13 August Current Affairs – Daily News

13 August Current Affairs – Daily News

CIVIL SNIPPETS

 

Decision on Kashmir doesn’t affect LAC, Delhi tells Beijing #GS2 #IR

 

External Affairs Minister S. Jaishankar reassured China that New Delhi’s decision to exercise greater administrative control over Ladakh would have no implications for India’s external boundaries or the Line of Actual Control with China.

 

“The legislative measures were aimed at better governance and socio-economic development,” he told his Chinese interlocutors, referring to India’s decision to revoke the special status of Jammu and Kashmir and making Ladakh, which borders China, a Union Territory.

 

‘No territorial claims’

 

“There was no implication for the external boundaries of India or the Line of Actual Control with China. India was not raising any additional territorial claims. The Chinese concerns in this regard were misplaced.

 

Mr. Jaishankar’s remarks follow the Chinese Foreign Ministry’s earlier response that India had “continued to damage China’s territorial sovereignty by unilaterally modifying the form of domestic law. The Chinese Foreign Office had also said that this practice was “unacceptable” and it would not have any effect.

 

Mr. Jaishankar said he had pointed out that regarding the boundary question, the two sides had agreed to a fair, reasonable and mutually acceptable settlement based on the 2005 Political Parameters and Guiding Principles.

 

External Affairs Minister S. Jaishankar told the Indian media on Monday that in his talks, China had raised the question of Aksai Chin — a territory claimed by India, but which is under Chinese control.

 

Regarding India’s decision to withdraw special status to Jammu and Kashmir, Mr. Jaishankar said that he had told his hosts that “this was an internal matter for India.” “The issue related to changes in a temporary provision of the Constitution of India and was the sole prerogative of the country.”

 

He said his Chinese counterpart, Wang Yi had also referred to rising tension between India and Pakistan as a result of these changes. In his response, Mr. Jaishankar said he had emphasised that “these changes had no bearing on Pakistan as it was an internal matter.”

 

“It did not impact the Line of Control (LoC). Where India-Pakistan relations are concerned, the Chinese side should base its assessment on realities. India as a responsible power had shown restraint in the face of provocative Pakistani rhetoric and actions. India has always stood for normalisation of the ties in an atmosphere free of terror.

 

Assam villagers feed elephants to keep them at bay #GS3 #Environment

 

A cluster of villages in central Assam’s Nagaon district has found a way of keeping crop-raiding elephants off their crops — by setting aside land to create a meal zone for them.

 

Most farmers of 12 villages in the Ronghang-Hatikhuli area of central Assam’s Nagaon district do not have enough land to sustain their families. But they donated 203 bighas (roughly 33 hectares) of community land and took turns to plant paddy exclusively for the elephants that often come down the hills of the adjoining Karbi Anglong district.

 

The “jumbo kheti” (cropland) has been envisaged as the last line of mealy defence against some 350-400 elephants that have often paid for venturing too close to human habitations. Five of them were electrocuted by illegal electric fences in the last 16 months, while half-a-dozen, injured by spears and arrows, died in the jungles up the hills.

 

About 10 km from the paddy field, toward the hills, is an 8-hectare plantation of Napier grass that 35 reformed hunters have grown for the elephants. This plantation is on land belonging to a tea estate. The locals have also planted saplings of 2,000 outenga (elephant apple), 1,500 jackfruit and 25,000 banana trees on barren land between the paddy field and the grass plantation.

 

The three-step plantation has a common thread — environmentalist Binod Dulu Bora and the NGO ‘Hatibondhu’, meaning ‘friends of elephants’, he is associated with. “Growing paddy for elephants was the idea of Pradip Kumar Bhuyan, the director of our NGO. We had several meetings with the villagers and convinced them that they would be setting an example for the world to follow towards reducing man-animal conflicts,

 

‘Odisha would get floods due to Polavaram dam’ #GS3 #Environment

 

Recent waterlogging and slow drainage of floodwaters in Motu tehsil of Odisha’s Malkangiri district hints at the vagaries this region would face after completion of the Polavaram project in adjoining Andhra Pradesh, alleged anti-Polavaram organisations and leaders of Odisha.

 

According to Malkangiri district residents, this year the Saveri river overflowed and flooded large areas of Motu and Kalimela tehsils. The region was similarly flooded in 1986 and 2006. However, then the floodwaters had receded in a day or two after the rain stopped.

 

This year the water has not receded even after a week. The CPI(M)’s Odisha unit, peasants’ organisation All India Kisan Mazdoor Sabha and the People’s Forum Against Polavaram have blamed the flood on the Polavaram project.

