Current Affairs for SSC CGL Exams - 15 May 2017

:: National ::

China says Belt and Road initiative would be on the lines of Panchsheel

Chinese President proposed five principles of peaceful co-existence or Panchsheel — the brainchild of China, India and Myanmar in the 1950s — as the mantra for advancing the Belt and Road Initiative (B&RI), and as a vehicle for achieving sustainable globalisation.
Despite India’s decision to skip the two-day Belt and Road Forum (BRF), the once special relationship between New Delhi and Beijing echoed during the opening session of the conclave.
In his keynote address, President Xi highlighted that China “will enhance friendship and cooperation with all countries in the world on the Belt and Road Initiative on the basis of the five principles of peaceful coexistence”.
Mr. Xi emerged as the new defender of globalisation, countering the resistance to open economic borders in the U.S. and parts of Europe, with a solid integrative plan.
India’s decision to boycott the BRF, as a mark of protest against the infringement of its sovereignty by the China- Pakistan Economic Corridor (CPEC), provided Pakistani Prime Minister Nawaz Sharif an opportunity to appear magnanimous at the conclave.
In his address, he signalled Islamabad’s openness for a dialogue with India, and offered to accommodate “all countries” in the CPEC.
India’s decision to stay away has raised eyebrows here, as other countries such as Japan and Vietnam, which have serious maritime disputes with China, have sent high-level official delegations, to the BRF.

Public hearing on Kulbhushan Jadhav in ICJ

The Peace Palace, home of the International Court of Justice in The Hague, will hold public hearings on the case of Kulbhushan Jadhav, who was arrested and sentenced to death by Pakistan in April over allegations of espionage and abetting terror.
The one-day hearing will involve two sessions of an hour and a half, according India and Pakistan an opportunity to make their case, starting with India in the morning. Pakistan’s session will follow in the afternoon.
The court’s judgment, which could follow as early as in a few days or take several months, is binding with no appeal.
ICJ President Ronny Abraham directed Prime Minister Nawaz Sharif to “act in such a way as to enable the court to enforce any decision it takes on the India plea,” effectively staying Jadhav’s execution until the court was able to hear and deliberate on the matter.
The Indian team, led by former solicitor general Harish Salve who won the stay at the ICJ last week, is expected to focus on the violations of the Vienna convention by Pakistan on the issue of consular access.
Also on the lack of transparency in the Pakistani military court, which India has said, in its 12-page appeal, qualifies for the trial to be pronounced “illegal”.

The southwest monsoon has advanced earlier this year

The southwest monsoon has advanced into the south Andaman Sea and Nicobar Islands three days ahead of its normal onset, according to the India Meteorological Department.
However, IMD said it was too early to forecast whether the monsoon would hit the Kerala coast ahead of the normal onset date, June 1.
The IMD said the monsoon could advance into some parts of southwest Bay of Bengal, some more parts of southeast Bay of Bengal, remaining parts of Andaman Sea, Andaman & Nicobar Islands and some parts of east-central Bay of Bengal during the next 72 hours.

Educational societies seeking minority status now be required to register as NGO with NITI

Educational trusts and societies seeking minority status will now be required to register as non-governmental organisation with the NITI Aayog, whether they need government aid or not.
The registration with the NITI Aayog portal Darpan is likely to put all the financial transactions of the trust and its office-bearers under government scanner as details such as PAN and Aadhaar of all trustees and office-bearers will be required for the enrolment.
The National Commission for Minority Educational Institutions, however, said the rule will not be applicable to institutions run by individuals.
Minority status permits schools and colleges to have a say in the reservation quantum and limits interference from the government.
As per the requirement, the unique ID should match corresponding details on the NGO’s website.
Since its inception in 2004, the commission has awarded minority status certificates to 12,954 schools and colleges in the country.
The government last year made it mandatory for NGOs and voluntary organisations to register with the NITI Aayog portal to enable them to apply for grants from any Ministry.
However, the trusts and NGOs not seeking government funding were not required to do so.
The Constitution gives linguistic and religious minorities the fundamental right to establish and administer educational institutions of their choice.
A society or trust consisting of members of a minority community, or even a single member of a minority community, may establish an institution.

