9 PM Current Affairs Brief – June 14, 2019

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India gets $42-billion FDI inflows in 2018: UN report

  1. According to UNCTAD’s World Investment Report 2019,Foreign Direct Investment (FDI) into India has increased by 6% to $42 billion in 2018.
  2. The sectors which received the strong inflows includes (a)manufacturing, (b)communication (c)financial services (d)cross-border merger and (e)acquisition activities.
  3. The report ranks India at 10th position amongst the top recipients of FDI in 2018.
  4. The report also says that FDI inflows has increased in South Asia by 3.5% to $54 billion.India attracted over 77% of the total foreign direct investments that came to the South Asian region
  5. However,the report says that the global FDI flows has fallen by 13% in 2018 to $1.3 trillion from $1.5 trillion in 2017.It is the third consecutive annual decline.
  6. The contraction was largely due to US multinational enterprises(MNEs) withdrawing earnings from abroad making use of tax reforms introduced by the US government in 2017.
  7. The United Nations Conference on Trade and Development (UNCTAD) was established in 1964 as a permanent intergovernmental body.
  8. UNCTAD is the part of the United Nations Secretariat dealing with trade, investment and development issues.

India slips to 141 in annual Global Peace Index; Iceland retains top spot

  1. The Global Peace Index(GPI) 2019 has been released.India has been ranked at 141 among 163 countries.The ranking of India in 2018 was the 136th.
  2. The GPI is a report produced by the Institute for Economics and Peace (IEP) and developed in consultation with an international panel of peace experts from peace institutes and think tanks with data collected and collated by the Economist Intelligence Unit.
  3. The GPI measures ongoing domestic and international conflict, safety and security in society, and the degree of militarisation in 163 countries and territories by taking into account 23 indicators.
  4. The index ranked Iceland as the most peaceful country in the world,a position it has held since 2008.Other countries at the top of the Global Peace Index(GPI) are New Zealand, Austria, Portugal, and Denmark.
  5. Afghanistan has been ranked as the least peaceful country in the world replacing Syria which is now the second least peaceful.
  6. The report has also said that India along with the Philippines, Japan, Bangladesh, Myanmar, China, Indonesia, Vietnam and Pakistan are the nine countries with the highest risk of multiple climate hazards.
  7. The report also says that the US, China, Saudi Arabia, Russia and India are the top five countries with the largest total military expenditure.

S Jaishankar flags off first batch of pilgrims for Kailash Mansarovar Yatra

  1. India’s External Affairs Minister has flagged off the first batch of pilgrims for this year’s Kailash Mansarovar Yatra.
  2. Kailash Manasarovar Yatra(KMY) is known for its religious value and cultural significance.Being significant to Hindus as the abode of Lord Shiva,it holds religious importance also for the Jains and the Buddhists.
  3. The Yatra is organized by the Ministry of External Affairs(MEA) with the support of the state governments of Uttarakhand, Delhi, and Sikkim and the cooperation of Indo Tibetan Border Police(ITBP).MEA does not provide any subsidy or financial assistance to Yatris.
  4. MEA organizes this Yatra during June to September each year through two different routes (a)Lipulekh Pass (Uttarakhand) and (b)Nathu La Pass (Sikkim).Nathula pass is a new route while Lipulekh has been in use for decades now.
  5. The Yatra is open to eligible Indian citizens holding valid Indian passports who wish to proceed to Kailash-Mansarovar for religious purposes.

Black or grey: What next for Pakistan at FATF?

