Current Affairs for BANK, IBPS Exams 01 February 2017

Current Affairs for BANK, IBPS Exams

01 February 2017

:: National ::

Economic survey points out positives and negatives

The government’s Chief Economic Adviser said there was a sense of anxiety about the economy’s prospects following demonetisation and stressed the need to allay the fears of an overzealous tax regime in its aftermath.
Mr. Subramanian termed the move to cancel the legal tender nature of high-value currency notes a “radical currency-cum-governance-cum-social engineering measure to permanently and punitively raise the cost of illicit and unaccounted transactions or kala dhan (black money).”
“Bank credit growth has come down, two-wheeler sales have come down. There will be an impact on GDP. But the question is how much,” he said.
The Survey pegs economic growth in 2016-17 at 7.1%, but this is based mainly on information for months before the November 8 demonetisation of Rs. 500 and Rs. 1,000 notes.
This is half a percentage point lower than the 7.6% growth last year, but the CEA warned that comparisons attributing the difference in growth numbers to demonetisation alone would be foolhardy.
Mr. Subramanian declined comment on the design and implementation of demonetisation, but did speak on the costs, and long-term benefits of what was “an unusual and unique monetary experiment” aimed at a structural break.
After a temporary slowdown in GDP growth, the Survey expects the economy to return to normal, once the scrapped currency is replaced by March.
In the long run, tax revenues and GDP growth would be bolstered on account of greater tax compliance and a reduction in real estate prices.

Supreme Court refused to stay the new law on Jallikattu

A few hours after the President gave his assent to the Tamil Nadu amendments in the Prevention of Cruelty Act of 1960 to allow jallikattu, the Supreme Court refused to stay the new State law.
Allowing the Central government to withdraw its January 7, 2016 notification permitting jallikattu, a Bench of Justices declined the plea for an interim stay on the operation of the Prevention of Cruelty to Animals (Tamil Nadu Amendment).
It asked the organisation and other animal rights activists the ‘basis’ of their challenge to the new State law.
Referring to the amendments made by the Tamil Nadu Assembly to the 1960 Central Act, Justice Misra pointed out that the declared object of the new legislation is the preservation of a particular breed of bulls.
Attorney-General Mukul Rohatgi told the Supreme Court that jallikattu was a matter of culture and that citizens had the right to take measures to “conserve their culture.”
Mr. Rohatgi then referred to Section 11 (3) (e) of the 1960 Act which permits slaughtering of animals for food.
The State government and others supporting jallikattu in the current litigation were given four weeks to file their counter-affidavits.

New restrictions introduced in H-1B visa

The White House said it was working on changes in H-1B and other guest worker visa programmes through legislative and executive actions as part of immigration reform.
These visa programmes are mandated by the legislature and are widely used by Indian IT companies to place skilled workers in the U.S.
It also proposed to roll back the permission to work now available to spouses of H-1B visa holders and to replace the current lottery system that selects the 85,000 annual H-1B visa beneficiaries.
This year’s selection process opens on April 1. According to the draft published by Vox.com, the Trump administration is also planning to have federal inspectors regularly visit the sites where guest workers are employed.
A new Bill introduced by Democrat Zoe Lofgren proposes changes in the H-1B programme, to make hiring of foreign workers expensive.
IT stocks plunged over 4%, knocking off more than Rs. 33,000 crore in market valuation of the top five companies, after a new H-1B Bill in the U.S. caused concerns that it would affect the hiring plans of Indian technology firms.

