Current Affairs for BANK, IBPS Exams - 1 January 2018

::NATIONAL::

2 new species of ginger found in the northeast

Scientists have discovered two new species of ginger in easternmost districts, Ukhrul in Manipur and Tuensang in Nagaland, both bordering Myanmar.
Hedychium chingmeianum , the species discovered in Tuensang district, is an epiphytic plant and grows on tall trees, while Caulokaempferia dinabandhuensis was found growing in rock crevices, boulders and humus rich soil in the Shirui Hills, where the highest peak stands at an elevation of 2,938 metres.
Both the plants are from the family of Zingiberaceae , to which the commonly found ginger (Zingiber officinale) belongs.
Two Botanical Survey of India (BSI) scientists, Nripemo Odyou and Dilip Kumar Roy, found the plant Hedychium chingmeianum , growing on tree trunks at Chingmei village in Tuensang district.
The plant, with reddish stems and creamy white flowers, was brought to the regional centre of BSI, Shillong, and cultivated there.
The species Caulokaempferia dinabandhuensis was discovered by Biseshwori Thongam and Bipin Konsam of the Institute of Bioresources and Sustainable Development.The species has beautiful oval-shaped pink flowers which appear in June-July.

Delhi sees the worst fog of season

The Capital had the worst fog of the season that brought visibility down to below 50 metres for several hours, badly affecting flight operations at Delhi airport. Delays were also caused in the rail network across north India.
According to airport officials, over 50 flights were diverted, 150 delayed and several cancelled as visibility fell below 50 metres at the Indira Gandhi International Airport between 7:30 a.m. and 10 a.m. on all three runways.
Flights only started landing after 10 a.m. and take-offs resumed after 11:30 a.m., said airport officials.
The delays had a cascading effect as passengers complained of chaos at the airport that was packed to capacity. Passengers were stuck at other airports in the country as well due to bad weather at Delhi airport, which delayed incoming flights. Northern Railway reported 15 trains cancelled, 57 delayed and 18 rescheduled due to early morning fog.
It has also forecast a cold day with the minimum temperature expected to fall to 5 degrees Celsius, the lowest forecast yet for the season. The maximum temperature is likely to settle at 23 degrees Celsius which is three degrees above normal for this time of the year.

::INTERNATIONAL::

Iran cuts access to social media

Iran cut access to social media on in a bid to head off further protests after days of unrest that saw two people killed and dozens arrested.
The Interior Minister warned protesters will “pay the price” as footage on social media showed thousands marching across the country overnight.
The spate of demonstrations began in second city Mashhad over high living costs, but quickly spread throughout the country and turned against the Islamic system as a whole, with slogans such as “Death to the dictator”.
Lorestan Province Deputy Governor Habibollah Khojastehpour told state television that two people were killed in clashes in the small western town of Dorud but denied security forces were responsible.
U.S. President Donald Trump said the “big protests” showed people “were getting wise as to how their money and wealth is being stolen and squandered on terrorism”.
Iranian authorities have sought to distinguish anti-regime protesters from what they see as legitimate economic grievances. “Do not get excited,” Parliament director for international affairs Hossein Amir-Abdollahian wrote in a tweet directed at Mr. Trump. “Sedition, unrest and chaos are different from gatherings and peaceful protests to pursue people’s livelihoods,” he said.
There have also been reminders of the continued support for the regime among conservative sections of society, with pro-regime students holding another day of demonstrations at the University of Tehran. They had outnumbered protesters at the university the day before, although online videos showed significant protests around parts of central Tehran.
Iranian authorities have blamed external forces for fomenting the protests, saying the majority of social media reports were emanating from regional rival Saudi Arabia or exile groups based in Europe.