 

According to AIKMS, the State Water Resources Department had in July 2018 conducted a survey in the areas to be affected, but the report has not been made public yet. PFAP added that Konta tehsil in Chhattisgarh has also suffered floods this year due to the Polavaram project.

 

 

 

 

Wildlife sanctuary set to have new contours #GS3 #Environment

 

The Forest Department has identified 308.84 hectares of revenue land for inclusion in the Krishna Wildlife Sanctuary (KWS) as recommended by the National Board for Wildlife, compensating the land being diverted for setting up Missile Test Launch Facility by the Defence Research and Development Organisation (DRDO) in Nagayalanka mandal in Krishna District.

 

Declared a sanctuary in 1989, the KWS is spread across 194.84 hectares in Krishna and Guntur districts. The huge chunk of revenue land adjacent to the existing sanctuary is now supporting a moderately dense mangrove cover in Nagayalanka mandal, geographically near the confluence point of the river Krishna and the Bay of Bengal.

 

Of the total 154.42 hectares of forest land to be diverted to the DRDO, 45 acres falls in the heart of the sanctuary.

 

“The DRDO proposes to utilise 45-acre forest land in the sanctuary for the road facility that connects to the test and technical facility of the project, almost dividing it into two parts.” observed former Chief Wildlife Warden A.V. Joseph in his field report in 2014.

 

“The stretch of 308.84 hectares (761.085 acres) of revenue land adjacent to the KWS has been identified as per the recommendations of the National Board for Wildlife. The final notification exercise to include the area in the sanctuary has almost been completed.

 

The higher authorities are re-examining the facts and area without any technical problems before issuing the final notification,” Divisional Forest Officer (Eluru-Wildlife) Anant Shankar told The Hindu.

 

The area, compensating the forest land to be diverted for the DRDO, has been identified adjacent to the KWS to ensure the maintenance of ecological balance and mangrove cover.

 

 

 

 

 

Sexual assault cases to top agenda at zonal council meeting to be chaired by Amit Shah- Sharad Vyas #GS2 #Governance

 

Speedy investigations into sexual assault cases, a comprehensive security plan and improved security at railway stations will top the agenda of the 24th meeting of the Western Zonal Council, to be chaired by Union Home Minister Amit Shah in Panjim on August 22.

 

The council, functioning under the aegis of the Ministry of Home Affairs (MHA)’s Inter-State Council Secretariat, comprises Goa, Gujarat, Maharashtra, and the Union Territories of Daman and Diu, and Dadra and Nagar Haveli. The Central government has also asked the States to provide an update on

 

 

the MHA’s refusal to give funds for modernisation of the police force in the absence of a comprehensive State security plan, said senior officials. The previous meeting of the council was chaired by former Home Minister Rajnath Singh on April 26, 2018 at Gandhinagar.

 

The August 22 meeting will also discuss the implementation and mismanagement, if any, of the Direct Benefit Transfer scheme as well as forest clearances pending for construction of the third line in the Wirpur-Sirpur section of major train projects. Goa was finalised as the venue for this year’s meeting as the previous meetings were held in Gujarat and Mumbai, senior officials said.

 

The eight items on the agenda were recently finalised by Sanjeev Gupta, Special Secretary, MHA. These include surplus land to be collected from various Central government organisations for the purpose of Housing for All schemes, and clearances under the Right of Way policy for freight corridors planned across the States.

 

The priority of the meeting will be speedy investigations into cases related to sexual assault and the conviction rate. The MHA is keen on knowing our (States’) response to its refusal to approve modernisation of police force unless we have put in place a State Security Plan,” said a State official.

 

The five zonal councils created under the States Re-Organisation Act, 1956 are advisory bodies that will discuss and make recommendations with regard to any matter of common interest in the field of economic and social planning between the Centre and States, border disputes, linguistic minorities, inter-State transport or matters connected with the reorganisation of States under this Act.

 

The Act provides that there shall be a zonal council for each of the five zones: North, Central, Eastern, Southern and Western.

 

 

 

 

 

Headgear made mandatory for children above four years #GS2 #Governance

 

In a significant move, protective headgear of prescribed standards has been made mandatory for children above four years while travelling on a motorcycle.

 

The safety measures for the children travelling on motorcycles have been included in the Motor Vehicles (Amendment) Act 2019 that is passed by Parliament.

 

With the President of India giving assent to the Act, that has amended the Motor Vehicles Act, 1988, on August 9, the Union Ministry of Law and Justice has notified the Act in the Gazette of India.

 

To make the protective headgear mandatory for children, Section 129 of the principal Act has been replaced in the Act as “Every person, above four years of age, driving or riding or being carried on a motorcycle of any class or description shall, while in public place wear protective headgear conforming to such standards as may be prescribed by the Central government”.

