Abhimanu

Weekly current affairs Series

Week: II, Dec 2016

Abhimanu’s IAS Study Group Chandigarh

NATIONAL ECONOMIC AFFAIRS

Ratan Watal committee

Ratan watal committee has submitted its report on the digital payments infrastructure to the government.

This committee has representatives from the Reserve Bank of India (RBI), Unique Identification Authority of India (UIDAI), the tax department and various industry bodies in the payments space.

Terms of Reference for this committee:

To study and recommend need for charges, if any, in the regulatory mechanism and any legislation, relevant for the purpose of promotion of payments by digital modes.

To study and recommend ways for leveraging Unique Identification Number or any other proof of identity for authentication of card/digital transactions and setting up of a Centralised KYC Registry;

To study introduction of single window system of Payment Gateway to accept all types of Cards/ Digital Payments of Government receipts;

To study feasibility and framing rules for creating a payments history of all Digital Payments and create necessary linkage between payments transaction history and credit information;

To study and recommend various measures to incentivize transactions through cards and digital means.

To study global best practices in payments including initiatives taken by various Governments/ Government Agencies

To identify market failure (s), if any, along with suitable interventions that may be implemented to promote payment by card/digital means

To identify regulatory bottlenecks, if any, and suggest changes to promote payment by card/ digital means

To study and make recommendations on any other matter related to promotion of payments through Cards and Digital Means

Recommendations of the report:

In its Report, the Committee has recommended the medium term strategy for accelerating growth of Digital Payments in India with a regulatory regime which is conducive to bridging the Digital divide by promoting competition, open access & interoperability in payments.

The Report recommends inclusion of financially and socially excluded groups and assimilation of emerging technologies in the market, while safeguarding security of Digital Transactions and providing level playing to all stakeholders and new players who will enter this new transaction space.

It has suggested inter-operability of the payments system between banks and non-banks, up-gradation of the digital payment infrastructure and institutions and a framework to reward innovations and for leading efforts in enabling digital payments.

Government decides to print plastic currency note

The government has decided to print banknotes based on a plastic or polymer substrate in order to make counterfeiting them more difficult.

History of plastic notes:

The first polymer notes introduced in the world was in Australia in 1996. The then Government of Australia stated the rise in black money in the country and currency bills losing life quickly. The government then proposed costlier polymer notes with better features and long life, making Australia more business friendly.

The Reserve Bank for long has been planning to launch plastic currency note after field trials.

In February 2014, the government had informed Parliament that one billion plastic notes of Rs 10 denomination would be introduced in a field trial in five cities selected for their geographical and climatic diversity. The selected cities were Kochi, Mysore, Jaipur, Shimla and Bhubaneswar.

Analysis:

Plastic notes have an average life span of about five years and are difficult to imitate. Also, currency notes made of plastic are cleaner than paper ones.

Plastic notes will last much longer than classic paper notes (thus reducing the cost of replacement by a significant amount).

Other than that, they won't get easily damaged by dirt and excessive handling in rough conditions.

Another quite major feature would be that security features on these notes will be easy to verify as well as quite difficult to counterfeit.

While on the other hand, there is higher production cost, Difficulty to fold, Hard to count as they are slippery and huge cost to recaliberate ATMs as existing machines are not compatible.

US Federal Reserve raises interest rates

US Federal Reserve raises interest rates for second time in a decade. The US Federal Reserve has raised its benchmark interest rate by 0.25%, only the second increase in a decade and first in 2016.

The Federal Reserve System Board unanimously voted to raise the key rate to a range of 0.5% to 0.75%, citing a stronger economic growth and rising employment.

After the financial crisis, the Fed slashed rates close to zero in a bid to support economic activity and prevent a bigger rise in unemployment.

It kept them there until December 2015, when it raised its target range to between 0.25pc and 0.5pc.

Federal Reserve

In US, Federal Reserve is in charge of monetary policy i.e. used to control inflation or infuse growth in the economy.

This reserve was established in 1913 by the Federal Reserve Act.

Federal Reserve system consist of 12 major private institutions which are accountable to the US congress through Federal Reserve Board of Governors.

The Federal Reserve has three main mechanisms for manipulating the money supply:

a) It can buy or sell treasury securities. Selling securities means less money supply in the market and vice versa.

b) It can change of discount rate. By lowering the discount rate, bank can avail loan at less rate of interest, which can increase the money flow. This move will help if economy needs to grow faster and create more jobs. In order to control inflation, discount rates are supposed to be increased.

c) The Federal Reserve can adjust the reserve requirement, which can affect the money multiplier. Any increase or decrease will affect money supply in the market.

Practically, The Federal Reserve uses open market operations to influence the supply of money in the U.S. economy.

This is done through federal fund rates. Federal fund rate is defined as interest rate at which banks and other depository institutions lend money to each other, usually on an overnight basis.

The law requires banks to keep a certain percentage of their customer's money on reserve, where the banks earn no interest on it.

Consequently, banks try to stay as close to the reserve limit as possible without going under it, lending money back and forth to maintain the proper level.

Any increase in these rates leads to less money with the banks, because they now have to maintain more money in the reserve, and any decrease in these rates leads to more money supply with the banks.

Analysis

This move means that the country’s central bank sees signs of a strengthening economy. When times are tougher, the Fed lowers the rate in order to make it easier for consumers and businesses to borrow and spend, thus pumping more money into the economy (which is why the Fed kept rates near zero during the recession). But when the economy shows improvement, the Fed may choose to raise rates in order to keep inflation in check.

