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Current Affairs - 24 August 2018

General Affairs 

It Was Mullaperiyar: In Top Court, Kerala Blames Tamil Nadu For Floods
  • Sudden release of excess waters from Mullaperiyar dam by Tamil Nadu was one of the reasons why the floods happened, Kerala told Supreme Court today. The release caused an overload in the Idukki reservoir downstream and water had to be released, Kerala said in an affidavit in the Supreme Court, filed in response to a petition that wanted a reduction of water level at the Mullaperiyar Dam.

    Kerala said it had suggested a gradual release of water from Mullaperiyar dam when the water level was at 136 feet. But Tamil Nadu did not accept it. Even when the water level rose to 139 feet, the same suggestion was made, Kerala Chief Secretary said.

    Tamil Nadu contends that it released water on August 16, nearly a week after floods started in Kerala. In its counter-affidavit, expected to be filed tomorrow, the state said it is allowed by the Supreme Court to store water upto 142 feet.

    Since August 8, Kerala was being battered by torrential rains, which turned out to be part of the worst monsoon in a century that cost more than 350 lives. The floods, Kerala said, have caused damages to the tune of 19,500 crore, wiping out houses, crops and infrastructure across vast stretches.

    The affidavit today also said of the state's 1,564 villages, 774 -- spanning 13 of its 14 districts -- were flooded. The deluge affected directly affected more than 54 lakh people, one sixth of the state's population. Around 13 lakh people had to leave their homes and go to relief camps.

    Kerala, however, has been at loggerheads with Tamil Nadu for long over the Mullaperiyar dam, contending that it has developed leaks and needs to be decommissioned. Tamil Nadu operates the dam, located in Kerala, under an 1886 pact drawn up between the British and the Maharaja of Travancore.

"No Chance At All," Says Top Election Officer On Simultaneous Polls
  • The Election Commission has ruled out the possibility of holding simultaneous elections to the state assemblies along with the Lok Sabha polls.

    Chief Election Commissioner OP Rawat today said that there is no chance at all of holding simultaneous elections without a "legal framework" in place. "Koi chance nahi," Mr Rawat was quoted by news agency PTI as saying when asked about simultaneous polls.

    Earlier this month, BJP chief Amit Shah wrote to the Law Commission expressing support for Prime Minister Narendra Modi's "One nation one election" idea. In his eight-page letter, the BJP chief said the opposition to simultaneous elections seems to be politically motivated.

    "The lawmakers will take at least a year to frame a law that can be enforceable. This process takes time. As soon as the Bill to amend the Constitution is ready, we (the Election Commission) will know that things are now moving," Mr Rawat said.

    He added that the Election Commission commences preparations for the Lok Sabha elections 14 months before the scheduled timeframe of polling. "The Commission has a staff strength of just 400 but deploys 1.11 crore people on poll duty during elections."

    While, the Lok Sabha elections are due in April-May next year, assembly polls to Madhya Pradesh, Chattisgarh, Rajasthan and Mizoram are scheduled to be held later this year.

    The government contends that holding polls at the national and state levels will cut down on the cost of elections in terms of both time and money. A paper by the Law Commission recently recommended holding the Lok Sabha and assembly polls in two phases beginning 2019.

    Most opposition parties have scoffed at the idea despite the government's many attempts to bring them on board. The Congress, Trinamool Congress, AAP, DMK, Telugu Desam Party, Left parties and the JD(S) have consistently opposed the proposal, questioning its feasibility and arguing that it would be against federal principles.

    The Congress has also dared Prime Minister Narendra Modi to dissolve the Lok Sabha early and announce general elections along with polls in four states this year. BJP ally Nitish Kumar has said that the concept of one nation one poll is right, but it is not feasible now.

RSS-Linked Muslim Body In UP Cuts Goat-Shaped Cakes To Celebrate Bakrid
  • The Muslim Rashtriya Manch, an affiliate of the RSS, cut goat-shaped cakes in Lucknow on Bakrid as it called on the community to shun extravagance and instead contribute in the upliftment of the poor and deprived.

