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Current Affairs - 26 January 2018

General Affairs 

India Stands With ASEAN For Rules-Based Regional Architecture: President Ram Nath Kovind
  • India stands "shoulder-toshoulder" with ASEAN in pursuit of a rules-based regional architecture that is open, inclusive and equitable, President Ram Nath Kovind said today.

    Mr Kovind received the ASEAN heads of state and government at the Rashtrapati Bhavan and hosted a lunch in their honour.

    The president, on the occasion, said that India's 'Act East policy' reinforces its ancient links with Southeast Asia through enhanced political, security, economic and cultural ties.

    "In this context, India greatly values ASEAN's role as a proponent of peace, stability and prosperity in the region,"

    President Kovind said and reiterated India's support to ASEAN's unity and centrality.

    "We stand shoulder-to-shoulder with ASEAN in pursuit of a rules-based regional architecture that is open, inclusive, balanced and equitable," he said.

    The president said that India and ASEAN are bound by history and geography.

    "Culture, commerce and connectivity -- and ideas and thought -- have woven us together in one common fabric. Our partnership is based on our shared heritage and is built on the foundation of strong people-to-people contacts, nurtured through the millennia," he said.

    Kovind said that India-ASEAN relations have come a long way since India established a dialogue partnership with ASEAN on January 28, 1992.

    ASEAN is a strategic partner for India, he said.

    "We have 30 dialogue mechanisms between India and ASEAN, including annual summits and seven ministerial meetings in a wide range of sectors," Kovind said.

    The Association of Southeast Asian Nations (ASEAN) comprises Thailand, Vietnam, Indonesia, Malaysia, the Philippines, Singapore, Myanmar (Burma), Cambodia, Laos and Brunei.

    The 10 ASEAN heads of state and government who visited the Rashtrapati Bhavan included Brunei's Sultan Haji Hassanal Bolkiah, Indonesian President Joko Widodo, Philippines President Rodrigo Roa Duterte, Cambodian Prime Minister Hun Sen and Singaporean Prime Minister Lee Hsien Loong.

    Malaysian Prime Minister Najib Razak, Thailand's Prime Minister General Prayut Chan-o-cha, Myanmar's State Counsellor Aung San Suu Kyi, Vietnamese Prime Minister Nguyen Xuan Phuc and Lao PDR's Prime Minister Thongloun Sisoulith also attended the lunch.

    These leaders are in India to attend the ASEAN-India Commemorative Summit.

    They will also  be guests of honour at India's 69th Republic Day celebrations on January 26.

'Make In India' Can't Be Termed Protectionist: Piyush Goyal
  • As global leaders flag concerns over protectionist measures introduced by the US and some other countries, Union minister Piyush Goyal has said 'Make in India' cannot be termed as protectionism and the country wants to share its prosperity with everyone in the world.

    At the World Economic Forum (WEF) Annual Meeting, Mr Goyal said India has positioned itself as a global statesman in the context of prevailing concerns relating to a fractured world.

    "India has always believed in sharing our prosperity with the rest of the world. 'Vasudhaiva Kutumbakam' (the world is one family) has been our credo since times immemorial.

    "Even now when we talk of Make in India, we are offering a platform where India has a competitive advantage compared to other countries. It's a very attractive place to do business and a large market," Mr Goyal told PTI in an interview in Davos.

    "Therefore, the Make in India programme is not protectionist as it is an opportunity for the world to get the best talent and the best pricing and the best of technology to serve all the people of the world," he said.

    Asked about the America First programme which has seen top companies being asked to bring oversea jobs and profits back to the US, Mr Goyal said India never does anything like that and believes in sharing growth and prosperity with all the stakeholders.

    "We don't tax worldwide income, we don't have those kinds of restrictions on capital flows which many parts of the world have introduced.

    "In that sense we are a very liberal economy and a very attractive economy to invest in and an economy that shows great potential for the days to come," he said.

    A number of global leaders, including Prime Minister Narendra Modi as well as Germany's Angela Merkel and France's Emmanuel Macron, in their speeches here have openly criticised protectionism and the threats being faced by globalisation from inward-looking economic policies of some countries. 

Eye on China, PM Modi Talks About Rules Based Order For Oceans And Seas
  • As the 10 leaders of the Association of Southeast Asian Nations (ASEAN) met Prime Minister Narendra Modi for the India-ASEAN summit, the emphasis on maritime security was a clear message to China. With Chinese expansionism on the rise, India's policy has shifted from 'Look East' to 'Act East'.