When the Fed raises rates, it's called contractionary monetary policy. A higher Fed funds rate means banks are less able to borrow money to keep their reserves at the mandated level. That means they will lend less money out, and the money they do lend will be at a higher rate. That's because they are borrowing money at a higher Fed funds rate to maintain their reserves. Since loans are harder to get and more expensive, businesses will be less likely to borrow, thus slowing the economy.

When this happens, adjustable-rate mortgages become more expensive. Homebuyers can only afford smaller loans, which slows the housing industry. Housing prices go down, so homeowners have less equity in their homes and feel poorer. They spend less, further slowing the economy.

When the Fed lowers the rate, the opposite occurs. Banks are more likely to borrow from each other to meet their reserve requirements when rate are low. Credit card rates drop, so consumers shop more. With cheaper bank lending, businesses expand. That's called expansionary monetary policy.

Adjustable-rate home loans become cheaper, so the housing market improves. Homeowners feel richer and spend more. They can also take out home equity loans more easily. They usually use these loans to buy home improvements and new cars, stimulating the economy.

NITI Aayog announces schemes incentivising digital payment

NITI Aayog has announced the launch of the schemes Lucky Grahak Yojana and the Digi-Dhan Vyapar Yojana to give cash awards to consumers and merchants who utilize digital payment instruments for personal consumption expenditures.

The scheme specially focuses on bringing the poor, lower middle class and small businesses into the digital payment fold.

It has been decided that National Payment Corporation of India (NPCI) shall be the implementing agency for this scheme.

It would be useful to reiterate that NPCI is a not for profit company which is charged with a responsibility of guiding India towards being a cashless society.

The primary aim of these schemes is to incentivize digital transactions so that electronic payments are adopted by all sections of the society, especially the poor and the middle class.

It has been designed keeping in mind all sections of the society and their usage patterns. For instance, the poorest of poor will be eligible for rewards by using USSD.

People in village and rural areas can participate in this scheme through AEPS.

To ensure that the focus of the scheme is on small transactions (entered into by common people), incentives shall be restricted to transactions within the range of Rs 50 and Rs 3000. All transactions between consumers and merchants; consumers and government agencies and all AEPS transactions will be considered for the incentive scheme.

The winners shall be identified through a random draw of the eligible Transaction IDs [which are generated automatically as soon as the transaction is completed] by software to be especially developed by NPCI for this purpose. NPCI has been directed to ensure a technical and security audit of the same to ensure that the technical integrity of the process is maintained.

The scheme will become operational with the first draw on 25 December 2016 leading up to a Mega Draw on Babasaheb Ambedkar Jayanti on 14 April 2017. It will comprise of two major components, one for the Consumers and the other for the Merchants:

Lucky Grahak Yojana [Consumers]:

Daily reward of Rs 1000 to be given to 15,000 lucky Consumers for a period of 100 days

Weekly prizes worth Rs 1 lakh, Rs 10,000 and Rs 5000 for Consumers who use the alternate modes of digital Payments

This will include all forms of transactions viz. UPI, USSD, AEPS and RuPay Cards but will for the time being exclude transactions through Private Credit Cards and Digital Wallets.

Digi-Dhan Vyapar Yojana [Merchants]:

Prizes for Merchants for all digital transactions conducted at Merchant establishments

Weekly prizes worth Rs 50,000, Rs 5,000 and Rs 2,500

Mega Draw on 14 of April - Ambedkar Jayanti

3 Mega Prizes for consumers worth Rs 1 crore, 50 lakh, 25 lakh for digital transactions between 8 November 2016 to 13 April 2017 to be announced on 14 April 2017

3 Mega Prizes for merchants worth Rs 50 lakh, 25 lakh, 12 lakh for digital transactions between 8 November 2016 to 13 April 2017 to be announced on 14 April 2017.

Home Ministry cancels FCRA licences of NGOs

Home Ministry cancels FCRA licences of Greenpeace and Citizen for Justice and Peace

The move comes after the licences were inadvertently renewed for five years automatically online. These NGOs are accused of prejudicial affecting public interest of the country and violation of various provisions of FCRA.

About FCRA:

FCRA (Foreign currency regulation act), 2010 was enacted with the primary purpose of regulating the inflow of foreign contributions and ensuring that the received foreign contributions are not utilized for purposes other than those specified under the legislation.

All charitable organizations in India receiving foreign contributions come under the purview of this Act.

The organizations having a definite cultural, economic, educational, religious or social programme are entitled to accept foreign contributions under the FCRA. Such contributions may be accepted only with the approval of the Government of India, through the Ministry of Home Affairs.

In order to be eligible to receive the foreign contributions, an organization may seek prior approval either each time the entity is to receive contributions or by obtaining a one-time long term registration, which is valid for a period of 5 years.

In the latter case, the permission needs to be renewed by applying at least 6 months prior to the date of expiry of the said permission.

Upon obtaining registration/prior permission, the organization is required to open and maintain a bank account exclusively for the receipt and utilization of foreign contributions under FCRA. All transactions related to foreign contributions must be executed only from the aforesaid bank account. In addition, a separate set of accounts and records is required to be maintained, exclusively for foreign contributions received and utilized.

FCRA mandates that foreign contributions should be utilized only for the purpose for which they were received.

Person is prohibited from transferring contributions to any other person, unless such transferee is authorized to receive foreign contributions.

Taxation Laws (Second Amendment) Act, 2016

The Taxation Laws (Second Amendment) Act, 2016 has come into force on December 15 2016 under the scheme of Taxation and Investment Regime for Pradhan Mantri Garib Kalyan Yojana, 2016.

The scheme shall commence on December 17, 2016, and shall remain open for declarations up till March 31st, 2017 notifies Central Board of direct Taxation (CBDT).