Printed Study Materials for IBPS, SBI Bank Exam

::BUSINESS AND ECONOMY::

Busting the myths on tax evasion

The Income Tax department has released new data on its direct tax mop-ups for assessment year 2015-16. Every time new data becomes available on the subject, it is used to reinforce the impression that Indians love to skip their taxes. But an objective analysis suggests that the despondency is overdone.
If filing an income tax return is a sign of voluntary compliance with the country’s tax laws, then India has been registering very material improvement in this metric in recent years.
The tax administration has recently begun sharing data on ‘Income Tax Return Statistics’ for each assessment year. The series flagged off in financial year FY12 (equating to assessment year 2012-13) and is updated until FY15 (assessment year 2015-16).
It shows that the number of valid income tax returns filed rose by a good 40% from 3.11 crore to 4.36 crore between FY12 and FY15. Those return filers comprise individuals as well as other taxable entities such as Hindu Undivided Families, firms, companies and non-profit organisations. The number of individuals filing a tax return showed equally impressive growth from 2.87 crore to 4.07 crore.
In effect, the number of I-T return filers in this period grew far faster (12% a year) than India’s population (estimated at 1.2%). This could partly reflect the demographic shift which is underway, where the working age population is expanding faster than other demographic segments. But it also reflects a culture of improving tax compliance.
Talking of compliance, there’s brisk growth in the income that assesses are declaring to the taxman too.
The total income reported in these returns (Returned Income) vaulted from Rs. 15.6 lakh crore in FY12 to Rs. 29.5 lakh crore in FY15, an 89% jump. Has demonetisation improved these metrics? Difficult to say. While many piecemeal data points on tax filings have been bandied about by the government this past year, official CBDT data that is comparable isn’t available beyond FY15.
Sceptics point out that while the number of tax returns filed may be growing, a good number of those return filers don’t cough up any tax. True, of the 4.36 crore return filers for FY15, as many as 1 crore declared income below the taxable threshold of Rs. 2.5 lakh. But this doesn’t necessarily prove deliberate evasion.
It may only go to show that a majority of Indian workers don’t yet earn an income reasonable enough to fall into the tax net.
The Economic Survey 2015-16 made the point that India’s tax slabs are set rather high because individuals earning Rs. 2 lakh-plus make up the top 5.8% sliver of the population. A recent Credit Suisse Global Wealth Report calculated that the median wealth of Indians stood at just Rs. 84,175 ($1,295) in 2017.
Given that an individual’s wealth is expected to be many times his annual income, this data supports the view that a majority of Indians don’t pay income tax simply because they don’t earn enough to do so.
As India’s economic prospects improve and lift aggregate income levels, a larger slice of the population may graduate to paying income tax. In fact, this trend is already underway. Between FY12 and FY15, the number of returns with income below Rs. 2.5 lakh shrank from 1.55 crore to 1 crore and those in the Rs. 2.5- Rs. 10 lakh bracket jumped from 2.08 crore to 3.02 crore.
Commentators complain that India’s direct tax base is woefully narrow, with just 2-3% of the population filing returns. But to correctly assess India’s direct tax base, the ‘number of effective assessees’ is a better measure than I-T filings data.
In India, a straight-forward comparison of the number of taxpayers with the total population count is a flawed measure of tax compliance, because only workers who earn income from taxable economic activities, are legally liable for income tax.
Census 2011 data tells us that only about 40% of the Indian population was employed for whole or part of the year. It is estimated that agriculture, income from which is tax-exempt, accounts for nearly half of the workforce.
Therefore, if one attempts a ballpark calculation and excludes agriculturists and the unemployed from the total population count (estimated 132 crore for 2016), there would be roughly 26 crore taxable income-earners in the economy.
Of these, 6.26 crore pay direct taxes in one form or another. The number could still do with improvement. But it is certainly not cause to brand India as a nation of tax evaders!

Explore selling and swapping of loan assets-FinMin

The finance ministry has asked public sector banks (PSBs) to explore options for selling and swapping of loan assets with other lenders with a view to strengthen their balance sheets.
Depending on their competencies, banks can look at opportunities to buy or swap loan assets, sources said, adding this was one of the issues discussed during PSB Manthan.
Swapping and selling assets will help banks focus on their core competencies and trim their burden.
For example, if a bank has expertise in lending to small and medium-sized firms, it can swap its retail loan portfolio with another bank that is good in the sector, sources said. In order to increase credit availability to small businesses, the Finance Ministry has also asked PSBs to open micro, small and medium enterprises (MSMEs) intensive branches.
MSMEs, which are a huge employment generator in the country, contribute 40% of India’s manufacturing. Besides, banks were also advised to strengthen cluster-based lending, people aware of the development said, adding that branches would help in channelising loans to the sector which is an engine of growth.
As many as 50 clusters have been identified for enhanced access to financing, sources added. Small Industries Development Bank of India has revamped the udyamimitra.in portal, so that banks compete for financing MSME projects.

