Current Affairs for BANK, IBPS Exams - 08 January 2018

Bank Exam Current Affairs

Current Affairs for BANK, IBPS Exams - 08 January 2018


INS Arihant more dependable platform for second strike

  • INS Arihant , India’s only operational ship submersible ballistic nuclear (SSBN) asset, is its most dependable platform for a second-strike, given the country “no first use” on nuclear weapons. The other options, land-based and air-launched, are easier to detect.
  • The submarine is manned by a staff of 100 with extensive training from the School for Advanced Underwater Warfare in Visakhapatnam and further hands-on training on INS Chakra , a Nerpa-class nuclear ship.
  • Arihant has been immobilised even as the second ballistic missile submarine,Arighat , was launched on November 19 for sea trials. The launch was kept a low-profile event attended by Defence Minister Nirmala Sitharaman and senior Navy officers.
  • INS Arihant and other nuclear launch platforms — land-based missiles and designated aircraft — are operationally handled by the Strategic Forces Command, and report to the Nuclear Command Authority chaired by the Prime Minister.
  • However, the over 100 nuclear warheads are not mated with missiles or bombs and remain in civilian custody of the Atomic Energy Department and the Defence Research and Development Organisation.
  • India has an ambitious plan to build a SSBN fleet, comprising five Arihant-class vessels.
  • Naval sources say the plan hinges on Arihant ’s success. It has taken 30 years to build it, at a high cost.
  • “It was initially estimated to cost about Rs. 3000 crore for three boats — now the cost of Arihant itself seems to have gone over Rs. 14,000 crore,” a former high-ranking naval officer said.
  • The Eastern Naval Command plans to operate its nuclear sub fleet from an independent Naval Operational Alternative Base (NOAB) being constructed on 5,000 acres of land at Rambilli, for direct access to the sea. The base is located about 50 km from Visakhapatnam, and jetties are under construction.

India’s role in studying gravitational waves increased

  • India’s role in studying gravitational waves — touted as one of the most important discoveries of the recent past — will increase once the proposed gravitational wave observatory is set up in the country, said David Reitze, executive director of LIGO.
  • The observatory is expected to start functioning by 2025.“The more detectors we have and depending on where they are, the more accurately we are able to point in the direction in the sky. India having a detector improves that dramatically and that’s going to be a big mission,” said Mr. Reitze.
  • Gravitational waves are ‘ripples’ in the fabric of space-time, caused by some of the most violent and energetic processes in the universe such as merger of black holes or neutron stars. Its discovery saw three scientists get the Nobel Prize for Physics in 2017
  • One way was to make the detector at least 40% more effective, allowing them to be more sensitive.
  • At present, the LIGO detectors are sensitive to about 70 to 80 megaparsec (280 million to 300 million light years) for binary neutron stars and for binary black holes, the sensitivity is about 2 gigaparsec (approximately 3 billion light years)
  • With improved sensitivity, these detectors will be able to fetch information from farther distances in space.

Army approved a revised promotion policy

  • Faced with long delays in the promotion of officers of the ranks of Major-General and Lieutenant-General, the Army has approved a revised promotion policy.
  • While deciding to fill only 75% of the annual vacancies for the next four years to bring down the average age of the officers, the new policy will allow Lieutenant-Generals with just 18 months of residual service to be considered for posting as commanders instead of the existing 24 months.
  • “The new promotion policy approved in the last week of December was promulgated based on the recommendations of an expert committee and the Army’s own consultations which have been approved by the Defence Ministry. The policy aims to reduce the ages of senior commanders and enhance transparency and stability in the higher ranks and appointments.
  • Over the past several years, many crucial staff positions have been vacant as eligible officers had not completed their command tenures because of the increased officer pool at the middle level and delays in holding promotion boards. This had increased the overall age of the officers compared with their counterparts in the Navy and the Air Force.
  • To address the issue, the Defence Ministry constituted a committee of two retired officers mandated to interact with all stakeholders and give their recommendations on revising the promotion policy.
  • The key measures in the revised policy include a clearly defined road map of conducting selection boards in a shorter timeframe for a brief period and calculation of vacancies based on actual exits in a year.
  • To take care of the immediate situation, a cap of 75% of the annual vacancies will be implemented for a brief period of four years to achieve a reduction of average age bracket by one year.
  • Other features include consideration of all affected officers on a common yardstick and promotion of different streams on common seniority. The measure reducing the qualifying residual service for commanders from 24 months to 18 months will “provide a larger pool of competent officers”.

