Current Affairs for SSC CGL Exams - 31 July 2017

::National::

NIA conducted raids at the office member of the legal cell of Hurriyat Conference

• In connection with the ongoing probe into the terror funding case in the Kashmir Valley, the NIA conducted raids at the office and residence of a senior member of the legal cell of Hurriyat Conference.

• The NIA is investigating his role as courier as he is suspected to be involved in routing funds to the separatist leaders from Pakistan-based handlers.

• The NIA conducted searches at the residence and office of Devinder Singh Behal, chairman, Jammu Kashmir Social Peace Forum, a constituent of the All Party Hurriyat Conference.

• The NIA also issued summons to Naseem, the second son of Mr. Geelani, to appear before it. His elder son Nayeem has also been summoned.

• During searches, the NIA team recovered four mobile phones, one Tablet, other electronic devices, some incriminating documents, financial papers and some other articles, said the spokesperson.

• Behal’s foreign trips have come under the lens and he will be questioned soon, the officials said.

• The NIA has also named separatist organisations such as the Hurriyat Conference (factions led by Mr. Geelani and Mirwaiz Farooq), Hizbul Mujahideen (HM) and all-woman outfit Dukhtaran-e-Millat in its FIR.

Indian government has slashed its expenses towards lobbying in the U.S.

• The Indian government has slashed its expenses towards lobbying in the U.S. with a total payment of $1,20,000 to its registered lobbyist firm in the second quarter of 2017.

• Which is down from the regular $1,80,000, in the first cut in nearly seven years. The disclosure has been made by BGR Government Affairs, which lobbied on behalf of India.

India is facing increased pressure to reduce North Korea’s diplomatic presence

• India is facing increased pressure to reduce North Korea’s diplomatic presence in the country as Pyongyang flexes its military muscles.

• During talks with Indian officials last week, a U.S. State Department delegation took up the presence of a large number of North Korean diplomats in India, and urged New Delhi to “shrink” North Korea’s diplomatic footprint in South Asia.

• India has criticised recent North Korean missile launches and nuclear tests. However, bilateral political and diplomatic ties, though minimal, have remained on track.

• The western pressure is driven by the fact that India and the U.S. have held talks on the North Korean actions most recently during PM Modi’s visit to Washington on June 27 when both sides “condemned” Pyongyang’s actions.

• They also indicated that both sides would “work together to counter the DPRK’s weapons of mass destruction programmes”.

• U.S. officials have indicated that they would like to see “less” diplomatic courtesies extended to the North Korean officials present in India.

• India has maintained ties with North Korea since the birth of the nation following the Korean war in the 1950s, and North Korea had been an active member of the Non-Alignment movement during the Cold War.

• However, bilateral ties cooled in the 1990s when Pakistan extended support to the country’s nuclear programme.

• The main worries at the moment are the reclusive country’s ability to use global loopholes to bypass the UN-enforced sanctions.

• Recent reports from Sri Lanka and Pakistan have indicated that North Korea has exploited export rules to earn much-needed foreign remittances.

• Another issue is the North Korean ability to attack political or diplomatic opponents across the world. In February this year, a stepbrother of the North Korean leader Kim Jong-un was assassinated at an airport in Jakarta.

::International::

China held a novel military parade, to demonstrate military modernisation

• Amid the standoff with India in the remote Doklam plateau, and rising tensions in North Korea, China held a novel military parade, which was demonstrated the country’s military modernisation under President Xi Jinping’s leadership.

• Dressed in combat fatigues and riding a jeep instead of a ceremonial car, President Xi inspected a unique event, where soldiers demonstrated their combat skills in vast open spaces used for training in windswept Inner Mongolia.

• Addressing troops, President Xi conveyed a twin message — 24x7 combat readiness against any enemy, and political cohesion through unswerving loyalty of the armed forces to the Communist Party of China.

• China has “the confidence and capability to defeat all armies that dare to offend”, he said, adding that the military should be “unswervingly loyal” to the Party and “extend the battleground to wherever the party points towards”.

• Though the parade marking the 90th anniversary of the People’s Liberation Army (PLA) was not directed against any specific country, it did come about during a stand-off between Indian and Chinese troops in the Sikkim section of the China-India boundary.

• Besides, tensions in the Korean peninsula are escalating, apart from the friction between Beijing and Washington in the South China Sea.

• The military showcased its new weapons, of which nearly half were on public display for the first time.

• J-20 stealth fighters, widely seen as China’s answer to the F-35 and F-22 fifth generation fighters of the United States, which flew in formation for the first time, were the stars of the parade.

• Besides, there were other planes which were especially suited for long range flights from artificial islands that China has developed in the South China Sea.

• China’s strategic nuclear missiles were once again among the highlights of the parade. All the weapons on display were of Chinese-origin.

• Unlike previous occasions, the troops shouted “Salute to the Chairman” as Mr. Xi passed by them. The standard greeting on previous occasions has been “Salute to the Chief”.

Russian President Vladimir Putin said 755 U.S. diplomats must leave Russia

• Russian President Vladimir Putin said 755 U.S. diplomats must leave Russia and warned ties with Washington could be gridlocked for a long time, in a move that followed tough new American sanctions.