Corporatisation of food

The ‘World Food India’ conference in Delhi in November informed us as much about the urban bias in development in India as about the disregard for public health and natural agriculture.
‘PepsiCo Leads Rs. 68,000 Crore plans for Food Sector’ read one media headline during the conference. Hundreds of corporations vend food, indiscriminate consumption of which creates digestive disorders, hypertension, heart disease, diabetes and even cancer.
Processed and packaged food can be especially challenging to our health as these also contain, in addition to chemicals like fertilizers, pesticides and herbicides, excessive amounts of sugar, salt and oil.
Our government would outsource food to these corporations fully if left to themselves, instead of establishing ecosystems for family farmers to grow food without chemicals and undertaking the hard work of pushing and incentivising peasants to diversify their production from wheat and rice to a range of rapidly disappearing traditional foods (like millets) and more lentils, fruits and vegetables.
These corporations, with little interest in the health of consumers, are going to change ‘preferences’ to more sugared ‘beverages’, more potato chips, more chocolates, more fried snacks. If outsourcing the change of consumer preferences to corporations isn’t a recipe for a public health disaster, what is?
‘Private Sector Must Invest More in Contract Farming: PM’ , announced yet another header. Companies are evaluating India as a market to sell their products and as an outsourcing hub.
This is farcical in a nation where a vast proportion of the population is malnourished and nutritionally challenged. Prime Minister Modi’s speech was targeted at corporations and their ‘ease of doing business’ with the consuming classes, and holds little hope for the poor. Each of these marks his unique approach to development where agency lies with mass-producing, machine-driven companies and entrepreneurs, not peasants and consumers.
The purpose of development is forgotten. All political parties are complicit in equating development with ‘GDP growth’ and ‘FDI’.
Not much of this will reach the farmer in the form of higher procurement prices; much will instead flow to corporations as profits. Few new jobs will be created in heavily automated food-processing factories. By their very nature, global corporations will import sophisticated machines and labour-eliminating attitudes from their home economies to run these factories.
No small farmer will benefit; instead, already wealthy, large farmers in well-irrigated parts of prosperous regions of India will make money from these factories: the kinnow farmers in Punjab and potato farmers in Haryana. What is smothered by the development discourse is the critical issue of health sovereignty; we are ceding our rights to eat healthy, fresh, chemical-free, unprocessed foods to corporations.
The urban, educated consumer demands organic retailers undergo stringent checks and penalties for misrepresentation, and rightly so. These same people, however, are eerily silent about the absence of labeling on 99.9% of all food today that is grown with overdoses of chemical fertilizers and pesticides, preserved with chemicals, sugars, salts and fats. These hold no warning that consuming them over a lifetime will destroy our health.
The larger picture is quite bleak with little hope of redemption; therefore, all the more reason that individuals must act for themselves.
We must ask difficult questions of a system that produces the chemically poisoned food we consume, and of a government that outsources public health to corporations who package and process unhealthy food.
Finally, we must commence our very personal journey of discovery by engaging with a neighbourhood organic farm.

Reasons for fiscal deficit widening

The government’s fiscal deficit up to November came in at 112% of the amount budgeted for the entire financial year ending in March, prompting a number of commentators to predict that the government would miss its target for the year.
The government missing its fiscal deficit target for the year means that either the revenue it collected fell short of projections, or that its expenditure was higher than planned. The data from the Controller General of Accounts shows that the government’s expenditure seems to be on track. That is, it has spent 68.9% of the amount budgeted for the year, with four months remaining. In other words, it has 31% of its budgeted expenditure left for the remaining 25% of the year.
The revenue side, however, seems to be where the issue is, at only 53% of the full-year target. Looking deeper, the data shows that the government’s non-tax revenue, at only 36.5% of the year’s target, is lagging behind last year’s performance, where it had earned 54.2% of that year’s non-tax revenue target by November.
The government announced that it would be borrowing an additional Rs. 50,000 crore during the remaining part of the financial year. While it was assumed that this would lead to a slippage in the fiscal deficit, the government was quick to explain that this would not happen. In its statement, it explained that the additional borrowing would be offset by trimming down the collections from its Treasury Bills.
While the effect of this extra borrowing on the fiscal deficit is yet to be determined, the news certainly had an effect on the bond market. According to news reports, the benchmark 10-year bond price fell to a nearly 17-month low, pushing its yield up by as much as 17 basis points. According to analysts, the bond market is still uncertain about the quantum of borrowing the government will do by the end of the financial year.
Following the release of the October data, which showed the fiscal deficit at 96% of the full year’s target, the Chief Statistician of India, TCA Anant, had said that there was no need to worry and that the fiscal deficit was bound to go up during the year before coming down again towards the end.
The main reason for this, he said, was the fact that the government had brought forward the date for the presentation of the Budget. Because of this, the government has been able to smoothen out its expenditure across the year, with more being spent in the first half of the year than was previously possible.
At the same time, the revenue profile of the government in terms of direct tax has remained more or less the same.
According to former Chief Statistician Pronab Sen, even a 0.5% slippage in the fiscal deficit would be okay as long as it is being driven by an increase in expenditure on developmental activities such as rural roads, irrigation, and low-cost housing.
Even though ratings agency Moody’s recently upgraded India, it did say that it would be tracking the fiscal situation, so any significant slippages could result in a downgrade in the future.

