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Current Affairs - 03 June 2018

General Affairs 

2 Soldiers Killed In Unprovoked And Indiscriminate Firing By Pakistan In Jammu's Akhnoor
  • Nearly a week after the Director General of Military Operations or DGMOs of India and Pakistan agreed to implement the ceasefire pact of 2003 in "letter and spirit", Pakistani rangers resorted to unprovoked and indiscriminate firing along the International Border in Jammu this morning killing two soldiers of the Border Security Force or BSF.

    The firing from across the International Border or IB in the Pragwal area of Jammu's Akhnoor sector started early this morning. "The unprovoked firing resulted in critical injuries to two Border Security Force soldiers manning a forward post," a senior officer of the BSF told news agency PTI.

    He said both the soldiers, including an assistant sub-inspector, succumbed to their injuries later at a hospital while undergoing treatment.

    "The firing from across the border in violation of the ceasefire agreement prompted a strong and effective retaliation by the BSF," the officer said. The cross-border firing was going on when last reports came in, he added.

    On May 29, the DGMOs of India and Pakistan agreed to "fully implement" the ceasefire pact of 2003 in "letter and spirit" forthwith to stop border skirmishes in Jammu and Kashmir.

    The two military commanders reviewed the prevailing situation along the Line of Control (LoC) as well as the International Border (IB) in the state during a conversation over the hotline. The special hotline contact between the two commanding officers was initiated by the Pakistani DGMO.

    Following the conversation between Indian DGMO Lt Gen Anil Chauhan and Pakistan's Maj Gen Sahir Shamshad Mirza, the two armies issued identical statements saying both sides agreed to implement the 15-year-old ceasefire understanding.

    Today's unprovoked firing by Pakistan raised the number of deaths due to ceasefire violations along the International Border and the Line of Control in the state to 46. The dead includes 20 security personnel.

    Last month, thousands of people residing along the International Border in Jammu, Kathua and Samba districts had to leave their homes after unprovoked and indiscriminate firing, and intense shelling from Pakistan between May 15 and May 23 which left 12 people dead. These included two BSF soldiers and an 8-month-old baby.

India Has Set Example By Committing To Beat Plastic Pollution: UN
  • India has set an example on the world stage by committing to beat plastic pollution and showcased best practices and innovations to overcome the challenge, a senior United Nations official said Saturday.

    Speaking ahead of the World Environment Day on June 5, to which India is the global host, Naysan Sahba, director of the UN Environment Programme's Division of Communications and Public Information, said India is "very active" in tackling issues related to environmental pollution.

    He commended India's commitment in overcoming the challenge of plastic pollution. India has set an example in beating plastic pollution at the world stage by showcasing best practices and innovations, he told PTI.

    "India is a very vocal, very proactive member of the UN Environment Assembly that governs the UN environment programme. India is very active in tackling issues related to environmental pollution and its initiative to be the global host for the World Environment Day shows India's commitment to (beat) the challenge," he said.

    He urged people to avoid consumption of single-use disposable plastics. "Plastics per say are not the problem but single-use disposable plastics are the issue as have very little value and a very linear approach to the economy," Mr Sahba said on the sidelines of a discussion on finding ways to create awareness about the environment and related issues.

    He said there is an urgent need to improve waste management processes and scale up the search for alternatives.

    Dia Mirza, actress and UN Environment Goodwill Ambassador for India, said plastics have become an "essential part of our lives". She said plastics that are not disposed of properly create an issue.

    The event was organised by New Delhi Social Workers Association and the United Nations Environment Programme.

    NDSWA president Gaurav Grover said: "There is a need to create awareness on ways to reduce the use of single-use disposable plastics... The World Environment Day is just a wake-up call for all of us to work for our environment".

India's Global Prestige Increased Under Modi Government: Ravi Shankar Prasad
  • Union Minister Ravi Shankar Prasad Saturday said India's global prestige has increased during the four years of the Narendra Modi-led NDA government.

    "India's global prestige has increased during the past four years of the Narendra Modi government. Modi ji is a global leader. India's viewpoint has been heard across the globe," Mr Prasad said.

