Current Affairs for SSC CGL Exams - 30 April 2017

:: National ::

Attorney-General to defend India in UNHRC

India will highlight its “impartial” justice system when it sends its top law officer, Attorney-General Mukul Rohatgi, to the Universal Periodic Review at the UN Human Rights Council in Geneva.
Mr. Rohatgi will defend India’s case against allegations of violations in Jammu and Kashmir, torture, minority rights and recent strictures against NGOs.
Mr. Rohatgi said he would convey that the treatment of 26/11 terrorist Ajmal Kasab and 1993 Mumbai blasts convict Yaqub Memon proves the Indian legal system’s “impartial” standards.
“These are two people who committed crimes against the state. They orchestrated, and were directly involved in, the massacre of hundreds of innocents, both Indian and foreign, in the heart of our financial capital.
Yet, both were tried impartially by a court of law, provided legal aid, were given every opportunity to appeal till the last stage even as their petitions for clemency were entertained at the highest level,” Mr. Rohatgi told.
In the run-up to the hearings at the UNHRC, held once in five years for every country, reports from governmental and non-governmental agencies from other countries in the 47-member council, including from the U.S. Congress and civil society groups, and international agencies, have been sought.
Sweden and Spain have asked for the government to explain its stand on homosexuality rights and the repeal of Article 377 that criminalises same-sex relationships.
The Attorney General, who will respond to the questions during a four-hour session in Geneva, said he would speak about constitutionally-mandated protections to minorities in India.

Turkey is keen on expanding defence industrial cooperation with India

Turkey is keen on expanding defence industrial cooperation with India and will offer its armed unmanned aerial vehicles (UAVs) during the upcoming visit of President Recep Tayyip Erdogan.
Turkey’s support to Pakistan on Kashmir at the Organisation of Islamic Cooperation was likely to continue.
Turkey said the areas of cooperation were aviation, space and ammunition, etc.
On Pakistan’s continued support to cross-border terrorism and Kashmir, he said the issue was for the two countries to discuss.

Strict law will increase tax compliance says FM

Union Finance Minister said the fear of consequences owing to strict and expeditious enforcement of law would ensure that as India evolved from a developing to a developed economy, it would be a highly tax compliant society.
Advocating use of technology for detecting evasion, Mr. Jaitley said the Enforcement Directorate should expeditiously use the penalising powers to deal with any non-compliance, particularly money laundering.
“Full compliance in taxation and currency laws has always been one of the features of developed states. If you go to the developed world, violations are rare.
Those who violate are strictly called upon and are answerable to the law and there are very strict penal consequences,” Mr. Jaitleysaid.
Mr. Jaitley said over the years, in India, non-compliance was never considered a moral wrong, it was rather considered smart.
“Non-compliance has hit the larger public and national interest,” he said, adding that compliance would help generate funds for development in various sectors.

Japan has selected former Union Law Minister Ashwani Kumar for top honour

The Japanese government has selected former Union Law Minister Ashwani Kumar for the Grand Cordon of the Order of the Rising Sun , in recognition of his achievements in bolstering India-Japan ties.
Indians who have in the past received the Decoration — conferred in recognition of distinguished accomplishments— include industrialist Ratan N. Tata.
Dr. Kumar served as the Special Envoy of former PM Manmohan Singh to Japan during the visit of the Emperor and Empress of Japan to India in December 2013, “and significantly contributed to the success of the visit.”

FICCI-India Sanitation Coalition prize to Aga khan foundation

The Aga Khan Foundation has bagged an award for implementing a development model that aims at improving access to water and sanitation for marginalised communities across urban and rural areas of the country.
The Aga Khan Development Network (AKDN) of the prestigious foundation received the FICCI-India Sanitation Coalition prize for the initiative that seeks to contribute towards building an open-defecation free India by 2019 under the ‘Swachh Bharat’ mission.
The initiative aims at improving access to water and sanitation for marginalised communities across urban and rural India, including helping 1,00,000 families and 538 schools, as well as building toilets in the States of Bihar, Gujarat, Madhya Pradesh, Telangana and Uttar Pradesh.
The integrated block-level sanitation model is being piloted in rural Bihar.

:: Business and Economy ::

