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Current Affairs - 03 July 2018

General Affairs 

"Economist PM", "Know-It-All" Finance Minister Ruined Economy: PM Modi
  • Current Affairs - 03 July 2018
    In perhaps his strongest defence of handling of the economy, Prime Minister Narendra Modi said his government steered the Indian economy out of "unbelievable" decay left by an "economist prime minister and a 'know-it-all' finance minister".
    India is now the fastest growing large economy of the world with strong fundamentals to propel further growth, PM Modi added.

    Rejecting criticism of jobless growth, he said if state after state is creating good number of jobs, how can the Centre be creating joblessness?

    He said problems in banks were identified in 2014 itself and they were freed from political interference in giving loans. The government brought the Insolvency and Bankruptcy Code to ensure defaulters lose their companies, the Prime Minister said.

    In an interview to Swarajya magazine, he said when the BJP government came to power, the state of the economy was much worse than expected. "Things were terrible. Even the budget figures were suspicious," he said.

    PM Modi said he chose 'rashtraneeti' (putting the interests of India first) over 'rajneeti' (political considerations) in not bringing out a white paper on the state of the economy when his government came to power.

    While playing politics on the state of the economy in 2014 would have been extremely simple and politically advantageous, the government thought reforms were needed and "we preferred to think of 'India First'."

    "We did not want to push the issues under the carpet, but we were more interested in addressing the issue. We focused on reforming, strengthening and transforming the Indian economy," he said.

    Stating that the details about the "decay in the Indian economy were unbelievable" with a potential to stir a crisis "under an 'economist' prime minister and a 'know-it-all' finance minister", he said India was in the Fragile Five economies of the world and "there were several landmines laid in various sectors."

    "We accepted this uncomfortable truth and hit the ground running from the very first day to stabilise things so that the Indian economy can be strengthened for the long haul. We tolerated a number of political allegations, we accepted political damage but ensured no damage to our country," he said, adding India is the fastest growing large economy now with strong fundamentals to propel further growth.

    Foreign investment is at an all-time high, GST has revolutionised the tax regime and India is an easier place to do business in than ever before, he said.

    Asked about lack of jobs in the economy, he said the issue at hand is more to do with a lack of data on jobs.

    "Our opponents will naturally exploit this opportunity to paint a picture of their choice and blame us. I don't blame our opponents for blaming us on the issue of jobs, after all no one has an accurate data on jobs. Our traditional matrix of measuring jobs is simply not good enough to measure new jobs in the new economy of New India," he said.

    He reeled out data on jobs being created at 3 lakh village-level common service centres, 15,000 start-ups, registration of 48 lakh new enterprises and in the construction of houses, railways and highways. Prime Minister Modi said 41 lakh formal jobs were created from September 2017 to April 2017 as reflected in EPFO payroll data.

    "There is a lack of consistency in the political debate around job creation. We have data put out by state governments on employment. For example, the previous Karnataka government claimed to have created 53 lakh jobs. The West Bengal government said it created 68 lakh jobs in the last term. Now, if states are all creating good numbers of jobs, is it possible that the country is not creating jobs? Is it possible that states are creating jobs but the Centre is creating joblessness?" he asked.

    The Prime Minister said his government was working on doubling farmers' income by 2022 by decreasing input costs, ensuring proper prices for the produce, increasing productivity and creating more avenues for income generation.

    "The previous government allocated Rs. 1.21 lakh crore to agriculture while we have allocated Rs. 2.12 lakh crore in the five-year period. But unlike them, our initiatives do not stay limited to the files, but enter the field," he said, citing crop insurance schemes, higher minimum support price, soil health card and neem-coated urea as the cornerstone of his government's rural focus.

AI Robot Cimon Reaches Space Station Aboard SpaceX Dragon
  • Current Affairs - 03 July 2018
    A SpaceX Dragon spacecraft loaded with about 2,600 kg of research materials and supplies, including an Artificial Intelligence (AI) robot named Cimon, reached the International Space Station on Monday, NASA said.
    The spacecraft lifted off on a Falcon 9 rocket on June 29 from Cape Canaveral Air Force Station in Florida.

    "Capture confirmed! Dragon now attached to the Space Station robotic arm," SpaceX tweeted on Monday.