    The union minister for law and justice, and electronics and information technology was talking to reporters on the completion of four years of the Modi government and enumerated its various achievements.

    India is marching ahead confidently on the path of growth following the central government's initiatives taken in the past four years, the BJP leader said, adding that India's GDP has grown significantly with the country receiving the highest FDI proposals.

    The central government has set up a number of IITs, IIMs and Kendriya Vidyalayas in the past four years, he said.

    Stating that the central government is committed to uplift of the poor, the minister said 31 crore Jan Dhan bank accounts were opened in the last four years.

3 Grenade Attacks On Forces After Kashmir Man Crushed During Clashes Dies
  • CRPF vehicles were the target of three grenade attacks in Srinagar on Saturday after a man, run over by its jeep, died late last night, sparking bouts of streets protests in several parts of Jammu and Kashmir capital Srinagar. Four Central Reserve Police Force personnel were among eight people injured in Saturday's three attacks. There were earlier reports of a fourth blast too but police later said it was probably a tyre burst.

    Authorities had pulled the plug on mobile internet and imposed restrictions in parts of Srinagar to keep peace after Kaiser Bhat, 21, died around last midnight. Kashmiri separatists, who called his death "plain murder" and called for a shutdown across Kashmir, were placed under house arrest, according to news agency PTI.

    Hundreds of people gathered on the streets near Kaiser Bhat's house to join his funeral procession in violation of prohibitory orders.

    As they marched towards Eidgah grounds some distance away, security forces tried to stop the procession leading to clashes. People threw stones at security forces who tried to disperse the mob. Dozens of tear-smoke shells and pellets were fired to chase them away. Some people later took the body to Eidgah where Kaiser Bhat was buried.

    Elsewhere in the city, police said there were reports of stone throwing. "There were some incidents of stone pelting in downtown but our (policemen) exhibited restraint and used minimum force," Kashmir police chief SP Pani told news agency AFP.

    Two cases have been registered in connection with Friday's incident where a CRPF jeep was targeted by scores of people, who tried to force the security personnel to open the armoured vehicle. The driver, however, raced to escape the crowd that was attacked with stones and iron rods. He ran over three people including Kaiser Bhat who died.

    The opposition National Conference has blamed the Mehbooba Mufti government and the police for the horrifying incident caught on camera.

    Police said the CRPF driver had been charged with dangerous driving. A separate case was also filed against unidentified men for attempted murder of the CRPF personnel in the vehicle at that time.

    It was a very unfortunate incident," said senior CRPF officer Ravideep Sahi.

    The driver, he said, demonstrated high degree of presence of mind and maneuvered their way from the mob else it would have tuned into a huge law and order situation.

    Former Jammu and Kashmir chief minister Omar Abdullah criticised the security forces, tweeting that they now "drive their jeeps right over protestors". Last month another protester was killed by a police armoured vehicle in Srinagar. Police initially denied involvement in the death until a video - shot on a mobile phone - showed the vehicle hitting the man. Police said it was an accident.

    Union minister and lawmaker from Jammu region Jitendra Singh countered him, saying some politicians found security forces "soft targets" and were quick to condemn them.

    Later in the day, terrorists lobbed a grenade towards a security forces patrol party in Fatehkadal area of Srinagar that injured three security personnel.  In the second attack, a CRPF vehicle in Budshah Chowk area near the city centre here, injuring another jawan. The third grenade attack took place in Magarmal Bagh area of the city but there was no damage due to the explosion, according to PTI.

Maharashtra Education Department Issues Safety Norms For School
  • The Maharashtra School Education department today issued guidelines for schools and junior colleges, mandating certain safety measures in students' interest.

    A circular issued by the department said that every school and junior college should install CCTV cameras. Attendance should be marked thrice a day, and if a student is found missing, parents should be informed immediately through a text message, the circular said. No student should be punished in such a way that he or she would suffer a mental or physical trauma, it said.

    The guidelines also restrict entry of unidentified persons on the school premises.

    Character certificate from police would be mandatory for recruitment as teachers or other staff at educational institutions.