    "We cut cakes made in the shape of goat or having an image of a goat in a symbolic sacrifice on Bakrid yesterday," national co-convenor of the organisation, Syed Hasan Kausar told PTI today.

    "We do not oppose sacrifice of animals and those who are doing so can go ahead with it but the extravagance attached with it is something which can be put to better use and the means could be utilised for removing poverty and illiteracy," he added.

    Stressing that the trend has found favours with others, Mr Kausar said national convenor of Sunni Social Forum Raja Raees too celebrated the festival in a similar manner.

    "We have been celebrating the festival in this manner since the past couple of years and its encouraging that others are also accepting it," he said. "Those who cannot slaughter goats are still Muslims and follow its tenets," he added.

    Another member of the organisation said it was an eco-friendly way of celebrating Bakrid and members of the community must be made aware of it.

    The state government also took extra measures to ensure peace and order by issuing instructions that the festival be celebrated in a dignified manner.

    "The Uttar Pradesh government had issued clear instructions that the sacrifice should not be held in the open and dignity of the festival be maintained... besides it was also asked that cattle heads and cows should not be slaughtered," deputy chief minister Keshav Prasad Maurya said.

    Chief Minister Yogi Adityanath who held a high-level meeting last week had issued directives to the police and administrative officials in this regard, specially since the festival this time coincided with the "kanwar yatra".

Give Kerala Rs. 2,600 Crore, Then Reject UAE Offer: CPI To Centre
  • If the Centre wants to reject the Rs. 700-crore offer of the UAE to Kerala for flood relief operations, it should give a Rs. 2,600-crore interim assistance as sought by the southern state, the Communist Party of India (CPI) said today.
    Suravaram Sudhakar Reddy, the national general secretary of the CPI - the second biggest constituent in the ruling Left Democratic Front (LDF) government in Kerala -- also accused the Centre of "standing on false prestige" on the issue of foreign aid at times of natural disasters.

    He said when a country faced a natural calamity, it was normal for other nations to offer aid, and recalled that India had helped Nepal and Bangladesh in such situations in the past and even made an offer to Pakistan when there was an earthquake in the neighbouring country.

    "In such circumstances, we can accept from the UNO and the UAE...whoever supports unconditionally without strings...we should accept it," Mr Reddy told PTI.

    The BJP-led NDA government at the Centre was "unofficially" saying that it was following the policy of the previous UPA government of not taking foreign assistance in case of natural disasters, he said. "The UPA government had taken many good decisions also, including giving special category status to Andhra Pradesh. Why are they (Centre) not giving (that)?," Mr Reddy asked.

    He described the decision of not accepting foreign aid for the Kerala flood relief operations as only a "pretext" and said the Centre was "standing on false prestige".

    "Neither is the Government of India ready to give what the Kerala government is asking for. It did not ask for all the Rs. 20,000 crore (estimated loss due to the rains). It is asking for Rs. 2,600 crore. The Centre, if it wants to reject the offer of the UAE, should give Rs. 2,600 crore (to Kerala) and then can say that India itself is ready to solve its problems," the Left leader said. 

EU Gives 190,000 Euros To Indian Red Cross For Kerala Flood Relief
  • The European Union (EU) has donated an initial 190,000 euros to the Indian Red Cross Society (IRCS) for providing immediate assistance in flood-devastated Kerala.

    "In response to the devastating monsoon floods that swept across large parts of Kerala, the EU has allocated an initial contribution of 190,000 Euros in humanitarian aid funding to support the Indian Red Cross Society for immediate relief assistance," it said in a statement. 

    "The aid will directly benefit 25,000 from among the most affected people in some of the worst hit areas," it said.

    The worst floods to hit Kerala since 1924 have claimed around 370 lives since monsoon rains began on May 29 and displaced hundreds of thousands this month. 

