Current Affairs for BANK, IBPS Exams - 01 December 2017

::National::

India’s economy regained momentum in the September quarter

• India’s economy regained momentum in the September quarter as the manufacturing sector shrugged off any teething impact from the July 1 implementation of the Goods and Services Tax to propel gross domestic product (GDP) growth to 6.3%.
• GDP growth recovered in the second fiscal quarter from a three-year low of 5.7% in the preceding three-month period, while Gross Value Added (GVA) growth accelerated to 6.1% from 5.6% in the first quarter.
• GDP growth for the first half of the financial year (April-September) was 6% compared with 7.7% in the year-earlier period. GVA growth was at 5.8% compared with 7.2% over the same period.
• “This indicates that perhaps the impact of demonetisation and GST is now behind us and hopefully in the coming quarters we can look for an upward trajectory,” Finance Minister Arun Jaitley said.
• “The most significant aspect is that this quarter’s positive result has been impacted significantly by growth in manufacturing,” he added.
• The manufacturing sector expanded by 7% in the quarter, a robust acceleration from 1.2% in the first quarter. Still, the pace was slower than the 7.7% seen in the second quarter of 2016-2017.
• Other sectors that witnessed growth of more than 6% were electricity, gas, water supply and other utility services, and trade, hotels, transport and communication services related to broadcasting.
• “The performance in the agriculture sector has been held up by the non-crop sector. This year’s crop production, while higher than the five-year average, is lower than last year, which saw a strong growth.”
• The agriculture sector grew by 2.3% in the first quarter, and by 4.1% in the year-earlier period.
• Mr. Jaitley also highlighted the uptick in gross fixed capital formation, which grew by 4.7% in the second quarter compared with 1.6% in the first quarter. This improvement, the Finance Minister said, reflected a revival in investment levels.
• Experts are, however, pointing to the slowdown in the services sector, especially finance, transport, and hotels, all of which saw growth slowing in the second quarter compared with the first quarter.

Karnataka opposed the NITI aayog’s proposal to privatise district hospitals

• NITI Aayog’s prescription for the State — to bring private sector players in a big way into the functioning of public hospitals in districts — has been met with strong opposition here.
• Karnataka, which has been selected for the SATH (Sustainable Action for Transforming Human capital) programme in the health sector, has opposed the aayog’s proposal to privatise well-functioning district hospitals in Tier 2 and Tier 3 cities for treatment of non-communicable diseases (NCDs).
• The aayog recommended leasing out for 30 years a section of district hospitals to a private company for providing treatment for cardiovascular, cancer, and pulmonary diseases.
• The government has also sternly opposed any terms and conditions for entering into an agreement with McKinsey & Company, consultants for implementation of the model.
• Health and Family Welfare Minister Said that the proposal will have adverse implications for the public healthcare system of the State.

Govt started universal program for the cleaning of Ganga

• Union Minister Nitin Gadkari has kicked off an international road trip to draw investment and technology sharing into the government’s Clean Ganga Mission in London this week.
• The visit had already resulted in Rs. 500 crore of pledges for investment for the development of the riverfront from a number of U.K.-based Indian business leaders, including Anil Agarwal, the Hindujas, Prakash Lohia and Ravi Malhotra.
• He dismissed criticism over the length of time taken by the project, insisting that doing it as an integrated conservation mission was key to its success. He said he was being “cautious” in his assessment that in two years there would be a considerable reduction in carbon dioxide and nitrogen dioxide levels.
• The government is keen to enlist private sector partners in the four-phase project. During his visit, he held productive talks with a number of Indian-origin business people in London, who had pledged considerable financial support for the initiative.
• While Anil Agarwal had made a commitment towards the development of the Patna riverfront, Forsight’s Ravi Malhotra will take up development at Kanpur, the Hindujas will lead development of the ghats and other amenities at Haridwar and Prakash Lohia of Indorama will take on Ganga Sagar in Kolkata.
• During the trip, on which he is accompanied by U.P. Singh, Director-General of the National Mission for the Clean Ganga, Mr. Gadkari also signed memoranda of understanding with five British companies for technology sharing and investment.