    "A rules based order for oceans and seas, respect for international law, is critical for peace. We are committed to working with ASEAN for maritime cooperation", PM Modi said in his opening remarks, adding that maritime cooperation was a key focus at a retreat of all leaders earlier in the day. In that retreat, there was an agreement to set up a mechanism on maritime cooperation. The summit that marks 25 years of India-ASEAN partnership was attended by the leaders of Thailand, Vietnam, Myanmar, Indonesia, Malaysia, the Philippines, Singapore, Cambodia, Laos and Brunei.

    India's outreach to South East Asian nations is significant given the shadow of China's dominance in the region. Security, connectivity, terrorism and trade were the key focus in talks.
    China today reacted cautiously to the summit. "We are okay with India developing friendly and cooperative relations with ASEAN countries. We hope all countries can work together for peace, stability and development of the region," the Chinese foreign ministry spokesperson said in Beijing.

    India still has a long way to go in order to counter China's influence in the region. According to official data, India-ASEAN trade for 2016-17 was $71 billion, in comparison to the $470 billion trade with China. In 2016, India invested $1 billion in ASEAN as compared to $10 billion by China.

    All 10 ASEAN leaders will be chief guests are the Republic Day parade tomorrow, a historic first for India.

$5 Billion Missile Deal Being Negotiated With India, Says Russian Official
  • Even as Russia has started delivery of the S-400 Triumf air defence missile to China, negotiations for the sale to India of the multi-barrel system with a range between 40 km and 400 km are at an "advanced stage" and should not be hurried up, a top Russian official has said.

    In an interview to IANS, Sergey Chemezov, CEO of Rostec Corporation, which was formed over a decade ago to consolidate strategically important companies, said it is important not to "rush" with the contract, and give both parties time for the negotiations.

    "Discussions on this contract are at an advanced stage. Currently, the technical details of the contract are being discussed," said Chemezov of the deal, pitched to be worth Rs. 39,000 crore ($5.5 billion) for "the supply of the most modern equipment for strategic purposes".

    "The inter-governmental agreement on this project was signed in Goa just one year ago," Chemezov noted, adding, "It is important not to rush things and give both parties time for negotiations."

    The deal was signed during Russian President Vladimir Putin's visit to India in October 2016, and negotiations are being conducted on factors like technology transfer, the final price and training of personnel before the contract is finalised.

    According to Indian Defence Ministry officials, the delivery of the missile system will begin two years after the contract is finalised. India had initially planned to buy at least 12 S-400 systems but pared this down to five.

    Sources had also said that India was ready to waive the offset clause to speed up the delivery. The clause requires the reinvestment of 30 per cent of the contract's value within the country.

    "This is a very complex contract with many technical specifications and variables, as well as pricing conditions, production and delivery schedules. Everything must be carefully coordinated," Chemezov said.

    "I am confident that as soon as the negotiations are completed, the contract will be signed. The work is proceeding according to plan and its pace fully meets our expectations," he added.

    The S-400 is designed to eliminate flying targets at an altitude of up to 30 km, including those incorporating stealth technologies. It is enough to secure an area roughly the size of the National Capital Territory of Delhi -- almost 1,500 km sq.

    A single regiment of the S-400 missile is usually divided into two smaller battalions fielding, with tracking and search radar systems, eight launchers, 112 guided missiles and command and support vehicles.

    The missile, which can simultaneously engage up to six targets, has been deployed in Syria, where Russia is targeting the Islamic State.

    China had signed a contract for the S-400 in 2014 and, according to Russian news agency TASS, the deliveries have started. Beijing was the first international customer of the missile system.

    Apart from China, the missile system has also been bought by Turkey, which has inked a deal for four S-400 batteries for around $2.5 billion.

    Russia has said that several other countries, including nations in West Asia and Southeast Asia, have also evinced interest in the S-400.

60-Crore Trial Run Of High-Speed Mumbai Train Is A Failure
  • The dreams of a high-speed local train have crashed and burned. The special rake was supposed to have a running speed close to that of Gatimaan Express, India's fastest train. But after pouring Rs. 60 crore and six years into building it and conducting trial runs, the railway authorities have finally admitted that the so-called high-speed train is barely faster than a regular local.

    According to Rail Designs and Standards Organisation, the train failed trial runs at 140 kmph due to faulty bogie design

    The Western Railway (WR) started testing the high-speed MRVC 1181 train in 2012, but all these years, officials remained tight-lipped on why it hadn't been pressed into service. It is only now that the authorities have responded to RTI (Right To Information) queries, admitting that the Rs. 60-crore rake is a complete failure.