    The EU said its funding support would ensure much needed assistance through the distribution of essential shelter and household items including tarpaulins and kitchen sets. 

    "As outbreaks of vector-borne diseases such as dengue, chikungunya and malaria are common following flooding, mosquito nets are also being provided, while disease prevention and hygiene promotion activities are being conducted," it said. 

    "Special attention will be placed on the most vulnerable populations."

    The funding is part of the EU''s overall contribution to the Disaster Relief Emergency Fund (DREF) of the International Federation of Red Cross and Red Crescent Societies (IFRC).

Business Affairs

Air India seeks Rs 500 crore urgently to repay banks
  • Since the failed disinvestment attempt in May, the Maharajah has been scrambling for cash. The buzz earlier was that Air India had asked for a Rs 30,000 crore fund infusion plan - after the Civil Aviation Ministry reportedly sought Rs 11,000-crore bailout package for the beleaguered airline. But post rejection from the government, at least on the former, the national carrier is now in dire straits and in urgent need of a cash infusion.

    According to The Economic Times, Air India is on the brink of defaulting on bank loan repayments, so the aviation ministry has sought Rs 500 crore from the finance ministry on an urgent basis. "A letter has been sent (to FinMin) to release the money in the interim so that payments can be made to banks," an aviation ministry official told the daily. In the current financial year, the airline has already received an equity infusion of Rs 650 crore up to June.

    In addition to this aid sought from the North Block, the airline is raising a Rs 1,500 crore short-term loan from the Bank of Baroda. According to Air India officials, a large chunk of this bank loan will go towards servicing the airline's international liabilities, which are on sovereign guarantee, as well as salaries and other expenditure. So there won't be enough left over to meet bank liabilities. After all, the airline boasts a total debt of over Rs 48,000 crore and reportedly has to pay around Rs 4,000-5,000 crore as outgo interest per year.

    The good news is that bankers have not classified this loan as a non-productive asset, although the account is certainly showing some signs of stress. Some Air India loans are reportedly now in SMA1 and SMA2 categories but the asset has not seen any fresh deterioration.

    According to RBI rules, defaults on loan accounts have to be classified as special mention accounts, or SMA. For instance, accounts with principal, interest or any payment overdue for a period between one and 30 days are classified under SMA-0 category. The account is put under SMA-1 category if payment is overdue for 31 to 60 days, and under SMA-2 category if the non-payment period is between 61-90 days.

    Given that the airline continues to grapple with financial woes, including consecutive default on salary for the past five months and a delay in payment to vendors, ministry officials claim that the airline may actually need a bigger bailout plan. "After the divestment plan did not yield any result, Air India Specific Alternate Mechanism (AISAM) had decided to provide a bailout to Air India. The bailout plan is being discussed at various levels and no final decision has been taken yet," said another source.

    According to him, current thinking favours debt reduction through sale of assets instead of creating a special purpose vehicle (SPV) to house debt and assets, as was proposed in the original divestment plan. "Shifting assets into an SPV would attract a lot of taxes and stamp duty. Hence, this plan was put on hold and we decided we will sell assets without shifting them to an SPV," he added.

    But selling assets is easier said than done. On one hand, its loss-making engineering subsidiary is unlikely find takers, and on the other, selling its profit-making ground handling subsidiary would choke off a steady revenue source.

    Meanwhile, Air India is managing to stay afloat on the Rs 30,000 crore bailout package extended by the previous UPA regime in 2012 for a decade. Of that, the airline has received Rs 27,195 crore so far.

Reliance Industries becomes first Indian company to cross Rs 8 lakh crore market cap
  • Mukesh Ambani-led Reliance Industries (RIL) on Thursday became the first Indian company to cross Rs 8 lakh crore market capitalisation, racing ahead of Tata Sons' crown jewel TCS by more than Rs 20,000 crore in valuation. The Reliance Industries' stock closed 1.86 per cent or 23.20 points higher at Rs 1,269 level on BSE today, taking its m-cap to Rs 8,04,691 crore. RIL stock has gained 37.85 per cent since the beginning of this year.

