Current Affairs Current Affairs - 30 August 2018 - Vikalp Education

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Current Affairs - 30 August 2018

General Affairs 

More Than 11,000 Claims Worth Rs. 1,200 Crore Filed With Insurers In Kerala
  • More than 11,000 claims worth an estimated Rs. 1,200 crore have been filed by flood-affected people with the four public sector insurance companies in Kerala, a top official said today.

    United India Insurance Company Director and General Manager K B Vijay Srinivas said the public sector insurance companies had decided to simplify the process and dilute norms for speedy disbursement of claims to the flood-affected people.

    "As of yesterday, the New India Assurance Company, General Insurance Corporation, United India Insurance Company and Oriental Insurance Company received more than 11,000 claims with an estimated loss of Rs. 1,200 crore. We are expecting more claims in the coming days," he told reporters, adding the process of settling claims would be done soon

    More staff have been brought from other states for quick disposal of cases, he said.

    All flood-related deaths will be treated as accident cases eligible for insurance claims, Mr Srinivas said, adding the companies will go by the list of deceased provided by the government.

    "The procedure for all types of insurance claims has been simplified and the companies will stick to the basic standard formalities," he said.

    As a pro-active step to process the claims relating to floods, the companies have started collecting preliminary information on the loss to policy holders through phone calls, e-mails and direct communication, the official said.

    On steps taken for speedy and hassle-free settlement of claims, he said postmortem and police reports have been done away with while disposing personal accident claims.

    The rains and floods in Kerala, the deadliest in the last century, have claimed the lives of 474 people since May 29 when the south west monsoon set in over the state.

Armed Forces Special Powers Act Extended For 6 Months In Assam
  • The Assam government today extended application of the controversial Armed Forces (Special Powers) Act, 1958 (AFSPA) in the state for six more months with immediate effect.

    The Act gives special rights and immunity to security forces in carrying out various operations in "disturbed" areas.

    "As per powers conferred under Section 3 of the Armed Forces (Special Powers) Act, 1958, the Governor of Assam has declared the entire State of Assam as 'Disturbed Area' upto 6 (six) months beyond 28th August 2018, unless withdrawn earlier," an official release said.

    Many civil society groups and activists have been demanding withdrawal of the Act from Assam claiming violation of human rights by the armed forces.

Speed Up Construction Of Bunkers Along Border In Jammu, Authorities Told
  • The Jammu and Kashmir government has asked authorities concerned to chalk out a strategy to expedite work on construction of bunkers along the International Border (IB) for the safety of the people in Jammu division, officials said today.

    Jammu Divisional Commissioner Sanjeev Verma passed the directive yesterday at a meeting convened to review the progress on construction of bunkers, a government official said.

    He said the meeting was attended by Jammu Deputy Commissioner Ramesh Kumar, Deputy Commissioners of Kathua, Samba, Rajouri and Poonch (through video conference) and senior officers of Roads and Buildings of the Public Works Department.

    The deputy commissioners apprised the divisional commissioner about the present status of progress being made for the construction and allotments of individual and community bunkers in their respective districts, the official said.

    He said Sanjeev Verma asked the deputy commissioners and executing agencies to chalk out strategy to expedite the work for construction of bunkers.

    The Centre had sanctioned the construction of 14,460 individual and community bunkers at a cost of 415.73 crore along the International Border last year.

    7,162 underground bunkers would be constructed along the International Border in Jammu, Kathua and Samba districts.

Arvind Kejriwal Demands White Paper On Demonetisation
  • Delhi Chief Minister Arvind Kejriwal on Wednesday demanded a white paper on demonetization from the central government, saying that people suffered immensely from it.

    "People suffered immensely due to demonetisation. Many died. Business suffered. People have a right to know - what was achieved through demonetization? The government should come out with a white paper on the same," Mr Kejriwal said in a tweet.

    He attached a tweet which said the RBI's annual report had stated that 99.3 per cent of all money in circulation came back to the banking system after the note ban.


    The central government on November 8, 2016 announced it was taking back all Rs. 500 and Rs. 1,000 bank notes.

World's Smallest Medical Robot Hits Guinness Book Of World Records
  • A doctoral research student at the University of Texas has built the world's smallest medical robot that cannot be seen with the human eye.

    Creation of Soutik Betal, the robot measures 120 nanometer and has entered the Guinness Book of World Records for its negligible size, Fast Company reports.