Participation of wilful defaulters may weaken IBC’

The Lok Sabha passed the Insolvency and Bankruptcy Code (Amendment) Bill, 2017. However, we are likely to witness a wave of demands seeking to allow failed promoters to participate in the bidding and resolution process of their respective firms.
The Corporate Affairs Ministry has asked stakeholders to share their views on these issues by January 10. The IBC was enacted in 2016 to find a time-bound resolution for ailing and sick firms, while protecting the interests all stakeholders, including creditors.
A successful completion of the resolution process was expected to help stem the rise of bad loans in the banking system. The new amendments are a part of the ordinance that was brought in last month.
The Bill prohibits wilful defaulters, promoters or management of the company, if it has an outstanding non-performing debt for over a year, and disqualified directors from submitting a resolution plan in case of defaults. It also bars the sale of property of a defaulting firm to such persons during liquidation.
Under the Code, initially, existing promoters could also bid and participate in the resolution process. However, through the said ordinance, the government banned them from participating in the process. This particular clause aims to prevent a backdoor entry for errant promoters to retain control of the company and reduce their debt at the same time.
Recently, several interested parties represented to the government seeking a removal of this ban. There is a view that by having a blanket restriction on promoters participating in the bidding process, the valuation of the company may be affected as the promoter knows the business and the company’s potential the best. While restrictions were imposed to avoid misuse, they feel it should not be a blanket ban but should have safeguards.
The role of the IBC in the present scenario is to remove delays in the resolution process. However, even if proceedings for such cases are completed within the stipulated 180 days, the recovered amount will only be a fraction of the original value of assets. So, the ‘haircut’ will be quite substantial. The silver lining is, banks can recognise profits out of collections made through IBC in cases where a large portion has already been provided for.
Also, a vigil is still required, said Mr. Jacob, to prevent ‘unscrupulous promoters misusing the provisions of the IBC to retain control of their company through benami transactions’, even as substantial sacrifices will be made by banks.
“Bankruptcy laws are an essential part of protecting creditors’ rights. They also help the markets flush away inefficient businesses and reallocate capital to efficient businesses,” according to K.M. Jayarao, executive VC, Ambit ARC.

::SCIENCE AND TECHNOLOGY::

Nasa’s one among many missions in 2018 is to ‘touch’ sun

NASA is turning 60 in 2018 and the agency is looking forward to launching a slew of important missions in the coming year, including one to “touch” the sun.
NASA’s Parker Solar Probe is scheduled for launch in 2018 to explore the sun’s outer atmosphere.
The probe will use Venus’ gravity during seven flybys over nearly seven years to gradually bring its orbit closer to the sun.
The Parker Solar Probe will perform its scientific investigations in a hazardous region of intense heat and solar radiation.
The primary goals for the mission are to trace how energy and heat move through the solar corona and to explore what accelerates the solar wind as well as solar energetic particles.
In 2018, NASA will also add to its existing robotic fleet on Mars with the InSight lander designed to study the interior and subsurface of the red planet.
The U.S. space agency’s first asteroid sample return mission, OSIRIS-REx, is scheduled to arrive at the near-Earth asteroid Bennu in August 2018, and will return a sample for study in 2023. A survey satellite to search for planets outside the solar system is also to be launched.