Discussions are on for India to join the Russia-led nuclear power plant in Bangladesh

• Discussions are on for India to join the Russia-led Rooppur nuclear power plant construction in Bangladesh, an official of the Russian atomic power agency Rosatom said.
• Russia is building two reactors of 1,200 MW each at Rooppur in Bangladesh and India has expressed its keenness to join the project.
• Bangladesh Prime Minister Sheikh Hasina formally launched the main construction work of the Rooppur plant. It is the country’s first nuclear power plant.
• As it is not a member of the 48-nation Nuclear Suppliers Group (NSG), India cannot directly take part in the construction of nuclear power plants but has individual agreements with Bangladesh and Russia.
• In December 2014, India and Russia signed the “Strategic Vision for Strengthening Cooperation in Peaceful Uses of Atomic Energy”, which allows the two sides to “explore opportunities for sourcing materials, equipment and services from Indian industry for the construction of Russian-designed nuclear power plants in third countries”.

::International::

China says Doklam comes under its territory

• The Chinese military hinted at maintaining sizeable presence of its troops near the area of Doklam standoff during winter, asserting that the region is in Chinese territory.
• India and China resolved the 73-day standoff on August 28 at Doklam after the People’s Liberation Army (PLA) stopped building a strategic road close to India’s narrow Chicken Neck area connecting north-eastern States. Bhutan also claims the Doklam area to be its part.
• India objected to the road building by the PLA, saying that it endangered the security of the narrow corridor.
• “Donglong [Doklam] is Chinese territory,” Col. Wu Qian, spokesman of the Chinese Ministry of Defence, said when asked about reports that the PLA continues to maintain troops close to the Doklam standoff area.

Russia and Egypt to use each other’s airspace and airbases for their military planes

• Russia’s government published a draft agreement between Russia and Egypt allowing both countries to use each other’s airspace and airbases for their military planes.
• The draft deal was set out in a decree, signed by Prime Minister Dmitry Medvedev on November 28, which ordered the Russian Defence Ministry to hold negotiations with Egyptian officials and to sign the document once both sides reached a deal.
• Russian Defence Minister Sergei Shoigu visited Cairo for talks with Egypt’s political and military leadership and the decree said the draft had been discussed with Egypt and approved by Mr. Medvedev.
• Russia launched a military operation to support Syrian President Bashar al-Assad in September 2015 and there are signs it is keen to expand its military presence in the region.
• Russian and Egyptian warplanes would be able to use each other’s airspace and airfields by giving five days’ advance notice, according to the draft agreement, which is expected to be valid for five years and could be extended.

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::Business and Economy::

Achieving 10% growth needs support from world community

• Finance Minister Arun Jaitley said that achieving a 10% GDP growth rate was challenging and would depend on how the world is moving.
• Speaking at the HT Leadership Summit here, he said India had done well by growing at 7-8% during the last three years.
• To scale to 10% is “very challenging” and it would not depend on domestic factors only, but on how the world is moving, he said.
• On reforms, the Finance Minister said India had structurally reformed and there was no finishing line in reforms.
• Mr. Jaitley said GST started with different tax rates and had rationalised the rates on many items. Going forward, future rationalisation of rates would depend on revenue collections, he said, indicating the merger of 12% and 18% rates into one while keeping a “thin” line of luxury and demerit items in the top 28% band.
• Currently, the GST has four rates of 5%, 12%, 18% and 28%. The Finance Minister said a cogent GST mechanism had been developed and no country in the world had a 5% tax rate.