    NASA astronauts Ricky Arnold and Drew Feustel captured the Dragon spacecraft using the space station's Canadarm2 robotic arm, the US space agency wrote in a blog post.

    Among the research arriving on Dragon is a cellular biology investigation (Micro-12) to understand how microgravity affects the growth, gene expression and ability of a model bacterium to transfer electrons through its cell membrane along the bacterial nanowires it produces.

    Such bacteria could be used in microbial fuel cells to make electricity from waste organic material.

    An Earth science instrument called the ECOsystem Spaceborne Thermal Radiometer Experiment on Space Station (ECOSTRESS) will provide a new space-based measurement of how plants respond to changes in water availability. This data can help society better manage agricultural water use.

    The spacecraft's occupant also included a robot named Cimon, short for Crew Interactive Mobile Companion.

    The pilot study with Cimon is a technology demonstration project, and an observational study that aims to obtain the first insights into the effects on crew support by AI, in terms of efficiency and acceptance during long-term missions in space.

Tejas Commences Operations From Kerala's Sulur Air Force Station
  • Current Affairs - 03 July 2018
    Indigenous fighter aircraft Tejas of No 45 Squadron 'The Flying Daggers' formally commenced operations from the Air Force Station at Sulur near Coimbatore under Group Captain S Dhankhar today.
    The Southern Air Command base at Thiruvananthapuram, Kerala has been entrusted with the responsibility of integrating the fighter in Air Force's Concept of Operations.

    Air Officer Commanding-in-Chief (Southern Air Command) RKS Bhadauria formally took part in the inaugural ceremony, an official release said.

    Tejas is the first advanced Fly-by-wire fighter aircraft designed, developed and manufactured in India by Bengaluru headquartered HAL. It is equipped with a satellite-aided Inertial Navigation System.

    The aircraft has a digital computer-based attack system and autopilot mode. It can fire Air to Air Missiles, carry bombs and Precision Guided ammunition.

    The 'No 45 Squadron' has been involved in training aircrew and would now undertake operations and maintenance of the aircraft under Group Captain S Dhankhar.

    With the deployment of Tejas, the 'Flying Daggers' would take up wartime role towards safeguarding national skies, the release said.

    Air Marshal R K S Bhadauria congratulated the personnel and lauded the efforts put in by the operations, maintenance and administration branches of the Air Force Station Sulur, it said.

Jobs Being Created But Opposition "Painting Picture Of Choice": PM Modi
  • Current Affairs - 03 July 2018
    Prime Minister Narendra Modi has rejected the opposition charge of lack of employment generation, citing data provided by state governments to ask how the Centre could create joblessness if the states are creating "good numbers of jobs".
    He also said that the lack of data on jobs had given the opposition the opportunity "to paint a picture of their choice".

    To double farmer income by 2022, his government is following a four-pronged strategy, which seeks to decrease input cost, ensure proper prices for the produce, minimise harvest and post-harvest losses and create more avenues for income generation, the PM Modi said in an interview to Swarajya magazine.

    Responding to a question on employment, he said there is lack of consistency in the political debate around job creation.

    "We have data put out by state governments on employment. For example, the previous Karnataka government claimed to have created 53 lakh jobs. The West Bengal government said it created 68 lakh jobs in the last term." If states are all creating good numbers of jobs, is it possible that the country is not creating jobs? Is it possible that states are creating jobs but the Centre is creating joblessness?" he said.

    More than a lack of jobs, the issue is lack of data on jobs, he pointed out.

    "Our opponents will naturally exploit this opportunity to paint a picture of their choice and blame us. I don't blame our opponents for blaming us on the issue of jobs, after all no one has an accurate data on jobs. Our traditional matrix of measuring jobs is simply not good enough to measure new jobs in the new economy of New India," PM Modi said.

    In support of his argument, PM Modi said there are close to three lakh village-level entrepreneurs running Common Service Centres across the country and also creating more employment.

    "Start-ups are working as job multipliers and there are around 15,000 start-ups, which the government has helped in some way, and there will be many more operational. Aggregators of various kinds employ thousands of youth," he said.

    More than 41 lakh formal jobs, PM Modi said, were created from September 2017 to April 2018 based on EPFO payroll data.

    According to a study based on EPFO data, more than 70 lakh jobs were created in the formal sector last year.