 

Exemption

 

Only Sikhs wearing turban have been exempted from the provision of Section 129 that makes helmets mandatory for all riders of motorcycles above four years of age.

 

The Act says the Central government may by rules provide for measures for the safety of the children below four years of age riding or being carried on a motorcycle.

 

With this amendment, children from the Kindergarten classes will have to wear the protective headgear if they have to travel on motorcycles.

 

At present, only protective headgear for children riding cycles are available in the market across the country. The decision of the Union government will see the markets flooded with protective headgear for children. For the parents, carrying headgear of children is another issue.

 

Road safety expert and former director of the National Transportation Planning and Research Centre (Natpac) T. Elangovan has called for providing a breathing space till the markets get ready with the protective headgear of prescribed standards. The parents should be made aware of the need of protective gear for children.

 

Pillion riders, including children, are more prone to the injuries than the rider of the motorcycle in case the vehicle collides. Helmets of prescribed standards fastened to the head by straps or other fastenings can avoid head injuries.

 

The former Natpac director says law enforcers should enforce rules to restrict travellers to two on a motorcycle. Often, the children hold on to the rider and the chances of thrown off are high. If at all children are allowed as a pillion riders, they should be of 13 years and above.

 

 

 

 

 

No harmful chemicals in PET bottles, finds CSIR study #GS3 #Environment

 

PET bottles are safe, a comprehensive evaluation by the CSIR-Central Food Technological Research Institute, Mysore has determined.

 

For years there’s been a swirling debate internationally on whether PET (Polyethylene Terephthalate)

 

bottles, which are the mainstay of plastic bottles and disposable food containers, leach harmful chemicals when exposed to high temperatures.

 

The CFRTI analysis, commissioned by an industry body, concluded that antimony, arsenic, barium, cadmium, chromium, cobalt, lead, mercury, selenium and zinc “were below” their detection limits (BDL) of 0.001 mg/kg. Bisphenol-A was below its detection limit of 0.02 mg/kg.

 

For their analysis, the researchers collected four different kinds of PET containers and exposed them to different stimuli such as ethanol of varying concentrations, acetic acid and vegetable oil.

 

 

These were supposed to simulate the kind of chemicals contained in packaged food and drink that could trigger the leakage of metals or other secondary chemicals.

 

They tested these bottles when they were subject to 40C and 60C temperature as well as when test-chemicals were stored in them for 10 days. Along with metals, the scientists also measured terephthalic acid, Isophthalic acid, Ethylene Glycol, BPA (bis-phenol A) and phthalates.

 

BPA is a synthetic organic compound and used in the manufacture of PET bottles but is now phased out after research found a link between the presence of BPA and the disruption of hormone regulation, as well as breast cancer.

 

The CFTRI scientists found that the presence of metals, BPA and pthalates were “below detection limit” meaning that they were below the minimum levels required by the instruments and methods employed by the researchers to detect these chemicals.

 

They were also below the EU (European Union) regulation norms of the “specific migration limit”, which is the maximum amount of a substance that can migrate from a food packaging material or food container into food.

 

In most cases the EU standards are similar to the ones specified by the Food Safety and Standards Authority of India, except for BPA for which FSSAI has not specified standards and zinc, where FSSAI permits 25mg/kg as opposed to the EU’s 5 mg/kg.

 

The analysis found that no chemcials breached the EU-specified norms. The studies further confirmed that antimony does not leach out of PET bottles. These findings further establish that no endocrine disruption happens from the use of PET bottles.

 

The migration studies were at most stringent conditions of time, temperature and accelerated testing environment,” said a statement from Pet Packaging Association for Clean Environment (PACE), the industry body which commissioned the study.

 

Of the plastics, PET is a unique and universal packaging material for food, pharmaceuticals, water, edible oils, personal care products, etc…

 

This project is unique, as it investigated not only the leaching aspects, but also examined the composition/chemistry of PET and furthermore, even studied the endocrine disruption potential of PET. In this respect, the findings in these reports would be more relevant than those found in any standalone tests.

 

The scientists also studied water stored in PET bottles and checked whether it affected the hormone levels of rats and mice.

 

“The evaluation found that the experimental male and female rats exhibited comparable blood hormone levels in both cases. This conclusively proved that PET bottles did not cause any Endocrine Disruption activity if used to package water,” a study report concluded.

