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Current Affairs - 04 November 2018

General Affairs 

Lord Ram's Statue Should Be Taller Than Statue Of Unity, Says Azam Khan
  • With Uttar Pradesh Chief Minister Yogi Adityanath likely to announce a 151-metre tall Lord Ram statue in Ayodhya, Samajwadi Party leader Azam Khan on Saturday welcomed the idea.

    Talking to ANI, Mr Khan asserted that Lord Ram's statue, which is likely to be built near the Sarayu river in the temple town should be constructed taller than the recently-inaugurated 182-meter Sardar Vallabhai Patel's statue.

    He said, "Why did this thought not occur at the time of building the statue of Sardar Vallabhbhai Patel? Why would anybody oppose (the building of Lord Ram's statue)? I would want an even taller statue of Lord Ram in Rampur."

    The announcement in this regard will be made during the Deepawali festivities to be organised the next week when Yogi Adityanath will be in Ayodhya.

    Reportedly, saints in Ayodhya have been pressing for construction of a statue of Lord Ram similar to that of Statue of Unity.

    Located on Sadhu-Bet Island, Gujarat, the 182-metre tall statue of Unity occupies over 20,000 square metres and is surrounded by a 12 square km artificial lake.

    The Statue was inaugurated by Prime Minister Narendra Modi on the 143rd birth anniversary of Sardar Vallabhbhai Patel - the first Home Minister and Deputy Prime Minister of India.

1,500 Cops, Security Clampdown At Sabarimala Ahead Of Reopening Day
  • A temporary ban on large gatherings was imposed on Kerala's Sabarimala town on Saturday night as the temple shrine prepared to reopen its gates on Monday amid fears of violence and protests by right-wing activists. Restrictions prohibiting the assembly of four or more people will be in force across  Elavunkal, Nilakkal, Pamba and Sannidhanam until Tuesday midnight.

    According to Pathanamthitta Superintendent of Police T Narayanan, as many as 1,500 police officers have been deployed in and around the pilgrimage site. The security arrangements are being monitored by Additional Director General of Police Anil Kanth, and mediapersons have been asked to stay away from the temple shrine until the day of the reopening. Comprehensive traffic arrangements have been made, and barricades erected at many places on the way to Nilakkal to prevent the entry of potential agitators.

    Besides policemen, a 20-member commando team has also been deployed at Sannidhanam, Nilakkal and Pamba.

    Female devotees and journalists approaching the hill shrine were attacked by right-wing activists on October 17, when its gates were opened for the first time after the Supreme Court discarded an age-old ban on women of menstrual age entering its premises. Several women attempted to enter its sanctum sanctorum in the days that followed, but were forced to turn back in the face of aggressive protesters. This forced the district administration to impose restrictions in the four areas from October 18 to 22.

    However, Mr Narayanan claimed that he is yet to be approached by women who want to enter the shrine during this phase of the pilgrimage. "If anybody comes forward, the police will see that the apex court verdict is carried out," he said.

    As of Saturday, police had registered 536 cases and arrested 3,719 people in connection with last month's violence. Around 100 are still in prison.

    In a related development, Kerala BJP president PS Sreedharan Pillai alleged that he received a death threat from somebody who allegedly intends to attack him during the Sabarimala Protection Rathyatra from November 8 to 13. The party has reportedly alerted Director General of Police Loknath Behara to the incident.

Indian Women Could Become First To Circumnavigate Earth In 2-Seater Plane
  • Keithair Misquitta is on a mission along with Aarohi Pandit to become the first Indian women to circumnavigate the globe in an ultra-light motor glider. She says it is not an easy mission.

    Ms Pandit and Ms Misquitta are flying a Light Sport Aircraft from the Tropic to the Arctic -- India to Greenland. Their journey in a tiny single engine, two-seater plane weighing less than 500 kg, over deserts, mountains, plains and oceans, is part of a daring circumnavigation attempt in the world.

    Phase 1 of the Colors-WE! Expedition has now been completed and the circumnavigation will resume soon.

    Talking about the journey so far, Ms Misquitta told IANS: "It was incredible. We had a chance to fly to places no one has ever been to, met so many kind and wonderful people. The journey wasn't always easy, but we had the experience of a lifetime."

    What are the lessons they stumbled upon?

    "The most important lessons were to keep going, and wait for your turn. The weather may not always be supportive, but if you are patient enough you will find a way out," Ms Misquitta said.