    Mumbaikars were promised a train that would run at speeds of 140-145 kmph, close to the speed of Gatimaan Express (160 kmph). Instead, Mumbai's fastest train has been dying a slow death as it sits abandoned at the Virar car shed. Its parts have been stripped and used on other trains that are in operation. Now, the officials have decided that the rake will run at the same speed as any other local - at a humble 80 kmph.

    This information came to light through a series of responses this month to a commuter activist's RTI applications to WR, the Mumbai Railway Vikas Corporation (MRVC), and the Lucknow-based Railway Designs and Standards Organisation (RDSO).

    Contradictory answers

    The trials were conducted between Mumbai, Virar and Dahanu, but all three organisations have given contradictory information on the number of trials conducted. WR's reply stated only that trials were conducted at variable speeds, and sanctioned speed was 145 kmph. MRVC's reply stated that two trials were conducted on the Virar-Dahanu section, and that they were not successful. This response also added that the train will be put into regular service after necessary modifications. There was no mention of the trial speed.

    The reply from RDSO said that three trials were conducted, and the train failed at 140 kmph, which was the top speed for testing. RDSO's response further explained that the train failed the trial runs because of a fault in the design of the bogie (the undercarriage and wheels).

    While the high-speed rake looks similar to the other locals, it is the bogie that would have made all the difference. It's frame and technology was bought from Siemens, Austria, as part of the R4,500-crore Mumbai Urban Transport Project (MUTP). The train would have cut down the travel time for longer distances to Dahanu, Karjat and Kasara by at least 20 to 25 minutes.

    Dead weight

    The train was rolled out by the Integral Coach Factory (ICF) in Chennai. The nine-car rake was filled with heavy bags of sand and debris during the test runs. "The bags were equal to the weight of a crowded train. Trials were conducted till a few years ago, but now the train has just been standing here," said an official at the Virar car shed. The train has now been cannibalised, as most of its functional parts, like lighting, seating and other accessories, have been used as replacements for existing running trains.

    Railway officials now claim that they had only planned to conduct trials with the rake, and it was never intended to be pressed into service. "There are limitations within the city for such high-speed travel, given the back-to-back line up of the trains in the saturated suburban system and the quality of tracks. But, it is easily possible outside city limits, at the Dahanu and Kasara-Karjat stretches. However, the tracks too need to be equipped to cater to such speeds," said an official.

    No officials were willing to speak on record about the project, and there was no explanation for why the authorities spent Rs. 60 crore on a train that was only meant to be used for trials. It seems all the more wasteful now, considering the success of the new Bombardier rakes, which are capable of running at about 110 to 120kmph, and cost nearly Rs. 10 crore less to make.

    160 kmph

    Speed of Gatimaan Express, the nation's fastest train

    140 kmph

    Speed at which the high-speed local failed

    120 kmph

    Speed that the Bombardier rakes are capable of

    145 kmph

    Speed that was promised

    80 kmph

    Regular speed at which the special train will now run

Business Affairs

India, ASEAN to work towards enhancing trade, says Modi
  • Prime Minister Narendra Modi on Thursday said India and the ASEAN will work towards further enhancing trade that has touched USD 70 billion, growing 25 times in the last 25 years.

    Highlighting the importance information and communication technology, he said it will forge new bond of digital connectivity between India and Association of Southeast Asian Nations (ASEAN) and help connect remote areas.

    The nature of ASEAN-India partnership has evolved significantly, he said, while proposing a dialogue on digital financial inclusion and investment promotion to deepen understanding and cooperation in financial matters.

    "Our trade has grown 25 times in 25 years. Investments are robust and growing. We will further enhance trade ties and work towards greater interaction among our business communities," Modi said at the ASEAN-India Commemorative Summit here.

    Trade between the 10-nation regional block and India has grown to USD 70 billion 2016-17, he said, adding that investments between ASEAN and India are robust and growing.

    The ASEAN comprises Thailand, Vietnam, Indonesia, Malaysia, the Philippines, Singapore, Myanmar (Burma), Cambodia, Laos and Brunei.

    With regard to information and communication technology cooperation, the Prime Minister emphasised on a new area of cooperation through a regional high capacity fibre optic network to digitally connect remote areas.

    "India offers to undertake a pilot project on rural connectivity which will create digital village in Cambodia, Laos PDR, Myanmar and Vietnam. Success of this project could be replicated in other ASEAN countries," he said.