Turnaround of rupee is good news for coutry

Towards the beginning of this year, no one expected the rupee to break out of the tight range between 66 and 68.85 that had shackled the currency for most part of 2016.
But the rupee not only strengthened above the 66 level against the dollar but also went on to mark a 20-month high of 63.93 last week.
This sudden spurt of strength follows a stolid show in 2016, when the Indian currency remained unfazed by some of the significant events that spelled a sea change for global markets.
The first was the UK’s referendum to decide whether to stay in the European Union or not. While everyone expected the British to vote against the move, results favoured an exit.
The British currency took a beating immediately after the referendum. The pound declined 20 per cent against the dollar, from 1.50 in June 2016 to 1.20 in October 2016.
Another event that marked a significant shift in the global economic order was the victory of Donald Trump in the US presidential elections. This made the dollar index break the psychological level of 100.
The initial trigger that helped the rupee break the 66 level came in the second week of March this year after the BJP’s resounding victory in the State Assembly elections in Uttar Pradesh.
This triggered a strong surge in Foreign Portfolio Investors’(FPIs) interest towards the Indian market. FPIs, who had bought just $646 million in Indian debt until then, went on a buying spree after the election results.
For the month of March, they bought $3.92 billion in the Indian debt segment. April has also witnessed a strong foreign money inflow of about $3 billion in the debt segment.
After selling $6.36 billion in 2016, FPIs have already poured in $7.52 billion in the first four months of this year. This inflow is higher than the $7.4 billion for the entire calendar year 2015.
The inflows into the equity segment are also showing signs of a strong pick-up this year. FPIs have pumped $6.38 billion into the Indian equity segment, which is double the $3.19 billion and $3.18 billion flows seen in 2015 and 2016, respectively.
With the first rate hike by the Federal Reserve already absorbed by the financial markets, there does not appear to be a great threat to foreign fund flows in the near future.
FPI flows into debt will be strong if the rupee continues to strengthen as these are short-term flows that are greatly influenced by currency strength.
The second factor that has helped the rupee break the key 66 level is the recent weakness in the dollar.
After raising the Fed fund rate by 25 basis points in March, the Fed reiterated that there will be a total of three rate hikes in 2017.
So, unless the Fed changes its stance and turns more aggressive over raising the rates, a strong recovery in the dollar is unlikely.
Also, the recent developments in Europe had been adding to the pressure on the dollar. The UK heading for early elections in June and the ongoing French elections have triggered a sharp rally in the euro and the pound in the last one month.
After falling continuously on a year-on-year basis from December 2014, India’s exports are showing signs of recovery since September last year. Exports have surged 35.85 per cent, from $21.52 billion in August 2016 to $29.23 billion in March 2017.
But this has failed to narrow the trade deficit as imports, on the other hand, have also surged at the same rate. India’s imports have risen 39.89 per cent, from $29.19 billion to $39.67 billion.
So, if the imports continue to rise at a faster pace than the exports, there is a possibility of the deficit widening further.
Two major components that can keep the import bills higher are crude oil and gold. The outlook for both these commodities is bullish.
Crude oil prices have been hovering around $50 per barrel over the last few months. The prices have been volatile, between $45 and $55 since December. The bias is bullish within this range.
An eventual break above $55 will increase the likelihood of oil prices surging to $60 levels. Gold has been gaining sheen from the geo-political uncertainty between the US and North Korea and from the broader weakness in the US dollar.
India’s current account had improved from a deficit of $7.08 billion to $0.3 billion in June 2016. But since then, the Current Account Deficit (CAD) has been widening and is back to $7.92 billion as of December 2016.
Given that there is low possibility of the trade deficit to improve in the coming months, there is a danger of the CAD widening further. This is negative for the rupee.
The RBI has been building up its forex reserves consistently. The reserves have risen 7 per cent, from around $344 billion in April 2015 to $369 billion now.
Also, as uncertainty continues to remain on the back of geo-political tensions between the US and North Korea, these reserves can be used to tackle any unexpected volatility in the market.
The rupee appears overvalued when the Real Effective Exchange Rate (REER) is taken into consideration. A currency is considered overvalued if its REER is greater than 100 and it is undervalued if the REER is below 100.
REER is a measure of valuing a currency against the currencies of its trade partners, adjusted for inflation.

Investment Trust (Inv-IT) finally arrived

The long wait for Investment Trust (Inv-IT) is finally over. IRB Infrastructure Developers (IRB) is the first to raise Rs. 4,650 crore through this route, which will be available for investors with a minimum subscription of Rs. 10 lakh.
Put simply, Inv-IT are trusts into which the sponsor, in this case IRB, transfers certain revenue-generating infrastructure assets (at least 80 per cent).
Units in these trusts can be purchased by the public and the revenue generated from the assets is distributed to the unit-holder. The trust can also invest in equity or lend to other infrastructure projects.
In the upcoming Inv-IT initial public offering, IRB will transfer six of its projects to the trust. The sponsor expects to raise Rs. 4,300 crore through fresh offering and another Rs. 350 crore via offer for sale.
According to data provided by IRB, sponsor holding is well above the minimum 15 per cent threshold mandated by the regulator for the initial three years.
Investors who don’t subscribe to the primary offer can buy units from the secondary market, where the minimum trading lot is Rs. 5 lakh. The issue will be open from May 3-5 both on the BSE and the NSE.
The funds raised through this issue will be used to repay the entire debt of about Rs. 3,300 crore on the books of these six projects. This is expected to improve the cash flows and soundness of the balance sheet, since financial costs will come down in the process.
The risks for a project can arise due to delays in construction, revenue collection and other political and project-related issues.
In case of road projects, the risks arise during the pre-construction and construction stages.
While pre-construction risks pertain to identification of economically-viable projects and related clearances, construction risks relate to design changes and unexpected escalation in raw material prices.
Moreover, post-construction, the extent to which the projected toll revenue materialises and how tactfully the initial years of low cash flow and high interest payments are managed, are crucial.
Moreover, the open-ended structure of this Inv-IT enables it to capitalise on new projects that suit its mandate.
As per SEBI’s norms, Inv-IT should invest at least 80 per cent of the value of the assets in revenue-generating infrastructure assets, while the rest can be invested in under construction projects and securities of infrastructure companies.
However, an Inv-IT is not allowed to invest in another Inv-IT. Though currently Inv-IT is not exposed to construction risk, this can definitely change in case a new under-construction project or securities of infrastructure companies are added to the portfolio.

Indians are slowly moving from investing in gold

Indians are slowly moving from investing in gold to putting their money in bank products, according to Uday Kotak, Executive Vice Chairman & Managing Director at Kotak Mahindra Private Limited.
And there is another layer of savers that is also venturing into investing in mutual funds, he added.
It is this greater risk appetite that would lead to higher domestic risk capital being invested in Indian start-ups, he said, saying that the overall process was a gradual one.
“The mutual fund market is growing at more than 30% in terms of new assets under management,” Mr. Kotak said while speaking at the CII Annual Session on Saturday.
The Indian start-up market was as yet inexperienced, not having the expertise to price risk properly or attach a value to ideas, Mr. Khanna said.