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Current Affairs - 19 May 2018

General Affairs 

Centre's Cauvery Water Sharing Plan Approved By Supreme Court
  • The Supreme Court today approved the centre's draft Cauvery Management Scheme for distribution of water among four South Indian states. A bench headed by Chief Justice Dipak Misra rejected the suggestions of Karnataka and Kerala governments over the scheme, terming them as devoid of merits.

    The bench, also comprising Justices A M Khanwilkar and D Y Chandrachud, said the Cauvery Water Disputes Tribunal's award, which was modified by the top court, has to be taken to the logical conclusion by the Cauvery Management Scheme.

    It also dismissed Tamil Nadu's plea seeking initiation of contempt against the centre for non-finalisation of the Cauvery scheme.

    Karnataka, which is facing political tug of war between BJP and Congress-JDS over government formation, had earlier made a failed bid to temporarily stall the finalisation of draft Cauvery management scheme.

    The top court had made it clear that it would see that the draft scheme is "in consonance with its judgement only."

    Earlier, the bench had red-flagged the provision empowering the centre to issue the directions, saying "this part (power of centre to issue directions) of the scheme is not in consonance with the judgement. We make it clear to you".

    The observation was made after the centre had submitted the draft Cauvery management scheme in the court for its approval.

    The top court, in its verdict delivered on February 16, had asked the centre to frame the Cauvery management scheme, including creation of the Cauvery Management Board, for release of water from Karnataka to Tamil Nadu, Kerala and Puducherry.

    The scheme, once finalised, would deal with the issue of water share of the four states in different circumstances like normal and deficient water years in the Cauvery River basin.

    The top court had modified the Cauvery Water Disputes Tribunal (CWDT) award of 2007 and made it clear that it will not be extending time for this on any ground.

    It had raised the 270 thousand million cubic feet or tmcft share of Cauvery water for Karnataka by 14.75 tmcft and reduced Tamil Nadu's share, while compensating it by allowing extraction of 10 tmcft groundwater from the river basin, saying the issue of drinking water has to be placed on a "higher pedestal".

Yeddyurappa Will Win Karnataka Trust Vote, Yashwant Sinha's Jab At BJP
  • Yashwant Sinha, a former union minister, has been critical of the central government and his former party's leadership for its attempt to form the government in Karnataka when the BJP did not have the numbers or an alliance to reach the majority mark.

    Mr Sinha had headed to a spot near parliament this week to protest Governor Vajubhai Vala's controversial invite to the BJP's BS Yeddyurappa that he said, had triggered an Indian Political League, quite like the Indian Premier League, or IPL in cricket,

    "Now, MLAs and MPs will be auctioned. They will support those who will give them maximum money," Mr Sinha said on Thursday, a reference to the governor giving Mr Yeddyurappa 15 days to prove his majority.

    Soon after the Supreme Court gave Chief Minister Yeddyurappa just 24 hour notice to face the trust vote at 4 p.m. on Saturday, Mr Sinha tweeted another sharp attack on the ruling BJP.

    "I can predict that tomorrow's vote of confidence in Karnataka will be won by BJP by foul means. Just wait and watch," Yashwant Sinha, who formally quit the BJP on the birthday of his son Jayant Sinha, a minister in PM Modi's government, said.

    The jibe came less than 24 hours before Mr Yeddyurappa, sworn in as Chief Minister on the strength of his claim that the people of Karnataka had delivered the mandate to the BJP. The BJP has 104 seats in the state assembly that has an effective strength of 221 members. The Congress and Janata Dal Secular alliance won 78 and 37 seats respectively.

    Mr Sinha's tweet was a follow-up to his forecast a day earlier that the political developments in Karnataka was, in his words, "a rehearsal" of what would happen in the national capital after the 2019 general elections if the BJP-led coalition didn't get a clear majority.

    Yashwant Sinha held the Finance and External Affairs portfolios in Prime Minister Atal Bihari Vajpayee's cabinet between 1998 and 2004.

    Mr Sinha was one of the veteran leaders of the BJP to be marginalised along with senior leaders including Murli Manohar Joshi and LK Advani after PM Narendra Modi's stunning victory in 2014. It was seen as a punishment for opposing Mr Modi being named their party's presumptive prime minister.