    The robot is basically a series of nano-composite particles of multi-functional oxide materials that can be remotely controlled by an electromagnetic field.

    Because the tiny robot is capable of interacting with biological cells, future applications could include direct medication to cells in conditions such as cancer and Alzheimer's.

Business Affairs

RBI says 99.3% demonetised notes were returned; major points from central bank's annual report
  • The Reserve Bank of India in its annual report has said Rs 15.31 lakh crore out of the total Rs 15.41 lakh crore demonetised currency have returned to the banking system. The central bank said 99.3 per cent junked notes were deposited in banks, while 0.7 per cent notes worth Rs 10,720 crore couldn't be traced. Critics say the numbers prove that demonetisation was a big failure. PM Modi had scrapped Rs 500 and Rs 1,000 notes in a surprise announcement on November 8, 2016.

    Here are the main points related to demonetisation the RBI has highlighted in its annual report for 2017-18:

    1. The value of banknotes in circulation increased by 37.7 per cent over the year to Rs 18.03-lakh crore at end-March 2018. The volume of banknotes, however, increased by 2.1 per cent. This is in sharp contrast to the government's push for digitisation and a less-cash economy.

    2. In value terms, the share of Rs 500 and Rs 2,000 banknotes, which together accounted for 72.7 per cent of the total value of banknotes in circulation in March-end 2017, increased to 80.2 per cent in March-end 2018.

    3. The after-effects of demonetisation continued in 2017-18 as well. The RBI says the indent for 2017-18 was higher by 9.1 per cent as compared to last year. However, the supply of banknotes was lower than the previous year.

    4. During the year, 2,700 crore pieces of banknotes were disposed off as against 1200 crore pieces last year, mainly on account of accelerated processing of Rs 500 and Rs 1,000 notes. The RBI said the humungous task of currency management, including remonetisation, processing and reconciliation, was achieved in record time.

    5. One of the aims for demonetisation was to fight the fake currency problem. According to the RBI data, 522,783 pieces of counterfeit notes were detected in the banking system in 2017-18.

    6. Of the total fake notes detected, the share of such notes detected by the central bank was higher at 36.1 per cent in 2017-18 as compared to 4.3 per cent during the previous year.

    7. The total expenditure incurred on security printing during the FY18 stood at Rs 4,912 crore as against Rs 7,965 crore in 2016-17, says the RBI. The amount was higher in FY17 due to demonetisation, which forced the RBI to print more new notes.

Reliance Infra completes Rs 18,800 crore Mumbai power biz sale to Adani
  • Reliance Infrastructure (RInfra) today said it has completed the Rs 18,800-crore deal for sale of its Mumbai energy business to Adani Transmission, which will help it pare debt by two-thirds to Rs 7,500 crore.

    RInfra Chairman Anil Ambani announced the culmination of the deal involving the sale of the integrated power business which was struck in December last year.

    Ambani said the deal will help cut the company's overall debt to Rs 7,500 crore from the earlier Rs 22,000 crore and also added that it is planning to be a zero debt company by next year.

    The company had called a board meet today to approve the transfer of Mumbai power business to Adani Transmission, after receiving the regulatory approvals.

    In the past eight months, the deal has received go-aheads from fair trade regulator Competition Commission of India (CCI), shareholders of the company and Maharashtra Electricity Regulatory Commission (MERC) for the sale.

    Last week, Reliance Infrastructure had defaulted on payment of redemption of non-convertible debentures (NCDs) amounting to Rs 133.38 crore.

    The company had, however, said it expects to make these payments in the next few days from the proceeds from of Mumbai power business to Adani Transmission.

    "All lenders have provided their no objection certificates (NOCs), and the company expects to close the transaction within the next few days," it had said.

    The two companies had signed the pact for 100 per cent stake sale of R-Infra's integrated business of generation, transmission and distribution of power for Mumbai in December 2017.

    The company had claimed that the Reliance Infrastructure Mumbai Power business (known as Reliance Energy) is India's largest private sector integrated power utility distributing power to nearly three million residential, industrial and commercial consumers in the suburbs of Mumbai, covering an area of 400 sq km.

    It caters to a peak demand of over 1,800 MW, with annual revenues of Rs 7,500 crore with stable cash flows. The company had earlier said that going forward, it will focus on upcoming opportunities in asset light EPC (engineering, procurement and construction) and defence businesses.

    The RInfra scrip gained 3.75 per cent to close at Rs 438.80 a piece on the BSE today, against a 0.45 per cent correction in the benchmark.

