(General Awareness for Bank's Exams)  India And The World

August - 2014

India And The World

• The two –day 18th BASIC countries (Brazil, South Africa, India and China) Ministerial Meeting will get underway to discuss important issues relating to the current UNFCCC Climate Change negotiations specially on matters pertaining to the Adhoc Working Group on the Durban Platform.

•  The 17th BASIC Ministerial Meeting on Climate Change was held in Hanzghou, China last October.

•  The BASIC Ministerial meeting provides an opportunity to Environment Ministers to enhance coordination on important issues in climate change negotiations and to arrive at a common position on such issues. The BASIC Ministers have been meeting regularly since the Conference of Parties in Copenhagen.

‘Developed nations must walk the talk on climate goals’

•  The BASIC (Brazil, South Africa, India and China) group reiterated that developed countries should walk the talk on climate change goals, accept their historical responsibilities of polluting the planet and finance technology transfer to the developing world.

• BASIC proposed joint action on various issues including emission targets and other plans to be set out by next year.

• A joint statement issued here after the two-day 18th ministerial meeting said progress after the Warsaw climate talks was reviewed and the 2015 outcome to be adopted at the meeting in Paris should be comprehensive, balanced, equitable and fair in order to enhance the effective implementation of the United Nations Framework Convention on Climate Change.

• India said all countries should ratify the second commitment period of the Kyoto Protocol quickly and there should be full operationalisation of the Green Climate Fund. Under the Durban Platform, the countries were expected to increase their ambitions on emission cuts but that is not happening, with some like Japan reducing their targets.

‘India, Pakistan must negotiate FTAs’

•  Co-chair of the India-Pakistan Joint Business Forum (IPJBF) said that the two neighbours should consider negotiating free trade agreements (FTAs). He also expressed the hope that Islamabad would soon grant the Most Favoured Nation (MFN) status to India as the formalities on the matter had already been completed. Pakistan is yet to reciprocate India’s grant of MFN status to it in 1996.

•  The PIJBF has constituted 10 task forces including for agriculture, banking and finance, energy, visa facilitation, textiles, automobiles, engineering and IT that will recommend steps and policies that the two neighbours could take for increasing bilateral trade and investments.

India to draft 5-year plan of action to deepen ties with ASEAN

• In her address at the 12th India-ASEAN meeting in Nay Pyi Taw, External Affairs Minister Sushma Swaraj said India would soon draft a five-year plan of action starting 2016 to take the trajectories of common interests with ASEAN to a new level and particularly emphasised on improving connectivity in the region to further boost trade and people-to-people contact.

•  Strongly pitching for improvement in connectivity, Indian said India wanted connectivity in all its dimensions - geographic, institutional and people-to-people. She also referred to 5Ts of government of India — Tradition, Talent, Tourism, Trade and Technology — reflecting priority areas and noted that in foreign policy connectivity precedes them all.

• The ASEAN-India strategic partnership owes its strength to the fact that India’s ‘Look East’ policy meets ASEAN’S ‘Look West’ towards India.

•  The members of ASEAN include Brunei, Cambodia, Indonesia, Myanmar, Singapore, Thailand, Philippines and Vietnam. India and the ASEAN have already implemented a free trade agreement in goods and are set to widen its base and include services and investments. The India-ASEAN Trade in Goods Agreement was signed in August 2009 and it came into force on January 1, 2010.

•  There has been significant progress in ties between India and the ASEAN grouping in the last few years in diverse sectors, particularly in trade and commerce. The bilateral trade grew by 4.6 per cent from $68.4 billion in 2011 to $71.6 billion in 2012. ASEAN’s exports were valued at $43.84 billion and imports from India amounted to $27.72 billion in 2012. The target has been set at $100 billion by 2015 for ASEAN-India trade.

Committed to working with Modi government, says Singapore PM

•  Singapore Prime Minister Lee HsienLoong re-affirmed his commitment to working with newly elected leaders in India and Indonesia.