    Unlike Mr Advani and Mr Joshi who have kept a low profile, Mr Sinha has been ruthless in his takedown of the central government. Last year, he had skewered his government's economic performance and has since then kept the barbs coming.

In Bengal Panchayat Polls, Independent Wins Seat Where False Voting Was Caught On Camera
  • One of the most blatant attempts to rig the result of a gram panchayat seat in West Bengal has backfired. An independent candidate has defeated the local Trinamool heavyweight in the fight for a seat at Krisnaganj, Nadia district, the very place where a man in a pink shirt was seen in a viral video furiously stamping ballot papers at a counting centre on Thursday, the counting day.

    Trinamool leaders dismissed the video as "contrived". But the State Election Commission took note, sought a police report and suspended counting. It was only after two men were arrested - not the one in pink shirt - that counting resumed and results were declared late at night.  

    Niladri Shukul, the independent candidate, returned home early Friday morning with the winner's certificate, almost unable to believe his luck.

    "They tried to use force to defeat me but they could not. This is the victory of truth. I have got justice and I am very happy, " said Mr Shukul, 35, who was backed in the polls by rebel Trinamool groups and the CPM.   

    When counting was in full swing at Majhdia Sudhir Ranjan Lahiri College on Thursday morning, suddenly crude bombs were hurled outside and a gang of miscreants stormed in. They cut the wire mesh that surrounds the counting area and a man in pink shirt grabbed a ballot box, pulled out ballot papers and started stamping on them with a stamp and ink pad he had brought along.

    Initially, poll officers did not understand what he was doing. But Niladri Shukul did. He was at that time ahead of the Trinamool candidate by 220 votes. The miscreants had come to change that.

    How? The man in the pink shirt did not vote in favour of the Trinamool candidate. He stamped ballot papers where the vote was in favour of the independent candidate.The double stamping would render the ballot paper invalid and the independent's vote count would fall.  

    Mr Shukul had figured it out but he was beaten up and thrown out of the counting centre.

    24 hours later, he is still edgy because those miscreants are still out there, he says. Two men have been arrested but not the one in pink shirt and other miscreants.

    "I would be happy if they gave me some security," Mr Shukul said.

    His worries won't end in a hurry. The Shibnibas gram panchayat where he has won a seat has a Trinamool majority. Of 13 seats in the gram panchayat, Trinamool has won 7 and BJP 5. Shukul is the lone Independent and getting work done will be an uphill challenge. Shukul knows that.

PM Modi To Inaugurate Ring Roads In Jammu And Srinagar
  • Prime Minister Narendra Modi will inaugurate several infrastructure projects in Jammu and Kashmir today. PM Modi, who is on a two-day visit to the state, will also lay foundation stones for Srinagar and Jammu ring roads projects.

    PM Modi will inaugurate the Srinagar ring road project at Sher-e-Kashmir International Conference Centre. He will lay the foundation stone for the Jammu ring road project at General Zorawar Singh Auditorium at University of Jammu.

    Union transport minister Nitin Gadkari will accompany PM Modi at the events.

    PM Modi will visit all the three major regions of the state. He will also lay the foundation stone for the ambitious Zojila tunnel that will provide all-weather connectivity to Ladakh with the rest of the country. The Zojila tunnel will be 14 kilometers long and will be Asia's longest bidirectional tunnel. It will be India's longest road tunnel.

    PM Modi will also inaugurate the 330-MW Kishanganga hydroelectric project in Srinagar.

    Massive security arrangements have been made for the Prime Minister's Jammu and Kashmir visit. As the separatists have called for a protest in Srinagar, security around the venue has been tightened and barricades have been erected at Lal Chowk, a major protest centre.

    All roads leading to the venue will be closed till tomorrow afternoon until PM Modi is in Srinagar, police said. Police, CRPF and BSF personnel have been deployed at the Dal Lake, while the Army has been asked to dominate the Zaberwan peak overlooking the venue where Modi will inaugurate the ring road around Srinagar.


    Police were also carrying out raids in various parts of the city to nab the notorious anti-social elements as a precautionary measure.

"Ceasefire" With Terror Groups During Ramzan Gets Home Ministry Worried
  • The centre announcing a unilateral "ceasefire" with terror groups during the month of Ramzan seems to have brought down the incidents of violence in Jammu and Kashmir. In the last two days, only three terror incidents have been reported in the Kashmir valley.

