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Current Affairs - 09 August 2018

General Affairs 

Maratha Groups Call For Maharashtra Bandh Tomorrow, Exclude Navi Mumbai
  • Sakal Maratha Samaj, an umbrella body of Maratha groups, today said a 'bandh' would be observed across Maharashtra, except Navi Mumbai, tomorrow to press for the community's demand for reservation.

    A leader of the organisation said the protest would be held in a peaceful manner from 8 am to 6 pm.

    "It will be a state-wide bandh, excluding Navi Mumbai. All the essential services, schools and colleges have been excluded from the bandh," Amol Jadhavrao, a leader of Sakal Maratha Samaj told reporters.

    "Due to some sensitive issues, we have decided not to observe bandh in Navi Mumbai," he said.

    Parts of Maharashtra, especially Koparkhairane and Kalamboli in Navi Mumbai, had witnessed violence during the Maratha quota stir late last month.

    Around 20 policemen, including eight officers, were injured in stone-pelting by protesters at Kopar Khairane and Kalamboli. A protester, injured in the violence in Navi Mumbai, had died from injuries.

    Mr Jadhavrao said, "It will be a peaceful protest from 8 am to 6 pm. I appeal to my fellow Maratha youth to desist from committing suicides. It is not going to help the community and its cause."

    A number of people from the community had earlier committed suicide in support of the quota demand.

    "We are also making an appeal to Maratha youths to stay away from violence. We will not indulge in any aggressive protest and there will be no damage to public properties," he assured.

    Mr Jadhavrao alleged that Maharashtra Chief Minister Devendra Fadnavis was talking to only a handful of Marathas and trying to create confusion within the community.

    "Fadnavis is trying to dilute the intensity of the agitation," he said.

    Commenting on different views expressed by separate Maratha groups in the last few days, he said, "The confusion was created after the agitators in Parli (in Beed district) suddenly decided to withdraw their agitation."

    "But meetings were held in Aurangabad and Mumbai, where rest of the Maratha groups expressed their willingness to go ahead with the bandh. Hence, tomorrow we are going to observe bandh," Mr Jadhavrao said.

    Another Maratha faction has given a call to only hold a sit-in outside the Mumbai suburban district collector's office.

    "We have given a call for a peaceful agitation. We have no intention to cause a contempt of court. The coordinators of Maratha morcha from Navi Mumbai can participate in the agitation in Mumbai," he said.

    "Fadnavis should give a time-bound programme for giving quota to the community on his letterhead and we will withdraw our agitation," Mr Jadhavrao said.

    The Bombay High Court had on Tuesday urged the Maratha community members to refrain from resorting to violence or committing suicide over their demand for reservation in government jobs and education.

    The high court was hearing a plea filed by the Maratha Kranti Morcha, seeking quota and directions to the backward classes commission to submit its recommendations to the state on entitlement of such quota expeditiously.

    Marathas, a politically influential community constituting around 30 per cent of the state's population, have been demanding 16 per cent reservation. The community had earlier taken out silent marches across the state to highlight their demands, prominent among them being that of reservation.

    The agitation, however, turned violent after a 27-year-old protester jumped to his death in Godavari River near Aurangabad on July 23.

    Violence had also erupted at Chakan near Pune during the Maratha quota agitation in the last week of July. Four policemen had been injured in stone-pelting during the protest at Chakan, where the mob also damaged nearly sixty vehicles, including state and civic-run buses and police jeeps.

    Meanwhile, police in Maharashtra are gearing up to prevent violence during the bandh called by Maratha organisations demanding reservations on August 9, an official said in Mumbai.

    There would be a heavy deployment of security personnel, especially in sensitive pockets where violence had taken place during the agitation earlier, a senior police official said.

    The protests would be videographed. The videos and CCTV footage will help police identify criminals and mischief-mongers who may try to take advantage and indulge in violence, the official said.

    According to police, between July 18 and 27, 276 cases of violence were registered across the state during the quota agitation. There were incidents of stone pelting at over 250 places and 198 incidents of arson, he said.

    More than Rs. 4.5 crore-worth public and private property was damaged within 10 days, a police official said.