    Ms Pandit, 22, and Ms Misquitta 24, set course westward on July 30 from Patiala, flying a Pipistrel Sinus 912 aircraft across Punjab, Rajasthan, Gujarat stopping in Pakistan, Iran, Turkey, Serbia, Slovenia, Germany, France, UK, Iceland and Greenland and overflying Croatia, Bulgaria and Austria.

    Ms Misquitta says the challenges have revolved around the weather and unfamiliar terrain.

    "We had to be extra prepared since this was the first time either of us had flown like this. We spoke to other pilots at airports, looked through various apps to anticipate the terrain and weather, and did as much studying and research as we could rather than be at the mercy of the forecasts which can change really fast."

BJP To Back Allies' Candidates Only If They Support PM: Devendra Fadnavis
  • Maharashtra Chief Minister Devendra Fadnavis Saturday said the BJP would back candidates of allies who support Prime Minister Narendra Modi but added that his party had capable candidates to field if this was not the case.

    Without naming bickering ally Shiv Sena, Mr Fadnavis said only candidates who support PM Modi would go to parliament in next year's general polls.

    The Sena, a constituent of BJP-led governments here and at the centre, has often attacked PM Modi over various issues.

    Mr Fadnavis, who was addressing a rally in Pimpri Chinchwad, said some people had questioned whether this rally was a preparation for next year's Lok Sabha polls for Maval and Shirur seats and if it signaled the end of the alliance with the Sena.

    Maval and Shirur Lok Sabha seats are currently held by the Sena's Shrirang Barne and Shivajirao Adhalrao Patil respectively.

    "I want to make it clear that this rally is not against any particular party. However our stand is clear that only those candidates who will support Modi ji will go to Parliament. If our allies show support for Modiji, we have no problem supporting their candidates," Mr Fadnavis told the gathering.

    In a message to the Sena about the BJP's readiness to go it alone in the two seats, Mr Fadnavis, pointing to posters of party lawmakers Laxman Jagtap and Mahesh Landage at the rally venue, said, "If you are not ready to support Modiji, we have capable candidates who can represent these seats in Parliament."

    "To make Modiji the prime minister in 2019 is the need of the entire country as we require a strong leadership," he added.

    Mr Fadnavis also challenged the opposition Congress and NCP to have a public debate on the development work done during their tenure and that of his government.

    "I am sure our work will be better than yours. If we are not better, we will not contest elections again," Mr Fadnavis claimed.

    He accused the Congress-NCP of "making a fortune" under the name of irrigation schemes while his government had implemented Jalyukt Shivar and taken irrigation facilities to the farms.

India's First Inland Vessel, With Cargo Of 16 Trucks, Heads For Varanasi
  • In a major milestone for India's push to develop its inland waterways, 16 containers have set sail from Kolkata for Varanasi on a vessel along the Ganga river, also called National Waterway-1. Calling it the "biggest news" in the country this week, Union Transport Minister Nitin Gadkari, said, "For the first time since independence, a container is moving on [an] inland vessel."

    Nitin Gadkari

     This should have been the biggest news of the week in India.   For the first time since independence, a container is moving on inland vessel. PepsiCo is moving 16 containers from Kolkata to Varanasi on vessel MV RN Tagore, over river Ganga. Such a huge accomplishment!#SagarMala

    The containers on the MV Rabindranath Tagore vessel, being transported by food and beverage giant PepsiCo is expected to reach its destination on November 12 and will be received by Prime Minister Narendra Modi in his parliamentary constituency.

    The Prime Minister will also open the newly-developed waterway terminal at Varanasi built as part of the centre's ambitious Sagar Mala project.

    The container vessel, which began its journey on Tuesday, is transporting 16 truckloads of food and snacks, said a statement from the Ministry of Shipping.

    With the Sagar Mala project, the government aims to reduce rail and road traffic, handling costs, pilferage and damage, and enable cargo owners to reduce their carbon footprints.

    Under it, 266 ports are set to be modernised with a total investment of more than Rs. 1.45 lakh crore over the next 10 years. The central government is also developing NW-1 under the Jal Marg Vikas Project, from Haldia to Varanasi - a distance of 1,390 km - at a cost of around Rs. 5,369 crore, with technical and financial assistance from the World Bank.

    Union Shipping Secretary Gopal Krishna said the "cargo movement to the east and northeastern states will become easier with the new mode of transportation through waterways."