    Modi also put forth India's offer for a training programme for professionals from ASEAN countries on telecom and networking technology to share best practices in policy, regulation and technological development.

GST revenue for December rises to Rs 86,703 crore; halts 2-month reverse trend
  • Reversing the two-month trend, the GST (Goods and Services Tax) revenue collection for December has gathered momentum by registering around Rs 6,000 crore growth as compared to the November collection. The total collection for the month of December - received till January 24 - is Rs 86,706 crore. Though the GST Council headed by Finance Minister Arun Jaitley on January 19 cut the tax rate on 29 goods and 54 categories of services, its effect on the overall the GST revenue would be known in next month data.  

    "Total revenue Collections under GST for the month of December 2017 (received in December 2017/January up to January 24, 2018) has been Rs 86,703 crores till January 24 2018," the Ministry of Finance said in a tweet. The ministry said one crore taxpayers have registered under the GST till January 24, of which 17.11 lakh are composition dealers which are required to file returns every quarter.

    A total of 8.10 lakh returns were filed by the composition dealers paying a total of Rs 335.86 crore as the GST. For the composition dealers, the last date of filing GSTR 4 Return for July-September (quarter) 2017 was December 24.  

    As many as 56.30 lakh GSTR 3B returns have been filed for December till January 24, added the ministry. For the October-December (2017) quarter, the last date for filing GSTR 4 Return was January 18, 2018. A total of 9.25 lakh returns were filed by Composition Dealers for this quarter paying a sum of Rs 421.35 crore as the GST, the ministry said.


    The government had attributed the downward trend in the GST tax revenue in the past two months to three factors. One was that in the first three months, there was an additional flow of the IGST (Integrated Goods and Service Tax) due to the first-time requirement of paying the IGST on transfer of goods from one state to another state even within the same company. As and when the final transaction of these goods takes place, the credit for IGST is being utilized for payment of SGST and CGST and therefore, the inflow of new taxes is low, it explained.

    Another reason for decline in the GST revenue was the fall in overall incidence of taxes on most of the commodities. Also, the tax administration of the GST is based on self-declared tax returns, in which the assessee decides on his own how much tax liability he has and claims input tax credit as per his own calculations.


    GST Council member and Bihar Finance Minister Sushil Modi said on January 18 that some dealers were evading taxes by suppressing turnover, which caused a revenue slump under the composition scheme. "We are surprised to find out that the total revenue collected was just Rs 310 crore in the past two months, despite 7.5 lakh composition dealers having filed returns," he said, adding that this decline meant the composition dealers were evading taxes. Under the composition scheme, tax payers with a turnover of up to Rs 1.5 crore have the option of paying a minimal rate of tax and filing a simplified tax return.

    The GST collection numbers for the month of November, received till December 25, was Rs 80,808 crore. A sum of Rs 83,346 crore was collected as the total revenue collection under the GST for October, received during November. The revenue collected under GST during October for September was Rs 95,131 crore, while the corresponding figure for August was of Rs 93,141 crore.

AAI awards 325 routes to 15 operators; 56 new airports, helipads to be connected under UDAN 2
  • In June 2016, the Narendra Modi government launched the National Civil Aviation Policy, the first comprehensive policy on civil aviation, with great fanfare. It not only aimed to make regional air connectivity a reality but also make flying affordable for the masses along the way - think airfare capped at Rs 2,500 per seat per hour. The Regional Connectivity Scheme (RCS), also known as UDAN (Ude Desh Ka Aam Nagrik), thus took off in 2017 with five airline operators being awarded 128 routes in the first round of bidding.

    And yesterday, the government announced results of second round of bidding under the scheme: The Airports Authority of India (AAI), the implementing agency, has awarded 325 routes to 15 airlines and helicopter operators. In the bargain, 25 new airports and 31 new helipads will now be connected to the existing network. "This is the first time that helicopter [services] are coming under Udan," said Civil Aviation Minister Ashok Gajapati Raju.

    The emphasis this time round was on enhancing air connectivity to hilly and remote areas with poor roads and possibly zero train network. A whopping 40% of the total routes in UDAN 2 were awarded to the newly-created category of 'priority areas' that include Jammu and Kashmir, the hill states and the Northeast apart from Andaman and Nicobar Islands and Lakshadweep Islands. With this, the government aims to connect around 41 airports and helipads in Arunachal Pradesh, Assam, Manipur, Jammu and Kashmir, Himachal Pradesh and Uttarakhand.