    Washrooms for boys and girls should be separate and at a suitable distance from each other, and there should be a woman attendant at the girls' washroom, the guidelines say.

    The woman attendant on school bus should not leave the bus until the last girl is dropped, the guidelines add.

    The guidelines will apply to state board schools as well as those affiliated to CBSE, ICSE and international boards.

    They would come into effect from the coming academic year.

    Education minister Vinod Tawde said while the state government cannot interfere in the curriculum of international boards, students' safety comes under the state's purview.

    "Students are from Maharashtra, so all these schools should also follow these norms. If any school fails, the education department will lodge a police case," he said.

Business Affairs

Whistle-blower levels fresh allegations against ICICI Bank CEO Chanda Kochhar in second letter to PM Modi
  • Whistle-blower Arvind Gupta, who exposed the alleged Videocon loan fraud, has levelled fresh allegations of quid pro quo on ICICI Bank MD and CEO Chanda Kochhar. He has claimed that the ICICI Bank had favoured Ruia brothers of Essar group for 'round-tripping' investments into Chanda Kochhar's husband Deepak Kochhar's NuPower Group - a firm which is at the centre of current Videocon loan probe.

    In a letter addressed to Prime Minister Narendra Modi on May 11, the whistle-blower said that the Ruias funded the NuPower and its subsidiary through their son-in-law Nishant Kanodia and nephew Anirudh Bhuwalka during December 2010 to March 2012 by subscribing to compulsorily convertible preference shares and equity shares.

    His letter states that Nishant Kanodia (husband of Ravi Ruia's daughter Smiti Ruia) invested in NuPower via Firstland Holdings - the holding company of Matix Group (co-promoted by Kanodia). Business Today had first broken the story of links between Deepak Kochhar, Nishant Kanodia, Essar Group and ICICI Bank.

    Mauritius-based Firstland Holdings subscribed to a total of 3,243,752 share of Rs 1,000 each of NuPower Renewable Ltd during December 31, 2010, to March 21, 2012, in four different tranches amounting to Rs 324.37 crore, as per the RoC filings by NuPower. Anirudh Bhuwalka-owned A-One Motors and Services Ltd acquired NuPower Technologies through AMW Motors Ltd which is owned and controlled by Asia Motor Works Holdings Ltd -- eventually controlled by the Essar Group, the letter claims.


    It further said that "Essar Group has round tripped investment payments to NuPower group via Firstland Holdings, Mauritius and had handsomely rewarded Deepak Kochhar...The Matix Group front ended the Firstland Holdings, Mauritius for investing Rs 325 core in the NuPower Group -- the group owned by the husband of Chanda Kochhar". Evidently, the malice of quid pro quo extends to another crony capitalist - the Ruia brothers of the Essar Group now headquartered in Mauritius -- the safe haven and a safe passage for global money laundering," Gupta said.

    According to the letter, these dealings happened during the period when Essar Group got sweetheart deals from ICICI Bank's overseas branches in Singapore, the UK and New York to acquire Essar Steel Minnesota in USA and Algoma Steel in Canada. The ICICI Bank - as a lead banker in a consortium - lent USD 530 million to Essar Steel in 2010, to Essar Oil USD 350 million to acquire Stanlow refinery in the UK. "All these investments by the Essar Group turned bad and have faced liquidation and bankruptcy proceedings for recovery of the investments," Gupta said in his letter.

    The whistle-blower further alleged that Essar Capital Holdings-Mauritius compensated the Matix Group for funding NuPower Renewable group by subscribing to the equity offering by the Matix Fertilisers and Chemicals during December 2010 to August 2011 by buying 163,540,343 shares of Rs 10 each for Rs 163.53 crore.

    The ICICI Bank refused to comment on the fresh charges levelled by Gupta. However, on Essar Steel Minnesota loans, it said that "a consortium of seven Indian banks including ICICI Bank had sanctioned loans to the entity. Also, large US funds gave loans to the company. Out of the total debt of the company of USD 1.02 billion, ICICI Bank's share was less than 25 per cent."