    The vessel will make its return journey with fertilizers belonging to Indian Farmers Fertiliser Cooperative Limited (IFFCO), which will be procured from its Phulpur plant near Allahabad.

Business Affairs

Ties between French and Indian firms to create 3,000 jobs in Maharashtra
  • French Ambassador to India Alexandre Ziegler Friday said that 12 agreements worth 200 million euro have been signed between French and Indian firms and these had the potential to create 3,000 jobs in Maharashtra.

    Addressing business delegates at the Indo-French Conclave here, Ziegler said economic partnership between the two nations has been dynamic in the past few years.

    "Our trade relations have grown by 20 per cent from last year and has doubled since 2009," he said, adding that his country saw India not as "revenue" or "market" but as a "true and precious" partner.

    The French Ambassador informed that 600 companies from his country have operations in India, employing 4 lakh people and investing around one billion euro annually.

    "The Indo-French relationship goes beyond these figures, and the potential is huge. We collectively need to work towards increasing the investment of French companies in India," said Ziegler.

    He expressed happiness at India achieving the 77th position, a jump of 23 places, on World Bank's 'Ease of Doing Business' ranking.

    The 12 agreements signed include French multinational Thales Group signing pacts with seven Indian firms, namely Godrej Precision Engineering, Bharat Forge, Amphenol Interconnect India, Larsen & Toubro, Solar Explosives, Mahindra Defence Systems and Coriolis.

    Other agreements included one between energy firm Technique Solaire and the Maharashtra Energy Development Agency as well as between aeronautical firm Turgis & Gaillard and the Maharashtra Airport Development Company (MADC).

    French ropeway firm Poma presented letters of intent for two projects in Nagpur and Tadoba, both in the state's Vidarbha region.

    French hospitality major Accor Hotels also exchanged a letter of intent with Gurugram-headquartered Interglobe Hotels Limited.

    Indo-French Chamber of Commerce and Industry secretary-general Payal Kanwar expressed delight at being able to organise an Indo-French business event of this size in Nagpur.

RBI allows banks to provide partial credit enhancement to NBFCs
  • The Reserve Bank of India, on Friday, permitted banks to grant partial credit enhancement (PCE) to bonds issued by non-banking financial companies (NBFCs) and housing finance companies, listed with the Reserve Bank of India (RBI) and the National Housing Bank respectively.

    RBI has allowed this to enable NBFCs to obtain funds from the bond market on favourable terms and to improve the bonds' credit rating. PCE is expected to assist NBFCs, and housing finance companies raise money from provident or pension funds investing in highly-rated instruments and insurance.

    The occupancy of these bonds should not be less than three years and shall only be used to refinance existing debt, states the central bank. "Banks shall introduce appropriate mechanisms to monitor and ensure that the end-use condition is met," said the RBI, reports LiveMint.

    RBI made this move after NBFCs and housing finance companies asked the government to make sure that confidence returns in the sector. They have also requested relaxations of the credit rating norms of National Housing Bank's related to refinancing, decreasing the criterion for years of existence to one year, contributing for 10 per cent of the loan loss by bank's capital infusion and the government.

    The central bank also limited the exposure of a bank through PCEs to bonds assigned by each NBFC or housing finance company to one per cent of bank's capital funds within the current borrower exposure limit.

    Banks are permitted to give PCE as the non-funded subordinate in the form of conditional credit only used in case of cash flow shortfall for maintaining the bonds, therefore improving the credit rating of the bond.

    The credit crunch that followed the IL&FS crisis saw the RBI providing special incentives to banks to enable the flow of funds to NBFCs. It has permitted banks to use government-issued securities as high-quality level 1 liquid assets equal to the bank's incremental offering to NBFCs and housing finance companies. The RBI has also increased banks' limit for offering their capital to a single non-infra funding NBFC from 10 per cent to 15 per cent till 31 December

ONGC Q2 results: Net profit rises 61% to Rs 8,265 crore on higher prices
  • State-owned Oil and Natural Gas Corp (ONGC) on Saturday reported a 61 per cent jump in its September quarter net profit as higher prices offset a dip in oil production.

    Its net profit was Rs 8,265 crore in July-September as compared to Rs 5,131 crore in the same period last year, the company said in a statement.

    The company got $73.07 for every barrel of crude oil it produced and sold in the second quarter, up 48 per cent from $49.43 per barrel realisation a year ago.