Partition Wouldn't Happen If Nehru Had Not Been Self-Centered: Dalai Lama
  • Had Jawaharlal Nehru not been self-centred, India and Pakistan would have been one country, the Dalai Lama said on Wednesday, adding that while Pandit Nehru was gifted with experience, mistakes do occur.

    "Mahatma Gandhi wanted to give the prime ministership to (Mohammad Ali) Jinnah. But Nehru refused. He was self-centred. He said, 'I wanted to be Prime Minister'. India and Pakistan would have been united (had Jinnah been made Prime Minister at the time). Pandit Nehru is very experienced. But mistakes do happen," the Dalai Lama said in response to a question from a student during an interaction held at the Goa Institute of Managament in North Goa's Sanquelim village, located nearly 30 km from Panaji.

    The Dalai Lama gave the Nehru analogy, in response to a question from a student who sought to know from the Tibetan leader, about how one can be sure-footed about one's decisions and how to avoid committing mistakes in life.

    The Dalai Lama was a key note speaker on the subject "Today's Relevance of India's Ancient Knowledge" organised as part of the celebrations hosted by the Goa Institute of Management, which is completing 25 years of its existence.

    Preceding the interaction, the Dalai Lama spoke extensively on India's ability to merge its rich traditional knowledge with modern facets of education.

    "India has a culture deeply rooted in tradition and knowledge. The land of ahimsa is a cauldron of traditional knowledge includes the art of meditation, compassion, secularism and more" the Dalai Lama said.

    While acknowledging that the British sowed the seeds of the modern style of education as we know it today, he remarked that India is probably the only country which can find the right balance between its traditional knowledge and modern education.

    He also emphasised the need to create dialogue and debate on a range of subjects which can aid aspiring B-school students to learn, analyse and gain new experiences. "We need more people to come together and talk and debate on aspects linked to India's ancient knowledge such as ahimsa and compassion. We also need to find ways to reduce conflict amongst ourselves," he added.

As Ex-Ministers Hit Government on Rafale, Allegations And Counterpoints
  • In a stinging indictment of the government, two former BJP ministers Arun Shourie and Yashwant Sinha today hit out at the Rs. 58,000 deal with France for 36 Rafale fighters which was signed in 2016.  Along with lawyer and Swaraj Abhiyan leader Prashant Bhushan, the three termed the entire transaction ''a textbook case of criminal misconduct, of misuse of public office, and of enriching parties at the expense of the national interest and national security".

    The attack on the Rafale deal comes after a series of statements made by Congress president Rahul Gandhi who has said that the government was trying to block attempts in the media to  independently report what the Congress calls a scam.  ''The Defence Minister lied to the country'' said Mr Gandhi in parliament last month.  ''Whom is she trying to protect? She must tell that to the country.  She has spoken an untruth.''

    Despite the allegations made by the opposition, there is no evidence, whatsoever, which has emerged of the presence of a middleman in the deal.  Neither is there proof, so far, of anyone having received kickbacks.  And while the government hasn't come out with a white paper on the entire deal, there has been a strong counter to every point raised by the opposition.

    The following are some of the key allegations made by Yashwant Sinha, Arun Shourie and Prashant Bhushan in their press conference today in New Delhi with counter-points offered either officially or unofficially by the Defence Ministry, the Indian Air Force or the Anil Ambani headed Reliance Defence.  Reliance Defence, the India-partner of Dassault, the French manufacturer of the Rafale, has been accused of being the beneficiary of a crony-capitalist arrangement organised by the government to manufacture aerospace components in India as part of the deal's offset requirements.   

    Allegation 1: Hindustan Aeronautics Limited (HAL) India was supposed to manufacture 108 Rafale fighters in India under a deal being negotiated by the UPA government.  HAL was dropped and a direct buy of 36 fighters has taken place which is part of a ''major scandal, gross misuse of office, and monumental misconduct.''