  1. The Financial Action Task Force(FATF) will hold its Plenary and Working Group meeting from 16th June,2019.
  2. The plenary could take up a proposal to downgrade Pakistan to the blacklist on terrorist financing from its current greylisted status.
  3. Pakistan has been under the FATF’s scanner since June,2018 when it was put on the greylist for terror financing and money laundering risks after an assessment of its financial system and law enforcement mechanism.
  4. Pakistan gave a political commitment to work with the FATF and Asia Pacific Group (APG) to strengthen its anti-money laundering (AML) and combating the financing of terrorism (CFT) regime.
  5. Based on this commitment,Pakistan and the FATF had agreed on the monitoring of 27 indicators under a 10-point action plan with deadlines.
  6. Successful implementation of the action plan and its physical verification by the APG will move Pakistan out of the greylist but failure by Pakistan will result in its blacklisting by September 2019.
  7. However,APG had informed Pakistan that its compliance on 18 of the 27 indicators were unsatisfactory and asked it to do more to demonstrate strict action against eight terrorist groups.
  8. Further,India is a voting member of the FATF and APG and co-chair of the Joint Group where it is represented by the Director General of India’s Financial Intelligence Unit (FIU).Pakistan had asked for India’s removal from the group citing bias and motivated action but that demand has been rejected.
  9. FATF is a global task force which was formed in 1989 by different countries to combat money laundering, terrorist financing and other illegal activities related to international financial system.
  10. FATF maintains two different lists of countries:those that have deficiencies in their AML/CTF regimes but they commit to an action plan to address these loopholes and those that do not end up doing enough. The former is commonly known as grey list and latter as blacklist.
  11. Once a country is blacklisted, FATF calls on other countries to apply enhanced due diligence and counter measures, increasing the cost of doing business with the country and in some cases severing it altogether.
  12. As of now there are only two countries in the blacklist which are Iran and North Korea and seven on the grey list which includes counties such as  Pakistan,Sri Lanka,Syria and Yemen.

Multilateral instrument to curb tax treaty abuse

  1. The Union Cabinet has approved the ratification of the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (MLI).
  2. The Multilateral Convention is an outcome of the OECD and G20 Project to tackle Base Erosion and Profit Shifting(BEPS Project).
  3. The BEPS Project objective is to tackle base erosion and profit shifting through tax planning strategies that exploit gaps and mismatches in tax rules to artificially shift profits to low or no-tax locations where there is little or no economic activity resulting in little or no overall corporate tax being paid.
  4. The BEPS Project identified 15 actions to address base erosion and profit shifting (BEPS) in a comprehensive manner.
  5. The Convention enables countries to implement the tax treaty related changes to achieve anti-abuse BEPS outcomes through the multilateral route without the need to bilaterally re-negotiate each such agreement which is burdensome and time consuming.
  6. The Convention will modify India’s treaties in order to curb revenue loss through treaty abuse and base erosion and profit shifting strategies by ensuring that profits are taxed where substantive economic activities generating the profits are carried out and where value is created.
  7. Further,the US is not a signatory of this Multilateral Convention as it believes that it has a robust tax treaty network that prevents treaty abuse.

SEBI directs rating agencies to disclose probability of default

  1. The Securities and Exchange Board of India (Sebi) has prescribed guidelines to strengthen the disclosures made by credit rating agencies to enhance the rating standards.
  2. SEBI has asked credit rating agencies(CRAs) to start disclosing a probability of default(PD) benchmark for the companies rated by them.
  3. Probability of default(PD) is a financial term describing the likelihood of a default over a particular time horizon.It provides an estimate of the likelihood that a borrower will be unable to meet its debt obligations.
  4. SEBI has also directed CRAs to disclose sensitive factors that could potentially impact the rating of the instruments which include financials and sector specific information.
  5. SEBI’s directive comes in the backdrop of ILFS crisis where rating agencies had given AAA rating to IL&FS at a time when the firm was in dire financial conditions.
  6. As a result,investors and lenders didn’t get financial status of the company at the right time which eventually led to defaults on repayments by IL&FS.
  7. Further,this step is likely to aid investors and lenders to get an idea about the probability of default by a company, enabling them to take the right decision before the situation turns grim.
  8. A credit rating agency (CRA) is a company that rates debtors on the basis of their ability to pay back their interests and loan amount on time and the probability of them defaulting.
  9. Credit rating agencies in India came into existence in late 1980s.Some of the credit rating agencies registered under SEBI are:(a)CRISIL (b)ICRA (c)CARE and (d)Fitch India.