    It is a major relief for the state administration as Prime Minister Narendra Modi is visiting Jammu and Kashmir today to inaugurate major infrastructure projects.

    Massive security arrangements have been made for PM Modi's visit. "We have made adequate arrangements. We allowed namaaz in Jama Masjid today, but barring two places, no incidents of stone throwing were reported," a senior police official told.

    However, the three terror incidents have given the Home Ministry a lot to worry about, as, in two of the three attacks, the security personnel couldn't even defend their own weapons.

    The news of the two weapon-snatching incidents has reached the North Block in Delhi.

    "In the first case, suspected terrorists snatched three rifles from police personnel at a guard post in Dalgate. In the second attack, the service rifle of a policeman was snatched at the university gate in Srinagar. The policeman was overpowered by terrorists in broad day light," the report that reached the North Block said.

    In the third incident, a 23-year-old man was killed by terrorists in Kashmir as they suspected him to be a relative of an informer.

    A similar ceasefire was announced by the centre in 2000. According to the ministry, for five months - 28 November, 2000 to 30 May, 2001- when the ceasefire was implemented, the number of incidents of violence had doubled.

    Figures available with the ministry show that from December 2000 to May 2001 as many as 1,300 incidents of violence had been reported. Around 250 attacks on security personnel had taken place, in which more than 280 security personnel had been killed. Apart from this, 400 civilians had been killed in two big suicide attacks.

    "Terrorists had got time to regain strength. They then systematically started attacking forces and civilians," a former Jammu and Kashmir DGP told.

    He said this move by the centre will backfire.

    However, the officers posted in the valley differ.  "For the last one year, we were going after numbers in Operation All Out. But it was not yielding results," a senior police officer said.

    This is not the first time in the last 12 months when operations against terrorists have been suspended. "Last year, when the elections were being held, operations were halted during Ramzan," a senior official said.

    The officer welcomed the government's decision. "It is a much-needed respite to security forces that have been on the edge for last so many months," he explains.  

    As many as 67 terrorists have been eliminated by security forces in the first four-and-a-half months of the current year. "All their top brass has been eliminated," adds another officer.

    Security forces in Jammu and Kashmir have been ordered not to launch operations during the holy month of Ramzan, Home Minister Rajnath Singh said earlier this week, announcing a ceasefire with terror groups in the state. The initiative is seen as a repeat of the ceasefire announced by the Atal Bihari Vajpayee government in 2000-2001.

Business Affairs

Tata Steel subsidiary acquires 72% stake in Bhushan Steel
  • "Tata Steel Limited hereby announces that Bamnipal Steel Limited (BNPL), a wholly-owned subsidiary of Tata Steel has successfully completed the acquisition of controlling stake of 72.65% in Bhushan Steel Limited (BSL) in accordance with the approved Resolution Plan under the Corporate Insolvency Resolution Process (CIRP) of the Insolvency and Bankruptcy Code 2016 (IBC) which has been managed by Mr. Vijaykumar V. Iyer, Partner, Deloitte Touche Tohmatsu India LLP in his capacity as the resolution professional," Tata Steel said in a BSE filing.

    In its statement, Tata Steel assured that all necessary approvals, like from Competition Commission of India (CCI) and National Compan Law Tribunal (NCLT), have already been secured. The admitted CIRP cost and employee dues have been paid, as required under IBC, said the company.

    Settlement of Rs 35,200 crores towards financial creditors of BSL is being carried out as per the terms of resolution plans and corresponding transaction documents. Additional Rs 1,200 crore will be paid to the operational creditors of BSL over the course of 12 months as per their admitted claims and as per the terms of the approved Resolution Plan, Tata Steel said in its statement.

    "The investment from BNPL in BSL has been done through a combination of the equity of Rs 158.89 crore and inter-corporate loan of Rs 34,973.69 crore. Additionally, Rs 100 crore has been paid by BNPL to the financial creditors of BSL as consideration for novation of the remaining financial debt of BSL. The acquisition is being financed through a combination of an external bridge loan of Rs 16,500 crore availed by BNPL and balance amount through investment by Tata Steel in BNPL. The bridge loan availed by BNPL is expected to be replaced by debt raised at BSL over time," the company said in its statement.