    According to the bank, the loan facilities provided to this project were classified as non-performing by all lenders. It said that the bank had followed all the internal processes of credit risk rating, credit appraisal and credit approval while sanctioning this loan. "Hence, it will be totally inappropriate and misleading to attribute any wrong motives to ICICI Bank for these loans," it said.

    An Essar Group spokesperson termed the letter as motivated and said: "Essar does not have any business interest in Firstland Holdings Ltd." "Moreover, as we understand, AMW Motors Limited Mumbai has not made the investment of Rs 197 crore in Nupower, contrary to the claims made in the letter. Essar has been dealing with ICICI since 1980. All transactions with them have been made in a very open and transparent manner, and in accordance with all applicable laws of the land," the spokesperson added.

    Matix Group also refuted the allegations and said: "Essar does not have any business interest in Firstland Holdings, contrary to what is being alleged. Firstland Holdings' investment in Nupower was made on merit to participate in the renewable energy sector, and has since been divested. No loans were ever taken by Matix from ICICI Bank."

    This is the second letter that Arvind Gupta has written to Prime Minister Modi. In 2016, he had written the first letter in which he exposed the dealings between Chanda Kochhar's husband and Videocon Group. Currently, the CBI, ED and Income Tax are probing the charges made in the first letter.  

    Acting on the second letter, the ICICI Bank has constituted an independent enquiry to probe the allegations of 'conflict of interest and 'quid pro quo' by Chanda Kochhar. The independent enquiry will use forensics, review emails and record the statements of the relevant personnel. "The enquiry would also cover all connected matters in the course of the investigation to bring the matter to a final close," the bank said.

Google not to renew contract for Project Maven: Report
  • Google workers have got word that the internet titan will retreat from a deal to help the US military use artificial intelligence to analyze drone video following an outcry from staff, according to reports.

    The New York Times and tech news website Gizmodo cited unnamed sources as saying that a Google's cloud team executive told employees on Friday that the company would not seek to renew the controversial contract for Project Maven after it expires next year.

    The collaboration with the US Department of Defense was said to have sparked rebellion inside the California-based company. An internal petition calling for Google to stay out of "the business of war" garnered thousands of signatures, and some workers reportedly quit to protest a collaboration with the military.

    The contract was reported to be worth less than $10 million to Google, but was thought to have potential to lead to more lucrative technology collaborations with the military. Google did not respond to a request for comment.

    Google has remained mum about Project Maven, which reportedly uses machine learning and engineering talent to distinguish people and objects in drone videos for the Defense Department.

    "We believe that Google should not be in the business of war," the employee petition reads, according to copies posted online.

    "Therefore, we ask that Project Maven be cancelled, and that Google draft, publicize and enforce a clear policy stating that neither Google nor its contractors will ever build warfare technology." The Electronic Frontier Foundation (EFF), an internet rights group, and the International Committee for Robot Arms Control (ICRAC) were among those who have weighed in with support.

    "As military commanders come to see the object recognition algorithms as reliable, it will be tempting to attenuate or even remove human review and oversight for these systems," ICRAC said in an open letter.

    "We are then just a short step away from authorizing autonomous drones to kill automatically, without human supervision or meaningful human control." Google has gone on the record saying that its work to improve machines' ability to recognize objects is not for offensive uses.

    The EFF and others stressed the need for moral and ethical frameworks regarding the use of artificial intelligence in weaponry.

    "The use of AI in weapons systems is a crucially important topic and one that deserves an international public discussion and likely some international agreements to ensure global safety," the EFF said in a blog post on the topic.

Online beauty and personal care retailers disrupting the market
  • The online retailing channel in India has grown exponentially in past decade. Multi-brand, multi-category retailers drove the growth of the sector, where the focus was primarily on electronic gadgets, appliances, and apparel. However, the online channel in the country is now witnessing a boom in speciality e-retailers in categories like beauty, personal care, healthcare, home furnishing etc. These speciality retailers have a deep assortment in their respective categories offering a large array of global and domestic brands erstwhile inaccessible to shoppers in the country.