• “There are new leaders in Indonesia and India. How their countries fare will affect the entire region. I look forward to working with them,” said Mr. Lee referring to Indian Prime Minister NarendraModi and Indonesian President JokoWidodo in his annual National Rally speech.

•  Highlighting Singapore’s concern about global uncertainties, Mr. Lee said: “The world is in flux. Conflicts far away could affect us.”

Japanese investment in smart cities high on Modi agenda

•  During his visit to Japan, from August 31 to September 3, Prime Minister NarendraModi is hoping to seal several bilateral agreements.

• According to diplomatic sources, these will include infrastructural investment for the government’s “smart cities” initiative, with Japan proposing project development agreements on high-speed railways, more industrial corridors, and road-links and rail-links through the north-eastern States to ASEAN countries as well.

•  The one aspect of the new government’s foreign policy that has moved from the past is the tougher language of discourse with leaders.

Great expectations from Modi’s Japan trip

•  India has “great expectations” from Prime Minister NarendraModi’s five-day visit to Japa, his first bilateral trip outside the subcontinent.

• Underlining the importance of the East Asian region, Mr. Modi’s visit to Japan will be followed by a Vietnam trip by President Pranab Mukherjee in September.

•  External Affairs Minister SushmaSwaraj just concluded a visit to Vietnam.

•  Top business leaders, including MukeshAmbani, GautamAdani and Kumar Mangalam Birla, will travel separately to Japan in visits timed to coincide with high-level business interactions Mr. Modi will initiate with his Japanese counterpart, Shinzo Abe.

India, Pakistan hold third flag meeting

•  Officers of the Border Security Force and the Desert Rangers of Pakistan held their third flag meeting along the international border that has witnessed relentless ceasefire violations in the past month and a half.

•  While the BSF complained about regular ceasefire violations, the Pakistani Rangers denied the charge and drew attention to the loss of life and property in BSF shelling.

Business and Economy

Black economy now amounts to 75% of GDP

•  Driven substantially by the higher education sector, real estate deals and mining income, India’s black economy could now be nearly three-quarters the size of its reported Gross Domestic Product (GDP).

•  There were no “reliable” estimates of black money generated in India and held within and outside the country, the government commissioned the National Institute of Public Finance and Policy (NIPFP) to estimate the black money in India and held overseas by Indians.

•  The capitation fees collected by private colleges, on management quota seats in professional courses, last year was around Rs 5,953 crore.

Two-step authentication must for credit cards: RBI

•  All transactions involving domestic credit cards must necessarily conform to additional authentication or validation process as mandated under the rules.

•  Asserting this, the Reserve Bank India (RBI) has made it clear that the two-step authentication process is a must even for ‘card not present transactions’.

•  The toughening RBI stance on two-step authentication process is primarily aimed to set right an unintended wrong arising out of the so-called customer-friendly payment model followed by certain service providers.

•  By doing so, they have managed to give the two-step authentication requirement a slip.

•  According to the RBI, however, this is resulting in foreign exchange outflow.

Plan afoot to make telcos tighten verification norms

•  The Government is planning to finalise and notify an upgraded penalty structure after its strategy of imposing fines on companies with unverified mobile phone subscribers paid marginal dividends.

•  The Department of Telecom (DoT) has been invoking licence conditions to impose penalties on companies slow in verifying whether subscribers have complied with the formalities of providing their residential address and other details.

• The Department of Telecom has always drawn short when penalising private companies. Every year about two dozen telecom operators attract penalties for various offences but the actual money flowing to the Government Exchequer has hovered around the 15 to 20 per cent mark.

•  According to DoT, these phone companies have been unable to account for the identity and residence proofs of over 4.5 crore SIM cards. Companies should have paid heed to the country’s national security interests while competing with each other to enrol more customers.

PM announces Rs. 8,000-crore package

• Prime Minister Narendra Modi waived off Jammu and Kashmir’s Rs. 60-crore liability towards the Food Corporation of India and announced a special Central assistance of Rs. 8,000 crore for four major road projects.

•  Listing ‘Prakash’ (energy), ‘Paryavaran’ (ecology) and ‘Paryatan’ (tourism) as development boosters the State needs, Mr. Modi said the development of J&K was a top priority for his government.