    Ambani today also said that work on the Rs 6,994-crore Bandra Versova sealink will start from October 1. RInfra has tied up with Italy's Astaldi to build the 10-km sealink in the western suburbs of the financial capital.

How FII inflows set the stage for record Sensex, Nifty rally this year
  • The Sensex and Nifty have surged to record highs this year which led to a major rise in investor wealth during the last six months. In fact, market capitalisation of BSE-listed firms rose to an all-time high of Rs 158.89 lakh crore at the end of trade today.

    The market capitalisation of BSE-listed firms rose by Rs 16.65 lakh crore or 11.71% since April 2018. At the end of March 2018, the figure stood at Rs 142.24 lakh crore.

    Similarly, the Sensex and Nifty rose 13.80% and 11.90% during the last six months, respectively.  

    Interestingly, domestic institutional investors (DIIs) have been net buyers in Indian markets since April. They invested Rs 44,845.49 crore into Indian equities. Since the beginning of this year, DIIs invested Rs 69,751 crore into Indian markets.

    Domestic institutional investors are institutional investors which undertake investment in securities and other financial assets of the country they are based in. The investors usually comprise banks, mutual funds houses and insurance companies who pour in money expecting to reap huge returns from their investments.

    The strong buying activity by DIIs helped market scale all-time highs this fiscal.

    But when it comes to Indian markets, contribution of FIIs cannot be ruled out.

    Foreign institutional investors are the institutional investors which undertake investment in securities and other financial assets of the country they are based out of.

    In the first three months of this fiscal, FIIs withdrew Rs 61,130.37 crore from the Indian market primarily due to US-China trade war and hawkish commentary by the US Federal Reserve.

    The trade war fears spooked global markets with analysts downgrading global growth estimates with the biggest downward revisions to growth in the US and China.

    But the negative trend of FIIs fund outflows could not last for long, thanks to a host of factors.

    VK Vijayakumar, chief investment strategist at Geojit said, "FIIs were apprehensive about the performance of emerging markets in general this year. In fact, the performance of most markets, with the exception of US, is mediocre. As on mid August, the EMU, Japan and EM indexes are down by 1.6 percent, 5.4 percent and 5.6 percent respectively in local currency. Out of the 27 major markets, only nine are in positive territory whereas 18 are in negative territory as on mid August. India is among the best performers and therefore FIIs have come back because it would be costly for them if they don't participate in this rally."

    A major incentive for FIIs pumping money into the Indian market was healthy earnings show by India Inc in the first quarter of current fiscal.

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

    India Inc witnessed a healthy 22 per cent revenue growth in the June quarter, according to a report by Icra.

    An analysis of 173 companies showed consumer-oriented sectors such as auto, FMCG, consumer durables and airlines as well as commodity linked sectors such as cement, iron and steel and oil and gas, saw stronger sales growth in the June quarter.

    Mustafa Nadeem, CEO at Epic Research said, "FIIs and DIIs have been positive since in fact June for the Indian market. The early signal for a medium-term bottom was change in derivatives rollover that we have seen for July series. It was above six-month average in a bear momentum that has seen a top of 11,150 and a sharp knife fall. The movement thereafter has been swift in Benchmark indices such as Nifty, Sensex or Nifty bank and IT for that perspective. The important point here is when we analyze Asian markets emerging economies; India is positioned well for fund inflows given the fact we have had few upgrades in the last one year.

    On the earnings front, Q1 has been as per street expectations with leading stocks posting double-digit growth and are giving a positive guidance in the coming quarters. Monsoon rainfall has been going fairly well and is somewhat expected to be normal throughout the season.

    All this does make India a sweet spot amongst the economies that are taking a hit from trade war."   

    July and August saw FIIs re-impose faith in the Indian market. FIIs invested Rs 2,263.94 crore in July 2018 and Rs 7,331.81 crore in August. The investment came after three consecutive months of withdrawals by FIIs starting April 2018.   

    Jaikishan Parmar, senior equity and research analyst at Angel Broking said, "The sell-off in the months leading up to June were driven by expectations that that the US Fed would get a lot more hawkish while the RBI would maintain a more neutral to dovish stance. However, the RBI has already hiked  rates on two occasions by 25 basis points each in the months of June and August. In the short term that does away with the risk of risk-off outflows from India and that explains why the tide tuned in the months of July and August. Also, the inflows in August were more because the RBI had front-ended the rate hikes and that was positive for the rupee value."