    Now that the acquisition is complete, the nominees of BNPL have been appointed on the Bhushan Steel after the existing directors of BSL have stepped down as per the approved resolution plan. As per the NCLT-approved resolution plan, BNPL has been named as the promoter of BSL and the outgoing promoters have been classified as public shareholders.

Jet Airways' Chairman Naresh Goyal hints he's holding the cards on Air India sale
  • Though the Air India sale process is not going well, Jet Airways Chairman Naresh Goyal seems to have again tossed his hat in the ring by indicating that he's still not out of the race when it comes to the divestment of the loss-making national carrier.

    According to a report in Bloomberg, the Jet Airways chairman, during an interview in Manchester, England, said: "We are looking at our own business. But I am not saying that we will not look at Air India, I've never said that. Ultimately we will always see what's best approach ahead of us, and for the country."

    Citing contours of the sale process, Jet Airways on April 10 had said it was not interested in participating in the Air India sale process.

    "We welcome the government move to privatise Air India. It is a bold step. However, considering the terms of offer in the information memorandum and based on our review, we are not participating in the process," Jet Airways Deputy CEO & CFO Amit Agarwal had said in an e-mailed statement. However, from Goyal's statement it seems evident the Jet Airways top boss is holding the cards on the expectation that the government would ease out more terms and conditions for the sale.

    The government extended the deadline for submitting the expression of interest (EOI) for Air India on May 1 to May 31. Earlier, the deadline for submitting EOI was May 14. After all three national carriers, including IndiGo, Jet Airways, and Tata Sons, citing various reasons like terms of reference, liabilities, stake issues, etc, for not participating in the sale process, the government extended the deadline to receive initial bids till May 31. If things go as per the plan, which so far seems unlikely, Air India will announce successful bidder on June 15.

    On May 1, the government had also clarified its stand on over 160 queries it received from interested bidders over the disinvestment of Air India and its subsidiaries, Air India Express and AISATS (Air India Sats Airport Services Private Limited). These queries were mainly about the impact of the government's decision to retain a 24 per cent stake in the airline, the make-up of the airline's debt and liabilities, its latest financial performance, slots, and employee rights.

    However, the government didn't change the basic terms of the sale offer, according to which the centre wants the bidder (a single company or consortium) to pick up only 76 per cent of the stake in Air India, including 100 per cent of Air India Express, and 50 per cent of AISATS, the ground handling subsidiary of AI. The government has also said that the successful bidder will also need to take on about Rs 33,392 crore of debt and retain the airline staff for a year.

How PM Modi's GST rollout brought Baba Ramdev's Patanjali to a grinding halt
  • Just an year ago, Baba Ramdev was sanguine about the growth prospects of Patanjali Ayurved Ltd. The confident yoga guru-turned-entrepreneur had said that Patanjali would double its turnover within a year. And, to be fair, it didn't seem a far-fetched target at that time. The company, after posting a record sales of Rs 10,561 crore in FY17, was aiming to grow two-fold in FY18.

    The last fiscal, however, has dashed Patanjali's hopes of a 100 per cent growth. It now seems that a cut throat competition in the FMCG space and some uncertain policy decisions by the government may have finally dawned on India's fastest growing consumer goods brand. The company's bewildering growth, which began from 2014, has come to a grinding halt.

    Baba Ramdev's closest aide and Patanjali's managing director, Acharya Balkrishna blamed the lingering effects of demonetisation and the hasty implementation of goods and services tax (GST) for lack of growth. "We have closed the year around the same level as the previous fiscal year's revenue," Balkrishna told Mint.

    Patanjali, which had clocked close to 111 per cent growth in sales in 2016-2017, was hoping to cross the annual revenue of India's largest packaged goods company Hindustan Unilever Ltd (HUL) by FY19. The stagnation in sales comes at a time when its rival HUL logged a double-digit growth in sales volume in the last quarter of FY18.

    HUL's net sales during the last quarter of FY18 stood at Rs 9,003 crore compared to Rs 8,773 crore in the same quarter of previous fiscal. Its consolidated net sales was at Rs 35,474 crore in 2017-18 as against Rs 34,964 crore in the previous fiscal.