 

 

 

 

PM-JAY to include cancer treatment soon, say health officials #GS2 #Governance

 

Cancer treatments will soon be covered under the Ayushman Bharat Yojana- Pradhan Mantri Jan Arogya Yojana (PM-JAY), which is the Central Government’s health insurance scheme that aims to give medical cover to over 10 crore poor and vulnerable families of approximately 50 crore beneficiaries, providing coverage of up to ₹5 lakh per family per year for secondary and tertiary care hospitalisation.

 

So far, 16,000 hospitals have been empanelled, nearly 34 lakh beneficiaries have been admitted, and 9 crore e-cards have been issued, according to senior health officials.

 

Maximum mortality

 

According to the World Health Organisation, the rate of mortality due to cancer in India is high, with cancer the second-most common disease in India, responsible for maximum mortality, with about 0.3 million deaths per year.

 

Government figures note that the estimated number of people living with the disease stands at around 2.25 million, with over 11 lakh new cancer patients registered each year.

 

“In India, the risk of developing cancer before the age of 75 years for males stands at 9.81% and females at 9.42%. Total deaths due to cancer in 2018 was 7,84,821 (Men: 4,13,519; Women: 3,71,302). The risk of dying from cancer before the age of 75 years stood at 7.34% in males and 6.28% in females.

 

Lung cancer is the most common type of cancer in India, followed by breast cancer and oral cancers.

 

All types

 

The need for including cancer treatment into the healthcare package came from the fact that “the government realised that cancer care costs were causing massive financial crisis among people and many had to go without treatment.

 

The Ayushman Bharat Yojana is now planning to include all types of cancers and their treatment under its healthcare packages. Talks are on and we should have a road map within the next three months.

 

The healthcare packages for cancer treatment are not very comprehensive and we feel that improvements can be made. In India, cancer treatment is very expensive and we would like to include treatment for all types of cancer in our health packages, which are cost-effective, proven and beneficial to patients.

 

Patients often undergo multiple therapies for cancer treatment, including chemotherapy, surgery and radiation, which are very expensive.

 

 

 

 

President’s nod to increase number of Supreme Court judges #GS2 #Governance

 

President Ram Nath Kovind has signed into law a Bill which seeks to increase the sanctioned strength of judges in the Supreme Court from 30 to 33 besides the Chief Justice of India.

 

The Supreme Court (Number of Judges) Amendment Bill was passed by Parliament earlier this week. With no vacancy, the present strength of the apex court is 31, including the chief justice of India. After the law comes into force, the sanctioned strength of SC will be 33, besides the CJI.

 

The move to increase the strength of judges by 3 or 10 per cent comes against the backdrop of rising cases in the top court which stand at nearly 60,000.

 

The decision also comes days after Chief Justice of India Ranjan Gogoi wrote to Prime Minister Narendra Modi to increase the number of judges in the top court.

 

According to a written reply by the Law Ministry to a Rajya Sabha question on July 11,59,331 cases are pending in the top court. Due to paucity of judges, the required number of constitution benches to decide important cases involving questions of law were not being formed, the CJI said.

 

“You would recall that way back in 1988, about three decades ago, the judge strength of the SC was increased from 18 to 26, and then again after two decades in 2009, it was increased to 31, including the CJI, to expedite disposal of cases to keep pace with the rate of institution,” he wrote.

 

Once the amended law comes into force, the Supreme Court collegium will recommend three names to the government for appointment as SC judges, a government functionary said.

 

 

 

 

 

Centre asks Twitter to block accounts ‘spreading falsehood’- Yuthika Bhargava #GS3 #Security

 

The Centre on Monday asked microblogging website Twitter to take down several accounts on its platform posting “objectionable and malicious” content, particularly relating to Kashmir.

 

We have asked Twitter to take down some 7-8 accounts that are spreading false information about what is happening in Kashmir.

 

The government official said the reports and information posted on these handles were related to violence in Kashmir. “They are fake, aimed at presenting a wrong picture [of the Kashmir situation] to the world.” Most of these were unverified accounts and the government may also try to locate the origin/location of these accounts.

 

 

The claim made by this account was also refuted by CRPF India in a tweet: “The malicious content of this tweet is absolutely baseless and untrue. As always, all the security forces of India are working with coordination and bonhomie.

 

“Patriotism and our tricolour lie at the core of our hearts and existence, even when the color of our uniforms may differ.”

 

 

 

 

 

Army plans to raise age of retirement of skilled staff #GS3 #Defence

 

The Army has conducted a new study on “age enhancement for retirement” of personnel in specialised areas to retain skilled manpower, Army sources said.

 

“We don’t want to lose skilled manpower. We have identified specialists in various disciplines and looking if we can raise their retirement age to between 55 and 58.

 

These include areas such as medical assistants, radiologists and electronics and mechanical engineers posted at Corps Headquarters and base workshops.