    Because of the depreciation in rupee, ONGC's realisation soared 61 per cent to Rs 5,117 per barrel. ONGC bills its customers in US dollars.

    It got $3.05 per million British thermal unit for natural gas as opposed to $2.48 per mmBtu last year.

    The PSU oil major's turnover was up 47.6 per cent to Rs 27,989 crore.

    Oil production fell 7 per cent to 4.9 million tonnes but gas output was up 3 per cent at 6.1 billion cubic metres.

    ONGC reasoned the decline to contractor not delivering a production unit for western offshore WO-16 Cluster.

    Non-delivery of the facility, which was scheduled to come at the beginning of the fiscal year, "led to a loss of oil production of about 0.35 million tonnes", ONGC said.

    "ONGC took stringent action to terminate the contract and proactively awarded a new contract recently for commissioning of (the facility) by March 2019," the statement said.

    In WO-16 Cluster, all the 15 wells have been completed, which will be put on production once the Mobile Offshore Production Unit (MOPU) for oil production is commissioned, it said.

    "ONGC gas production has seen an increasing trend on year on year basis. The gas production has increased by about 3 per cent in first half of 2018-19" to 12 billion cubic meters, the statement said.

    "The gas production is expected to increase further with the completion of Daman Development Project in Western Offshore and further increase from VA-S1 field in Eastern Offshore," it said.

Gold prices break 6 year record ahead of Diwali
  • Gold strengthened for the sixth straight week and gathered further grounds to reached 6-year high of Rs 32,780 and ended at Rs 32,650 per 10 gram at the bullion market amid the pick-up in buying activity ahead of Diwali.

    Silver, however, lacked necessary buying support and shed some grounds.

    Bullion traders said persistent buying by ornament makers, triggered by upcoming festive and wedding season lifted the gold prices to trade at an almost six-year high of Rs 32,780 per 10 gram.

    Globally, gold after moving both ways ended the week a shade lower at USD 1,233.20 an ounce as against previous week's level of USD 1,233.80. Silver too ended almost flat at USD 14.82 an ounce.

    In the national capital, gold of 99.9 per cent and 99.5 per cent purity commenced the week steady at Rs 32,550 and Rs 32,400 per ten gram, respectively on scattered support.

    Later, on pick-up in buying activity, driven by upcoming festivals, it surged to trade at near six-year high of Rs 32,780 and Rs 32,630 per ten gram and finally settled Rs 100 each higher at Rs 32,650 and Rs 32,500. This is the highest level since November 29, 2012, when the precious metal had closed at Rs 32,940.

    In contrast, silver ready after shuttling both ways on alternate bouts of buying and selling, finally ended the week Rs 70 down at Rs 39,530 per kg but silver weekly-based delivered managed to close Rs 110 higher at Rs 38,820 per kg on speculative activity.

    On the other hand, silver coins strengthened by Rs 1,000 to Rs 76,000 for buying and Rs 77,000 for selling of 100 pieces on increased demand ahead of Diwali.

Rafale deal: Reliance Group hits back at Rahul Gandhi's allegations of kickbacks from Dassault
  • Reliance Group has trashed allegations of receiving kickbacks levelled against it by Congress president Rahul Gandhi as blatant lies. In a statement on Friday, the Anil Ambani-led conglomerate argued that its owner is being dragged into a political battle ahead of upcoming States and General elections.

    "The Congress Party has today once again resorted to blatant lies and distorted facts to mount an unwarranted campaign of calumny and falsehoods against the Reliance Group and its Chairman Mr Anil Ambani personally," a Reliance Infrastructure spokesperson said.

    In a press meet earlier today, Rahul Gandhi had targeted Anil Ambani with allegations of receiving kickbacks in the deal over purchase of 36 Rafale fighter jets. Gandhi blamed that the piece of land, which was decisive in giving the contract to Reliance Defence, was bought from the money Dassault gave to Reliance Group.

    In response to this, Reliance said that Dassault's investment in Reliance Airport Developers Limited (RADL) had no link whatsoever to the contract for purchase of 36 Rafale fighter jets between the Government of India and France. RADL is a subsidiary of Reliance Infrastructure and operates five regional airports in Maharashtra, at Nanded, Latur, Baramati, Yavatmal and Osmanabad.

