. According to reports circulating in the media, anonymous sources from the ministry have said there are slim chances of the government revising the minimum basic pay of the Central government employees. The government staff unions have been demanding that their minimum pay is hiked to Rs 26,000 from Rs 18,000 that was defined on recommendations from 7th Central Pay Commission.
      Reports quoting Finance Ministry sources stated that the government has no plans to make any changes to the minimum basic pay for central government employees with reference to the Department of Personnel and Training (DoPT) letter to Staff Side, National Council (JCM) dated October 30, 2017. The letter stated that the minimum wage decided by the 7th Pay Commission does not qualify as an anomaly as per the parameters set by the National Anomaly Committee (NAC).
      The NAC had laid down three conditions for an item to be considered an anomaly arising on account of recommendations from the 7th Pay Commission. Finance Minister Arun Jaitley had earlier suggested that a hike in minimum basic pay for central government employees was in offing. With NAC setting aside the matter as of now, the Cabinet is unlikely to take a decision on changing the minimum basic pay for central government employees either. Several employee unions had staged a three-day dharna earlier this month to protest against the delay in minimum wage hike.
      The 7th Pay Commission had decided on a fitment factor of 2.57 which resulted in the minimum basic pay increasing from Rs 7,000 to Rs 18,000 with effect from January 01, 2016. The representatives of central government employees, on the other hand, have been demanding the fitment factor to be bumped up to 3.7 so that the minimum wages are raised to Rs 26,000. Expressing dissatisfaction over the methodology to calculate the minimum wages, the Staff Side had even asked for the pay matrix to be altered.
      Meanwhile, there still is a chance for an increase in minimum pension of retired central government employees. The same NAC letter also asks the government employees representatives to take up the matter with Director of Pension as the matter falls under his purview.

    General Awareness

    President approves ordinance to amend Insolvency and Bankruptcy Code

    • On November 23, 2017, President Ram Nath Kovind gave his consent to an ordinance to amend the Insolvency and Bankruptcy Code (IBC). This ordinance will now be presented in the upcoming Winter Session of Parliament. The provisions of this ordinance are aimed towards preventing misuse of IBC by unscrupulous, undesirable persons.
      Key Provision of the ordinance to amend the Insolvency and Bankruptcy Code (IBC):
      Wilful defaulters, whose accounts have been classified as non-performing assets (NPAs) for one year or more and are unable to settle their overdue amounts including interest will be considered ineligible to be a ‘resolution applicant.’
      • As per the official statement, sale of property to a person who is ineligible to be a resolution applicant has been barred and violations of this norm will attract fine ranging from Rs. 1 lakh to Rs. 2 crore.
      • Those who have executed an enforceable guarantee in favour of a creditor, in respect of a corporate debtor have also been termed as ineligible to be a ‘resolution applicant’.
      • Even promoters or those in management of control of the resolution applicant, have been included in the list of ineligible person to be a ‘resolution applicant’.
      • The new sections to be added in the IBC through the ordinance not only restricts such persons to participate in the resolution or liquidation process, but also stipulates that Committee of Creditors (CoC) should ensure the viability and feasibility of the resolution plan before approving it.
      • It has also been laid out that a resolution plan, which is yet to be approved, involves a resolution applicant who is not eligible as per the new norms, should be rejected by the CoC.
      Quick Facts about Insolvency and Bankruptcy Code, 2016 (IBC):
      • IBC is the bankruptcy law of India which provides a time-bound insolvency resolution process.
      • It came into effect in December 2016.
      • First insolvency resolution order under Insolvency and Bankruptcy Code, 2016 was passed in August 2017.

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