 

In the armed forces, personnel of Other Ranks (ORs) start retiring in the 35-37 age group and officers at 54 unless they get promoted to higher ranks.

 

Though these limits have been set due to the rigours of military service, there has been huge technological advancement over the decades and also not all personnel go through the same stress or serve in extreme situations, the source said.

 

Extension of retirement age would offer a dual benefit of retaining expertise which saves the cost of replacing them and also reduces the mounting pension burden on the Army.

 

The personnel continue in active service for longer duration and do not have to search for alternative employment. The “age enhancement for retirement” study has been completed and the draft report has to be approved by the Defence Ministry, sources said.

 

This study is in addition to the four major thrust areas of force restructuring and transformation ordered by the Chief of the Army Staff, General Bipin Rawat, and is in various stages of completion and implementation.

 

Currently, restructuring for Army headquarters, force restructuring, cadre review of officers and review of terms and conditions of Junior Commissioned Officers (JCO) and ORs are taking place.

 

For lower ranks also

 

 

As part of reviewing the terms and conditions of the ORs, the Army is considering increasing the pensionable service of jawans and lance naiks by two years from the current 15 years and further up to 20 years in a phased manner.

 

The officer cadre management study was ordered last year to enhance functional efficiency, correct structural ratio and meet legitimate career expectations of officer cadre, the source said. “The review will be completed by the year-end and then implemented.”

 

Under this, a proposal is under consideration is to ensure that 50% of all officers become Major Generals. At present, officers are commissioned as Lieutenants and proceed to the rank of Lieutenant-Colonel in a time-bound manner.

 

 

 

 

 

New rules can deny green cards for immigrants using public benefits #GS2 #IR

 

Trump administration rules that could deny green cards to immigrants who use Medicaid, food stamps, housing vouchers or other forms of public assistance are going into effect, potentially making it more difficult for some to become U.S. citizens.

 

Federal law already requires those seeking green cards and legal status to prove they will not be a burden to the United States, or what’s called a “public charge,” but the new rules, made public on Monday, detail a broader range of programmes that could disqualify them.

 

U.S. Citizenship and Immigration Services officers will now weigh public assistance along with other factors such as education, household income and health to determine whether to grant legal status.

 

Much of President Donald Trump’s effort to crack down on illegal immigration has been in the spotlight, but the rule change is one of the most aggressive efforts to restrict legal immigration. It’s part of a push to move the U.S. to a system that focusses on immigrants’ skills instead of emphasising the reunification of families, as it has done.

 

The rules will take effect in mid-October. They don’t apply to U.S. citizens, even if the U.S. citizen is related to an immigrant who is subject to them.

 

‘Core principle’

 

The acting director of Citizenship and Immigration Services, Ken Cuccinelli, said the rule change fits with the Republican President’s message.

 

“That’s a core principle of the American Dream. It’s deeply embedded in our history, and particularly our history related to legal immigration.” Immigrants make up a small percentage of those who get public benefits. In fact, many are ineligible for public benefits because of their immigration status.

 

 

But advocates worry the rules will scare immigrants into not asking for help. And they are concerned the rules give too broad an authority to decide whether someone is likely to need public assistance at any time, giving immigration officials the ability to deny legal status to more people.

 

On average, 5,44,000 people apply annually for green cards, with about 3,82,000 falling into categories that would be subject to this review. Guidelines in use since 1999 referred to a public charge as someone primarily dependent on cash assistance, income maintenance or government support for long-term institutionalisation.

 

Under the new rules, the Department of Homeland Security has redefined a public charge as someone who is “more likely than not” to receive public benefits for more than 12 months within a 36-month period.

 

If someone has two benefits, that is counted as two months. And the definition has been broadened to include Medicaid, housing assistance and food assistance under the Supplemental Nutrition Assistance Program, or SNAP.

 

Following publication of the proposed rules last fall, Homeland Security received 2,66,000 public comments, more than triple the average number for a rule change at the agency, and it made a series of amendments to the final rules as a result.

 

For example, women who are pregnant and on Medicaid or who need public assistance will not be subject to the new rules during the pregnancy and for 60 days after the birth of the baby.

 

The Medicare Part D low-income subsidy won’t be considered a public benefit. And public benefits received by children up until age 21 won’t be considered.

 

Nor will emergency medical assistance, school lunch programs, foster care or adoption, student loans and mortgages, food pantries, homeless shelters or disaster relief.

 

 

 

 

 

As cup brims with losses, Centre to hold meeting with tea sector chiefs #GS3 #Economy

 

Days after the Indian Tea Association (ITA) sent a distress signal through newspaper advertisements, the Centre has called for a meeting of all stakeholders to discuss issues pertaining to the sector.