Integrated Disease Surveillance Programme indicated food poisoning one of the major outbreaks

  • Recent data put out by the Union Health Ministry’s Integrated Disease Surveillance Programme (IDSP) has indicated that food poisoning is one of the commonest outbreaks reported in 2017. This is apart from acute diarrhoeal disease (ADD).
  • According to the data, 312 of the 1,649 outbreaks reported till the third week of December 2017 were due to ADD and 242 were due to food poisoning.
  • The IDSP has interpreted that the incidence of ADD and food poisoning is high in places where food is cooked in bulk, such as canteens, hostels and wedding venues.
  • Director of the National Centre for Disease Control (NCDC), the nodal agency under the Union Health Ministry that documents outbreaks and brings out data under its disease surveillance programme, told that the trend had been the same over many years.
  • “It is not just this year. Acute diarrhoeal disease and food poisoning have been common outbreaks since 2008. This is followed by chickenpox and measles,” Dr. Dhariwal said.
  • Food poisoning, also called food-borne illness, is caused by eating contaminated food. Infectious organisms including bacteria, viruses and parasites or their toxins are the most common causes.
  • Pointing out that the increase in the number of cases was due to better and increased reporting of cases, he said the good thing was that the overall mortality was not alarming.

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Govt urges NRI’s to come back to India in Asean-India summit

  • Setting the tone for the government’s outreach to the Indian diaspora, External Affairs Minister Sushma Swaraj on Sunday urged people of Indian origin to take advantage of India’s projects for connectivity to Southeast Asian countries.
  • Speaking in Hindi at the ASEAN-India Pravasi Bharatiya Divas in Singapore, she said her Ministry prioritised the welfare of Indian citizens living abroad, and urged them to return home to take advantage of the economic opportunities.
  • Referring to the challenges such as piracy in the high seas and the armed conflicts that Indians living abroad often encountered, she said her Ministry was committed to helping the crisis-struck Indians at a “supersonic speed”.
  • Ms. Swaraj said Southeast Asia remained an inseparable part of the plan to convert the 21st century into the Asian century.
  • Her comments came days before India hosts the heads of states of the Southeast Asian countries in Delhi on January 25 for the ASEAN-India Commemorative Summit, a high-profile display of its “Act East policy”.
  • Ms. Swaraj, who was in Indonesia on January 5 and 6, had announced that President Joko Widodo would be one of the guests of the summit and the Republic Day parade.
  • The push for ASEAN ties will be on display on January 9 when India hosts the first global meeting of parliamentarians of Indian origin.

::Business and Economy::