    The market valuation of oil-to-telecom conglomerate crossed the $100-billion mark last month. A few days later, its m-cap surged past Rs 7 lakh crore, making it the second company after IT bellwether Tata Consultancy Services to achieve the coveted milestone. TCS had crossed the $100 billion milestone on April 23.

    While RIL is the first homegrown major to achieve this feat, the aggregate market capitalisation of 15 Tata group companies comes to Rs 11.32 lakh crore. Also, the collective valuation of Deepak Parekh-led financial services behemoth HDFC Group had recently crossed Rs 10 lakh crore. This includes HDFC Ltd, HDFC Bank, HDFC Asset Management Company and HDFC Standard Life Insurance Company.

    It's not just the shareholders who are reaping in the benefits of sky high valuations, promoters too have seen their wealth grow exponentially.

    Ambanis own 47.35 per cent stake in RIL, compared to 71.92 per cent held by promoters of TCS. With today's hike in stock prices, the collective wealth of Ambani family has risen to Rs 3,81,021 crore.

    The aggregate value of promoter holdings in 15 top Tata group companies has crossed $100 billion (Rs 7.03 lakh crore), thanks to the recent surge in TCS and Titan stocks and the depreciation witnessed in the Indian rupee. The Tata Trusts through the holding companies -- Tata Sons and Tata Industries -- control the promoter stake in group companies.

Facebook, Google watch out! Govt plans new rules for internet, social media companies
  • Miffed at WhatsApp's less-than-satisfactory compliance with the government's directive to combat fake news on its platform, the Centre is reportedly planning to tighten the screws on the accountability front for all internet and social media companies. The development comes in the wake of around 40 incidents of lynching deaths across the country due to mass misinformation spread on WhatsApp, boasting over 200 million users in India.

    According to The Economic Times, the government is likely to introduce new guidelines soon to ensure better compliance, speedier action to stop the spread of rumours or offensive content on their platforms, as well as better enforcement. A top official told the daily that the stringent move will involve the notification of fresh clauses under existing intermediary guidelines under Section 79 of the Information Technology Act. "The draft of the guidelines is ready and a legal firm is vetting it. It should be out by September," the source added.

    While the above Section makes it clear that intermediaries shall not be "liable for any third party information, data, or communication link made available or hosted" by them, it also mandates them to observe "due diligence". Currently, internet firms such as Google and Facebook, which also owns WhatsApp, are categorised as intermediaries, which act as facilitators and do not actively take part in creating or modifying information.

    Significantly, the report added that intermediary guidelines under this section, notified in 2011, allowed companies time up to 36 hours to remove objectionable content and name a grievance officer on its website for response. However, these guidelines were not stringently enforced.
    So, cracking the whip, the proposed guidelines will make it mandatory for players in the business to name a grievance officer for India, who will not only be tasked with responding to complaints within a few hours but also ensure traceability of content.

    "The ball is now in our court. We have to come out with guidelines under Section 79 of the IT Act and then we can take it to WhatsApp [or any other internet company] and say you are not complying with them," said the official, adding, "These will provide us with tools to enforce [rules]. Right now they say that they are end-to-end encrypted so [one] can't trace the origin of messages."

    In fact, back in July, Electronics and Information Technology (IT) Minister Ravi Shankar Prasad had hinted at this in the Rajya Sabha, saying that the government was working towards strengthening the implementation aspects of Section 79 to better respond to emerging challenges in the online space.

    In a way, this development seems to signal a softening in the government's previous stance. The buzz earlier this month was that the government was mulling an option of actually blocking popular apps, including Facebook, WhatsApp and Instagram, over concerns of fake news as well as the growing misuse of social media for illegal activities such as child pornography and terror. The Department of Telecommunications (DoT) had reportedly even sent out a letter to stakeholders seeking technical inputs on blocking the apps under the provisions of Section 69A of the Information Technology Act, 2000. This section allows the government to block public access to any online information that can threaten public order, or the unity, integrity, defence or sovereignty of India, or impact friendly relations with foreign states.