    Counterpoint:  The UPA was unable to conclude any deal for the manufacture of Rafale aircraft in India after talks completely broke down with HAL stating its inability to manufacture the fighter in India at the cost prescribed by Dassault.  During the course of negotiations, it emerged that the man-power costs to manufacture the Rafale in India would be 2.7 times what was prescribed by Dassault.  What is more, Dassault were unwilling to guarantee the manufacture of the fighters at Hindustan Aeronautics.  Neither were they convinced by the ability of HAL or its ancillary units to manufacture the Rafale's sophisticated RBE-2 Active Electronically Scanned Array (AESA) radar.

    Allegation 2: An amount of Euro 1.7 billion for ''India specific upgrades'' is an unjustified addition to the overall cost to acquire 36 Rafale jets in India, an ''excuse that is now being pedalled.'' This is just a ''cock-and-bull afterthought.''

    Counterpoint: In fact, the Euro 1.7 billion amount is a one-time development cost to significantly enhance the capability of the Rafale far beyond what was going to be acquired had the UPA's deal been signed.  The ''India specific upgrades'' include more than a dozen modifications including the provision of low band jammers, a towed decoy system, additional modes and higher resolution for the radar and Front Sector Optonics system of the Rafale.  The jets coming in will also be integrated with an Israeli helmet mounted sight and have modifications to the engine to perform from high altitude bases such as Leh in Ladakh.  Perhaps, most significantly, key systems of the Rafale will likely be "hardened" to withstand the impact of an electron magnetic pulse triggered by the detonation of nuclear weapons which the Rafale can launch.  The overall package may also include software patches or upgrades which will allow India to integrate indigenously manufactured weaponry with the Rafale.  In simple terms, the Rafale being acquired by India is a nuclear strike weapon system, a key part of the country's overall nuclear deterrent.

    Allegation 3: ''The government of India has been insisting that it cannot disclose the price of the aircraft because of an Agreement of Secrecy with the Government of France. This claim is as much of a lie as it is baseless.''

    Counterpoint: In fact, the price of the Rafale has been disclosed off-the-record to defence beat reporters, including this correspondent, shortly after the deal was signed.   Each single engine Rafale costs Euro 91.07 million.  The 8 twin seat fighters cost Euro 94 million each.  ''India specific upgrades'' which enhance the capability of each fighter beyond what was on offer earlier cost Euro 1.7 billion.  This brings the total cost of the fighters to Euro 5.0 billion including the one-time cost of several of the India-specific upgrade components in development specifically for India.  Over and above this, the weaponry package costs Euro 700 million, spare parts cost Euro 1.8 billion and performance based logistics which guarantee that the fighters are available at least 75 % of the time cost an additional Euro 350 million.  The total cost of the entire deal is Euro 7.85 billion.

    However, what remains clear is that there is no individual break up of systems or components being developed as part of the Euro 1.7 billion "India Specific Upgrade'' package.  The opposition says they want the break-up of these costs.  The government has argued that these remain protected within the ambit of Article 10 of the Intergovernmental Agreement between India and France on the purchase of the Rafale aircraft which, in turn, is guided by the provisions of the Security Agreement signed between India and France in 2008.  At the same time, there is nothing that prevents the all-party Parliamentary Standing Committee on Defence from being briefed on sensitive military matters.  The overall Rafale deal is also being audited by the Comptroller and Auditor General.  This being the case, it is unclear why the government has been so reticent to take MPs into confidence so far.

    Allegation 4: ''Did the deal have the approval of the Cabinet Committee on Security at the time that the Prime Minister announced it in April 2015 and included it in the India-France joint statement?''

    Counterpoint:  According to Article 71 of the Defence Ministry's Defence Procurement Procedure 2013, which governed this deal, ''There may be occasions when procurements would have to be done from friendly foreign countries which may be necessitated due to geo-strategic advantages that are likely to accrue to our country.''  Such deals are cleared by a Competition Financial Authority (CFA), which in this case would be the Cabinet Committee of Security (CCS).  This clearance from the CCS did indeed come a month before the deal was signed in September 2016.  A clearance from the CCS was not required at the time the Prime Minister made his announcement in Paris in April 2015 since this was only an intent to acquire the Rafale.  Actual negotiations to close out the deal took more than a year to conclude.

