9 PM Current Affairs Brief – July 8, 2019

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Union Finance Minister Nirmala Sitharaman to address RBI board tomorrow

  1. Finance Minister is scheduled to address the post-budget meeting of the RBI’s central board. She will highlight the key points of the Budget including the fiscal consolidation roadmap.
  2. The government has lowered the fiscal deficit target for 2019-20 at 3.3% of GDP from 3.4% set in the Interim Budget presented on February 1, 2019.
  3. Fiscal deficit is the amount of money that the government needs to borrow in a given year because their expenses were more than their revenues.
  4. The Centre has also came out with a roadmap to reduce the fiscal deficit to 3% of the gross domestic product (GDP) by 2020-21 and eliminate the primary deficit.
  5. Primary deficit refers to the deficit left after subtracting interest payments from the fiscal deficit.
  6. She would also address about the announcements made in the Budget to spur growth by touching almost all sectors of the economy with the objective of achieving a $5 trillion economy by 2024-25.
  7. The Budget has also announced opening up of aviation, insurance and media sectors to foreign direct investment (FDI).
  8. It has also proposed measures to improve NBFCs access to funding by providing a limited backstop for the purchase of their assets.
  9. The government will provide a partial guarantee to state banks for the acquisition of up to ₹1 lakh crore of highly-rated assets from non-bank finance companies (NBFC).
  10. The Reserve Bank of India has been made regulator of housing finance firms as well replacing the National Housing Bank(NHB).Apart from this, the government has also budgeted a dividend from the Reserve Bank of India amounting to about ₹90,000 crore.

Plan for district eco-panels draws fire

  1. Government has released a draft law on Environment Impact Assessment Notification (EIA), 2019. The draft law is an update to the EIA 2006.
  2. The law makes the District Magistrate (DM) the chairperson of the District Environment Impact Assessment Authority (DEIAA) that will accord environment clearance for minor mining projects.
  3. Minor mining broadly refers to sand and stone mining in plots smaller than 25 hectares.
  4. However, State Environment Impact Assessment Authority (SEIAA) have objected to the draft law.
  5. They have said that making District Magistrate (DM) the chairman of the DEIAA would be self-serving for grant of environmental clearance. Also, the DM doesn’t have technical expertise in matters of environment and ecology.
  6. EIA is a process which studies all aspects of the environment and seeks to anticipate the impact (positive and/or negative) of a proposed project or development on the environment. EIA is mandatory under the Environmental (Protection) Act, 1986 for 29 categories of developmental activities involving investments of Rs. 50 crores and above.

African leaders set to sign landmark trade deal at AU Summit

  1. African Countries will officially sign a African Continental Free Trade Area agreement at an African Union (AU) summit in Niger.
  2. The agreement aims to create a single unified market for the continent’s 1.3 billion people and to boost economic development.
  3. The plans for the free trade zone received a boost when Africa’s largest economy, Nigeria became the 25th country to ratify the trade agreement.
  4. The goal of the new free trade area is to significantly increase trade within Africa. Currently, African countries conduct only 16% of their trade with each other, compared to 65% among European countries.
  5. African Union is a pan-Africa continental union consisting of 55 countries. Its structure is loosely modelled on that of European Union. It is headquartered in Addis Ababa, Ethiopia.
  6. It was founded in May 2001 in Addis Ababa, Ethiopia and launched in July 2002 in South Africa. It had replaced Organisation of African Unity (OAU).
  7. The objective of AU is to (a) achieve greater unity and solidarity between the African countries and Africans (b) to defend the sovereignty, territorial integrity and independence of its Member States and (c) To accelerate the political and social-economic integration of the continent.