    Beauty and hygiene-related shopping searches on Google are the third highest after the apparel and mobile phones according to Google and Bain & Company. Interestingly, these are also categories where the market is highly fragmented and organized players are virtually absent. Traditionally, this category has been catered to some extent by multi-brand, multi-category large players both in brick-and-mortar stores and also by online players. However, niche category specialists are able to bring a wider selection of brands and products including several global products on their portals.

    Beauty and personal care market in India is of the order of US$ 6.5 billion that grew at CAGR of seventeen per cent over 2011-2016 as per "India Cosmetic Market Overview". The market size is projected to reach US$ 35 billion by 2035. Owing to rising digital and social media, the idea of beauty and personal care has been progressing remarkably. Global exposure and rising penetration of smartphones have led to increasing awareness and aspirations for the latest global trends including demand for beauty and personal care products. Higher participation of women in the workforce and increasing disposable income has also led to an increase in demand for premium beauty products.

    While shoppers have been becoming savvier, the market has not able to meet the rising aspirations and demands. Multi-category modern trade retailers offering global brands made the access easy to customers in some places. However, limited real estate and mall development restricted the reach. Complex logistics and pricing issue for international brands found it difficult to expand in the market driven by mass brands. Unorganised small retail stores with limited facilities for display and promotion remained a challenge for premium beauty brands. The phenomenon of counterfeits and refills was another problem for premium beauty and personal care products.

    This ecosystem made the market attractive for speciality online retailers like Nykaa, Purplle, and NewU to capture the imagination of shoppers looking for access to global brands in the category. While these players entered the market around 5-6 years back, the last couple of years have seen them picking up the traction. Beauty and personal care that contributed to less than 1 per cent of the total online retailing revenue witnessed a growth of 32 per cent in value sales during 2016 as observed by Euromonitor.

    Nykaa, the leader in this space got top global brands like MAC, Estee Lauder, Clinique, NYX, Bare Essentials, Bobbi Brown etc. which had no or very limited availability in the country. Purplle.com, another strong online player in this space, has exclusive distribution rights for some international brands like Moda, Vipera and Gravitale in India. This exclusive portfolio helped these companies to attract a large number of affluent customers looking for premium brands. Their shoppers are young women, have average ticket size of around INR 1,500,  and they get a substantial proportion of their revenues from repeat purchases. Beyond selling beauty and personal care products, both Nykaa and Purplle have dedicated sections on beauty trends and advisory for its shoppers. These retailers help customers with makeup looks, beauty assistant, beauty routines, and provide access to beauty experts. Having access to large behavioral data Nykaa developed its own private labels in several categories that are promoted aggressively by the retailer. The private label portfolio helps it differentiate itself from other brands on the site. Purplle also launched its private brand Stay Quirky in April 2017 to get better margins. While Nykaa and Purplle cater to customers with premium national and international brands, NewU by Dabur is another prominent online beauty and personal care retailer offering a portfolio of affordable brands. NewU has stronger focus on skin, hair and personal care products with fewer brands in colour cosmetics category. NewU's also has an exclusive range of affordable global brands Jaquline and Spice Island on its portal.

    A noteworthy aspect of all these online beauty retailers is their interest in omnichannel presence. While these retailers focus on online channel for wide distribution and deep assortment, they have been looking at physical brick-and-mortar experience stores, a big white space in the country. NewU has an extensive network of stores while Nykka has recently launched brick-and-mortar stores for premium products like fragrances and colour cosmetics. While the country lagged in the brick-and-mortar chains for beauty products and customers had limited choices in the form of beauty stores, online beauty retailers have finally disrupted the market and now Indian shoppers can lay their hands on global brands through the online channel.

46% of start-ups prefer to hire male employees post Maternity Benefit Act, says survey by LocalCircles
  • The Maternity Benefit (Amendment) Act, 2017 was touted as a bold move by the government. It increased the duration of paid maternity leave in India from 12 weeks to 26 weeks. But it also increased the compliance burden on small and medium enterprises.

    After the Act was passed, 11% businesses said they hired male employees only while 46% said they hired mostly male and a few female employees, according to a poll by LocalCircles. 43% said they hired both males and females in equal proportion. The poll received 2,987 votes from startups and SMEs across India

    India has one of the world's most generous maternity leave policy and is probably the only country where its entire financial burden is supposed to be borne by the employer.