    The telecom industry body Cellular Operators Association of India had been quick to point out that it would be extremely difficult, if not near impossible, to categorically block these apps. But the new proposal is not winning hearts, either.

    Citing legal experts, the daily reported that the move to mandate the traceability of messages circulated will open up a "can of worms" since the law will also be binding on text messages on cellular networks. "The government can't expect officials of companies to take decisions on content within a few hours, something the courts will take many years to decide," Rahul Matthan, partner at law firm Trilegal, told the daily. "There are some sites such as Facebook which curate the news feed and play some active control, and we can put responsibility on them, but all messages don't need to be reviewed to solve this."

    Furthermore, the proposed guidelines could potentially violate a past Supreme Court's verdict. According to experts, Section 79 rules were subject to review and reading down by the apex court in its landmark 2015 Shreya Singhal judgment so any change in it might impact constitutional rights. "The legislature can't amend the concepts which have been laid down by the apex court during the Singhal judgement," said Matthan, adding that the government needs to come up with a law against lynching, not against the messenger.

    In a related development, Prasad met with WhatsApp CEO Chris Daniels and asked the company to find solutions to current challenges that are downright criminal violation of Indian laws. The minister had also said the company will need to have a "proper corporate entity located in India" along with a local grievance officer, a system to trace the origin of fake messages and better compliance with laws of the land. "We won't appreciate a scenario where any problem will have to be answered in America," Prasad had added.

    WhatsApp has reportedly assured the government that it would soon take steps on all these counts. How soon, is the big question now.

Moody's says India to grow at 7.5% in 2018, 2019
  • The Indian economy is expected to grow by around 7.5 per cent in 2018 and 2019 as it is largely resilient to external pressures like those from higher oil prices, Moody's Investors Service said today.

    In its Global Macro Outlook for 2018-19, Moody's said the run-up in energy prices over the last few months will raise headline inflation temporarily but the growth story remains intact as it is supported by strong urban and rural demand and improved industrial activity.

    "Growth prospects for many of the G-20 economies remain solid, but there are indications that the synchronous acceleration of growth heading into 2018 is now giving way to diverging trends. The near-term global outlook for most advanced economies is broadly resilient, in contrast to the weakening of some developing economies in the face of emerging headwinds from rising US trade protectionism, tightening external liquidity conditions and elevated oil prices," it said.

    Moody's put G-20 growth at 3.3 per cent in 2018 and 3.1 per cent in 2019. The advanced economies will grow 2.3 per cent in 2018 and 2 per cent in 2019, while G-20 emerging markets will remain the growth drivers at 5.1 per cent in both 2018 and 2019.

    "We expect the Indian economy to grow around 7.5 per cent in 2018 and 2019," it said.

    Moody's had in May cut India's 2018 growth forecast to 7.3 per cent from the previous estimate of 7.5 per cent, saying the economy is in cyclical recovery but higher oil prices and tighter financial conditions will weigh on the pace of acceleration.

    Today, in the graphic accompanying the outlook, it put 2018 growth at 7.3 per cent and 7.5 per cent for 2019. But in the text it put the growth "around 7.5 per cent" for both the years.

    Indian economy grew by 7.7 per cent in the first quarter of 2018. "High-frequency indicators suggest a similar out-turn for the second quarter," Moody's said. "Growth is supported by strong urban and rural demand and improved industrial activity."

    While robust activity is shown in the industrial sector, a normal monsoon together with the increase in the minimum support prices for Kharif crops should support rural demand.

    "Thus, despite external headwinds from higher oil prices and tightening financing conditions, growth prospects for the remainder of the year remain in line with the economy's potential," it said.