Salient features of the Scheme are as under:

Declaration under the Scheme can be made by any person in respect of undisclosed income in the form of cash or deposits in an account with bank or post office or specified entity.

Tax @30% of the undisclosed income, surcharge @33% of tax and penalty @10% of such income is payable besides mandatory deposit of 25% of the undisclosed income in Pradhan Mantri Garib Kalyan Deposit Scheme, 2016. The deposits are interest free and have a lock-in period of four years.

The income declared under the Scheme shall not be included in the total income of the declarant under the Income-tax Act for any assessment year.

The declarations made under the Scheme shall not be admissible as evidence under any Act (eg. Central Excise Act, Wealth-tax Act, Companies Act etc.). However, no immunity will be available under Criminal Acts mentioned in section 199-O of the Scheme

Non declaration of undisclosed cash or deposit in accounts under the Scheme will render such undisclosed income liable to tax, surcharge and cess totaling to 77.25% of such income, if declared in the return of income. In case the same is not shown in the return of income a further penalty @10% of tax shall also be levied followed by prosecution. It may be noted that the provisions for levy of penalty for misreporting of income @200% of tax payable under section 270A of the Income-tax Act have not been amended and shall continue to apply with respect to cases falling under the said section.

NATIONAL POLITY

India Social Development Report (SDR)

With the objective of bridging the gap between the mainstream social rights activists and disability rights groups, the Council for Social Development released its India Social Development Report 2016, with the theme ‘Disability Rights Perspectives’.

The report has focussed on the theme with the ultimate objective of persuading more and more people to dismantle boundaries between mainstream social rights activism and disability rights groups.

Highlights of the report:

About 45% of all persons with disabilities (PWD) in India are illiterate. While 38% of all male PWDs were illiterate, the illiteracy rate was 55% for female PWDs.

Each category of disability, a greater proportion of women in that category are illiterate than men, with 76% of women with multiple disabilities being illiterate.

It estimated that of the 75 million children of primary school age who are out of school, “one-third is children with disabilities.”

The number of PWDs in India at 26.8 million, or 2.2% of the population, noting that this might be an underestimate. The World Bank had put the number at 4-8% of the population. Men formed 56% of the PWDs, and 70% of the disabled population was rural.

Movement disability accounted for the largest number of PWDs, followed by hearing disability and visual impairment. The report noted that the high incidence of polio in India may be responsible for the high proportion of movement disability.

While movement disability accounted for 20% of all disabled children, of the 2 million children in the age-group of 0 to 6 who were disabled, it was down to 9%. This difference could be due to the effectiveness of the polio immunisation program, the report said.

64% of the PWDs in India were non-workers. Of the rest, the majority were only able to find employment as casual labourer or agricultural labourer. Among the States, Tamil Nadu had the least terrible record in providing employment for the PWDs, with 59% of the PWDs being non-workers.

At the national level, only 2% of the PWDs were enrolled in any vocational course, with the highest rate of enrolment being in Kerala, where 5% were enrolled in vocational courses.

Lack of social services and transport were the top obstacles to the PWDs accessing health care facilities.

Analysis:

Women with disabilities experience combined disadvantages associated with recognition of their sexuality, higher rates of violence, a lack of legal capacity, neglect and exploitation, which impacts their aspirations and their voice. The discrimination and disadvantage experienced by women with disabilities in India have largely gone unaddressed and unacknowledged by a ‘gender-neutral’ disability service, legislation and policy.

There are about 200 laws pertaining to people with an unsound mind. The legal capacity of such persons was also greatly curbed. They are denied the right to vote and the right to work. So the report seeks both justice and dignity for such women.

Some NGOs have cultivated vested interests when it comes to educating children with disability and do not want them to get into the formal schooling system. In case of persons with disability, their attendance was more important than their enrolment in schools because they drop out due to various reasons. There are nearly 8 million children out of school and among PwDs, the percentage of out of school children is very high

Cyclone 'Vardah'

Cyclone ‘ Vardah ’made a landfall near Chennai, bringing heavy rains accompanied by high velocity winds to Tamil Nadu’s capital and other coastal districts.

Hundreds of trees have been uprooted in Chennai and rains have also affected transportation systems and power supply. Andhra Pradesh too has reported heavy rainfall in coastal districts., though the destruction has not been as much as in the neighbouring state.

Cyclone Vardah – which means red rose -- has gained in speed and intensity on its journey across the Bay of Bengal, belying predictions it would weaken considerably.

On its way inland, Cyclone Vardah hit several islands in the Andamans, uprooting trees and electricity poles besides severely impacting tourism in the archipelago

Fishermen have been advised not to venture into sea along and off south Andhra Pradesh, north Tamil Nadu and Puducherry coasts in the next 36 hours as sea conditions would be “rough to very rough”.

India’s cyclone season generally lasts from April to December, often causing dozens of deaths, evacuations of tens of thousands of people from low-lying villages and widespread crop and property damage.

How are cyclones named?

Tropical cyclones passing over the northern part of the Indian Ocean are named by eight countries in the region, namely India, Pakistan, Bangladesh, Sri Lanka, Maldives, Myanmar, Oman and Thailand.

The process only began in 2004, fours years after World Meteorological Organization agreed in principle to allow them to name cyclones originating in the Bay of Bengal and Arabian Sea.

The alphabet system is used to designate the name of a cyclone, which means the name of the year’s first cyclone begins with A. Previously, till 1979, cyclones were only given female names. Male names were only introduced in the same year.

World Meteorological Organization (WMO) maintains the database of cyclone/hurricane/typhoon names. There are six lists of names used in rotation and they are recycled every six years. The names are picked from this pre-designated list and are usually familiar with the people living in the region. India has so far contributed the following names: Agni, Bijli, Akash, Jal, Lehar, Megh, Sagar and Vayu.