Slowdown in Agriculture is a cause of concern

• While the rebound in GDP growth in the second quarter can act as a ‘confidence booster’ for the economy, the slowdown in the services sector, including finance, transport and hotels, as well as in agriculture is cause for concern, according to industry bodies and consultants.
• Ranen Banerjee, partner (public finance and economics), PwC India, said in a statement, “the GDP numbers for Q2 are not surprising and it is on expected lines given the re-stocking in manufacturing that has taken place in this quarter post the GST roll out.
• Possible causes for the slowdown include the larger working capital requirements faced by the services sector (especially export-oriented ones) and teething process issues post-GST implementation, he said.
• “We also possibly need to examine whether the 3 percentage point increase in tax rate on services — from an effective 15% pre-GST to 18% under GST — is causing some demand side impact. We will need to wait for Q3 and Q4 GDP numbers to be able to comment on this more conclusively,” he added.
• Assocham secretary general D.S. Rawat said, “... agriculture remains an area of concern with a mere 1.7% in the second quarter against 2.3% in the previous quarter. Setbacks in the agri performance can have a cascading impact on consumer inflation.”
• “What is encouraging is that manufacturing has emerged as a key driver of growth indicating that firms have started restocking and recovery is taking shape. Gross fixed capital formation has also picked up from last year’s lacklustre pace,” he said.

GST had an immediate and significant impact on economic growth

• The Goods and Services Tax (GST) appears to have had an immediate and significant impact on economic growth, according to tax analysts and government officials.
• The fiscal second quarter (July-September), which coincided with the July 1 roll-out of GST, saw GDP growth accelerate to 6.3%, from 5.7% in the first quarter.
• The new indirect tax regime had an impact — both in terms of the methodology of calculating GDP, as well as on the performance of the input parameters themselves.
• However, this year, the uncertainty surrounding GST procedures, and the leeway the government has given in terms of extended deadlines, has meant that the indirect tax collections for the particular period are still being updated.
• Gross Domestic Product (GSP) is calculated by adding the indirect taxes figure to Gross Value Added (GVA), and subtracting subsidies, Mr. Anant said, highlighting the reason that GST collections are so crucial for accurate GDP computation.
• “On the one hand, there would possibly have been some disruption in the early days of GST due to the uncertainty surrounding the new processes . On the other hand, net taxes are added back to the GVA and somewhat lower collections on the GST front could have had some dampening effect as compared to a non-GST year.
• Mr. Anant said the GDP data for the second quarter could see an upward revision when the government released its revised estimates as it would reflect the final indirect tax collections — a figure that would include the taxes collected from late filers as well.
• “When GST got implemented, then orders started flowing in and growth picked up. So, GST has had a major impact on this quarter’s growth rate. In the coming quarters, the GST reforms in terms of rates and compliance should play a significant part in manufacturing sector growth.”
• Mr. Anant said services was another area impacted by GST as earlier sales tax data was used to gauge activity.

Eight core sectors grew at a slower pace of 4.7% in October

• Eight core sectors grew at a slower pace of 4.7% in October, chiefly due to subdued performance of cement, steel and refinery segments.
• The eight infrastructure sectors — coal, crude oil, natural gas, refinery products, fertilisers, steel, cement and electricity — had clocked a growth of 7.1% in October last year.
• Meanwhile, the Industry Ministry has revised downwards September growth print of these eight sectors to 4.7% from the earlier estimate of 5.2%
• Official data released showed that cement production contracted by 2.7% as against an expansion of 6.2% in October 2016.
• Output growth in the steel segment too slowed to 8.4% in the last month compared with 17.4% in the year-earlier period. Similarly, there was slowdown in refinery output, whose growth was 7.5% in October this year.
• This compared with 12.6% expansion in the same month last year. Electricity generation, too, was slower on an annual basis.
• Meanwhile, coal segment has shown significant improvement as it expanded by 3.9%. It had witnessed a decline of 1.9% in the year-earlier period.
• The fertiliser sector grew by 3% as against 0.7% last year.Crude oil production and natural gas output have shown improvement, too.
• Cumulatively, the growth in the eight core sectors slowed down to 3.5% as against 5.6% in the comparable period of the last fiscal.
• The eight core industries constitute 40.27% of weight of items in the index of industrial production (IIP).

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