    Allegation 5: Why was Reliance Defence allowed to become India-offset partner of Dassault, the French company that builds the Rafale? ''Neither Reliance nor any of its allied companies have any experience of manufacturing aerospace and defence equipment.'' (Offsets are a key component of the Rafale contract.  50 % or the value of the deal (or approximately Rs.30,000 crore must be reinvested in Indian companies which need to manufacture aerospace components in India)

    Counterpoint:   Not a single private company in India has manufactured fighter aircraft though several including Reliance Defence have a stated interest in expanding their business to include military aviation.  The Dassault Reliance Aerospace Ltd. (DRAL) joint venture is headed by the Chairman of Dassault, Eric Trappier, not Reliance Defence Chief Anil Ambani.  The manufacture of components has to be certified by Dassault and the warranty of items produced at the plant in Mihan, Nagpur has to be provided by Dassault, not Reliance.  Dassault is training Indian manpower to work here and the only aviation components presently being built is the cockpit assembly of Dassault Falcon business jets.  At the same time, Dassault has engaged in negotiations with more than 70 Indian companies other than Reliance including Tata Advanced Systems, Samtel, Hindustan Aeronautics (for engine components), Godrej and Larsen & Toubro.

    Allegation 6: Why did the government clear the offset proposals of Reliance Defence despite knowing that the company ''had a debt of Rs.8000 crores, and had an accumulated loss of Rs.1,300 crores?''

    Counterpoint: The choice of offset partner is not decided by the government.  Dassault chose to select Reliance Defence.  Neither is the government required to clear the off-set package at this stage.  According to Defence Ministry sources, ''as per contract, details of Indian offset partners will be confirmed by Dassault Aviation either at the time of seeking offset credits or one year prior to discharge of offset obligations.'' Since that stage has not yet emerged, the vendor (Dassault) ''has not submitted any proposal for offset discharge.''

    Despite the allegations and several counter-arguments, it remains clear that the opposition, particularly the Congress, is not keen to let go off the Rafale issue.  The Congress believes the ''Rafale scam'' is a key election agenda while the studied silence of the Ministry of Defence continues to leave several key questions unanswered.  There are no indicators that the government will take key members of the opposition into confidence on sensitive aspect of the deal.  Nor is there any clarity on whether the government is willing to provide an item-wise breakup of the ''India specific upgrade'' package worth a whopping E 1.7 billion, which lies at the heart of this controversy.

Prime Minister Narendra Modi Reviews Household Electrification Scheme
  • Prime Minister Narendra Modi has reviewed the progress of household electrification under the "Saubhagya" scheme, focusing on last mile connectivity and distribution of power in urban and rural areas, a PMO statement said.

    The prime minister had yesterday reviewed the progress in the key infrastructure sectors of power, renewable energy, petroleum and natural gas, coal and mining.

    The review meeting, which lasted for over two hours, was attended by top officials from infrastructure-related ministries, NITI Aayog and the Prime Minister's Office.

    Progress in household electrification under the 'Saubhagya' initiative was reviewed. The discussions focused on last mile connectivity and distribution in both urban and rural areas, the PMO statement said.

    In September 2017, the PM Modi had launched the 'Pradhan Mantri Sahaj Bijli Har Ghar Yojana -Saubhagya' to ensure electrification of all willing households in the country in rural as well as urban areas.

    Under the scheme, states and Union Territories are required to complete the works of household electrification by December 31, 2018.

    The beneficiaries for free electricity connections would be identified using Socio Economic and Caste Census (SECC) 2011 data.

    However, un-electrified households not covered under SECC data would also be provided electricity connections under the scheme on payment of Rs. 500 which will be recovered by discoms in 10 installments through electricity bills.

    In course of the presentation made by NITI Aayog, it was noted that the installed power generation capacity in India has risen to 344 gigawatts. India's energy deficit, which stood at over 4 per cent in 2014, has shrunk to less than 1 per cent in 2018.

    Significant capacity additions have been made in transmission lines, transformer capacity and inter-regional transmission. India now ranks 26th in the World Bank's "Ease of Getting Electricity" Index, up from 99th in 2014.