Rs. 11,000-crore project to provide road connectivity to 44 Naxal-affected districts

The Centre will soon begin work on a Rs. 11,000-crore project to provide road connectivity to 44 Naxal-affected districts, including Sukma in Chhattisgarh, which had recently witnessed one of the deadliest Maoist attacks.
Five per cent of the total project cost i.e. Rs. 550 crore will be kept aside for administrative expenses including for deployment of security forces at strategic locations.
To improve rural road connectivity in the Left Wing Extremism affected districts, the Cabinet had last year approved the centrally-sponsored “Road Connectivity Project for LWE Affected Areas” scheme.
The project will be implemented under the Pradhan Mantri Gram Sadak Yojana in the districts that are critical from a security and communication point of view.
Under the project, there will be construction or upgradation of 5,411 km of roads and 126 bridges. Work will be taken up at an estimated cost of Rs. 11,724.53 crore in the above districts.
The project is likely to be started in the next few weeks and all necessary arrangements have been made for its launch. Out of these 44 districts, the maximum are in Chhattisgarh, where 25 personnel of the Central Reserve Police Force were killed by Naxals last month.
Odisha, Jharkhand, Bihar, Madhya Pradesh, Telangana and Maharashtra are the other States that will be covered under the scheme.

:: Business and Economy ::

Banks in India facing worst of challenges

Never in their existence so far have they collectively faced a crisis such as the current one. A close look at a few critical numbers would reveal the extent of damage that has been caused to their financial health:
Their credit growth has been on a continuous decline for the last five years, and in December 2016 it was only 5.3% (annual) for SBI and its associates and 2.9% (annual) for nationalised banks.
PSU banks are not only fast losing business share to other banks and NBFCs but are a now drag on the economy.
To the extent that their inability or reluctance to expand credit is caused by their persistently high stressed assets– estimated at about 17% of their aggregate loans and advances and still rising — the problem has assumed a structural dimension.
This was indicated in an empirical finding in RBI’s annual report for 2014-15 that the NPA ratio (to aggregate loans and advances) and credit growth exhibit a high negative correlation.
And contrary to popular perception, there is no hard evidence that the high NPA of PSU banks is caused by any cyclical downturn of the economy or a fall in commodity price.
If this were the case, then NPAs for small-scale industries would have been much higher. Also, NPAs of the private sector and foreign banks would have been similarly high.
The financial performance of PSU banks has also been on a sharp decline, with their return on assets (RoA) falling from about 0.8% in 2011-12 to negative 0.2% in 2015-16.
Factoring in the slight increase in their leverage from 5.8 to 6.1 in the period, the return on equity (RoE) nosedived from 14% to negative 3.5%.
Their equity shares are now trading at different deep discounts to book value, although some buoyancy in the prices of a few of them is observed, of late.
The first signs of a sharp rise in the NPAs of PSU banks were seen in early 2012 on the back of a surge in ‘restructured standard advances’.
The present NPA problem has its provenance in the generous, imprudent and perhaps politically-inspired restructuring leeway given to banks by RBI in 2008-09 and thereafter, which, among other things, created a bizarre incentive for banks to hide NPAs on a scale never witnessed before.
Since the beginning of 2012, successive Financial Stability Reports (FSR) of RBI have played a kind of hide-and-seek game with their analyses and projections of PSU banks’ NPAs.
Incidentally, the June 2012 FSR of RBI put the probability of a restructured standard advance becoming an NPA at only 15%. Four years later, the FSR of June 2016 admitted that an ‘increasing proportion of restructured advances are reckoned as NPA’.
The GNPA ratio for PSU banks increased threefold between 2013 and 2016, while that of private sector banks rose only marginally.
The last Economic Survey puts the gross non-performing loans for India’s banking system at $191 billion equivalent (8.4% of India’s GDP).
The debt owed by the top 10 stressed business groups in India increased from Rs. 1,372 billion in FY08 to Rs. 7,519 billion by FY16. Bulk of the incremental debt in this period is likely to end up as NPA.