President delivered address to the Parliament

President Pranab Mukherjee called for a constructive debate on simultaneous elections to the Lok Sabha and the Assemblies and funding of polls to eradicate money power.
During his customary address to the joint session of Parliament at the beginning of the budget session, Mr. Mukherjee spoke about the need to debate these issues, which are pet themes of Prime Minister Narendra Modi.
“Frequent elections put on hold development programmes, disrupt normal public life and impact essential services and burden human resource with prolonged period of election duty,” he said.
Mr. Mukherjee referred to the government’s demonetisation decision to fight black money and corruption as also the surgical strikes as bold decisions, both of which were received with thumping of desks by members.
Referring to the surgical strikes, he said the government had taken decisive steps to give a fitting reply to the repeated incursions.
On demonetisation, he said the resilience and forbearance demonstrated by people, especially the poor, in the fight against black money and corruption, were “remarkable”.
He emphasised that “financial inclusion is key to poverty alleviation. An unprecedented 26 crore plus Jan Dhan accounts have been opened for the un-banked.”
He also said that the government was taking special initiatives to develop Northeast India, including opening new road and rail routes to neighbouring countries for boosting the economic development of the region.

:: International ::

Bangladesh will push ahead with plan to relocate Rohingya refugees

Bangladesh will push ahead with a controversial plan to relocate tens of thousands of Rohingya refugees from Myanmar to a remote island despite warnings it is uninhabitable and prone to flooding.
The government has set up a committee comprising state officials in the coastal districts, ordering authorities to help identify and relocate undocumented Myanmar nationals to Thengar Char in the Bay of Bengal.
The committee will assist transferring both registered and unregistered refugees from Myanmar to Thengar Char near Hatiya island in Noakhali district.
Hatiya is situated on the estuary of the River Meghna and is a nine-hour journey away from the camps where the Rohingya have taken shelter.
Some 232,000 Rohingya Muslims — both registered and unregistered — were already living in Bangladesh before more than 65,000 stateless Rohingya fleeing violence in Myanmar’s western state of Rakhine began entering the country.
Most of those who fled to Bangladesh live in squalid conditions in refugee camps in Cox’s Bazar district, which borders Rakhine State and is home to the country’s biggest tourist resort.

Austria’s governing coalition has agreed to prohibit full-face veils

Austria’s governing coalition has agreed to prohibit full-face veils in courts, schools and other “public places” as part of a package of reforms drawn up after more than a week of negotiations.
Govt also agrred to ban police officers, judges and magistrates and public prosecutors from wearing head scarves in the interest of appearing “ideologically and religiously neutral”.
Austria’s Chancellor said that the ban was part of a wide-ranging programme aimed at fending off the challenge of the far-right.
The 35-page programme also includes beefing up surveillance and obliging migrants granted the right to stay to sign an “integration contract” and a “statement of values”.
“Those who are not prepared to accept Enlightenment values will have to leave our country and society,” says the text.

:: Science and Technology ::

Devices that can operate one million times faster than modern electronics

A researcher from India has taken the first definitive step to produce high-speed electronic devices that can operate one million times faster than modern electronics.
The electrons were found to be moving at a speed (frequency) close to 1,015 (one million billion) hertz; the best achievable speed in modern transistors is only 109 (one billion) hertz. The results were published in Nature .
Conventionally, the motion of electrons (conductivity) is achieved by applying voltage. But Dr. Garg and others controlled the motion of electrons inside the solid material by using laser pulses.
Light waves are electromagnetic in nature and have very high oscillation frequency of electric and magnetic fields. This ultra-high frequency of light waves can be used to drive and control electron motion in semiconductors.
The performance of high-speed circuits rely on how quickly electric current can be turned on and off inside a material.
The very short time interval needed to turn silicon dioxide from an insulator to a conductor was possible as the team used high-intensity and extremely short laser pulses and silicon dioxide in the form of a nanofilm. In the bulk form.
Silicon dioxide tends to get damaged by high-intensity laser as the material tends to accumulate heat produced by the laser pulse.
But as a nanofilm, silicon dioxide becomes nearly transparent to laser and absorbs less heat and therefore gets less damaged.

Solar-powered purifier developed by researchers

Researchers have developed a solar-powered purifier, which could provide a highly efficient and inexpensive way to turn contaminated water into potable water for personal use.
The device could help address global drinking water shortages, especially in developing areas and regions affected by natural disasters, researchers said.
The team built a small-scale solar still. The device, called a “solar vapour generator,” cleans or desalinates water by using the heat converted from sunlight.