    Officials expressed confidence that India is on track to comfortably achieve the prime minister's target of 175 gigawatts renewable energy capacity by 2022.

    PM Modi urged the officials to work towards ensuring that the benefits from increase in solar energy capacity reach the farmers through appropriate interventions such as solar pumps and user-friendly solar cooking solutions.

    In the petroleum and natural gas sector, it was noted that targets set under the Pradhan Mantri Ujjwala Yojana will be comfortably achieved in the current financial year.

    In the coal sector, discussions focused on further augmentation of production capacity, the statement said.

Tamil Nadu's Personality-Driven Politics Ends With Karunanidhi's Death
  • The death of Dravidian stalwart Muthuvel Karunanidhi has signalled the virtual end of personality-driven bi-polar politics in the state, dominated by charismatic individuals of arch-rivals DMK and AIADMK in the past five decades.

    While it was Karunanidhi and MGR (MG Ramachandran) who held sway over the masses in the initial phase, it later became a contest between was the DMK veteran and MGR's protege late J Jayalalithaa.

    Incidentally, the year 2016 saw both Ms Jayalalithaa and Mr Karunanidhi recede from the political limelight as she died after 75 days of hospitalisation in December, while the DMK chief suffered illness from which he never recovered fully till his demise.

    Mr Karunanidhi, known for his trademark baritone, lost his voice owing to a tracheosteomy procedure, and he subsequently faded away from active politics with his public appearances becoming rare till his death aged 94 last evening.

    The illness forced Mr Karunanidhi to confine himself to his Gopalapuram residence as his son MK Stalin took charge of the day-to-day affairs of the party, assuming a new post of Working President.

    Following his ascent to the Chief Minister's chair for the first time in 1969 following the death of incumbent and DMK founder CN Annadurai, Mr Karunanidhi enjoyed unbridled success till 1972 when the charismatic MG Ramachandran decided to take on Mr Karunanidhi.

    Kicked out of DMK following his differences with Mr Karunanidhi, MG Ramachandran, popularly known as MGR, founded AIADMK and in the 1977 general elections steered his party to a massive win against DMK.

    Since then, the state politics was dominated by the two individuals till MGR's death in 1987 and the trend of bi-polar politics continued for next few decades with Jayalalithaa emerging as the new rival to Karunanidhi.

    Though the AIADMK split post-MGR's death, Jayalalithaa unified the two factions to take forward his legacy.

    Observers of Tamil Nadu politics are of the view that Mr Karunanidhi may have suffered reversals in electoral terms on many occasions, but was never down.

    In the political spectrum dominated by Ms Jayalalithaa and Mr Karunanidhi, leaders like Vijayakant of DMDK made some noise making impressive electoral shows. However, their short-lived glory proved time and again that the bi-polar nature of Dravidian politics was intact.

    The exit of Mr Karunanidhi and Ms Jayalalithaa from Tamil Nadu politics, however, seems to have created a political vaccum in the state politics.

    Observers are of the view that it would be a challenge for any leader to match their charisma and political influence and hence the personality-driven politics of the state could come to an end.

Business Affairs

Flipkart-Walmart deal: CCI nod to US retail giant's Flipkart acquisition for $16 billion
  • The Competition Commission of India (CCI) cleared the acquisition of India e-commerce major Flipkart by the United States-based retail behemoth Walmart. The approval from the competition watchdog clears the path for the biggest FDI deal in the history of Indian corporate sector. Back in May, Walmart had announced acquisition of 77 per cent stake in Flipkart in lieu of $16 billion. Once the deal is complete, the 11-year old Indian e-commerce firm will be valued at $20.8 billion.

    In a tweet on Wednesdy, the CCI stated that it has cleared the Flipkart-Walmart deal. "@CCI_India approves proposed acquisition of Flipkart Private Limited by Wal-Mart International Holdings, Inc," the regulator said in a tweet.