AirAsia CEO Tony Fernandes to appear before CBI in flying license bribery case
  • The Central Bureau of Investigation has also summoned group CEO of AirAsia, Tony Fernandes to appear before it on June 6 for questioning in the case.

    On Friday, the CBI questioned 'lobbyist' Rajender Dubey in connection with alleged malpractices by AirAsia India Limited and its promoters while trying to get international flying licences by manipulating policies, officials said.

    Dubey, promoter of Singapore-based HNR Trading Pte. Ltd, was called today at the agency headquarters where he was questioned at length about the meetings he allegedly arranged for the executives of AirAsia India and its promoters in the power corridors, they said.

    The CBI also asked him about more than Rs 12 crore which were allegedly remitted to his company under the garb of a "sham" contract signed with AirAsia India, the official said.

    The agency has alleged that Dubey had played a role as a liaison agent and was instrumental in seeking appointments and facilitating meetings for officials of the airline with the various government officials for clearance of formalities, they said.

    "During the year 2015-16, AirAsia (lndia) Limited remitted about Rs 12.28 crore to HNR Trading Pte. Ltd., Singapore for a sham contract on the basis of a bogus agreement on plain paper, which was utilised for paying bribe to unknown public servants of Government of lndia and others for securing permit for operation of international scheduled air transport services," the CBI has alleged in the FIR.

    The agency has alleged that two more lobbyists were roped in for distributing the money further.

    After the registration of the FIR, CBI spokesperson R K Gaur had said that the accused promoters of the company and board of directors allegedly entered in criminal conspiracy with unidentified government officials through lobbyists to expedite the approval process for AirAsia India and change in aviation policies to suit the company.

    " It was further alleged that FIPB and FDI norms were violated by said air group by giving effective management control to a foreign entity by making the said private airline (Air Asia India Ltd) a de-facto subsidiary indirectly rather than a joint venture," Gaur had said.

    He had said lobbyists were allegedly paid money which was utilised for paying bribe to unknown public servants and others for securing permit for operation of international scheduled air transport services.

    "An effort was allegedly made in the Ministry of Civil Aviation to remove/amend the 5/20 rule (which makes it mandatory for an airline to have five years of flying experience and 20 aircraft to be eligible for international flying licence)," he had said.

    General Awareness

    Govt weighs linking drug prices to WPI inflation
    • Context: The government is considering the feasibility of linking the permitted annual increase in prices of non-scheduled formulations to the Wholesale Price Index (WPI) in a bid to regulate the prices of drugs.

      Implications:

      The move, if implemented, could deal a big blow to the Pharma- industry. The industry is currently in a situation where there are strong incentives for companies to market non-scheduled formulations to avail to automatic 10% increase. Compounded over five years, the price of a non-scheduled drug goes up by over 60%.

      Background:

      The NITI Aayog has recommended an amendment to the Drug Price Control Order (DPCO) 2013, suggesting that prices of non-scheduled drugs be also be linked to WPI to regulate them like the prices of scheduled drugs.

      What necessitates this?

      According to DPCO 2013, prices of scheduled drugs are revised in line with the wholesale price index (WPI) of the previous calendar year. As a corollary, the companies are even required to cut the prices if there is a decline in the annual WPI. However, manufacturers of medicines not under price control are allowed to increase the maximum retail price by 10% annually. According to DoP, only about 850 drugs are under price control as against the more than 6,000 medicines available in the market of various strengths and dosages.

      Concerns:

      Pharma companies see this proposal as a serious adverse development and say it has the potential to cause irreparable damage to the Indian Pharma industry. Given the real annual inflation, increase based only on WPI is not at all reasonable as the industry has to deal with the rising cost of manufacturing.

      Additionally, according to the proposal, in case of a negative WPI, mandating the National Pharmaceutical Pricing Authority (NPPA) to change the ceiling price of scheduled drugs and it will not be required for individual drugs to reduce their MRPs if they are already lower than such revised ceiling price.
      Pharma lobby groups have supported the equalization of the annual price increase between scheduled and non-scheduled drugs.

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