:: Business and Economy ::

Core sector grew at 5.6% in december

The eight core industries registered a growth of 5.6% in December 2016 on the back of healthy output recorded by refinery products and steel.
The growth rate of eight infrastructure sectors — coal, crude oil, natural gas, refinery products, fertilisers, steel, cement and electricity — was 2.9% in December 2015. It stood at 4.9% in November 2016.
The core sectors, which contribute 38% to the total industrial production, expanded 5% in April – December 2016 compared with 2.6% growth in the same period in the last financial year.
Refinery products and steel production jumped 6.4% and 14.9%, respectively, during the month under review.
However, crude oil, fertiliser, natural gas and cement output reported contraction. Coal output declined by 4.4% in December 2016 from 5.3% in the same month previous year.
Similarly, electricity generation, too, dipped by 6% as compared with 8.8% in December 2015.

The government has marginally revised GDP growth for 2015–16 to 7.9%

The government has marginally revised upwards the GDP growth for 2015–16 to 7.9% from the earlier estimate of 7.6% after factoring in the latest data on agriculture and industrial production.
“Real GDP or GDP at constant (2011–12) prices for 2015–16 and 2014–15 stands at Rs. 113.58 lakh crore and Rs. 105.23 lakh crore respectively, showing growth of 7.9% during 2015–16 and 7.2% during 2014–15,” stated CSO.
However, the figure for 2014–15 has remained unchanged at 7.2% in the second revision of the national accounts for the fiscal. Last year, CSO had estimated GDP growth rate for 2015–16 and 2014–15 at 7.6% and 7.2%, respectively.
CSO said the Gross Value Added (GVA) at constant (2011–12) basic prices grew at 7.8% in 2015–16 as against 6.9% in 2014–15.
As per the revised numbers, growth in real GVA in 2015–16 has been higher than that of 2014–15, mainly due to stronger growth in agriculture, forestry and fishing (0.8%), manufacturing (10.6%), trade, repair, hotels and restaurants.
Per capita net national income at current prices is estimated at Rs. 86,513 and Rs. 94,178 respectively for 2014–15 and 2015–16.
Per capita PFCE (private final consumption expenditure) at current prices is estimated at Rs. 57,402 and Rs. 61,571 for 2014–15 and 2015–16, respectively.