    @CCI_India approves proposed acquisition of Flipkart Private Limited by Wal-Mart International Holdings, Inc

    - CCI (@CCI_India) August 8, 2018
    Walmart had applied for the approval on May 19, after it announced the acquisition of Flipkart, its biggest so far. The CCI, which keeps an eye on unfair business practises in the market, needed to ascertain whether the deal between Flipkart and Walmart threatened the retail scenario in India. Seeking its approval, Walmart had assured the CCI that the deal will not lead to any competition complications and the pecking order of the Indian retail sector will remain unaffected.
    The approval is likely to draw flak from retailer bodies who have been vocally opposing the deal, on grounds that the resultant entity will eat into the market of small retailers. Retailers outfits are even willing take the matter of court in the event of the government not stopping this deal. In contrast, Walmart has maintained that the deal will ultimately benefit the small traders and farmers, and will create employment.

    At the beginning of this week, Walmart had announced that it will hire 1,000 professionals for handling the technical aspect of its venture in India. It is mostly to hold off competition from e-commerce giant Amazon. This announcement came days after the US retail giant said that it will generate at least 30,000 direct and indirect jobs by establishing 15 wholesale Cash and Carry stores across Uttar Pradesh.

IMF sees Indian economy as an elephant that is starting to run
  • It was in 1991, when India waved goodbye to the Licence Raj and embraced economic liberalisation, that it was first likened to the elephant - slow, ponderous but powerful and impossible to ignore. Now, 27 years later, the International Monetary Fund (IMF) believes the $2.6 trillion economy is an elephant that is starting to run.

    What's more, its latest report on India not only reaffirms that the country is "again one of the world's fastest-growing economies" - accounting for about 15 percent of global growth - but also that India it could be what China previously was for the world economy.

    "Real GDP growth is estimated to have bottomed out after the dual shocks of demonetisation and disruptions from GST implementation. Growth was 6.7 per cent in 2017/18 and is projected to increase to 7.3 per cent in 2018/19," said the IMF in its 2018 assessment of the Indian economy, released today. The IMF holds bilateral discussions with members, usually every year, and puts out a staff report in the end.  

    "The prolonged slowdown in global growth, subdued investments and stressed balance sheets of the banking and corporate sectors have impacted India's efforts to achieve its growth potential. Despite these challenges, growth has accelerated," read a statement by Subir Gokarn, India's Executive Director to the IMF, and Himanshu Joshi, his Senior Advisor.

    The report's favourable medium-term outlook reflects continued robustness in private consumption and a recovery in investment, which is supplemented by progress in bank balance-sheet repair and improved credit growth. Better still, it sees economic risks to the outlook as "tilted to the downside" - be it external risks such as higher global oil prices or domestic financial vulnerabilities.

    According to Ranil Salgado, IMF's mission chief for India, the organisation views India as a "long run source of global growth". After all, it is a key driver of global economic growth, next only to China and the US.

    "India has three decades before it hits the point where the working age population starts to decline. So that's a long time. This is India's window of opportunity in Asia... Only a few other Asian countries have this," Salgado told PTI. "For the [next] three decades, it [India] is a source of growth for the global economy and could be even longer. But three decades where India can be almost what China was for the world economy for a while."

    According to the IMF, India is gaining momentum on the back of good macroeconomic policies, stability-oriented policies as well as some important reforms unleashed in recent years. For instance, despite the sundry teething issues with the GST, the Salgado views the new tax regime as a long-term major gain for India. "It's something that's difficult to do. Other countries have struggled. In India it's much more complex because you have 29 states and union territories and you need agreement. I think that that was a great achievement," he said.

    Highlighting the Insolvency and Bankruptcy Code (IBC) as another big achievement, Salgado said that it is already shifting the power balance between debtors and creditors and improving corporate repayment discipline. "If you think of the IBC, it's a difficult change. Basically, the underlying system to resolve bad assets from the corporate sector side is something new. It takes time and experience has to be gained. And we're seeing some of the hitches along the way there, but generally things seem to be moving in the right direction," the senior IMF official added.

    According to him, India's third big achievement "is the inflation-targeting framework that you now have in the Reserve Bank of India", formally adopted in 2016 but even earlier informally.