Social security law may be implemented in phases

The Labour Ministry may implement its proposed social security law in a phased manner, exempting small factories employing up to 10 workers, from its ambit initially.
The small factories could be covered in the second phase. Factories employing more than 10 workers and informal sector workers can be covered in the first phase.
After two years, factories employing less than 10 workers can also be brought under the framework of the proposed social security law.
The Labour Ministry had, in March, proposed a labour code on social security which will provide social security cover to the entire workforce in the country, including self-employed and agricultural workers. Factories with even a single worker would have had to contribute towards social security benefits, as per the code.
This was the first time that the Central government had proposed a law for providing universal social security to all workers which have been one of the key demands of the central trade unions.
However, small and medium enterprises, which are kept out of social security schemes at present, had raised concerns over the government’s proposal.
The provident fund and pension contribution, administered by the Employees’ Provident Fund Organisation (EPFO), is mandatory only for factories employing at least 20 workers at present.
Further, medical benefits under the Employees’ State Insurance Act apply to factories with at least 10 workers and it is also applicable to shops, hotels, restaurants, cinemas and road transport undertakings.
According to the Sixth Economic Census, 98.62% of the total establishments in India — both agricultural and non-agricultural sectors — employ less than 10 workers.
Providing social security to all workers will be one of the key themes of the 47th Indian Labour Conference (ILC) which is likely to be inaugurated by Prime Minister Narendra Modi later this year.

There is still lot to be done on GST

The Goods and Services Tax Council will meet on May 18-19 to finalise various rules involved with implementing the new tax regime in the country, including on issues like input tax credit, valuation norms.?
The GST Council has met 13 times to finalise the minutiae of the five laws that will help bring the new tax regime to reality. Four of these laws have been cleared by the Union Cabinet and passed by Parliament.
The fifth, the State GST law, needs to be passed by the legislative assemblies of each state and union territory with legislature. The Council still has to finalise the rules and rates of individual products and services.
The draft rules that will be finalised during the upcoming Council meeting do not as yet address key operational issues that directly affect vendors, distributors, and service providers.
These issues include the place of supply rules for service companies. Clarity on this will determine whether a service has been provided on an inter-state or intra-state basis, which in turn will determine whether the Integrated GST tax will apply.
Another major issue is the treatment of cases where the billing address is different from the shipping address.
Since most companies have so far configured their ERP programs to incorporate GST as a destination-based tax, there is no clarity as yet in the rules as to what happens if the destination of the goods or service is different from where the bill is to be made.
The e-waybill has to be accepted by the seller, transporter, and recipient for the transaction to be closed as far the GST Network is concerned.
Reconciliation of waybills is a big problem now, with the recipient usually failing to accept the waybill, leaving the transaction incomplete. The e-waybill system will require a big change in behaviour for it to work, they say.
A larger issue is that incorporating GST will require SMEs to overhaul and computerise their systems, since even dealing with the Harmonized System of Nomenclature (HSN) codes for individual products will require a computer.
The codes are up to 10 digits in length. The first four define the category and the subsequent digits specify the exact product.
The tax rates are not likely to be made public in the next meeting of the GST Council. There is no great urgency on this count, because the numbers can simply be plugged into the software as and when they are known without having to change the code itself.
Also, revealing rates too early may lead to hoarding of goods that are likely to be more expensive under GST due to higher tax incidence.
Knowing the tax rates of individual items could greatly help firms in their procurement decisions for the July-September quarter.