Why are cyclones given names?

The practice first began to help people easily remember them instead of identifying a storm with a specific number based on its latitude-longitude.

Also it is easy to issue alerts, and for the media to report the developments. This simultaneously increases the community preparedness and heightens interest in the event, according to WMO. Names are ideally retired in case there is massive damage to property and loss of human lives.

Murder rate declining in India

According to the recently released official data from the National Crime Records Bureau (NCRB), the murder rate in India has been steadily declining over the past two decades.

Important highlights:

In India, murder rate has declined from 4.6 in 1992, the peak year of violence (in terms of murder rate) to 2.6 in 2015.

Among mega cities, Patna turns out to be the least safe, having a murder rate of 11.3 — four times that of the national average in 2015. Meerut, Ludhiana, Faridabad and Agra come next.

Kolkata, Kochi and Mumbai happen to be the safest, all having a rate of less than one murder per lakh population.

However, the NCRB numbers are based on FIRs alone. Crimes for which FIRs are not registered are not accounted for in the official data. But unlike other crimes, data for murders are understood to be closer to reality as there is little incentive and possibility in under-reporting murder cases.

Further, as compared with other crimes, murders are is less likely to pass unnoticed.

Absolute numbers are still high — 32,127 murders were recorded in 2015, which means 88 people were killed every day.

In fact, murders in 2015 alone were almost similar in number to terrorism-related fatalities in India over the last two decades. As per data from South Asia Terrorism Portal — which compiles figures from news reports and is likely to be an underestimate — 34,691 civilians and security men were killed in terror attacks in India from 1994 to 2016.

The incidents of murder have not changed much. Between 2006 and 2015, the figure was between 32,000 and 35,000. In the decade before, 1996-2005, recorded murder incidents were between 32,000 and 38,000. As per NCRB data from 1952-2015, 1992 saw the maximum number of deaths in one calendar year—40,105.

In 2015, the major motive of murder was ‘Personal vendetta or enmity’ (4,758 cases), accounting for 14.8 per cent of the total murder cases followed by ‘property dispute’ with 3,540 cases (11.0 per cent).

Objectives of National Crime Records Bureau:

To function as a clearing house of information on crime and criminals including those operating at National and International levels so as to assists the investigators, and others in linking crimes to their perpetrators.

To store, coordinate and disseminate information on inter-state and international criminals from and to respective States, national investigating agencies, courts and prosecutors in India without having to refer to the Police Station records.

To collect and process crime statistics at the National level.

To receive from and supply data to penal and correctional agencies for their tasks of rehabilitation of criminals, their remand, parole, premature release etc.

To coordinate, guide and assist the functioning of the State Crime Records Bureaux

To provide training facilities to personnel of the Crime Records bureaux, and

To evaluate, develop and modernise crime Records Bureaux

Executive and develop computer based systems for the Central Police Organisations - and also cater to their data processing and training needs for computerization.

To function as the National storehouse of fingerprint (FP) records of convicted persons including FP records of foreign criminals.

To help trace interstate criminals by fingerprint search.

To advise Central and State Governments on matters related to fingerprints and footprints, and to conduct training courses for finger print experts.

Exclusive suburban tracks

Indian Railways is planning to build exclusive rail tracks for suburban trains in a bid to ease congestion.

At present, the Railways is running suburban train services in certain sections on the tracks laid primarily for long-distance trains.

But running suburban services on existing tracks can adversely affects the capacity of freight trains and long-distance trains, So it would not be possible for Railways to use existing infrastructure for the purpose of suburban services.

The Railways has framed the draft guidelines to address the demand for more suburban trains from the state governments. Main guidelines are:

Suburban railway projects are proposed to be implemented and operated through a special purpose vehicle (SPV) with equal equity participation from the respective state governments and the Railways.

State governments would set up a dedicated urban transport fund through “levy of dedicated taxes, levies, betterment tax, impact fee”, among others in the “influence zone of proposed railway station” to finance the capital cost of suburban train projects.

Indian Railways, on request from the SPV, may restructure fares on suburban trains and impose a surcharge to recover the operating losses and the capital cost “if operating losses are not recovered from the dedicated urban transport fund.”

The state governments will be required to conduct feasibility studies of the project at their own cost which will be examined by zonal Railways and subsequently sent to Indian Railways.

States will have to ensure there is no delay in land acquisition and Indian Railways will only contribute its equity share to the SPV once 70 per cent of the land to be acquired is made available by the state government, as per another proposal. States will have to bear the complete cost of land acquisition, leasing of railway land and resettlement and rehabilitation.

Union Cabinet approves MoU between Rural Development Ministry & FAO

The Union Cabinet has approved MoU between Ministry of Rural Development and Food and Agriculture Organisation (FAO) to improve effectiveness of rural development programmes in country.

The MoU will facilitate South-South cooperation mechanisms around Deendayal Antyodaya Yojana - National Rural Livelihoods Mission (DAY-NRLM)'s experience through exchange visits and dialogues, and establishment of a good-practice Learning Centre.

It will strengthen the vertical up scaling of the livelihoods of rural populations that are supported by DAY-NRLM, help to develop inclusive and sustainable value chains for key crops and agro-industrial products, employment diversification, skills development, especially for rural youth, strengthening of social protection, risk management mechanisms and enhanced resilience building, especially in arid and disaster risk-prone districts.

The MoU will also provide for collaboration on activities of common interest to support an integrated approach to rural poverty reduction through activities aimed to promote the economic empowerment of rural women, access of rural poor to natural resources and their sustainable use and social protection.