    However, a sputtering growth has failed to dampen the spirit of Acharya Balkrishna who believes that the current fiscal will be better when it comes to numbers. Early this year, Balkrishna had spurned the interest shown by luxury brand LVMH's private equity fund, L. Catterton, in Patanjali. He had said that they will never sell stake to a foreign company.

    Last year, Patanjali's founder Baba Ramdev had said that the promoter of the company will always be a Sanyasi and never a businessman. Patanjali's MD Acharya Balkrishna, who owns 96.8 per cent of the company's shares, is among the richest Indians. In an interview to Business Today, Balkrishna had claimed that he is least interested in creating wealth for himself.

    Acharyaji and Swamiji, as they are fondly referred to by their followers, started their FMCG and Ayurvedic formulations journey in 1990, when they set up the Divya Yog Pharmacy Trust. One of the reasons for its dominance in Indian households is that it claims to offer 'swadeshi' products at affordable prices. On an average, Patanjali launches two-three products a month in all the categories it is present in.

    Earlier, Patanjali used to sell its products at designated shops, but now the brand is sold at almost all leading e-commerce portals such as Amazon, Flipkart, Paytm Mall, 1MG, BigBasket, Grofers, etc. The company is also planning to increase its employee strength to 5 lakh. Earlier this month, it emerged as the highest bidder for the debt-stressed Ruchi Soya Industries which owes around Rs 12,000 crore to a consortium of 16 lenders.

    But of late, the company has come under the scanner for allegedly selling substandard quality products. Its popular Amla juice was suspended by the defence canteen stores (CSD stores) for not meeting quality parameters. But the company maintains that not more than 10 per cent of its business is outsourced, adding that from procurement to production to selling, everything is done by the brand leaving little scope for adulteration.

Farm loan waiver to cost Karnataka Rs 12,000 crore
  • Karnataka Chief Minister BS Yeddyurappa announced a farm loan waiver soon after taking oath, a move that economists feel could cost the state dear. It's in keeping with his party BJP's pre-poll promise of granting waiver to farmers who had raised loans of up to Rs 1 lakh.

    "Its cost to the state exchequer would be roughly to the tune of Rs 12,000 crore," says Professor R. S. Deshpande, senior economist and former director and currently honorary visiting professor at the Institute for Social and Economic Change (ISEC), Bengaluru.

    Speaking to Business Today, he said, "The figure on the actual impact could go up as we still need to get numbers from commercial banks on the outstanding loans to such farmers (could be about 8 lakh of them)."

    The immediate impact would be that the amount would get reduced from the state's expenditure on development, he says. This may not be the best thing at the moment. Consider this. Professor Deshpande says that the Karnataka government has already accumulated huge debt over the past five years and servicing this will alone take a huge share of the state's  revenue every year. He calls it a result of the failure of the state's agriculture policy that allowed loans to get accumulated and not taking adequate correctives during crop failures and farmers' distress.

    Calling for greater accountability, he says, "That is one reason farmer suicides continue in the state and it is estimated that about 10 farmers commit suicide everyday in the state," he says. Deshpande is also quite critical of the handling of affairs by the last agriculture minister Krishna Byre Gowda. But then, he did have words of praise for the minister's father, C Byre Gowda, who also happened to be the state's former agriculture minister but someone, who Deshpande feels, did some stellar work in this area. For the moment, the next five years are going to be a testing time for any government, adds Deshpande.

    While all eyes at the moment are on Yeddyurappa and how he can garner the numbers needed to ensure his government's survival, the move on farm loan waiver was rather swift, in line with the emphasis in the party manifesto. The first line of his party's election manifesto in the state promises: "crop loan waiver up to Rs 1 lakh, including all loans from various nationalised banks and cooperatives in the first cabinet meeting for the benefit of farmers".

Sensex falls 300 pts to close below 35,000 level, Nifty breaks 10,600 on negative global cues
  • The Sensex fell 300 points to end at 34,848.30 today on across-the-board selling amid political uncertainty in Karnataka and negative global cues. The broader NSE Nifty too cracked below the 10,600-level. Top Sensex losers were L&T (3.54%) , ICICI Bank (3.21%), Sun Pharma (3.21%), Tata Motors (3.14%).

    Capital goods and auto sector stocks were the top sectoral losers on BSE.