 

The ITA, the apex industry association — accounting for a majority of the tea produced in the organised sector — had inserted an advertisement, highlighting the crisis and seeking government intervention.

 

More than 80% of the ITA members, with estates in Assam and West Bengal, had incurred losses in 2018-19 and were preparing for losses during the first quarter of this fiscal.

 

 

A reading of the published results of the listed companies shows that in most cases the losses had widened since 2017-18.

 

These firms belong to industry houses such as Williamson Magor, a heritage company, the Birlas, Bangurs, the Goenkas, Tata Group and another heritage organisation in the public sector, The Andrew Yule Group.

 

The long list includes McLeod Rusell, Warren Tea, Andrew Yule, Jay Shree Tea, Associated Plantations Pvt. Ltd. and Joonktollee Tea & Industries to name a few.

 

The red streak runs across the country’s tea-growing regions in the north and the south. Companies like Harrisons Malayalam Ltd. based in Kerala, and with tea and rubber plantations in Kerala and Tamil Nadu, have also recorded shown losses during the last fiscal.

 

The main reason cited by the managements of these companies as also the industry captains has been the stagnation in the average selling price of tea.

 

While the costs have ballooned to almost ₹200 per kg, the average selling prices have remained flat at about ₹160 per kg between 2013-14 and 2018-19.

 

Costs have mainly increased on account of wages and farm inputs such as fertilizers as well as fuel costs. In a recent presentation, IIM Professor Mahadevan, who has studied the auction system, said that prices have stagnated over the last four to five years.

 

The industry also feels that production needs to be regulated in order to boost prices. “The unhealthy demand-supply situation is one of the main reasons for stagnating prices. His company closed the first quarter of this fiscal with a ₹10.6-crore loss against ₹50 lakh a year ago.

 

The emergence of a “dual economy,’’ created by the growing dominance of the small tea growers’ (STG) sector, has also added to the woes of the organised industry.

 

According to a January 2019 ITA estimate, the organised sector’s production cost per kg stood at about ₹190 against that of ₹115 of the STG (small tea growers) and bought leaf sector. In 2018, the latter accounted for almost 50% of the tea output.

 

However, sector experts felt a section of the industry, too, had failed. “One major reason is that this industry failed to reinvent itself and continued with the same old cultural practices and selling procedures similar to what was being done 100 years ago.

 

In private conversation, even industry representatives admitted that many large players had not sufficiently engaged in replantation activities to reduce the ageing bushes which give rise to indifferent quality of tea.

 

Saudi Aramco to bring largest FDI: 20 per cent stake in RIL oil #GS3 #Economy

 

 

In what could be the largest foreign direct investment in India, Saudi Aramco has proposed to sign a non-binding Letter of Intent (LOI) to acquire a 20 per cent stake in the oil to chemicals (O2C) division — comprising the refining, petrochemicals and fuels marketing businesses — of Reliance Industries Ltd (RIL).

 

Saudi Aramco’s potential 20 per cent stake which is based on an enterprise value of $75 billion for the O2C division of RIL is worth around $ 15 billion, or Rs 1,06,000 crore.

 

The deal with Aramco will include of Reliance’s refining and petrochemicals assets as well as the remainder of stake the firm has in fuel retailing business after selling 49 per cent to BP of Britain.

 

RIL and Aramco, the world’s largest integrated oil and gas company producing one in every eight barrels of crude oil globally, had been negotiating the deal for the last couple of months.

 

Under the non-binding LOI, the proposed investment is subject to due diligence, and the executed definitive agreement will be subject to regulatory and other customary approvals.

 

“Saudi Aramco and RIL have a long-standing crude oil supply relationship of over 25 years. Saudi Aramco is the world’s largest and lowest cost-per-barrel producer of crude oil, is geographically close to India, and offers a wide range of crude supply options.

 

To date, it has supplied approximately 2 billion barrels of crude oil for processing at RIL’s refinery at Jamnagar.

 

RIL’s Jamnagar refinery is the largest and most complex refinery in the world, with deep integration of refining and petrochemical activities across multiple manufacturing facilities. The proposed investment would result in Saudi Aramco supplying 500 KBPD of Arabian crude oil to the Jamnagar refinery on a long term basis.

 

This signifies perfect synergy between the world’s largest oil producer and the world’s largest integrated refinery and petrochemicals complex.

 

RIL’s oils to chemicals business achieved revenue of Rs 5.7 lakh crore, exports of Rs 2.2 lakh crore and EBITDA (earnings before interest, tax, depreciation and mortisation) of Rs 52,041 crore.