About Deendayal Antyodaya Yojana – National Rural Livelihoods Mission (DAY-NRLM):

Deen Dayal Antyodaya Yojana - National Livelihoods Mission (NRLM) was launched by the Ministry of Rural Development (MoRD), Government of India in June 2011. The Mission aims at creating efficient and effective institutional platforms of the rural poor enabling them to increase household income through sustainable livelihood enhancements and improved access to financial services. The scheme was succeeded by Deen Dayal Antyodaya Yojana on 25 September 2015.

Under the scheme the rural poor will be targeted through self-managed Self Help Groups (SHGs) and federated institutions will support them for livelihoods collectives in a period of 8-10 years.

In addition, the poor would be facilitated to achieve increased access to their rights, entitlements and public services, diversified risk and better social indicators of empowerment. NRLM believes in harnessing the innate capabilities of the poor and complements them with capacities (information, knowledge, skills, tools, finance and collectivization) to participate in the growing economy of the country.

Key Features

Universal Social Mobilisation - At least one woman member from each identified rural poor household, is to be brought under the Self Help Group (SHG) network in a time bound manner. Special emphasis is particularly on vulnerable communities such as manual scavengers, victims of human trafficking, Particularly Vulnerable Tribal Groups (PVTGs), Persons with Disabilities (PwDs) and bonded labour.

Participatory Identification of Poor (PIP) - The inclusion of the target group under NRLM is determined by a well-defined, transparent and equitable process of participatory identification of poor, at the level of the community.

Community Funds as Resources in Perpetuity - NRLM provides Revolving Fund (RF) and Community Investment Fund (CIF) as resources in perpetuity to the institutions of the poor, to strengthen their institutional and financial management capacity and build their track record to attract mainstream bank finance.

Financial Inclusion - NRLM works on both demand and supply sides of financial inclusion. On the demand side, it promotes financial literacy among the poor and provides catalytic capital to the SHGs and their federations. On the supply side, the Mission coordinates with the financial sector and encourages use of Information, Communication & Technology (ICT) based financial technologies, business correspondents and community facilitators like ‘Bank Mitras’. It also works towards universal coverage of rural poor against risk of loss of life, health and assets. Further, it works on remittances, especially in areas where migration is endemic.

Livelihoods - NRLM focuses on stabilizing and promoting existing livelihood portfolio of the poor through its three pillars – ‘vulnerability reduction’ and ‘livelihoods enhancement’ through deepening/enhancing and expanding existing livelihoods options and tapping new opportunities in farm and non-farm sectors; ‘employment’ - building skills for the job market outside; and ‘enterprises’ - nurturing self-employed and entrepreneurs (for micro-enterprises).

Major Port Authorities Bill, 2016

The Union Cabinet has approved the draft Major Port Authorities Bill, 2016 to replace the existing Major Port Trusts Act, 1963.

The bill aims to empower 12 major ports to perform with greater efficiency on account of full autonomy in decision-making.

Highlights of the bill:

The new Major Ports Authority Bill, 2016, would help to impart faster and transparent decision-making, benefiting the stakeholders and better project execution capability.

The bill is aimed at reorienting the governance model in central ports to the landlord port model, in line with successful global practices.

In the landlord port model, the publicly governed port authority acts as a regulatory body and as landlord, while private companies carry out port operations—mainly cargo-handling activities. Here, the port authority maintains ownership of the port, while the infrastructure is leased to private firms that provide and maintain

their own superstructure and install own equipment to handle cargo. In return, the landlord port gets a share of the revenue from the private entity. In the service port model, the port authority owns the land and all available assets—fixed and mobile—and performs all regulatory and port functions.

Currently, most major port trusts in India carry out terminal operations as well, resulting in a hybrid model of port governance.

Under the bill, the composition of a port board has been simplified and it will now consist of 10 members, including 3-4 independent members, instead of 17-19 under the current model.

The role of the Tariff Authority for Major Ports has also been redefined.

The port authority has been given powers to fix tariff which would act as a reference for purposes of bidding for public-private partnership (PPP) projects. PPP operators will be free to fix tariff based on market conditions.

The board of the port authority has been given the power to fix the scale of rates for other port services and assets, including land. An independent review board has been proposed to be created to look into disputes between ports and PPP concessionaires.

The Bill is more compact in comparison to Major Port Trusts Act, 1963. It has reduced number of sections to 65 from 134 by eliminating obsolete and overlapping Sections of previous Act.

It has been delegated full powers to enter into contracts, planning and development, fixing of tariff. However, these powers have exception in case of national interest, security and emergency arising out of inaction and default.

Role of Tariff Authority for Major Ports (TAMP) has been redefined. It has been given powers to fix tariff which will act as a reference tariff for purposes of bidding for PPP projects. PPP operators will be free to fix tariff based on market conditions.

Independent Review Board: It has been proposed to carry out the “residual function of the erstwhile TAMP for major ports. It will look into disputes between ports and PPP concessionaires. It will also review stressed PPP projects and suggest measures” to revive such projects.

Centre Announces Notification of Prevention of Cruelty to Animals (Pet

Shop) Rules, 2016

The Government has issued the notification for the Prevention of Cruelty to Animals (Pet Shop) Rules, 2016. This is meant to regulate pet shops.

The objective of these rules is to make pet shops accountable and to prevent cruelty inflicted on animals kept in such pet shops.

The proposed Rules provide as under:

It will be mandatory for all pet shop owners to register themselves with the State Animal Welfare Board of the respective State Governments/Union Territories.

Such shops will be registered only after inspection by the representatives of State Board, a veterinary practitioner and a representative of Society for Prevention of Cruelty to Animals.