    "Now, you know that informal sector constitutes around 80 per cent of all jobs ... job creation in the formal sector can have a spinoff effect on job creation in the informal sector ... If 41 lakh jobs were generated in the formal sector in eight months, how much would be the total formal plus informal sector jobs?" he said.

    With more than 12 crore loans given under Mudra micro loans, "would it be unfair to expect that one loan would have created or supported means of livelihood for at least one person?" PM Modi asked

    On the issue of doubling farmers' income PM Modi said farmers were earlier forced to do farming which was unscientific and they had to often had to face 'lathis' for getting urea.

    Now, efforts are being made to make farming scientific, he asserted.

    "Shortage and scarcity of urea is a thing of past and neem-coated urea is improving productivity. Now the farmer has a holistic crop insurance cover with PM Fasal Bima Yojana," he said.

    On minimum support price, the PM said they will get minimum support price of 1.5 times their cost.

    He also urged the private sector to increase investment in agriculture.

    "In India, private sector investment is only 1.75 per cent of total investment in agriculture. From technology to food processing and from modern machinery to research, there is huge scope for the private sector", he said.

Heavy Rains In Large Parts Of The Country Likely This Week: Met Office
  • Current Affairs - 03 July 2018
    Heavy to very heavy rainfall is expected in large parts of the county including Jammu and Kashmir, Tamil Nadu, Assam and Gujarat, over the next few days till Friday, the Met Department said today.
    The warning comes after met office said last week that the monsoon had covered the entire country, 17 days ahead of its normal onset date.

    According to the weather office, heavy to very heavy rains at a few places, with extremely heavy rains at isolated places, are very likely over Uttarakhand and east Uttar Pradesh.

    Heavy rains are very likely today at isolated places over sub Himalayan West Bengal, Sikkim, Bihar, Assam and Meghalaya, the weather office said in a statement. Himachal Pradesh, Uttar Pradesh and Arunachal Pradesh may also see rainfall

    Also, heavy rains are likely to occur in Haryana, Chandigarh, Chhattisgarh, Jharkhand, Odisha, Nagaland, Manipur, Mizoram and Tripura, Konkan and Goa. Heavy rain is likely to occur tomorrow at isolated places over east Uttar Pradesh, sub ­Himalayan West Bengal, Sikkim and Bihar.

    The four-month monsoon season normally begins from June 1 and ends on September 30.

    This year, the Kerala saw the onset of on May 29, three days ahead of its normal onset date of June 1. It battered the western coast in the first half of June.

Business Affairs

PM Modi says the state of economy under 'economist' Manmohan Singh left him shocked
  • Current Affairs - 03 July 2018
    Hitting out at the Congress-led UPA for its 'dismal management of the Indian economy' under an 'economist' prime minister and a 'know-it-all' finance minister, Prime Minister Narendra Modi said that the details about the decay in the Indian economy were unbelievable and it had the potential to cause a crisis all over.

    In an interview to Swarajya magazine, PM Modi said, "We all knew that the economy was in the doldrums but since we were not in government, we naturally did not have the complete details of the state of the economy. But, what we saw when we formed the government left us shocked!"

    "The state of the economy was much worse than expected. Things were terrible. Even the budget figures were suspicious," the Prime Minister added.

    PM Modi's statement comes on the first anniversary of implementation of India's biggest tax reform, the Goods and Service Tax (GST). Prime Minister also said that Mercedes car and milk cannot be taxed at the same rate and accepting Congress party' demand for a uniform 18 per cent rate would lead to a spike in food and essential items' taxation.

    "In 2014, industry was leaving India. India was in the Fragile Five. Experts believed that the 'I' in BRICS would collapse. Public sentiment was that of disappointment and pessimism. Now, in the midst of this, imagine a White Paper coming out giving intricate details of the extent of damage. Instead of being a mollifier, it would be a multiplier of the distress," PM Modi said when he was asked why BJP didn't bring a white paper on the state of Indian economy.

    "Playing politics on the state of the economy in 2014, would have been extremely simple as well as politically advantageous for us. We had just won a historic election, so obviously the frenzy was at a different level. The Congress Party and their allies were in big trouble. Even for the media, it would have made news for months on end," he added.