    No let-up in selling by foreign funds and surging crude oil prices in global markets dragged down the key indices.

    Investors remained on the sidelines amid doubts whether the BS Yeddyurappa government in Karnataka will be able to prove its majority in the house tomorrow, brokers said.

    The Supreme Court ordered a floor test in the Karnataka Assembly at 4 PM tomorrow, reducing the 15-day window given by the Governor to Yeddyurappa to prove majority.

    Yeddyurappa was sworn-in as the chief minister yesterday.

    Falling for the fourth straight session, the 30-share Sensex opened lower and stayed in the negative terrain for the major part of the session, hitting a low of 34,821.62 before ending at 34,848.30 -- down by 300.82 points, or 0.86 per cent.

    The barometer had lost 407.59 points in the previous three sessions.

    The 50-share NSE Nifty settled 86.30 points, or 0.81 per cent, lower at 10,596.40. During the session, it moved between 10,589.10 and 10,674.95.

    During the week, the Sensex lost 687.49 points, or 1.93 per cent, while the Nifty dropped 210.10 points, or 1.94 per cent.

    State-run banks remained under selling pressure on disappointing quarterly results due to a jump in provisions for bad loans.

    General Awareness

    Swachh Survekshan 2018
    • Context: The Swachh Survekshan 2018 results have been announced. It was organized by the Ministry of Housing and Urban Affairs (MoHUA), under the aegis of the Swachh Bharat Mission (Urban), assessed 4203 Urban Local Bodies. Compared to the previous surveys, this year’s exercise allocated substantial weightage to the feedback from citizens based on their daily experience.

      The on-field survey for Swachh Survekshan was conducted by an independent agency and the data for ranking of the cities collected from 3 sources:

      Service Level Progress: To verify whether systems and processes are in place in Urban Local Bodies (ULBs) to implement Swachh Bharat Mission (Urban) in the most efficient way.
      Direct Observation: To verify and assess general cleanliness in the cities by making random field visits in different parts of the city and public conveniences (Community/Public Toilets).
      Citizens Feedback: To collect feedback directly from citizens and monitor the performance of Swachhata App, a citizens grievance Mobile App.

      Performance of various cities:

      Indore has emerged as the cleanest city, followed by Bhopal and Chandigarh. Indore was the cleanest city last year as well.
      Jharkhand has been adjudged as the best performing state, followed by Maharashtra and Chhattisgarh.
      Cleanest State Capital/UT: Greater Mumbai.
      India’s ‘Cleanest big City’: Vijaywada (Andhra Pradesh).
      India’s ‘Fastest Mover’ big City: Ghaziabad (Uttar Pradesh).
      India’s Best City in ‘Citizens Feedback’: Kota (Rajasthan).
      India’s Best City in ‘Innovation & Best Practices’: Nagpur (Maharashtra).
      India’s Best City in ‘Solid Waste Management: Navi Mumbai (Maharashtra).
      India’s Cleanest Medium City: Mysuru (Karnataka).
      India’s ‘Fastest Mover’ Medium City: Bhiwandi (Maharashtra).
      India’s Best City in ‘Citizens Feedback’: Parbhani (Maharashtra).
      India’s Best City in ‘Innovation & Best Practices’: Aligarh (Uttar Pradesh).
      India’s Best City in ‘Solid Waste Management: Mangalore (Karnataka).
      India’s Cleanest Small City: New Delhi Municipal Council.
      India’s ‘Fastest Mover’ Small City: Bhusawal (Maharashtra).
      India’s Best City in ‘Citizens Feedback’: Giridih (Jharkhand).
      India’s Best City in ‘Innovation & Best Practices’: Ambikapur (Jharkhand).
      India’s Best City in ‘Solid Waste Management: Tirupati (Andhra Pradesh).

      Previous surveys:

      In 2016, Swachh Survekshan was conducted in 73 cities having a population of one million or more and capital city of States/ UTs and Mysore had bagged the award of being the cleanest city of India.
      In 2017, the scope of Swachh Survekshan was enlarged to cover 434 cities having a population of one lakh or more and Capital city of states/ UTs and Indore was awarded as cleanest city of India.

      What’s important?

      For Prelims: Rankings of cities in various categories.
      For Mains: Swachh Bharat Mission- Significance, challenges and solutions.

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