 

Since its inception, our Jamnagar refinery has been processing Saudi oil every single day for 20 years. Now we have transformed our longstanding relationship of two decades, based on mutual trust, into a partnership of growth potential for many more years.

 

The company will become debt-free by 2021. “We have a very clear roadmap to becoming a zero net debt company within the next 18 months that is by March 2021,” he said.

 

Meanwhile, public sector oil companies have proposed a $44-billion oil refinery with Saudi Aramco and Abu Dhabi National Oil Company (ADNOC) in Maharashtra.

 

 

Though the refinery was initially proposed to be built at Nanar, Ratnagiri district, farmers refused to surrender land, fearing it could damage a region famed for mango and cashew plantations.

 

 

 

 

 

Six cities picked for Centre’s project to link research, industry #GS2 #Governance

 

The Centre has identified six cities Bhubaneswar, Chandigarh, Jodhpur, Pune, Ahmedabad and Hyderabad for development as City Knowledge and Innovation Clusters.

 

These clusters are being planned to provide a connect between the existing research and knowledge at an institution and various industries that exist in the city or state.

 

The project is being spearheaded by the office of the Principal Scientific Advisor (PSA) on a priority basis under its agenda for the first 100 days of the NDA government’s second term.

 

PSA officials said the concept notes for all cities are ready and consultative meetings in some cities have already been initiated. According to them, 20 national-level laboratories are already on Bhubaneswar’s roster and over 30 different business houses or industries have participated in various meetings in Pune.

 

“There is a huge amount of knowledge and fiscal resources, which exist within a city or region. If we can seamlessly connect these independent entities into a virtual platform, we will be able to optimise the resources, and various sectors will be able to work in partnership instead of in silos.

 

“For instance, if a particular industry has a problem that needs to be solved, which can be done by scientists or maybe even an instrument that one of the R&D labs have, today there is no access or even knowledge of the existence of this equipment or technical solution.

 

For this purpose, each city cluster will have a nodal office headed by a CEO, who will be selected by the stakeholders. “This could be an industrialist or a scientist or an academic.

 

Anyone that the stakeholders think is an appropriate appointment,” an official said. Government officials, such as municipal commissioners, will be a part of the city cluster.

 

Officials said the project will assist industries in gaining access to existing technology, and help academic institutions and R&D facilities commercialise this technology.

 

The nodal offices will be run and funded by the PSA’s office for the first three years, within which time the stakeholders will have to look at how to make the initiative independent of government funding and sustainable.

 

The government’s hopes are anchored in the experience of Chandigarh that has experimented with a version of the project called Chandigarh Region Innovation Knowledge Cluster (CRIKC) where the city has opened its laboratories to students of Panjab University.

 

 

The Chandigarh model has done so well that the Governor is looking at how to extend it to the rest of the state,” an official said.

 

Officials said the aim of the project is that over a period of time, city clusters will be able to bid for international projects and seek international funding from organisations like the World Bank.

 

Given how the project seeks to enhance collaboration of research and facilities in the clusters, the government is also planning to set up I-Stemm, a web portal which will function as a nationwide inventory of all public funded institutions — both academic and R&D as well as all scientific instruments and infrastructure.

 

As many as 350 institutes have already signed up for I-Stemm, officials said.

 

 

 

 

 

Over 200 million transactions worth Rs 9,685 crore made on AePS in July #GS2 #Governance

 

Aadhaar-enabled payment system (AePS) transactions crossed the 200-million mark in July this year, the National Payments Corporation of India (NPCI) said on Monday.

 

AePS is a bank-led model which allows basic interoperable banking transactions, such as cash withdrawal, intrabank or interbank fund transfer and balance enquiry with micro automated teller machines (ATMs) through a business correspondent and using Aadhaar authentication.

 

In July 2019, the transaction count of AePS stood at 220.18 million with a transaction value of Rs 9,685.35 crore, up from a transaction count of 194.33 million and value of Rs 8,867.33 crore in the preceding month.

 

Radha Rama Dorai, MD–ATM and Allied Services, FIS, said, “The surge in micro ATM usage is being driven by a combination of factors, including a slowdown in ATM deployment, a large number of Aadhaar-enrolled individuals and a hitherto favourable cost-benefit dynamic for merchants operating micro ATMs.”

 

To support the increasing volume of transactions as a result of wider financial inclusion, more ATMs are needed, especially in rural areas where there are only five ATMs per lakh of population, as against metropolitan locations where there are 50 ATMs per lakh, she added.

 

A total of 6.65 crore Indian citizens have availed the banking services through AePS platform in July, NPCI said.

 

AePS is delivering the 4As for financial inclusion to rural part of India — authentication of customer, availability of services, accessibility through AePS channel and affordability as it is free of cost to the customers.