    Of the 19 states that stand to benefit from UDAN-II, Uttarakhand leads the pack with 15 airports and helipads coming under the scheme. Sikkim, likewise, has much to cheer with flights set to connect Pakyong to Delhi, Guwahati and Kolkata. Then there is Kargil airport, which so far was used only for defence-related flights. The timeline set for 75% of the new routes is reportedly six months-the remaining will take longer.

    "There has been an astounding increase in regional aviation and an explosion of connectivity in previously unserved areas since the commencement of the UDAN programme one-and-a-half years ago," said Minister of State for Civil Aviation Jayant Sinha at a programme awarding the winning bids. According to Raju, UDAN 1 and 2 have added around 80 airports-the country previously had 75 airports connected by scheduled airlines. The number of passengers flown may be rather underwhelming-UDAN has only added 3-4% to the total passenger trips in the country-but it's a step in the right direction.

    On the reason for the disappointing numbers is that Air Odisha Aviation and Air Deccan, which had bagged the lion's share of routes in the first round of bidding, are reportedly yet to start flying on a majority of them. In UDAN 2, of the 90 proposals awarded to 13 airline companies for fixed-wing aircraft operations, the maximum have been bagged by Interglobe Aviation, the parent company of IndiGo Airlines, followed by SpiceJet. Among the major aviation players, Jet Airways, too, bid for routes. Meanwhile, Pawan Hans has scored maximum in the helicopter proposals category. Let's hope they take to the skies sooner.

    The scheme is being part-funded by AAI, which has given Rs 200 crore in the current fiscal and is likely to contribute Rs 500 crore in the next fiscal. This contribution will come from the dividend that AAI pays to the government annually, in addition to the levy of Rs 5,000 per flight being imposed on non-RCS operations.

    The second round of RCS will need Viability Gap Funding (VGF)-government subsidy basically--of Rs 620 crore, while the first round required Rs 213 crore. According to Raju, it was encouraging to see that many participants in UDAN 2-like SpiceJet and IndiGo-sought no subsidy. "This tells us that the scheme is getting the desired result and that it will not require any subsidy after some time and is moving towards self-sustainability," he added.

LIC Mutual Fund's new SIP plan offers option to invest with Rs 300 a day
  • State-owned insurance group LIC (Life Insurance Corporation) has launched a daily SIP scheme that can be started with an investment of amount as low as Rs 300 per day. The scheme has been launched to expand LIC's Systematic Investment Plan portfolio to 30 per cent. Mutual Fund SIP (Systematic Investment Plan) is a safer way to invest in equity without even worrying about market conditions. In SIP, you can invest a pre-determined amount in mutual funds for a specific time and get a return.

    The company says in addition to investing on hybrid schemes like LIC MF Balanced Fund and LIC MF Monthly Income Plan, you can choose from the company's five different equity schemes - LIC MF Equity Fund, LIC MF Growth Fund, LIC MF Midcap Fund, LIC MF Infrastructure Fund and LIC MF Index Fund. The company hopes that after the rollout of this scheme, its SIP inflow would increase from Rs 23 crore to Rs 30 crore every month.

    "Through daily SIP, the fund house is trying to promote the habit of investing daily and the aim is to create wealth through investing daily with a minimum sum of Rs 300 across 22 working days, which will lead to a monthly investment of Rs 6,600," LIC MF said in a statement.

    LIC Mutual Fund chief marketing officer Rajesh Patwardhan said the current financial year has seen a surge of 56 per cent in mutual funds through SIP investments. "Mutual Fund SIP is gaining recognition among the investors as it encourages investing in a disciplined manner without worrying about market volatility and timing the market," Patwardhan said. "We believe that while SIP is a better route to invest in equity, daily SIP will further help in beating the market volatility and benefit our investors from rupee cost averaging," he added.


    First of all, become KYC compliant by logging online through eKYC. You also need to submit address proof, PAN card and identity proof.

    Select a right intermediary or asset management company (AMC) and choose an SIP plan that suits according to your earning.

    Decide how much you can spare to invest on regular intervals (daily, weekly or monthly). Some companies also offer services like automatic deduction at the select date from your bank account.

    After completing all the formalities, submit your form to the intermediary and AMC.

Sensex, Nifty snap six-day gaining streak amid January derivatives expiry, SBI top loser
  • The Sensex and Nifty snapped their six-day gaining streak and closed lower in volatile trade on derivatives expiry for January.

    While the Sensex closed 111 points lower to 36,050, Nifty closed 16 points lower at 11,069 level.

    ICICI Bank (1.60%), Coal India (1.56%) and Kotak Mahindra Bank (0.99%) were the top gainers on Sensex.