    Then there are several key smaller steps that the government is taking, like attempts to improve the business climate, steps to further liberalise FDI, et al. "Overall, we're seeing efforts to improve the balance sheet of banks as well as corporate sector. In our view, these are all important things that need to continue," he said.

    The report added that a further deepening and broadening of structural reforms - like simplifying and streamlining the GST - is needed to raise investment, job growth, and productivity over the medium term, to help India's catch up with advanced economies. The IMF also identifies labour reforms and enhancing infrastructure as key areas for continued reforms.

    "Another key area of reform is to strengthen governance in public sector banks to complement the reforms in the financial sector already underway. This is needed, for example, to improve incentives to enhance the efficiency of bank operations and foster more disciplined lending practices by banks," said Salgado, adding, "A first step would be to strengthen the quality and independence of these banks' boards, and privatization could also eventually be considered."

    All in all, Salgado believes that things are relatively positive for us. "India has a young population. It has the potential for a demographic dividend of the next three decades," he said, but quickly cautioned that the benefits of demographic dividend are not automatically realised.

    "It takes good policies to create jobs, to create even stronger economic growth. Seven to eight per cent growth is very good. It's one of the best in the world. But for India, which is appropriately aspiring to quickly catch up with the richer advanced countries, you need even stronger growth," he explained, adding that India ought to aspire to double-digit growth like China used to post. "Because if that doesn't occur, there is the risk that India could grow old before it becomes rich," he warned.

Six factors Sensex, Nifty rose to record highs today
  • The market closed at record highs on Wednesday, powered by a surge in banking and consumer durables stocks. While the Sensex closed 221 points (0.59 per cent) higher at 37,887, the Nifty gained 60 points to close at the 11,450 level. Intra-day, the Sensex hit an all-time high of 37,931 while Nifty touched 11,459 for the first time. Market heavyweight Reliance Industries added 35 points (2.85 per cent) to close at 1217. The stock touched a fresh 52-week high of 1222. Other Sensex gainers were ONGC (2.87 per cent), ICICI Bank (1.63 per cent) and SBI (1.53 per cent).  Here are the six reasons the stock market jumped to a record high.

    Stellar corporate earnings

    The Q1 earnings show by India Inc has been led by a better performance by firms in FMCG and information technology sectors, which have logged double digit growth in net sales and net profit. Earnings of banking and finance companies too logged double-digit growth, which have improved sentiment on the street.

    Banking stocks rally

    Banking stocks led the charge with the Bank Nifty closing above 28,000 level for first time. BSE bankex too rose 245 points or 0.78% to close at 31587 level.

    Rising rupee

    The rupee on Wednesday opened 2 paise higher at 68.66 against the US dollar. Rupee snapped its three-day losing streak today and climbed primarily due to weakness in the dollar against major currencies. Forex market largely withstood the initial discomfort and broad-based dollar weakness helped the rupee to reverse its bearish undertone, according to a PTI report. It finally closed higher by 6 paise at 68.62 level.

    Normal monsoon forecast

    The IMD last week said monsoon rains would be normal in August and September, which bouyed market sentiment.  In the second Long Range Forecast for rainfall during the second half of the Southwest Monsoon season, the IMD said the scenario realised till the end of July suggests that distribution of rainfall was very good across the country except Bihar, Jharkhand and north-eastern states. The favourable distribution of rainfall was expected to continue for the next two months, it said, raising hopes for agricultural operations during the kharif season.

    FIIs withdrawal slows down

    Domestic institutional investors (DIIs) played a key role in setting record rally for indices. DIIs poured Rs 3,845 crore into the Indian market since the beginning of this month. FIIs who have been net sellers in Indian equities since April 2018 sold equities worth just Rs 2,768.75 crore in July. The amount is far lower than Rs 9,620.56 crore, Rs 12,359.71 crore  and Rs 10,249.17 crore withdrawn in April, May and June this year, respectively. The reduction in FII selling in Indian market signals the growing faith of these investors in Indian securities.  The constant FII inflows into the market boosted sentiment on the street.

    RIL stock play

    Market heavyweight Reliance Industries added 2.85% or 35 points to the rally and closed at 1217 level. The stock touched a fresh 52-week high of 1,222 level gaining over 3 per cent intra-day.