 

 

The inputs required for a customer to carry out an AePS transaction are the name of the customer’s bank, Aadhaar number and fingerprint captured during their enrolment.

 

It was reported last month that cash usage in the hinterland continues to trump digital modes of payments, as evidenced by the rising value of transactions made through micro ATMs.

 

In June, the value of cash withdrawn and deposited through micro ATMs overtook that of those made using RuPay cards at point of sale (PoS) terminals.

 

While micro ATMs recorded 33 million transactions worth Rs 8,774 crore during the month, RuPay cards were used at PoS terminals for making 61 million transactions worth Rs 8,723 crore. —FE

 

 

 

 

 

Two ways to look at GDP #GS3 #Economy

 

In January 2015, India’s Central Statistics Office (CSO) introduced a new series of National Account Statistics. The new series made several changes. In particular, it revised the base year from 2004-05 to 2011-12.

 

It also employed a new methodology to estimate India’s gross domestic product (GDP) and used new data sets to arrive at the GDP. However, even though the CSO’s changes were in line with international norms of national income accounting, some academics and researchers raised doubts about the new GDP estimates.

 

Revising base years, improving methodologies and opting for better databases are part of normal practice in national income accounting. But the debate intensified when, in 2018, the statistical establishment released two back-series (that is, recalibrating the GDP data for past years based on the new methodology) that contradicted each other.

 

The first back-series, presented by the National Statistical Commission (NSC) in July 2018, found that the average economic growth between 2005-06 and 2011-12 was 8.6% instead of the 8.3% according to the old series. The second back-series, calculated by CSO and published in November 2018, found this average to be just 7%.

 

The statistical debate quickly acquired a political colour because of the years concerned. Former Finance Minister P Chidambaram called the CSO back-series a “hatchet job”. The then Finance Minister Arun Jaitley backed the new way of GDP estimation as more reflective of the ground realities.

 

Earlier this year, the accusation that the new method overestimates GDP received a boost after Arvind Subramanian, India’s Chief Economic Adviser between 2014 and 2018, argued that the new series overestimated GDP growth by as much as 2.5 percentage points. In other words, if last year’s GDP growth was 7% then, according to Subramanian, the actual GDP growth would be only about 4.5%.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Those who say nay

 

In his paper, presented in June, Subramanian presented a history of how he looked at the new series since its introduction and always found its results “puzzling”. For instance, as chart 1 (top left) shows, India’s GDP growth rate between 2011 and 2016 appears out of sync with the fate of key macroeconomic indicators, such as investment, exports and credit etc.; this is starkly in contrast to how things were for a decade before the new series with 2011-12 as the base year.

 

Also, as charts 2 and 3 show, this disconnect between key macroeconomic indicators post-2011 becomes even clearer when India’s data are compared to the average of six emerging economies. India’s GDP declined far less than the 6-country average despite its macro-indicators being worse hit.

 

 

Subramanian argued higher GDP growth between 2011 and 2016 is neither backed by movement in key macro-indicators, nor by a surge in productivity (otherwise corporate profits would not have declined in this period), nor by a surge in consumption (otherwise consumer confidence and industrial capacity utilisation would not have dipped sharply).

 

Lastly, Subramanian argued that the GDP Deflator (level of inflation), used to subtract from nominal GDP growth in order to arrive at the “real” GDP growth rate, was considerably less than the retail inflation (as measured by Consumer Price Index) in the 2011-16 period. This essentially resulted in an overestimation of “real” GDP growth rate.

 

Those who say aye

 

N R Bhanumurthy, Professor at NIPFP and the chair of the NSC sub-committee that presented the first back-series, is among those who have countered some of Subramanian’s fundamental assertions. For one, he has shown that the nominal GDP growth rate, which is the only observable variable, has not changed under the old and new series (chart 4, top right).

 

Secondly, there was no consolidated CPI before 2011. As such, arguing that the gap between CPI and GDP deflator was low between 2002 and 2011, and wide between 2011 and 2016, is unfounded.

 

According to Bhanumurthy, if one applies the Production Shift approach — wherein new activities (that are added in the new series) are given progressively more weight (or less weight) as one move ahead in time (or moves back in time) — the two series do not show any discordant breaks either for GDP or for gross value added (charts 5 and 6).

 

In fact, given the wide differences between the two data methodologies and data sets, Bhanumurthy characterises the whole debate as an “apples to oranges” comparison. “You can predict the direction of GDP growth using leading indicators such as car sales, but you cannot ‘estimate’ GDP growth rate for a year gone by on the basis of such indicators,” he says.

 

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