    On Banks

    Speaking on the state of public sector banks which are struggling with bad loans, PM Modi said, "We had identified the problem with banks in 2014 itself. A retreat of bankers was held in Pune where top-most officials attended. I told them to go about their work with utmost professionalism and clean the sector. I assured them that the long-standing culture of phone calls from Delhi influencing their working is not the way our government works. This is what enabled the true state of affairs to come out."

    Hinting at Congress-led UPA government's involvement for the rise in banks' NPAs, PM Modi said: "Earlier, If someone owed Rs 500 crore and when it was time to repay that loan, a phone call from Delhi would ensure another loan of Rs 500 crore is given so that the previous loan was repaid. This cycle persisted. We stopped this. This is why the old loans had to be shown as NPAs."

    On Air India

    While speaking on failed disinvestment of Air India, the Prime Minister said, "At the cabinet level, we have cleared the sale of not only Air India but several other (loss-making) public sector units - this itself is a historical in many ways; that they are yet to be sold is the result of timing and process."

    Defending the terms set out by his government's on Air India stake sale, PM said, "We don't want to make a sale where we will be accused of selling something for X amount when we could have got more. But the policy decisions for strategic sales have already been taken."

Sunil Mehta-led panel supports formation of AMC to fight 'bad loan' menace
  • Current Affairs - 03 July 2018
    The Sunil Mehta committee has backed the government plan for a bad bank to fight the bad loan menace by setting up an asset management company (AMC) or asset reconstruction company (ARC), according to sources. In the report submitted to the finance ministry on Monday, the committee has suggested that the proposed bad bank appoint experts from outside to tackle the stressed assets issue that has crossed 11.6 per cent of the system and rely more on the cash route rather than the issuing security receipts, sources said.

    The committee, which has SBI chairman Rajnish Kumar and Bank of Baroda head BS Jayakumar as members, also favours banks and overseas investors funding the bad bank, and not the public funds or a portion of the forex reserves as had been suggested by some quarters.

    On June 8, Interim Finance Minister Piyush Goyal had announced a committee under the chairmanship of Punjab National Bank Non-Executive Chairman Sunil Mehta.

    The committee was given a fortnight to submit its report on the feasibility of setting up an ARC/AMC for faster resolution of bad loans. The recent Financial Stability Report of the Reserve Bank had said gross NPAs may rise to 12.2 per cent by March 2019 from 11.6 per cent in March 2018.

    The bad loans in the system has become such a menace that the RBI has asked as many as 11 of public sector lenders like Central Bank, Bank of India, UCO Bank, Dena Bank, Allahabad Bank among others to not to engage in large lending activities under what it calls the Prompt Corrective Action (PCA) framework.

    Before this drastic measure, last year the central bank had identified as many as 40 largest stressed accounts, including Bhushan Steel, Bhushan Power & Steel Essar Steel, Alok Industries, and Amtek Auto among others and asked banks to refer them for bankruptcy courts. These 40 companies account for a whopping 40 per cent of the dud loan pile of over Rs 11 trillion in the system.

    Following up its stern actions, on February 12 this year, the central bank scrapped all the extant debt resolution mechanisms such CDR, S4A, joint lenders forum among others and asked banks to classify any account that fails to service its debt obligation even for a day as NPA.

    The idea of a bad bank has been in the works for some time now but has more distracters than supporters as many feel that this will just create another badly performing entity, as this would only embolden lazy and reckless banking.

    One of the vocal opponents of the idea is Raghuram Rajan, the former RBI governor, while a notable voice favouring it is Arvind Subramanian, who announced his resignation from the post of chief economic adviser to the Finance Minister last week.

US decision to revoke spouse-visa rule may affect 1 lakh jobs, raise domestic tensions
  • Current Affairs - 03 July 2018
    The Trump administration in the US has reconfirmed its intent to rescind the H-4 rule regarding employment authorisation to certain spouses of H-1B visa holders, which is popular among Indian IT professionals. A research conducted by Christopher JL Cunningham of the University of Tennessee at Chattanooga and Pooja B Vijayakumar from the Kemmy Business School at the University of Limerick has revealed that the decision could affect over 100,000 people who might lose their jobs if the US government goes ahead with the revoking the rule. The move will have a big impact on Indian-American women as they are the major beneficiary of the Obama-era rule. The revoking of the H-4 rule would also cause problems for employers in terms of monetary losses and a shortage of workforce.