Narendra Modi to chair NITI Aayog meeting

  1. Prime Minister will chair the fifth meeting of the Governing Council of the NITI Aayog.
  2. The issues that will be discussed during the meeting are (a)rainwater harvesting (b)drought situation (c)aspirational districts programme (d)transforming agriculture and (e)security issues with a focus on the Left Wing Extremism-affected districts.
  3. The Governing Council of NITI Aayog comprises the Prime Minister, Chief Ministers of all the States and Lieutenant Governors of Union Territories and other special invitees.
  4. It is the premier body tasked with evolving a shared vision of national development priorities,sectors and strategies with the active involvement of States.
  5. The NITI Aayog was formed through cabinet resolution in 2015.It had replaced planning commission.It is the premier policy think tank of the Government of India providing both directional and policy inputs.
  6. The NITI Aayog has been mandated with fostering cooperative federalism through structured support initiatives and mechanisms with the States on a continuous basis recognizing that strong States make a strong nation.
  7. It seeks to design and assist the implementation of strategic,long-term policy frameworks and programme initiatives and also monitor their progress and efficacy.

Habeas corpus writ for illegal detention,not paternity issue

  1. The Delhi High Court has held that a court is not entitled to examine the issue of paternity in a Habeas Corpus writ petition.
  2. This judgment came on a petition by a couple seeking issuance of a writ of Habeas Corpus for the production of a minor child who was in the custody of an NGO.
  3. However,the court dismissed the petition and said that it was outside the scope of habeas corpus jurisdiction.The court granted parents the liberty to file appropriate legal proceedings to seek declaration as parents and custody of the minor.
  4. Article 32 empowers the Supreme Court and Article 226 empowers the High Courts to issue writs to a person or authority including the government.
  5. The writs which can be issued are (a)habeas corpus (b)mandamus (c)prohibition (d)quo warranto and (e)certiorari.
  6. A Writ is a formal written order issued by the Court in the name of the sovereign power.Any warrant,orders,directions,and so on,issued by the Supreme Court or the High Court are called writs.
  7. Habeas corpus is a writ requiring a person under arrest to be brought before a judge or into court especially to secure the person’s release unless lawful grounds are shown for their detention.

Narendra Modi, Xi Jinping agree to speed up boundary talks

  1. Indian Prime Minister has met with Chinese President on the sidelines of the Shanghai Cooperation Organisation (SCO) Summit.
  2. The two leaders have agreed to expedite the dialogue on the India-China boundary issue for securing a fair solution.
  3. The two leaders also discussed the status of the bilateral relationship since the Wuhan summit which came in the backdrop of tension following the Doklam standoff.
  4. Chinese President also highlighted the need for regional cooperation and connectivity and singled out the Bangladesh-China-India-Myanmar (BCIM) economic corridor as an example for expanding the India-China ties.
  5. Indian PM also acknowledged China’s contribution to the listing of Pakistan-based terror mastermind Masood Azhar as a global terrorist at the United Nations Security Council.
  6. India China border dispute is rooted in the status of the McMahon Line, which defines the border between India and Tibet.There has not been remarkable progress in resolving the border dispute between the two sides due to the importance of Aksai Chin to China and Arunachal Pradesh to India.
  7. BCIM corridor aims to connect China’s eastern city of Kunming with India’s Kolkata through Dhaka in Bangladesh and Mandalay in Myanmar. It envisages formation of a thriving economic belt focusing on cross-border transport,energy and telecommunication networks.
  8. India has not opposed the BCIM corridor but it has concerns about China expanding its influence in its eastern neighbouring countries.It also fears the project would open its northeastern region to China.