•  Mr. Modi also inaugurated two power projects — at Nemo Bazgo in Leh and at Chutak in Kargil — besides laying the foundation stone of a Rs 1,788-cr transmission line that would connect entire Ladakh region to the northern grid via Srinagar and Drass.

DoT working on modalities of BSNL-MTNL merger

•  In a bid to revive BSNL and MTNL, Department of Telecom is working on modalities to merge the two state-run telecom companies and also undertake organisational restructuring.

•  Asked if there is a timeline for the merger, the source said there is no set timeframe but it might take one to two years.

•  Minister of Communications and IT Ravishankar Prasad had also met the senior management of BSNL and MTNL recently to discuss the blueprint for reviving the loss-making PSU telecom companies.

•  The total debt of the two firms has increased to Rs. 21,208 crore at the end of June 2014.

Labour issues can’t be solved using police: HC

• “A labour problem cannot be solved using police force,” said Justice P. Devadass of the Madras High Court, while releasing on conditional bail 167 workers arrested on the Independence Day for staging a demonstration at the KancheepuramCollectorate.

•  The judge said the arrested could not be treated as hardened criminals as they did not possess any lethal weapon.

•  The police or public or public officials were not their enemies. They were airing their grievance against the management of a company.
  L&T to bid for bullet train project

•  Larsen & Toubro (L&T) is gearing up to bid for the government’s ambitious bullet train project, its Executive Chairman A. M. Naik, said.

•  He said that L&T had emerged as the lowest price bidder for the SardarVallabhbhai Patel’s Statue of Unity project in Gujarat though the contract was yet to be awarded.

•  The company is also expecting bigger opportunities from infrastructure projects, including metro rail.

5 Indian firms among Forbes’ most innovative companies

•  Five Indian companies, including Hindustan Unilever and Tata Consultancy Services, are among Forbes’ list of the world’s 100 most innovative companies that investors think are most likely to “generate big, new growth ideas“.

•  The annual ‘World’s Most Innovative Companies’ list, released, has been topped by California-based global cloud computing company Salesforce for the fourth year in a row.

•  The five Indian companies on the list are consumer goods company Hindustan Unilever, which is ranked 14th, followed by IT major Tata Consultancy Services (57), construction services firm Larsen & Toubro (58), pharma major Sun Pharma Industries (65) and Bajaj Auto (96).

RBI panel to study tax structure on financial instruments

•  The Reserve Bank of India, set up a working group to study various issues relating to taxation of financial instruments.
  The working group is expected to suggest appropriate rationalisation measures to boost private financial savings.
  It will review the current tax structure as applicable to various financial instruments issued in theIndian financial system.
  It will also identify possible ‘tax arbitrage’ among financial instruments under the extant tax structure.
  Also, it will suggest rationalisation of tax treatment across financial instruments to promote financial savings and for minimising distortions, taking into account the recommendations of earlier committees in this regard and the draft Direct Taxes Code.

•  BalbirKaur, Adviser, Department of Economic and Policy Research, Reserve Bank of India, will be the convenor of the group.

•  It is expected to submit its report within three months of its first meeting.

Tata Value ties up with Snapdeal

•  Online marketplace Snapdeal and Tata Value Homes, a subsidiary of Tata Housing with focus on affordable housing , announced partnership to enable users to buy houses online.

•  As part of the partnership, about 1,000 homes across projects in cities such as Mumbai, Pune, Ahmedabad, Bangalore and Chennai will be put up for sale on Snapdeal. These houses are priced between Rs.18 lakh and Rs.70 lakh and range from 1 BHK to 3 BHK.

•  Tata Value Homes will continue to sell through its own portal as well.

•  Upon possession of the house, customers buying the house through Snapdeal will get Rs.10,000 a month for a year as an assured rent (whether they stay on premise or lease it out) as part of the deal.

Centre to unveil home loan scheme for transgenders

• The Union Ministry of Housing and Urban Poverty Alleviation (HUPA) has proposed rolling out a loan assistance scheme that will for the first time help transgenders and economically weaker sections to secure home loans in urban areas.