• The Russian Foreign Ministry had earlier demanded Washington cut its diplomatic presence in Russia by September to 455 — the same number Moscow has in the U.S.

• “More than a thousand people were working and are still working” at the U.S. embassy and consulates, Mr. Putin told Rossia-24 television. “755 people must stop their activities in Russia.”

• Mr. Putin added that Russia could consider imposing additional measures against the U.S. but he opposed such moves for now.

• “We have waited long enough, hoping that the situation would perhaps change for the better,” he said. “But it seems that even if the situation is changing, it’s not for any time soon.”

• U.S. Senate overwhelmingly approved a Bill to toughen sanctions on Russia for allegedly meddling in the 2016 U.S. presidential election and for its annexation of Crimea in 2014.

::Business and Economy::

Monetary policy review meeting scheduled for August 2

• The Reserve Bank of India (RBI) is expected to reduce the key policy rate or the repo rate by 25 basis points (bps) to 6% in its monetary policy review meeting scheduled for August 2 while maintaining neutral stance on interest rates.

• If the RBI does cut the repo rate, this could only be the second such instance by the monetary policy committee (MPC) since it was established in October 2016.

• The expectation of a rate cut is mainly due to a fall in retail inflation, which eased to 1.54% in June — a record low, after reading 2.18% in May.

• The benign consumer inflation reading for successive months has made economists believe that inflation may have fallen to 4% on a durable basis. Inflation for June was lower than the RBI’s target band of 2-6%.

• RBI had changed its stance to neutral from accommodative in its February which surprised market participants.

• However, during the last policy review in June, the central bank revised its inflation projection downwards to 2-3.5% in the first half of the year and 3.5-4.5% in the second half — opening up the possibility of a rate reduction.

• The earlier projection for retail inflation in the first half of the fiscal was 4.5% and 5% in the second half.

• Importantly, one of the members of the Monetary Policy Committee, R.H. Dholakia, voted for a 50 bps rate cut during the last policy meeting in June.

• While most economists expect a 25 bps rate cut on Wednesday, the RBI is likely to hold on to its neutral stance. Opinion is divided as to whether there would be further rate cuts.

Government announced a few changes in its Sovereign Gold Bond

• The Government announced a few changes in its Sovereign Gold Bond (SGB) Scheme recently. The primary change was the increase in the limit to 4 kg (from 0.5kg) for individuals, HUF and 20 kg for Trusts.

• This was probably done to encourage high net-worth individuals, rich farmers as well as trusts to invest in these bonds. The basic premise is that most Indians believe in gold as a time-tested and safe asset class and prefer it over other forms of investment.

• So far, SGB has been moderately successful with the launch of eight tranches of these bonds since November 2015, garnering approximately Rs. 5,000 crore or about 16 tonnes of gold.

• However, the potential to scale up is huge. Keeping this in mind, the Government also introduced flexibility in the scheme to design and introduce variants to cater to a cross-section of investors.

• The sovereign gold bond initially introduced by the Government in 2015 has achieved only limited success, mostly because of its unrealistic pricing pattern vis-a-vis the international price of bullion,.

• Bullion prices are highly sensitive to international geopolitical tensions, U.S. Federal rates and dollar upswings. \

• They move in a price band of 5-10% year on year. Past SGB prices ranging from Rs. 3,150 per gm to Rs. 2,750 per gm was often not in parity with the market rate realities and this often led to the SGB consumers losing money, despite earning a 2.5% return on investments.

• The pricing of SGB ideally should be the average of the bullion price of the 60 day-period preceding the issue date of SGB.

• Another factor diminishing the attractiveness of the SGB is its price being pegged to a 10% import duty, and any reduction in the import duty by the Government in the subsequent period would likely inflict severe loss of value to those who have already invested.

• While the Government introduced these bonds to help reduce India’s over dependence on gold imports, the move was also aimed at changing the habits of Indians from saving in physical form of gold to a paper form with Sovereign backing.

• Annual consumption of gold in India is in the range of 700-800 tonnes, almost all of which is imported. Of this, approximately 500-600 tonnes is bought by consumers as jewellery for cultural reasons (mainly for weddings).

• The balance is in the form of gold bars and coins for savings or investment purposes, which is what the Government hopes to convert to paper form so that both are served — investors are happy as long as they earn some returns and capital appreciation at the time of redemption, as well as it helps reduce an equivalent amount of physical gold imports.

• To ensure further success, the Government should allow mass channels such as gold loan Non-Banking Finance Companies (NBFCs) to also market it, said Thomas George Muthoot, director, Muthoot Fincorp, part of the Muthoot Pappachan Group.

NHB Residex from the National Housing Bank to track housing prices

• NHB Residex from the National Housing Bank, designed by a technical advisory committee comprising Government representatives, lenders and property market players, is a set of benchmarks that aims to track housing price indicators across Indian cities.

• Originally flagged off in July 2007, the index was discontinued in 2015 and was refurbished and re-introduced earlier this month.

• It now sports enhanced city coverage (rising from 26 to 50, to be eventually raised to 100), a new base year (2012-13) and new data sources (with data from banks and home finance companies and market surveys).

• The NHB Residex currently offers two sets of quarterly Housing Price Indices (HPIs) across the cities it tracks.

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