U.S. open to dialogue on GSP, says Pompeo

  1. The US secretary of state has said that the US could discuss its decision to withdraw duty-free benefits to Indian exporters under the generalized system of preferences (GSP) scheme.
  2. GSP is a preferential tariff system extended by developed countries to developing countries.It is a preferential arrangement in the sense that it allows concessional low/zero tariff imports from developing countries.
  3. The US has terminated India’s designation as a beneficiary under GSP highlighting concerns over India not allowing equitable and reasonable access to its markets.
  4. The US and India is also expected to discuss India’s data localisation rules which had forced foreign companies to store their data locally.
  5. The US will also discuss with India the 5G network technology issue where US has been insisting countries to block access to the Chinese telecom giant Huawei to their next generation(5G) telecommunication networking markets.

Explained: Strait of Hormuz, the world’s most important oil artery

  1. Amidst growing tensions between USA and Iran, the Strait of Hormuz has been repeatedly been in news. Recently, two tankers were damaged south of the Strait of Hormuz. In May 2019, four vessels were attacked off the UAE coast near Fujairah, just outside the Strait of Hormuz.
  2. The Strait of Hormuz lies between Oman and Iran. It links the Persian Gulf north of it with the Gulf of Oman to the south and the Arabian Sea beyond.
  3. On the north coast lies Iran, and on the south coast the United Arab Emirates and Musandam, an exclave of Oman.
  4. It is 21 miles (33 km) wide at its narrowest point, with the shipping lane just two miles (three km) wide in either direction.
  5. It is considered as world’s most important oil artery. Almost a fifth of the world’s oil passes through the Strait. According to data from analytics firm Vortexa some 17.2 million barrels per day (bpd) pass through it.
  6. OPEC members Saudi Arabia, Iran, the UAE, Kuwait and Iraq export most of their crude via the Hormuz Strait. Qatar, the world’s biggest liquefied natural gas (LNG) exporter, sends almost all of its LNG through the Strait.
  7. The US Fifth Fleet, based in Bahrain, is tasked with protecting commercial shipping in the area.

Two tankers attacked in Gulf of Oman

  1. Recently,two tankers were attacked in the Gulf of Oman.The ship were carrying oil and other transporting a cargo of chemicals near the strategically important Strait of Hormuz.
  2. The US has blamed Iran for the attacks on the tankers.However,Iran has dismissed the claims and said that Iran has no connection with the explosions.
  3. Earlier,Iranian officials had threatened to interrupt the flow of oil through the Strait of Hormuz after the US administration had ended the waivers that allow countries to import Iranian oil.
  4. Further,the tension has risen in the region since the U.S had pulled out of a deal between Iran and global powers that aimed to curb Iran’s nuclear ambitions.
  5. The Gulf of Oman lies at one end of the strategic Strait of Hormuz.The Strait of Hormuz is a vital shipping route linking Middle East oil producers to markets in Asia, Europe, North America and beyond.It has been at the heart of regional tensions for decades.
  6. The waterway separates Iran and Oman linking the Gulf to the Gulf of Oman and the Arabian Sea.The Strait is 21 miles (33 km) wide at its narrowest point, but the shipping lane is just two miles (three km) wide in either direction.
  7. A fifth of global oil consumption passes through the Strait from Middle East crude producers to major markets.It is also the route used for nearly all the liquefied natural gas (LNG) produced by the world’s biggest LNG exporter,Qatar.

Pre-Budget consultations: Financial sector seeks dedicated liquidity window for NBFCs

  1. Finance Minister has held pre-budget discussions with the representatives from India’s financial sector.
  2. The representatives sought for a dedicated liquidity window for non-bank finance companies(NBFC) that can be used as a source of emergency funding.
  3. The bankers has asked the government to infuse capital in regional rural banks,rationalise the securities transaction tax and make corporate tax progressive.
  4. The other demands made by industry representatives included an enhanced role of Financial Sector Development Council(FSDC) in the NBFC sector,setting-up of Debt Exchange Traded Fund and domestic capability building in audit & credit Rating.
  5. An NBFC is a company registered under the Companies Act, 1956.It engages in the business of (a)loans and advances (b)acquisition of shares /stocks/ bonds/ debentures/securities issued by Government or local authority or other marketable securities of a like nature leasing and (c)hire-purchase,insurance business,chit business.
  6. The Financial Stability and Development Council (FSDC) was set up by the Government as the apex level forum in December 2010.
  7. The objective of FSDC is to strengthen and institutionalize the mechanism for maintaining financial stability, enhancing inter-regulatory coordination and promoting financial sector development.
  8. The Chairman of the Council is the Finance Minister and its members include the heads of all Financial Sector Regulators (RBI, SEBI, PFRDA & IRDA), Finance Secretary,Department of Economic Affairs (DEA),Secretary, Department of Financial Services (DFS) and Chief Economic Adviser.