    In a notification last month, the Department of Homeland Security's Unified Agenda stated that the Trump administration is "removing H-4 dependent spouses from the class of aliens eligible for employment authorisation." As per the notification, the department proposed to remove from its regulations certain H-4 spouses of H-1B non-immigrants as a 'class of aliens' eligible for employment authorisation.

    The research report published in Bloomberg said Cunningham and Vijayakumar found that such a shift would likely isolate spouses socially, raise domestic tensions and strain the family's financial resources.  The decision would lead to dissatisfaction among H1-B visa holders, which could also force them to remain in foreign services for longer than usual, the report revealed. The country would also have to bear the failed expatriate assignments costs, which could vary from $250,000 to $1 million, the study said.

    "Policy changes like the one being considered for America are often made in the absence of complete information that might help policymakers better understand the true breadth of likely consequences," the study said. It was in February 2015 that the Obama-led US government extended eligibility for employment authorisation to certain H-4 dependent spouses of H-1B non-immigrants who are now seeking employment-based lawful permanent resident (LPR) status. "The agency is considering a number of policy and regulatory changes to carry out the President's Buy American, Hire American Executive Order, including a thorough review of employment-based visa programmes," Michael Bars, USCIS Spokesperson had told PTI in June.

    It was 1952 that the US started allowing companies to allow foreign workers to meet the employment demand. In the decades to come, several IT companies, especially Indian firms, were targeted for outsourcing cheap labour to avoid huge cost involved with employing American labour.

    Tightening of the US visa rules to promote 'Buy American, hire American' was one of the poll agendas of President Donald Trump. The move, however, could have a deeper financial impact on the families living in the US, who benefited from the Obama administration's policies and even bought properties after settling in the country.

    Some Indians whose wives were beneficiaries of the H-4 rule are living in the US for years now. Many such couples have even started families in the US, who are American citizens. Moving out could be really difficult for such people as their children are now the US citizens.

    Many Indian women, who were earlier allowed to work in the US, have started applying in different companies back in India. Besides, Trump's restriction on the H-1B rule has led to fear of job loss among several male Indians living in the US. Those who already have worked in the US for more than six years -- under the H1-B rule a professional is allowed to work in the US for three years, a tenure that can be extended till the next three years - are also looking for jobs in neighbouring Mexico and Canada.

Metro Man E Sreedharan says 'highly expensive' bullet train will cater only to elites
  • Current Affairs - 03 July 2018
    Prime Minister Narendra Modi's bullet train project had earlier evoked sharp criticism from the opposition parties. Now, the 'Metro Man' himself has slammed PM Modi's pet project. E Sreedharan, who was given this sobriquet for being the brains behind the Delhi Metro, told Hindustan Times that bullet train is highly expensive and beyond the reach of ordinary people.

    "What India needs is a modern, clean, safe and fast rail system," Sreedharan told the daily, adding that such trains will cater only to the elites. The comments by the Metro Man come at a time when the project is facing land acquisition hurdles from farmers in Gujarat and Mahrashtra.

    The Mumbai-Ahmedabad High Speed Rail Project is currently being built at an estimated cost of Rs 1,10,000 crore which is almost equal to total capital outlay of Indian Railways in 2017. Besides, it will service only 500-odd kilometres in a country where around 12,600 trains run every day to ferry more than 2.3 crore passengers, equivalent to Australia's entire population.

    Last year, Prime Minister Narendra Modi heaped praise on his Japanese counterpart Shinzo Abe for extending a soft loan worth Rs 88,000 crore at 0.1 per cent for India's ambitious bullet train project.

    According to a study conducted by IIM Ahmedabad, Ahmedabad-Mumbai bullet train will need to make 100 trips daily and carry 88,000-118,000 passengers per day to be financially viable. This figure could well be way above the total number of passengers travelling between the two cities on any given day. Not to mention the ticket price for the bullet train is expected to be around Rs 3,000. For a much less price, one can travel between Ahmedabad and Mumbai on an airplane and reach in an hour.