    Moody's said the Reserve Bank of India (RBI) in July raised the benchmark repo rate by 25 basis points for the second time in two months to 6.5 per cent.

    "Two concerns behind the tightening cycle are rising core inflation and vulnerability to tightening external financial conditions," it said.

    Retail inflation in India has risen as per expectations since mid-2017 but remains stable at around 5 per cent. But core inflation has moved up in recent month to 6.2 per cent, it said adding a number of factors influencing the headline inflation rate in both directions, most of which are transitory.

    "The run up in energy prices over the past few months will raise headline inflation temporarily. The impact on food inflation from increased procurement prices to farmers will be mitigated somewhat by the expected rise in farm output because of a good harvest," it said.

    An upside to inflation comes from strengthening demand, which is reflected in rising core inflation. "We, therefore, expect the RBI to continue on a steady tightening path into 2019," it added.

You may be able to make phone calls, use internet on flights from October
  • Indian fliers will finally be able to use internet and make phone calls on their flights. The telecom department will allow calls and internet at 30,000 ft from October this year. An official at the Department of Telecommunications (DoT) said, "We are in the final stages of inflight connectivity licence norms and the service option will be given to carriers and telecom companies within two months," as mentioned in The Economic Times.

    DoT officials said that they have followed the telecom regulator's recommendations to draft the guidelines. Once the department clears the plan, the law ministry's approval will take another two weeks to sanction. The official said that there have been meetings with telecom operators and airlines with some parties showing interest to offer these services.

    The official also said that once the licences are rolled out, the carriers and telecom companies can fight it out to pick the service they want to push out.

    Indian carriers are in favour of providing internet services as it would result in add-on revenues and bring them at par with international flights. There is still no clarity on the pricing. However, it is anticipated that the cost will far surpass that of normal rates for mobile services as initial investments will be made by the airlines.

    However, it is not going to be a simple task for Indian carriers. Each aircraft would require an investment of about $1 million, an executive said. The plane will also have to be grounded for at least 10 days to retrofit the aircraft with the technology. In current circumstances, this revamping may not come across as very welcoming.

    The Telecom Regulatory Authority of India (TRAI) had earlier said that Indian and international flights be allowed voice and data services within India's airspace above an altitude of 9,850 ft. It suggested that in-flight service connectivity licences should be provided at Re 1 annually. Except for international flights, the Telecom Commission approved TRAI's recommendations.

General Awareness

    President appoints Governors of seven states
    • What to study?

      For Prelims: Constitutional provisions related to the office of governor.
      For Mains: Significance and issues associated with the office of governor- is he merely a rubber stamp, comparison of powers with the President and frequent removals.

      Context: By exercising his authority under Article 156 of the constitution, President Ram Nath Kovind has appointed Governors of seven states including Bihar, Haryana, Uttarakhand, Jammu and Kashmir, Sikkim, Meghalaya, and Tripura.

      Governors of States in India:

      Governor is the head of the Executive power of any state in India, just like the President who is the head of the executive power in the Union.

      Governor is the nominal head of a state, unlike the Chief Minister who is the real head of a state in India.
      According to an amendment in the Constitution of India (7th Constitutional Amendment Act), brought about in 1956, the same person can be the Governor of two or more states.

      Appointment and removal:

      The governors and lieutenant-governors are appointed by the president for a term of 5 years.
      The term of governor’s office is normally 5 years but it can be terminated earlier by: Dismissal by the president on the advice of the prime minister of the country, at whose pleasure the governor holds office or Resignation by the governor.
      There is no provision of impeachment, as it happens for the president.
      Article 157 and Article 158 of the Constitution of India specify eligibility requirements for the post of governor.


      Like the President of India, the Governor of any state in India is vested with certain executive, legislative and judicial powers.
      He or she also possesses certain discretionary or emergency powers.
      But one major difference in the powers enjoyed by the President and those enjoyed by the Governor is, the Governor does not have any diplomatic or military powers.

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