    In its statement, Reliance said that application for land at Multi-modal International Cargo Hub and Airport, Nagpur was filed in August 2015. Payments were made for this plot between August 2015 and July 2017, which was then used for Dassault-Reliance Aerosapce (DRAL). On the other hand, investment by Dassault Aviation in RADL, to acquire 34.8% equity stake for Rs. 309 crore, was made by way of FDI in September 2017.

    "The Congress party has falsely alleged that the funds invested in RADL have been used for the purchase of land at MIHAN, Nagpur for the Dassault-Reliance 49:51 joint venture. The payment for the land at MIHAN, Nagpur, Maharashtra was made from 2015 to 2017, much before the investment by Dassault in RADL," the spokesperson said.

    "To allege that Dassault investment in Reliance Airport Developers Limited (RADL) was used to pay for this land is factually incorrect and preposterous. We repeat it is a blatant lie to state that land at MIHAN was bought from funds provided by Dassault," Reliance Infrastructure said.

    Refuting Congress' allegations that funds from Dassault Aviation have gone into Anil Ambani's pockets, Reliance said, "The Dassault investment in DRAL and RADL are two independent and stand alone business investments and in both cases, funds have been received by the companies and not a single rupee by Mr Anil Ambani in his personal capacity."

General Awareness

    Partial credit enhancement (PCE)
    • What to study?

      For Prelims and Mains: Meaning, features and significance of PCE and NBFCs.

      Context: The Reserve Bank of India (RBI) has allowed banks to provide partial credit enhancement (PCE) to bonds issued by systemically important non-deposit taking non-banking financial companies (NBFCs) registered with the RBI and housing finance companies (HFCs) registered with the National Housing Bank.


      The move is aimed at enhancing the credit rating of the bonds and enabling these NBFCs to access funds from the bond market on better terms.
      PCE is expected to help NBFCs and HFCs raise money from insurance and provident or pension funds who invest only in highly-rated instruments.

      Key facts:

      The tenure of these bonds shall not be less than three years and proceeds from them shall only be utilized to refinance existing debt.
      Banks shall introduce appropriate mechanisms to monitor and ensure that the end-use condition is met.
      The central bank has restricted the exposure of a bank through PCEs to bonds issued by each such NBFC or HFC to 1% of capital funds of the bank within the current single and group borrower exposure limits.
      Banks are allowed to provide PCE as non-funded subordinated facility in the form of a contingent line of credit to be used in case of shortfall in cash flows for servicing the bonds and thereby improve the credit rating of the bond issue.


      The incentive comes at a time when NBFCs and HFCs have requested the government and regulators to ensure that confidence returns to the market. They have sought relaxations of the National Housing Bank’s credit rating norms related to refinance, lowering of the criterion on years of existence to one year, providing for 10% of the loan loss by the government and capital infusion in banks.

      What is credit enhancement?

      Credit enhancement means improving the credit rating of a corporate bond. For example, if a bond is rated BBB, credit enhancement, which is basically an assurance of repayment by another entity, can improve the rating to AA. This is done to provide an additional source of assurance or guarantee to service the bond.

      RBI has now allowed banks to provide credit enhancement up to 20% of the total bond issue. This means banks (one or many together) can assure repayment of dues related to a bond issue up to 20% of the value. Other than banks, organisations such as India Infrastructure Finance Co. Ltd also provide this facility.


      Typically, bonds issued by subsidiaries or special purpose vehicles (SPVs) of infrastructure companies seek enhancement. Since the projects take a long time to become operational and generate money, along with the risk of implementation, often their formal credit rating is not very high. Through the credit enhancement facility, the existing rating can be improved at an early stage, which enables the issuer to raise funds at a relatively lower yield. Higher the credit rating, lower is the cost of raising funds.

      Since these bonds are long-term in nature, they appeal to institutional investors like pension funds and insurers. However, these investors, especially pension funds, invest mostly in investment grade securities which are at least AA-rated. Credit enhancement makes the bonds more attractive by improving the rating enough so that institutional investors become interested in adding these to their portfolios.


      For the investor, the facility provides a sort of insurance in case of hard times. Basically, the credit enhancement gets used only when there is a shortfall in either paying interest or repaying principal. Hence, investors are more secure about repayment even if there is uncertainty regarding cash flows for some time.


      The bond market will benefit as more issues get placed, which will help in developing the secondary market. This is useful in giving investors an early exit route, and in adding stability to secondary market transactions in long-term corporate bonds. At present, however, there is not much trading happening in long-term corporate bonds from infrastructure companies in the secondary market.

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