The rules define space requirement for birds, cats, dogs, rabbits, guinea pig, hamster, rats and mice in the pet shops.

It defines the basic amenities, power back-up, general care, veterinary care and other operational requirement for animals kept in pet shops.

It is mandatory to maintain proper records of sale, purchase, death of animals in pet shop, sick animals etc.

Every pet shop owner is required to submit yearly report to the State Board regarding animals, sold, traded, bartered, brokered, given away, boarded or exhibited during previous year, or any other information asked for by the State Board.

Violation of Rules: Non-compliance of the proposed rules will lead to cancellation of registration of pet shop and pet animals so confiscated, shall be handed over to an Animal Welfare Organisation, or a rescue centre recognised by the Board.

INTETRNATIONAL AFFAIRS

India, Vietnam sign Civil Nuclear deal, three other agreements

India and Vietnam signed a civil nuclear cooperation agreement which will further strengthen the comprehensive strategic partnership between the two countries.

The two countries also signed three other agreements — to enhance aviation links, to jointly work in the area of energy efficiency and promotion of parliamentary cooperation.

Vietnam is the 14th country with which India signed the civil nuclear deal.

The two countries had earlier in 1986 signed a pact in the civil nuclear field which was limited to training. However, the new agreement is broad based and encompasses research on nuclear reactors.

The cooperation in research on nuclear reactors will get activated once India gets membership of the Nuclear Suppliers Group.

An MoU on 'Promotion of traffic between Vietnam and India and sharing of best practices in airline operation, ground handling procedure and management' was also signed between Air India and Vietjet Aviation Joint Stock Company.

Analysis(Indo-Vietnam relations):

India’s foreign policy towards East Asia has witnessed a marked shift over the last two years, with the government intent on transforming India’s relations with this part of the world under its “Act East” policy. Vietnam is one of the East Asia Countries which has received a special place in the list of India’s foreign policy priorities, given its profound significance in India’s strategic and economic interests.

Defence cooperation has been an important cornerstone of the strategic partnership between the two countries for the last many years; India has provided a credit line of US $ 100 million for defence procurement.

The two countries signed a vision statement for next five years in 2015 and a MoU on cooperation between the coast guards of the two countries. India also announced extending of a new defence credit line of $500 million and elevated the strategic partnership to the comprehensive strategic partnership, signifying India’s deep commitment to help Vietnam to build its defence capabilities.

The deepening defence engagement between India and Vietnam indeed is the reflection of India’s deeply interested in actively participating in shaping the political security order in Asia-Pacific. In so doing, the Indian strategic community believes that a strong defence relationship with Vietnam can prove a huge strategic asset for India, so far as its interests in the South China Sea are concerned. As About 50 per cent of its trade transits through the South China Sea, New Delhi needs foster security ties Hanoi to ensure that there is absolute freedom of navigation in this part of the world.

Trade between India and Vietnam has reached $8.03 billion in 2014.India has also offered to discuss a line of credit of US$300 million in the textile sector.

Energy is another area which is a crucial aspect of the relationship between the two countries. As India needs to find viable sources of energy to sustain and intensify its economic growth, it attaches high importance to Vietnam in its energy policy. Thus, while India’s ONGC Videsh has been working with Vietnam in oil exploration activates, the award of a US$ 1.8 billion thermal power project to India’s Tata

Power in Vietnam’s Soc Trang Province is seen to make an epoch-making shift in the energy relations between the two countries. Also, intense engagement with Vietnam would help India to strength its presence in the ASEAN and other similar regional forums.

Non-OPEC producers agree to cut oil output

OPEC and non-OPEC producers reached their first deal since 2001 to curtail oil output jointly and ease a global glut after more than two years of low prices that overstretched many budgets and spurred unrest in some countries.

Russia, which 15 years ago failed to deliver on promises to cut in tandem with OPEC, is also expected to perform real output reductions this time.

In the first week of December, OPEC agreed to slash output by 1.2 million barrels per day from Jan. 1, with top exporter Saudi Arabia cutting as much as 486,000 bpd.

By the end of March Russia would be producing 200,000 bpd less than its October 2016 level of 11.247 million bpd – Russia’s highest production estimate so far. Russian output would fall to 10.947 million bpd after six months.

About Organization of the Petroleum Exporting Countries (OPEC):

The OPEC is an intergovernmental organization of 14 oil-exporting developing nations that coordinates and unifies the petroleum policies of its member countries.

Established: 1960 in Baghdad, Iraq by the first five members.

Headquarters: Vienna, Austria.

OPEC Members: Algeria, Angola, Libya, Nigeria and Gabon (from Africa); Indonesia, Iran, Iraq, Saudi Arabia (the de facto leader) Kuwait, Qatar, United Arab Emirates (from Asia); Ecuador and Venezuela (from Latin America).

As of 2015, these 14 OPEC member countries accounted for an estimated 43% of global oil production and 73% of the world’s oil reserves.

Two-thirds of OPEC’s oil production and reserves are in its six Middle Eastern (west Asian) countries that surround the oil-rich Persian Gulf.

Analysis:

This deal will speed up the oil market stabilization, reduce volatility, and attract new investments.

Oil prices have more than halved in the past two years after Saudi Arabia raised output steeply in an attempt to drive higher-cost producers such as U.S. shale firms out of the market. The plunge in oil to below $50 per barrel – and sometimes even below $30 – from as high as $115 in mid-2014 has helped reduce growth in U.S. shale output.

But it also hit the revenues of oil-dependent economies including Saudi Arabia and Russia, prompting the two largest exporters of crude to start their first oil co-operation talks in 15 years.