Chandrayaan-2 Explained: What Moon can hold for India

  1. The Indian Space Research Organization (ISRO) has announced that Chandrayaan-2, India’s second Moon mission, will be launched on July 15, 2019. Its lander and rover would touch down on the moon’s surface on September 6.
  2. Chandrayaan-2 is India’s second mission to the moon. It is a totally indigenous mission.
  3. Chandrayaan-2 will comprise of an Orbiter, Lander named ‘Vikram’ (after scientist Vikram Sarabhai) and Rover named ‘Pragyan’. The orbiter will circle the moon and provide information about its surface, while the lander will make a soft landing on the surface and send out the rover. The rover will be used mostly for in situ experiments.
  4. Chandrayaan-2 will launch aboard a Geosynchronous Satellite Launch Vehicle Mark III, (GSLV -MK III) rocket. The GSLV-MkIII is a three-stage heavy lift launch vehicle that has been designed to carry four-tonne class satellites into Geosynchronous Transfer Orbit (GTO).
  5. India’s first mission to moon Chandrayaan 1 was launched in October 2008 and operated till August 2009. Unlike Chandrayaan 2, Chandrayaan 1 was designed to just orbit the Moon and make observations with instruments on board.
  6. The Chandrayaan-1 mission sent one of its instruments, called Moon Impact Probe, or MIP to crash-land on the Moon’s surface. Data sent by MIP on its way to the Moon had shown evidence of presence of water. However, ISRO could not publish these finding due to anomalies in calibration.
  7. The confirmation for water on water on moon came through studies on data produced by another instrument on board the Chandrayaan-1 spacecraft, the M3 or Moon Mineralogy Mapper. M3 was put on Chandrayaan 1 by NASA.

India set to join heavyweight torpedo club

  1. The Indian Navy has decided to induct the indigenously developed heavyweight torpedo “Varunastra” into its arsenal. This will put India in a group of only eight countries that have the capability to manufacture heavyweight torpedoes
  2. Torpedo is self-propelled underwater missile, launched from a submarine, surface vessel, or airplane and designed for exploding upon contact with the target.
  3. Varunastra has been developed by the Naval Science and Technology Laboratory (NTSL), Visakhapatnam. NTSL is a premiere laboratory of Defence Research and Development Organisation (DRDO).
  4. Varunastra can be launched from ships and submarines. It can also be launched from ashore. It is equipped with one of the most advanced automatic and remote-controlled guidance systems. The weapon system uses its own intelligence in tracing the target.
  5. It is seven to eight metres long, weighs 1,500 kg and has a diameter of 533 mm. When fired it can travel at 40 knots, or 74 kmph. The operational range is 40 km and it can carry a warhead weighing 250 kg.

In Arunachal, the golden cat wears new colours

  1. Scientists have discovered six different ‘colour morphs’ (cinnamon, golden, grey, melanistic, ocelot and tightly rosette) of the Asiatic golden cat in Arunachal Pradesh. This may be the world’s greatest number of different-colored wild cat species ever reported in one area.
  2. The study was carried out by scientists from Zoological Society of London, and University College London. It has been published in Ecological Society of America’s journal Ecology.
  3. Colour morphs are occurrence of two or more discrete colour forms of the animal within a population, due to a genetic mutation. For example- Black Panther is a colour morph of the common leopard.
  4. The colour morphs are not classified as different sub-species as they may live in the same area and even inter-breed.
  5. Asiatic Golden cat is a medium-sized wild cat. It is found in Nepal, Bhutan, north-east India, Myanmar, China, and South East Asia (Thailand, Sumatra and Indonesia). It is listed as ‘Near Threatened’ on the IUCN Red List of Threatened Species.