Railways launches first 'smart coach', 100 more to be rolled out soon
  • Soon, railway coaches will be as 'smart' as metro trains. These railway trains will be equipped with modern technologies like Artificial Intelligence to enhance the security of passengers and improve train efficiency. First such state-of-the-art coach was unveiled at the Modern Coach Factory in Raebareli on Tuesday, and the Railways plans to make 100 such trains as a pilot project. Called 'Smart Trains', these coaches will have sensors that can detect defects on bearings, wheels and railway track, giving authorities constant feedback. Early detection of these faults will enable Railways to plan maintenance in advance, and avoid accidents, which will boost train efficiency. Besides, the modern infotainment system installed in it will enable you to locate train in real time. Artificial Intelligence-powered CCTVs would help officials keep a tab on any untoward incident. People will also be able to communicate with the railway staff regarding any assistance.

    The state-of-the-art coach is equipped with modern sensors and centralised computer to monitor the status of all sensors through a single window. It has been built on LHB platform and has vibration-based self-power harvesting sensor on the axle box, which will predict the defects on the bearings, wheel defects and hard spot (defects) on the track.

    "Basically, we made this coach intelligent, which means we turn it into a coach that can sense passengers' requirements, react according to that. Similarly, this coach will alert authorities on maintenance, safety and security front too. The black box installed in the coach would ensure all these things are constantly being monitored. This infotainment system will not only provide analytics-based passenger information, entertainment facilities like Wi-Fi but will also keep air conditioning and water levels at a check," Rajesh Agarwal, General Manager, Modern Coach Factory, said.

    The Central Processing Unit, known as 'PICCU' (Passenger Information and Coach Computing Unit), an industrial grade computer has been provided with GSM network and will primarily monitor the important area of coach maintenance and passenger interface. The passenger information system will inform the passengers about the current location of the train and also the expected time of arrival at the next station. This system can also show the speed of the train, the statement said.

    Arun Arora, Principal CME, Railways, said: "This is an age of the smart device. Form mobile phones to music systems, everything is smart these days. We have tried to leverage on this technology. We hope to soon install it in the Kaifiyat Express."

    CCTV with artificial intelligence capability will enhance the security of the passengers and also monitor the behaviour and activities of on board railway staff. "The footage will also help in an investigation into any untoward incident during the journey and identifying the culprits and indirect intervention from a remote control centre," the ministry said. The coach is also provided with the emergency talk back system for communication between the passengers (especially woman and child) and the guard of the train so that necessary assistance can be provided. It also has Wi-fi hot spot information system. An additional cost of all systems/all equipment will be approximately Rs 12-14 lakh, which can be recovered in a year or so, the ministry said.

    A pilot project is being launched to turn out a minimum 100 more smart coaches to gain experience and validate. "Once these sensors will be installed in these coaches, we will monitor them in trials and see if any modification is required," said Arora.

JSW Steel vs Tata Steel: Race continues for steel bellwether tag
  • Action continues unabated in steel industry. The Indian private steelmakers JSW Steel and Tata Steel, which are in rampant acquisitions to increase the capacities, look to submit bids for Usha Martin's 1 MT steel unit. JSW will replace pharma major Lupin in the Nifty 50 index from next month as its market value inches closer to Rs 1 lakh crore. The Chinese steel import to India fell in the first four months of this year when domestic demand picks up. The steel companies look to increase the steel prices by 5-8 per cent from next month.

    Who will become the steel bellwether? Reports say that both JSW and Tata look to submit bids for Usha Martin's 1 MT steel unit. Tata recently acquired Bhushan Steel, which helped it increase its production capacity to 18.6 million tonne (MT). On the other side, JSW bought Monnet Ispat and emerged as the lead bidder for 3.5 MT Bhushan Power & Steel. With the addition of 1.5MT Monnet, the capacity of JSW increased to 19.5 MT. In addition, both are planning for Greenfield capacity expansions.

    The resurgent steel manufacturers in the country are set to increase the steel prices by Rs 1500 a tonne from September. It will eventually help them realise better margins. The major reason for steel price increase is the depreciation of the Indian rupee, which made the import of the raw material coking coal expensive. The coal price has increased 14 per cent year-on-year, while rates of domestically sourced iron ore shot up by 11 per cent. The merchant miners in Odisha have started charging a premium of Rs 900 for a tonne of iron ore. The steel price is expected to move up by Rs 1,500 per tonne for both downstream products and hot-rolled coils. The increase is expected to be even steeper for long products.