•  The Ministry has tweaked the existing Rajiv RinnYojna (RRY), which was launched as an instrument to aid the EWS (economically weaker sections) and LIG (lower income group) segments in urban areas, through enhanced credit flow and replaced it with a new scheme that will make it easier for the economically weaker sections and minority groups to own homes.

•  The RRY launched by the UPA government with much fanfare failed to take off and funds earmarked for it lapsed.

•  The Ministry has now not only given it a new name — HOMES (Home Owners Mortgage Equity Subvention Scheme) but has also made it more attractive by enhancing the loan amount and increasing the interest subsidy from 5 per cent to 5.5 per cent on loans granted to construct houses or extend the existing ones.

Insurance Bill may be cleared by year-end

•  Union Finance Minister ArunJaitley has expressed hope that Parliament will pass the Insurance Bill for raising the foreign direct investment (FDI) limit to 49 per cent by the end of this year, the first major economic reform proposed by the NarendraModi Government.

•  The UPA Government had originally proposed raising the FDI cap back in 2008 when it introduced the Insurance Laws (Amendment) Bill. However, opposition from political parties, including the BJP, did not allow the Bill to be taken up in the RajyaSabha.

•  The Modi Government introduced a fresh Insurance Laws (Amendment) Bill in Parliament earlier this month. It proposes a rider that management control rests in the hands of an Indian promoter alongside the eased FDI cap.

•  After the introduction of the Bill, the government moved 97 amendments because of which it could not be passed.

Monthly cap on LPG cylinders goes

•  The Union Cabinet lifted the restriction of one LPG cylinder per month to a domestic consumer. While households will still get only 12 cylinders in a year at subsidised rates.

•  The monthly cap has been lifted in view of complaints from consumers regarding the limited access to LPG imposed by the earlier restriction.

•  Now consumers can avail themselves of their quota of 12 cylinders at any time of the year.

Smart cards to buy milk

•  Angry customers haggling with milk-booth operators for change is a common sight.

•  Keeping this in mind and to promote cashless transactions, Delhi-NCR’s largest milk supplier, Mother Dairy, has teamed up with the State Bank of India to make everyone’s life easier with the help of a smart card.

Higher minimum PF pension from Sept. 1

•  The minimum monthly pension of Rs. 1,000 and a higher wage ceiling of Rs. 15,000 for social security schemes run by the Employees’ Provident Fund Organisation will be implemented from September 1. It will benefit 28 lakh pensioners.

•  The government has raised the maximum sum assured under the Employees’ Deposit Linked Insurance Scheme to Rs. 3 lakh.

•  This means in case an EPFO subscriber dies, his family will be entitled to sum assured of Rs 3.6 lakh instead of existing Rs 1.56 lakh.

Govt to increase dearness allowance to 107 p.c

• The Government is likely to approve a hike in dearness allowance (DA) to 107 per cent from the existing 100 per cent, benefiting around 30 lakh Centre’s employees and its 50 lakh pensioners including dependents.

•  “The average rate of retail inflation for industrial workers from July 1, 2013 to June 30, 2014 works out to be 7.25 per cent. Thus the Central government will hike dearness allowance for it employees by 7 per cent,” an official said.

•  He said the Finance Ministry will now put a Cabinet proposal for approval of 7 per cent DA hike from July 1 this year as the revised Consumer Price Index-Industrial Workers data for June was released by Labour Ministry on Saturday.

•  With increase in DA, the pensioners will also gain as the benefit provided to them as dearness relief will be hiked to 107 per cent of basic pay.

•  The previous UPA government had increased DA to 100 per cent from 90 per cent with effect from January 1, 2014, on February 28 on the basis of agreed formula for revision of the allowance.

Competition Commission of India puts Sun-Ranbaxy deal under public scrutiny

• The Competition Commission, which has put the multi-billion dollar Sun-Ranbaxy deal for public scrutiny, said the major issue is whether the combination would result in high market concentration of certain molecules.
   

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