OPEC and the non-OPEC countries at the meeting were responsible for 55 per cent of global output. Their joint reduction of around 1.8 million bpd would account for about 2 per cent of global oil supply.

Many non-OPEC countries such as Mexico and Azerbaijan face a natural drop in oil production and many expressed doubts those declines should be counted as cuts.While a lot of the countries are formalizing natural declines, cuts by Russia, Kazakhstan and Oman are real. Russia and Kazakhstan were between them expected to add 400,000 bpd to production next year.

If OPEC cut output by up to 700,000 barrels a day, the production glut would disappear as soon as the end of this years. The world’s inventories could then be drawn down and prices could rise.

OPEC has been producing at record levels as its members compete among themselves for buyers. Saudi Arabia, the group’s largest producer, has also been pumping at record levels in recent months and was expected to slow down output in the fall and winter anyway.

India, being the 3rd largest importer of crude oil imports 85% of total oil and 95% of natural gas from OPEC nations. In recent time due to cheaper oil prices in international market due to overproduction and non-

coordination among OPEC countries Indian economy had immensely benefited. However, this decision may result in spike in oil prices which can have major implications for the India’s current account deficit and overall economy in general.

In recent times, lower oil prices kept the Indian economy on the shining path and managed to keep inflation under control making it fastest growing economy in G20 countries.

BRICS to share tax information

BRICS nations pledged to share tax information automatically and adopt global standards on tax transparency to check cross border tax evasion.

The meeting of the heads of Revenue of Brazil, Russia, India, China and South Africa (BRICS) also resolved to support other developing nations in increasing their tax administrations’ capacity to implement the OECD/G20 standard on Automatic Exchange of Information (AEOI).

BRICS member also urged timely and consistent implementation of the Base Erosion and Profit Shifting Project across as many tax jurisdictions as possible and appealed to all countries to join the framework and participate in the BEPS project.

The OECD/G20 project on BEPS provides governments with solutions for closing the gaps in existing international rules that allow corporate profits to artificially shift to low or no-tax environments, where little or no economic activity takes place.

Automatic Exchange of Information (AEOI)

The Standard requires financial institutions to report information on accounts held by non-resident individuals and entities (including trusts and foundations) to their tax administration. The tax administration then securely transmits the information to the account holders’ countries of residence on an annual basis.

The Standard specifies the financial account information to be exchanged, the financial institutions that need to report, and the different types of accounts and taxpayers covered. To capture a wide range of information, the Standard requires not only deposit-taking banks to report, but also custodial institutions, certain investment entities, and certain insurance companies. The type of account information to be reported on includes account balances, interest, dividends, and sale and redemption proceeds from financial assets.

In order to ensure that the information is accurate and complete, the Standard also specifies the information gathering procedures to be followed by financial institutions, and these procedures draw on the existing international anti-money laundering standards.

Confidentiality, data safeguards and proper use of the information is critical, and the Standard sets out clear requirements that must be met by all jurisdictions participating in AEOI.

The Standard also includes a model agreement for government authorities to use to operationalise the automatic exchanges and a technical user guide to ensure the information is reported in a standardised format.

Asia Pacific Ministerial Conference on Housing and Urban Development

(APMCHUD)

Sixth edition of Asia Pacific Ministerial Conference on Housing and Urban Development (APMCHUD) was held in New Delhi.

This conference sought to address issues ranging from crowded city centres to peripheral expansion, metropolitan based urban population growth, megacities and urban corridors etc.

New Delhi declaration is adopted on the conclusion of conference.

Highlight of New Delhi Declaration:

The declaration strongly recommended formulation of National Human Settlement Policies to promote inclusive, safe, resilient and sustainable city and human settlements.

This declaration strongly advocated planning for urban and adjoining rural areas in an integrated manner instead of looking at them as independent entities.

The Declaration also called for a thorough review of existing policies and formulation of new policies to promote New Urban Agenda adopted at the United Nations Conference on Housing and Sustainable Development in Quito, Eucador.

This declaration stressed on the need for effective governance structures in urban areas.

The Implementation Plan further recommended land regulation policy mechanisms such as land pooling to ensure inclusive and participatory planning, integration of land use and transportation planning across defined boundaries of cities and mixed land use, enforcement and incentivasation of timely execution of infrastructure projects, formulation of comprehensive urban parking policies and community participation in urban planning and service delivery.

In view of the vulnerability of most of the Asia Pacific countries to natural disasters and other risks, the Implementation Plan has recommended urban resilience as criteria for investment. Resilience is the ability of cities to withstand and absorb disasters and shocks and maintain normal services and quickly return to normalcy.

About this conference:

India in association with UN-HABITAT(United Nations Human Settlements Programme) had taken the initiative to organize the first Asia Pacific Ministers Conference on Housing and Urban Development in December, 2006.

This led to the creation of the ‘Asia Pacific Ministerial Conference on Housing and Urban Development’ (APMCHUD) with its objectives enshrined in the ‘Delhi Declaration’ adopted unanimously by the countries participating in the conference from the Asia Pacific Region.

The primary purpose of this inter-governmental body is to promote sustainable housing and urban development in the Asia pacific region through collaborative initiatives.

The APMCHUD comprises of two organisations: The Bureau and the Secretariat.

The APMCHUD’s Ministerial conference is a biennial event.

The Conference elects a Bureau which governs the functioning of the body and the implementation of the decisions of the Conferences.

The Bureau meets regularly, approximately twice in a year. The Bureau is supported by a Secretariat which is established at New Delhi.