    In the first quarter, the domestic steelmakers posted better-than-expected earnings. The operating profits increased because of strong prices- hot-rolled coil (HRC) prices were up 14 per cent compared to previous year. Tata Steel reported a 61 per cent higher standalone Ebitda per tonne of over Rs 17,000 in the first quarter, while that of JSW doubled to nearly Rs 12,600.

    Another good news for the Indian steelmakers is that China has cut its steel exports to India. In the first four months of this financial year, the country imported 3.03 million tonne (MT) of steel, up by 8.2 per cent, and half of it from Korea and Japan at zero or near-zero customs duty under Regional Comprehensive Economic Partnership (RCEP) agreement. China has exported 0.51MT to India, 22 per cent lower compared to last year same period. India has again turned into a net importer as exports of Indian companies at 2.47MT (in four months) are 19 per cent lower than imports. It indicates that the demand is growing faster in the country and it gives larger business opportunities for the Indian companies.

    Japanese major Nippon Steel & Sumitomo Metal Corp, which bid for Essar Steel along with ArcelorMittal, said recently that it sees India as the "most promising market". Nippon's executive vice president Katsuhiro Miyamoto told Reuters, "India will be the fastest-growing steel market in the world going forward."

    The market valuation of JSW Steel touched over Rs 96,000 crore and industry experts expect that it will cross Rs 1 lakh crore shortly if the market continues the present rally. The shares of JSW have risen more than 47 per cent so far this year and its strong performance helped it enter the benchmark Nifty50 index. The scrip will replace pharma stock Lupin from September 28, 2018. On Wednesday, JSW share price jumped nearly 11 per cent intraday to Rs 405.40 before closing at Rs 397.80. Tata Steel has a market valuation of over Rs 68,000 crore and its share rose by 0.5 per cent to Rs 593.35 on Wednesday. However, the analysts expect that Tata will also improve its valuation after completing the merger of its European division with Thyssenkrupp. It will create the continent's second largest steelmaker after ArcelorMittal.

General Awareness

    Venezuela crisis
    • What to study?

      For Prelims: Location of Venezuela, Venezuela’s new currency.
      For Mains: Causes and effects of the crisis, how to avert?

      Context: Venezuela, once a rich oil reserve country, is now battering an unprecedented economic crisis. Hyperinflation, mass migration, food shortage, increasing number of crimes and grinding poverty has pushed the nation into a deep turmoil.

      What is the Venezuela crisis?

      Hyperinflation is the biggest problem faced by Venezuela. The inflation rate there is expected to reach a stunning one million per cent this year, putting it on par with the crises of Zimbabwe in the 2000s and Germany in the 1920s, according to the International Monetary Fund. The government claims that the country is the victim of an “economic war” and that the major issues are due to opposition “plots” and American sanctions.

      What caused this increase?

      The plummeting oil prices since 2014 is one of the main reasons why Venezuela’s currency has weakened sharply. The country, which has rich oil reserves largely depended on it for its revenue. But when the oil price dropped drastically in 2014, Venezuela which received 96 per cent of its revenue from the oil exports, suffered a shortage of foreign currency. This made import of basic essentials like food and medicines difficult.


      Venezuela’s imports are down 50% from a year ago. Venezuela’s minimum wage is now about the equivalent of $1 a month, making basics unaffordable for many. With a shortage of the import goods, the black market has got a free hand in the country. Prices have been doubling every 26 days on average.

      A survey from February this year found that almost 90% of Venezuelans live in poverty and more than 60% surveyed said that they had woken up hungry because they did not have enough money to buy food, reported Reuters. Apart from food, the country is also facing medicine shortage. The economic crisis has also hit the public health system, making medicine and equipment inaccessible to its people.

      As the country slips into poverty, many are turning towards crime to make money. A recent Gallup study placed Venezuela at the bottom of its 2018 Law and Order index, with 42 per cent of surveyed Venezuelans reporting they had been robbed the previous year and one-quarter saying they had been assaulted.

      Mass migration:

      Angered by the economic crisis in the country, many Venezuelans have started leaving the country. Of the 2.3 million Venezuelans living abroad, more than 1.6 million have fled the country since the crisis began in 2015, according to the UN. The pace of departures has accelerated in recent days, sparking a warning from the UN. The majority have crossed into neighbouring Colombia and then to Ecuador, Peru and Chile. Others have gone south to Brazil.

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