Centre reduces contribution rate for ESI

  1. The government of India has announced reduction in the rate of contribution under the Employees’ State Insurance (Act) from 6.5% to 4%.
  2. The employers’ contribution has been reduced from 4.75% to 3.25% and employees’ contribution has been reduced from 1.75% to 0.75%.
  3. The move is aimed at formalising India’s informal workforce and expanding social security coverage. Further, reduction in the share of contribution of employers will reduce the financial liability of the establishments leading to improved viability of these establishments.
  4. It is also expected that reduction in rate of ESI contribution will lead to improved compliance of law.
  5. The Employees’ State Insurance Act 1948 (the ESI Act) provides for medical, cash, maternity, disability and dependent benefits to the Insured Persons under the Act. The ESI Act is administered by Employees’ State Insurance Corporation (ESIC), Ministry of Labour and Employment.
  6. Benefits provided under the ESI Act are funded by the contributions made by the employers and the employees. The Government of India through Ministry of Labour and Employment decides the rate of contribution under the ESI Act.
  7. The ESI Act, 1948, applies to organisations with 10 or more employees, drawing a salary of up to Rs. 21,000/ month (Rs 25000/ month in case of persons with disabilities). The threshold for coverage of establishments is 20 employees in Maharashtra and Chandigarh.

Sarbat Sehat Bima Yojana

  1. The Punjab State Health Minister has said that the state government will launch its flagship universal health insurance scheme ‘Sarbat Sehat Bima Yojana’ from July. It is a first of its kind in the state.
  2. The scheme will provide an annual health cover of Rs. 5 lakh per family. Around 43.18 lakh families in Punjab will be covered under the scheme.
  3. Out of 43.18 lakh families, there are 14.86 lakh Pradhan Mantri Jan Arogya Yojana (PMJAY) families. The cost of the premium for families covered under PMJAY would be borne by the Union Government and the State Government in 60:40 ratio.  For the rest of beneficiaries all the cost would be borne by the State Government
  4. Beneficiaries could avail the cashless secondary care and tertiary treatment in empanelled public and private hospitals of Punjab and Chandigarh.
  5. Ayushman Bharat – Pradhan Mantri Jan Arogya Yojana (PMJAY) is a centrally sponsored scheme which seeks to provide coverage of up to ₹5 lakh (per family per year) for secondary and tertiary care hospitalisation.

India to have its own space station: ISRO

  1. Indian Space Research Organization (ISRO) has said that India is planning to have its own space station. The modalities for it will be worked out after Gaganyaan Mission- India’s first Human Space Flight Programme which is scheduled to be launched by 2022.
  2. A space station is a habitable artificial satellite. It is capable of hosting crew members for an extended period of time, and provides facilities for experiments and support vehicles to dock.
  3. ISRO has said that India’s space station would be small with weight of the space station likely to be 20 tonnes. It will have a provision for people to live for 15-20 days. It will be used for studies including microgravity tests.
  4. ISRO has been working on ‘space docking experiment’ (Spadex). It seeks to demonstrate autonomous docking. It involves transfer of material between the 2 satellites, in order to demonstrate the potential for refuelling capability between spacecraft. The Department of Space had allocated 10 crore for Spadex.
  5. Currently, there is only one fully functional space station in the Earth’s lower orbit, the International Space Station. The ISS is a partnership between European Union (European Space Agency), the United States (NASA), Japan (JAXA), Canada (CSA) and Russia (Roscosmos).
  6. Further, China has also announced that its Tiangong or “Heavenly Palace”, a space station, will go into orbit in 2022.
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