FDRI needs to increase the confidence in investors

  • The banking system of any country is built on an edifice of trust that depositors have in their banks. The confidence that money is safe, keeps depositors away from withdrawing their funds unless they really need it.
  • Meanwhile, it allows banks to lend out the money to borrowers which generates interest income for the depositor, profit for the bank and larger economic growth.
  • However, the ‘bail-in’ clause in the government’s Financial Resolution and Deposit Insurance (FRDI) Bill has created confusion. Section 52 of the Bill allows the proposed Resolution Corporation to cancel the liability owed by a failed bank.
  • Since the main liability of a bank is the ordinary depositor’s money, it naturally causes concern whether depositors stand to lose their money beyond what is insured in the event of a bank failure. Unless nipped in the bud, a panic reaction could destabilise the banking system.
  • The new provision of ‘bail-in’ is welcome. However, when the banking system is struggling with the larger issue of non-performing assets, it is better to concentrate on recovery and also encourage bankers grant fresh loans for that the economy grows at faster pace.
  • In India, up to Rs. 1 lakh of a depositor’s money is protected by insurance provided by the Deposit Insurance and Credit Guarantee Corporation (DICGC), a subsidiary of the Reserve Bank of India.
  • However, this insurance limit has not been changed since 1993 even while income and deposit levels have grown substantially.
  • Many countries revised their deposit insurance limits after the global financial crisis of 2008 but India did not do so. Deposits up to $250,000 are protected by insurance in the U.S. while the figure is $1,15,000 in the U.K. But the accurate comparison should take into account the average income in a country.
  • Deposit insurance limit is 3-4 times the average income levels in the U.K. and the U.S. In the case of emerging countries like Brazil and China, the insurance limit is 9 times the per capita income. Compare that with India where the insurance limit is actually a little less than its per capita income.
  • Government should increase the deposit insurance limit under the Bill, considering that at about $1,600, it is at a much lower level than some of the other developing or larger economies.
  • Further, there should be provision for a periodic review to raise the quantum of deposits covered by insurance.
  • There are two problems with this clarification. First, the implicit guarantee cannot be emphasised beyond a point lest it creates a moral hazard in the form of risky behaviour by banks and lazy monitoring of banks by depositors.
  • Second, what about private banks who hold 25% share of total deposits in the country? Are their customers not deserving of the same protection from the government?

Taxation issues led to problems for coffee

  • Under the Constitution, agricultural income can be taxed by the State and not by the Centre.
  • However, in the case of tea, the Centre contended that there was a substantial manufacturing process involved in the production of tea; hence, income from tea could not be classified as fully agricultural income and that a part of the income had to be taxed as central income.
  • This was done under Sec 8 of the I-T Act, which stated that due to the manufacturing activity involved, 40% of the income would be taxed by the Centre.
  • In 2002, the Centre then followed the same logic and introduced Sec 7 & 7B for rubber and coffee respectively. It decided to partially tax the agricultural income from both commodities, claiming there was manufacturing activity involved.
  • Where coffee is cured or hulled before being sold, manufacturing activity was involved and hence 25% of the income was to be taxed by the Centre.
  • Curing is a process by which raw coffee is converted to green beans ready for roasting. Substantial machinery and effort is involved but the actual cost of curing works out to about Rs. 2 per kg for a product worth about Rs. 200 per kg, or 1%. The Centre thus claimed the right to tax 25% of the agricultural income from coffee.
  • Once this legislation was enacted planters, started selling uncured coffee instead of cured coffee. The coffees were sold in raw coffee form which is a ‘bulk’ coffee. Soon, a vibrant, active, regular and credible market for raw coffee developed.
  • Today, the farm gate prices are quoted mostly for raw coffee. When raw coffee is traded, the criteria looked at is moisture content, appearance and outturns, not so much the cup taste. Overnight, the charm of producing a fine cup disappeared
  • Good bulks at the least cost of production became the norm. The coffee was then bought by curers, exporters and domestic roasters, who cured, graded and bulked the coffee according to customer requirements. In the process, the origin of the coffee got lost.
  • The production of fine coffees takes a lot of effort; while the extra input and efforts are certain, the rewards are uncertain. There is a considerable marketing effort involved and the price realisations are uncertain.
  • In such a scenario, most growers will be reluctant to pursue fine coffees when they know that they fall within the jurisdiction of an income tax officer.
  • Though today there is no agricultural income tax, central income tax can also be avoided. As a result, one finds that most of the fine coffee awards are won by corporates, who have the administrative capacity to deal with the extra headaches.

Credit growth, after a long gap, grew in double digits to 10.65%

  • Credit growth, after a long gap, grew in double digits to 10.65% to Rs. 80,96,727 crore in the fortnight ended December 22, 2017 due to the base effect, according to RBI data.
  • Advances stood at Rs. 73,17,391 crore in the fortnight ended December 23, 2016. “The credit growth is mainly because of the base effect,” State Bank of India’s managing director (retail and digital banking) P.K. Gupta said.
  • “Due to demonetisation last year, the base figures are getting revised and so, that is where you are seeing the growth,” Mr. Gupta added.

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