    State-run lender SBI (4.96%) was the top Sensex loser a day after the government moved proposal to infuse additional grant of Rs 88,139 crore - Rs 80,000 crore through Recap Bonds and Rs 8,139 crore as budgetary support - for 2018 under the public sector banks recapitalisation plan.

    Large state-run lenders slid as they stood to receive less money than expected from a government recapitalisation plan.

    Other major Sensex losers were Adani Ports (2.37%) and Dr Reddy's (2.26%).

    Market breadth was negative with 1702 stocks closing lower against 1145 rising on BSE. 165 stocks were unchanged.

    Midcaps and small cap stocks indexes on BSE were the top losers falling 134 points and 132 points, respectively.

    Bank Nifty recovered 300 points from day's lows to close 47 points higher at 27,445. The index earlier hit a lifetime high of 27,522 level.

    BSE auto index was the top loser among 19 sectoral indexes falling 305 points to 25,670 level.

    Overall sentiment was cautious as investors awaited the annual budget for the fiscal year starting in April to be unveiled on February 1.

    Expiry of monthly derivative contracts at the end of the session, after indexes hit record highs in each of the six previous sessions, also kept sentiment in check.

    "Markets are usually volatile on the settlement date for futures and options contracts. Now, markets are waiting for the annual budget," said R.K. Gupta, managing director at Taurus Asset Management.

    Investors booked profits in IT stocks, with the Nifty IT index slipping 1.9 percent after gaining in the last seven sessions. Infosys Ltd fell 2 percent while Tata Consultancy Services Ltd slid 2.2 percent.

    Meanwhile, Biocon Ltd fell as much as 5.4 percent after posting a 46 percent drop in third-quarter profit.

General Awareness

Conservation, environmental pollution and degradation, environmental impact assessment.
Environmental Performance Index

  • A report titled ‘Reward Work, Not Wealth’ has been released by the international rights group Oxfam. The report reveals how the global economy enables wealthy elite to accumulate vast wealth even as hundreds of millions of people struggle to survive on poverty pay.

    Highlights of the report:

    The richest 1% in India cornered 73% of the wealth generated in the country last year. Besides, 67 crore Indians comprising the population’s poorest half saw their wealth rise by just 1%. The wealth of India’s richest 1 per cent increased by over Rs. 20.9 lakh crore during 2017, an amount equivalent to total budget of the central government in 2017–18, Oxfam India said. This presents a worrying picture of rising income inequality.
    Globally, 82% of the wealth generated last year worldwide went to the 1%, while 3.7 billion people that account for the poorest half of population saw no increase in their wealth. 2017 saw an unprecedented increase in the number of billionaires, at a rate of one every two days. Billionaire wealth has risen by an average of 13% a year since 2010—six times faster than the wages of ordinary workers, which have risen by a yearly average of just 2%.
    The survey also showed that women workers often find themselves at the bottom of the heap and nine out of 10 billionaires are men. In India, there are only four women billionaires and three of them inherited family wealth.


    The billionaire boom is not a sign of a thriving economy but a symptom of a failing economic system. Those working hard, growing food for the country, building infrastructure, working in factories are struggling to fund their child’s education, buy medicines for family members and manage two meals a day. The growing divide undermines democracy and promotes corruption and cronyism.

    What needs to be done?

    Oxfam makes several recommendations to start fixing the problem of income inequality. On the government’s part, it has asked for things like promoting inclusive growth by encouraging labour-intensive sectors that will create more jobs, imposing higher tax on the super-rich, implementing policies to tackle all forms of gender discrimination and sealing the “leaking wealth bucket” by taking stringent measures against tax evasion. The report reveals that the top 1% is evading an estimated $200bn in tax. More significantly, developing countries are losing at least $170 billion each year in foregone tax revenues from corporations and the super-rich.

    The recommendations for corporations are far more eyebrow-raising, be it “Limit returns to shareholders and promote a pay ratio for companies’ top executives that is no more than 20 times their median employees’ pay” or refraining from rewarding shareholders through dividends or buybacks or even paying bonuses to executives until “all their employees have received a living wage”.

    Way ahead:

    The survey found that, in India, it will take 941 years for a minimum wage worker in rural India to earn what the top paid executive at a leading Indian garment firm earns in a year, the study found. In the US, it takes slightly over one working day for a CEO to earn what an ordinary worker makes in a year. Therefore, the survey stressed that the gap between the rich and the poor needs to be urgently addressed.

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