    It's not just bullet train, Sreedharan is also not happy with the progress of Indian Railways. "I do not agree that the Indian Railways has made rapid progress. Apart from bio-toilets, there is no technical upgradation. Speed has not increased. In fact, the average speed of most prestigious trains has come down. Punctuality is worst - officially 70%, actually less than 50%. Accident record has not improved. Many also die on tracks, at level-crossings, in suburban sections. Almost 20,000 lives are lost on tracks yearly. I feel Indian Railways is 20 years behind those of advanced nations," the veteran engineer told the newspaper.

    Sreedharan, the key architect for various metro projects across the country, was recently given a new task to standardise the metro service in the country. Sreedharan also believes that India can manufacture coaches and other parts indigenously. "I feel we can convert metro into a Make in India project," he said

Reliance recycled 220 crore plastic bottles last year; plans ramp up
  • Current Affairs - 03 July 2018
    At a time when states including Maharashtra are enforcing plastic ban, its largest raw material maker Reliance Industries claims that they recycled 220 crore post-consumer PET bottles into fibres last year and looks to ramp it up further. Recycling is being carried out at RIL's Barabanki, Hoshiarpur and Nagothane plants, the company said.

    "The used PET bottles are used as a raw material for manufacturing recycled polyester fibre. The fibre generated through this process is branded as Recron GreenGold and RIL through its selected downstream mills manufactures R|Elan GreenGold fabrics, the greenest fabric in the world," the officials claimed.

    RIL is the country's largest producer of polymer, which is the main raw material for making plastic products.

    The collection of used PET bottles is carried out through around 150 collection centres across the country. "RIL's PET bottle collection initiative directly and indirectly provides employment to around 3 lakh economically weak people that includes a majority of rag pickers," say officials. RIL has tied up with various leading apparel brands including Wrangler, Myntra and Proline to co-brand apparels that are made from green fabrics. The fibre manufactured is also used for filling pillows and soft toys and to manufacture carpets and rugs.

    The Rs 1.1 lakh crore Indian plastic industry has 30,000 companies working in the business. Of the 13 million tonne (MT) plastic consumed every year in the country, about 9 MT is being generated as waste and its 60 per cent is being recycled, according to the authorities. Normally all beverages bottles are thrown as waste, which usually finds its way to landfills or chokes the drainage systems in the cities. Himachal Pradesh banned plastic bags in 2003 and it was followed by Delhi, Sikkim, Rajasthan and Goa, before the ban in Maharashtra a couple of weeks back.

    Earlier, Business Standard reported that RIL was creating a platform for recycling, building a corpus and setting up a full-fledged sustainability team. RIL, which implements the concept of circular economy in its plastic business, has also put in place an effluent treatment plant (ETP) to deal with the pollutants generated during the process of washing, the company said.

    General Awareness

    India gets its 37th WORLD UNESCO World HERITAGE SITE
    • Context: In a Remarkable Achievement, India gets its 37th WORLD UNESCO World HERITAGE SITE. The decision was taken at the 42nd session of the World Heritage Committee of UNESCO at Manama in Bahrain.

      37th site: Victorian Gothic and Art Deco Ensemble of Mumbai.

      Facts for Prelims:

      This makes Mumbai city the second city in India after Ahmedabad to be inscribed on the World Heritage List.
      In the past 5 years alone, India has managed to get inscribed seven of its properties/sites on the World Heritage List of UNESCO.
      India now has overall 37 World Heritage Inscriptions with 29 Cultural, 07 Natural and 01 Mixed sites.
      While India stands second largest in number after China in terms of number of World Heritage properties in ASPAC (Asia and Pacific) region, it is overall sixth in the world.

      What is a World Heritage site?

      A World Heritage site is classified as a natural or man-made area or a structure that is of international importance, and a space which requires special protection. These sites are officially recognised by the UN and the United Nations Educational Scientific and Cultural Organisation, also known as UNESCO. UNESCO believes that the sites classified as World Heritage are important for humanity, and they hold cultural and physical significance.

      Background:

      In 1982, the International Council on Monuments and Sites (ICOMOS) announced, 18 April as the “World Heritage Day”, approved by the General Assembly of UNESCO in 1983, with the aim of enhancing awareness of the importance of the cultural heritage of humankind, and redouble efforts to protect and conserve the human heritage.

      What’s important?

      For Prelims: UNESCO WHS- important sites.
      For Mains: Significance and the need for conservation of WHS.

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