Production of Vande Bharat Express comes to a grinding halt

  1. Recently, the production of India’s first semi high-speed train called as Vande Bharat Express (Train 18) has been stopped at the Integral Coach Factory (ICF) in Chennai.
  2. The reason is that the design of the Train has been found to be violative of certain specifications.
  3. The primary issue was that making of Train had dozens of deviations from the specifications prescribed by Research Designs and Standards Organisation (RDSO).
  4. Further, investigation is also going on into the allegations that one company was favoured in the making of the Train 18.
  5. Train 18 is India’s first indigenously built engineless train capable of running at a speed of up to 160 kmph, It is also being referred to as a successor to the 30-year-old Shatabdi Express.
  6. The fully air-conditioned semi-high speed train will cut travel time by 15% as compared to the Shatabdi. It has been manufactured under ‘Make in India’ initiative by the Integral Coach Factory (ICF).
  7. The features of the train include (a) modern air-conditioned coaches (b) touch free automatic doors (c) GPS-enabled passenger information system and (d) on board uninterrupted Wifi and infotainment system.

Central Govt. to set up three CoE in Sports at Itanagar in AP

  1. Union Minister of State for Youth Affairs and Sports has informed that central government is going to set-up three Sports Centre of Excellence in Itanagar, Arunachal Pradesh.
  2. The three centre of excellence will be for (a) Martial Arts (b) Weight Lifting and (c) Boxing. These centres will have a capacity of 300 sportspersons with residential facility.
  3. The minister has also announced that this year Arunachal Pradesh will host the North East Youth Festival.
  4. The government will also set up 12 to 15 football stadiums with Astro-turf football pitches across the state in the next three years.

Raising of FDI in insurance broking to 100% upsets domestic brokers

  1. Finance Minister has proposed a 100% foreign direct investment (FDI) in the insurance intermediaries in the Union Budget 2019.
  2. Insurance intermediaries are the backbone of the industry. They help in distribution of insurance policies and also help customers get attractive rates for the products.
  3. Insurance intermediaries include insurance brokers, insurance repositories, surveyors and loss assessors and third-party administrators (TPA).
  4. In 2014,a panel formed by the IRDAI under Suresh Mathur had also suggested that 100% FDI be allowed over three years. However, the suggestions of the panel were not implemented as FDI cap in the overall insurance industry was raised from 26% to only 49%.
  5. However, experts have said that this would move will decimate most of the lndian brokers engaged in direct insurance and reinsurance broking and who do not have a joint venture with any overseas broker.
  6. On the other hand, some experts have said that the hike in FDI will bring in more technology and efficiency in the segment and boost insurance penetration.

Budget 2019: Defence allocation disappoints military

  1. Union Budget has allocated Rs 3.18 lakh crore for defence. The allocation is estimated to be at around 1.6% of the GDP which experts have said is the lowest since the 1962 war with China.
  2. The defence officials has said that the capital expenditure allocated for the Navy and the Indian Air Force (IAF) does not meet their committed liabilities.
  3. Committed liabilities are payments for deals already signed and typically spread over several years. The remaining part of the capital head goes for new procurements.
  4. The industry is also disappointed as the expected easing of Foreign Direct Investment (FDI) in the defence sector has also been excluded.
  5. However, the only relief the services were given was waiver of basic customs duty for import of equipment not manufactured in the country.

U.S. curbs, Chabahar downgrade choke Indo-Afghan trade

  1. The government in its Budget has allocated ₹45 crore for India’s building activities in the port of Chabahar Iran. This is a reduction from the previous year’s allocation of ₹150 crore.
  2. Experts have said that this reduction will affect the India-Afghan trade, which is already hit by (a) Pakistan’s decision to ban airspace rights to most flights to and from India and (b) U.S. sanctions on Iran.
  3. Earlier, the U.S. had issued India a waiver to develop Chabahar port to promote trade with Afghanistan as a part of its South Asia strategy. But the cancellation of all waivers for oil and economic sanctions imposed by the US administration have halted trade.
  4. However, Afghan officials have said that flights including commercial passenger airlines had carried cargo between the two countries since June 2017 under an arrangement where the Afghan government subsidies about 80% of the transport costs to promote India-Afghan trade.
  5. Chabahar port which was inaugurated in 2017 has been built largely by India. It provides a key supply route for Afghanistan while allowing India to bypass rival Pakistan to trade with Central Asia.
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