Economic survey recommends major reforms

The Economic Survey recommended the Centre to incentivise good fiscal work by States to keep the overall fiscal performance on track.
Greater reliance will need to be placed on incentivising good fiscal performance, not least because States are gradually repaying their obligations to the Centre, removing its ability to impose a hard budget constraint on them.
It, however, added that incentivising good performance by the States will require the Centre to be an exemplar of sound fiscal management itself.
The average revenue deficit has been eliminated, while the average fiscal deficit was curbed to less than 3% of GSDP. The average debt to GSDP ratio has also fallen,” it said.
Survey noted that much of the improvement in financial positions was possible because of exogenous factors, most notably assistance from the Centre in the form of increased revenue transfers, the assumption of state debt, and the introduction of centrally sponsored schemes.
The Survey also highlighted that Pay Commission recommendations, and mounting payments from the UDAY bonds will lead to increase in fiscal challenges for the States.
Further, the Survey has further suggested that Redistributive Resource Transfers should be significantly linked to fiscal and governance efforts on the part of the States.
Redistributive Resource Transfer or RRT to a state (from the Centre) is defined as gross devolution to the state adjusted for the respective state’s share in aggregate GDP.
The top 10 recipients are: Sikkim, Arunachal Pradesh, Mizoram, Nagaland, Manipur, Meghalaya, Tripura, Jammu and Kashmir, Himachal Pradesh and Assam.
It also recommended using a part of the RRTs or redistribute the gains from resource use, as a Universal Basic Income directly to households in relevant states which receive large RRT flows and are more reliant on natural resource revenues.
Smaller States such as Uttarakhand, Himachal Pradesh and Goa trade more, while the net exporters are the manufacturing powerhouses of Tamil Nadu, Gujarat, and Maharashtra, according to the Economic Survey.
One other finding on internal trade between States, of the first-ever estimates for interstate trade flows, is that cross-border exchanges between and within firms amount to at least 54% of GDP (in 2015).
Implying that India’s interstate trade is 1.7 times larger than its international trade of 32% of GDP.
Belying their status as agricultural and/or less developed, Haryana and Uttar Pradesh appear to be manufacturing powerhouses because of their proximity to the national capital region, according to the Survey.
India’s aggregate interstate trade (54% of GDP) is not as high as that of the U.S. (78% of GDP) or China (74% of GDP), but substantially greater than provincial trade within Canada and greater than trade between Europe Union countries.
The costs of moving (within India) are about twice as great for people as they are for goods, the Survey said. However, it said there is a potential dampener on the finding that trade in goods is high within India.
Devoting considerable attention to India’s twin-balance sheet problem, the Survey said that the agency could take charge of the largest, most difficult cases, and make politically tough decisions to reduce debt.
India’s NPA ratio at its current level of 9.1% of the gross loans is higher than any other major emerging market (with the exception of Russia), higher even than the peak levels seen in Korea during the East Asian financial crisis.
Advocating PARA to resolve the problem of twin-balance sheets (corporates and banks) to be funded by the windfall gain to the government (from the unreturned old demonetised notes).
Economic Survey said, so far, public discussion of the bad loan problem had focused on bank capital, under the assumption that the main obstacle to resolving the twin balance sheet (TBS) concern was finding the funds needed by the public sector banks.
India has “changed utterly” over the last 13 years since the Fiscal Responsibility and Budget Management (FRBM) was enshrined in law for prudent fiscal management and therefore.
FRBM operational framework designed in 2003 “needs to be modified to reflect the India of today and even more importantly, the India of tomorrow,” according to the Economic Survey.
This suggestion assumes significance in the backdrop of the N.K. Singh panel recently submitting its report on revising the FRBM Act to finance minister Arun Jaitley.
Noting that India’s economic experience shows that the fiscal activism embraced by advanced economies giving a greater role to counter-cyclical policies and attaching less weight to curbing debt was not relevant for India.
The Survey said India’s fiscal experience has underscored the fundamental validity of the fiscal policy principles enshrined in the FRBM Act.
However, India’s experience has reaffirmed the need for rules to contain fiscal deficits because of the proclivity to spend during booms and undertake stimulus during downturns, it observed.
Even as these FRBM’s basic tenets — or the fundamental validity of the fiscal policy principles — remain valid, “… the task of the FRBM Review Committee (will be) to set out a new vision, an FRBM for the 21st century.”
The government has set a target for fiscal deficit of 3.5% of GDP for FY’17, a lower target than the 3.9% set for 2015-16 which was achieved. In value terms, the 3.5% is Rs. 5.33 lakh crore.
According to data released, fiscal deficit in the April-December (2016-17) period was 93.9% of the Budget target against 87.9% for the same period a year ago. The April-December fiscal deficit in value terms was Rs. 5.01 lakh crore.
Economic Survey acknowledged the adverse impact of demonetisation in the short term as it projected that GDP growth this year would be slowed by 0.25-0.5 percentage point as a result of the withdrawal of high-value currency notes.
“The question is: how much? The short answer is between one-quarter and half-a-percentage point relative to the baseline of about 7%,” it said.
The Reserve Bank of India had in December trimmed its projection for Gross Value Added growth for the current financial year to 7.1% from 7.6% after considering the short-term disruptions caused by demonetisation.
The survey acknowledged that GDP growth in the second half of the current fiscal would understate the overall impact because the most affected parts of the economy, informal and cash based,were either not captured in national income accounts or measured based on formal sector indicators.