The APMCHUD secretariat is headed by the Chief Coordinator. This responsibility is looked after by the Joint Secretary (Housing), Ministry of Housing and Urban Poverty Alleviation

SCIENCE AND TECHNOLOGY

Japan launches 'space junk' collector

Japan launched a cargo ship bound for the International Space Station (ISS), carrying a 'space junk' collector.

The cargo ship is also carrying other materials for the ISS including batteries and drinking water for the astronauts living there.

The capsule — called Kounotori, or white stork — contains nearly 5 tons of food, water and other supplies, including six new lithium-ion batteries for the station's solar power system.

Astronauts will conduct spacewalks next month to replace the old nickel-hydrogen batteries that store energy generated by the station's big solar panels.

This is Japan's sixth shipment to the 250-mile-high outpost, currently home to Pesquet, two Americans and three Russians. It launched from Tanegashima Space Center in southern Japan.

About 'Space junk' collector:

Scientists at JAXA(Japan Aerospace Exploration Agency) have spent 10 years developing a tether system to pull space junk out of orbit around Earth. JAXA worked with fishnet manufacturer Nitto Seimo to create an electro dynamic tether made from thin wires of stainless steel and aluminum, using fishnet plaiting technology.

The clean-up concept involves attaching one end of the tether to debris. As the tether swings through the Earth’s magnetic field, it will generate electricity, which is expected to have a slowing effect on the space debris, pulling it into lower and lower orbit, and eventually into the Earth’s atmosphere where it will burn up.

Analysis:

Humans have been exploring space for over five decades, and it is estimated that over 100 million pieces of space detritus have accumulated from bits and pieces shed from rockets and crippled satellites.

The orbiting belt of debris has been variously called a “critical contemporary crisis,” a “growing threat to space exploration,” and a “significant threat to the health and mission success of satellites.

Collisions can (and have) damage working equipment, and space debris is an ongoing problem for scientists who have to try to protect vulnerable navigation, weather, and communication equipment.

TIFR discovery challenges theory of superconductivity

Physicists from the Tata Institute of Fundamental Research (TIFR), Mumbai, have found that the metal bismuth becomes a superconductor at a temperature at least 1,000-times higher than predicted.

The discovery has surprised the physics community because prevailing wisdom doesn’t allow bismuth to become a superconductor in the conditions in which it did. As a result, physicists will now have to find new explanations and rework on this theory.

About Superconductor:

Superconductors are substances that conduct electricity without any resistance. If an electric current enters a superconducting wire at one end, it will emerge out of the other without any loss.

The phenomenon was first observed in mercury in 1911 by the Dutch physicist Heike Kamerlingh Onnes. Since then, many superconducting substances have been found. Perhaps the most well-known is a compound called yttrium barium copper oxide, which offers zero resistance to the flow of current when cooled to 90 kelvin (-183.15º C).

About discovery:

The TIFR group, however, found that bismuth became a superconductor below an ultra-cold temperature of 0.00053 kelvin (and at ambient pressure).

The last work done in bismuth found that it is not superconducting down to 0.01 kelvin. This was done 20 years ago and people gave up.

About Bardeen-Cooper-Schrieffer (BCS) theory

To be able to conduct electricity, the atoms of a metal must have some mobile electrons that can move throughout the metal instead of being trapped around the atoms.

In superconducting metals that have been cooled to low temperatures, these electrons overcome the repulsion due to their ‘like’ charges, come together, and form pairs.

The sea of electron-pairs around the metal then flow as one like a fluid, and refuse to be jolted out of their reverie by vibrating atoms unless the metal is warmed up beyond a threshold temperature. This explanation is called the Bardeen-Cooper-Schrieffer (BCS) theory.

It won its conceivers – John Bardeen, Leon Cooper and John R. Schrieffer – the Nobel Prize for physics in 1972.

In bismuth, however, there is only one mobile electron for every 100,000 atoms.

BCS theory applied to bismuth gives a superconducting transition temperature of the order of nano-kelvins, much less than the 0.5 milli-kelvin seen in the work of the TIFR group.

About Bismuth

Bismuth is a simple elemental system. Historically, it has paved the way for many developments in understanding the fermiology of metals. Fermiology is the study of Fermi surfaces, which are abstract values used to predict the properties of metallic substances. For example, the Fermi surface of bismuth was mapped out by the de-Haas van Alphen technique, paving the way for that technique to become the standard tool for investigation of Fermi surfaces of metals” (emphasis in the original).

Bismuth transitions from exhibiting the properties of a semimetal to that of a semiconductor when subjected to intense magnetic fields or pressure. It also exhibits electron fractionalisation, whereby in the presence of a strong magnetic field, changes in bismuth’s internal structure seem to suggest the presence of particles with a fraction of the charge of an electron. “These features are presently ill-understood, and so the latest discovery of superconductivity is all the more remarkable, showing up the extremely rich variety of phases that such a ‘simple’ system can exhibit.”

As a result, the TIFR discovery of superconductivity in bismuth recalls “a set of very intriguing issues for understanding the wider issue of how and under which conditions electrons in metals can exhibit unanticipated behaviours.”

QUICK FACTS

In Global terrorism index, 2016 , rank of India is – 7th

Country which topped the Global terrorism index 2016 is - Iraq

The Human Rights Day was observed on – 10th December

The 2016 World Power Language Index (PLI) announced which langauge is the most powerful language in the world – English.

EKUVERINis the joint military exercise between India and – Maldives.

Ghana’s main opposition leader who has won the presidency in his third run for the office - Nana Akufo-Addo

New Prime minister of Italy - Paolo Gentiloni.

New Director General of the Inter-Services Intelligence (ISI)- Lt. Gen. Naveed Mukhtar

New Secretary-General of the United Nations- Antonio Guterres

Turner Prize 2016 has won by - Helen Marten