India's average per capita income higher in last 4 years at Rs 80,000
  • India's average per capita income in the last four financial years was higher at Rs 79,882 as compared to the preceding four fiscals, Parliament was informed.

    In contrast, from 2011-12 to 2014-15 it was Rs 67,594.

    "The average Per Capita NNI (net national income) in the country during 2011-12 to 2014-15 is estimated at Rs 67,594 whereas average Per Capita NNI in the country during 2014-15 to 2017-18 is estimated at Rs 79,882," Minister of State for Statistics Vijay Goel said in a written reply to Lok Sabha.

    The minister was replying to a question on whether India's average per capita income during the last four years has been much higher than the average per capita income of previous four years.

    According to statement, the per capita income grew by 4.6 percent in 2013-14 to Rs 68,572; 6.2 percent to Rs 72,805 in 2014-15; 6.9 percent to Rs 77,826 in 2015-16 and by 5.7 percent to Rs 82,229 in 2016-17.

CCI approves Tata Steel's proposed acquisition of Bhushan Power & Steel
  • Fair trade regulator CCI has approved Tata Steel's proposed acquisition of debt-ridden Bhushan Power and Steel. "@CCI_India finds no appreciable adverse effect on competition in respect of Tata Steel's proposed acquisition of 100 per cent of the total issued and paid up capital of Bhushan Power and Steel Limited," the regulator said in a tweet today.

    According to the notice submitted to the Competition Commission of India (CCI), the proposed combination involves the acquisition by Tata Steel, either directly or through a wholly owned subsidiary, of up to 100 per cent of the total issued and paid up share capital of Bhushan Power and Steel, which is presently undergoing insolvency resolution proceedings initiated under the Insolvency and Bankruptcy Code (IBC).

    Bhushan Power and Steel owes about Rs 45,000 crore to its lenders and it was among the 12 non-performing accounts referred by the Reserve Bank of India for insolvency proceedings in June last year.

General Awareness

    Restricted Area Permit (RAP) regime
    • What to study?

      For Prelims: RAP- features, important Islands in Andaman and Nicobar.
      For Mains: Need for RAP.

      Context: The Union government has decided to exclude 29 inhabited Andaman & Nicobar Islands from the Restricted Area Permit (RAP) regime, subject to certain conditions, to boost tourism and overall development of Andaman & Nicobar Islands.

      Key facts:

      The list of the islands permitted for foreigners visit includes East Island, North Andaman, Smith Island, Curfew Island, Stewart Island, Land Fall Island, Ayes Island, Middle Andaman, Long Island, Strait Island, North Passage, Baratang, South Andaman, Havelock, Neil Island, Flat Bay, Little Andaman, Chowra, Tillang Chong Island, Teressa, Katchal, Nancowry, Kamorta, Pulomilo, Great Nicobar, Little Nicobar, Narcondam Island and Interview Island.
      Foreigners will also be allowed to visit 11 uninhabited Islands, to be notified by Andaman and Nicobar Islands Administration, only for day visits.

      Exceptions:

      Citizens of Afghanistan, China and Pakistan and foreign nationals having their origin in these countries would continue to require RAP to visit Andaman & Nicobar Islands. In such cases, RAP may be granted only after obtaining prior approval of the ministry of home affairs.
      For visiting Mayabunder and Diglipur, citizens of Myanmar will continue to require RAP which shall be issued only with the prior approval of the MHA.

      What is Restricted Area Permit (RAP) regime?

      RAP regime was notified under the Foreigners (Restricted Areas) Order, 1963.
      Under it, foreign nationals are not normally allowed to visit protected or restricted area unless Government is satisfied that there are extra-ordinary reasons to justify their visit.
      Every foreigner, except citizen of Bhutan, who desires to enter and stay in protected or restricted area, is required to obtain special permit from competent authority having power to issue such permits to foreigner, seeking it.
      Citizens of Afghanistan, China and Pakistan and foreign nationals of Pakistani origin are exception and are not allowed to enter such areas.

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