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Current Affairs - 21 August 2018

NATION


U.K. confirms Nirav’s presence


  • The United Kingdom has confirmed to the Indian agencies that Nirav Modi, involved in the ₹13,578-crore Punjab National Bank fraud case, is staying there.
  • The Central Bureau of Investigation has sought his detention and initiation of extradition proceedings.
  • The agency has also sent the extradition request to the Union Home Ministry to be forwarded to the U.K. authorities through the External Affairs Ministry.
Modi letter calls for positive engagement
  • In a letter to his newly sworn-in Pakistani counterpart Imran Khan, Mr. Modi called for building good neighbourly ties for security and prosperity in the South Asian region.
  • The Indian response came soon after the newly appointed Pakistani Foreign Minister Shah Mehmood Qureshi said Mr. Modi had indicated at dialogue in his letter that was sent on August 18.
  • Mr. Modi’s call for engagement comes in the backdrop of recent Indian insistence that Delhi will hold talks only if Pakistan acts against terror suspects and outfits.
  • Mr. Qureshi, in his first remarks after taking charge, said he would remove the trust deficit with neighbours and try to build new bridges. “We know the issues are tough and will not be solved overnight, but we have to engage,” he said
Mahadayi dispute: Goa approaches tribunal
  • The Goa government on Monday filed an application before the Mahadayi Water Dispute tribunal in New Delhi, seeking action for disobedience against Karnataka for breach of the tribunal’s order of injunction dated April 17,2014.
  • In January, Karnataka had built earthen bunds to block the flow of the Mahadayi river’s water into Goa, for which the latter had filed an contempt application before the tribunal.
  • However, Karnataka filed an affidavit saying it won’t divert the water. Following this, Goa withdrew the contempt application. 
  • However, in July, it was noticed that on account of the gradient slope that Karnataka built, the Mahadayi water was flowing to the Malaprabha basin.
River inter-linking: Karnataka seeks rightful share in water allocation
  • Speaking during the 15th meeting of the Special Committee for Inter Linking of Rivers held in New Delhi,  Karnataka Water Resources Minister D.K. Shivakumar said that the State had been denied of its rightful share from the transferred water — from surplus basins under the Inter Linking of Rivers Scheme.
  • He said that the State had a large Drought-prone Areas Programme (DPAP) and Desert Development Programme (DDP) areas which have been facing water stress for decades. 
  • He cited examples of how the State got lower allocations, including from the Krishna basin, where it got 907 tmcft against the 1,012 tmcft it demanded, Cauvery basin (284.75 tmcft against a demand of 465 tmcft) and Mahadayi basin (13.42 tmcft against a demand of 36.55 tmcft).
  • In the modified link proposal of the Mahanadi-Godavari-Krishna-Cauvery-Vaigai-Gundar river, the State was again not considered for allocation. The allocation made by National Water Development Agency without consulting all basin states of the Cauvery and the Krishna is arbitrary,” he said.
  • The State would be forced to approach the Union government for the constitution of a tribunal if its interests were not taken care of by the National Water Development Agency
Maldives grants $50,000 as flood relief assistance
  • The Government of Maldives will donate $50,000 (roughly ₹35 lakh) towards flood relief in Kerala, authorities said. 
  • “India is our closest neighbour. Any natural disaster or calamity that strikes our neighbour has an emotional impact on Maldives. This donation is a small gesture to a neighbour and friend who has always stood by Maldives in need,” Ambassador of the Maldives to India Ahmed Mohamed
BIMSTEC envoys bat for FTA
  • BIMSTEC suffers from a “lack of visibility” in the region, said the envoys of seven member countries who form the “Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation,” who also called for the speedy conclusion of a Free Trade Agreement within the group comprising Bangladesh, Bhutan, India, Nepal, Sri Lanka, Myanmar and Thailand.
  • Prime Minister Narendra Modi will join a summit of leaders from BIMSTEC countries in Kathmandu on August 30-31 and hold bilateral talks with most of them, including Bangladesh Prime Minister Sheikh Hasina and Nepal Prime Minister K.P. Oli. 
  • At an event organised by business chamber FICCI just ahead of the summit, envoys of BIMSTEC countries said the FTA should be the top priority for them.
  • "We need to expedite the BIMSTEC FTA to boost our intra-regional trade from its present level of 7% to 21%,” said Bangladesh High Commissioner Syed Muazzem Ali. 
  • When asked about a timeline to complete the FTA, Sri Lankan High Commissioner Chitranganee Wagiswara said it was still unclear whether the agreement would go forward during the summit.
  • Others added that at present the negotiations of the 16-nation Regional Comprehensive Economic Partnership (RCEP), due to be completed by the end of 2018, were taking precedence.
  • The envoys also spoke about the need for the upcoming summit to promote security issues including “terrorism and violent extremism” in the region.
  • The envoys also spoke about the need for the upcoming summit to promote security issues including “terrorism and violent extremism” in the region.
  • Thailand’s Ambassador Chutintorn Gongsakdi pointed out that the India-Myanmar-Thailand Trilateral Highway had not been completed, which is crucial to trade movement between the countries.
NDRF aid only for severe calamities
  • The Union government has declared the Kerala floods a “calamity of severe nature”. Here is a look at what this means, whether the State can expect additional help from the Centre and how the various disaster relief funds in the country are funded and deployed.
  • What are the classifications of disasters, and how does this affect funding?
  1. According to the National Disaster Management Policy, the State governments have to provide disaster relief from their respective State Disaster Response Funds (SDRFs), and only for a “calamity of severe nature”, will additional assistance be provided from the National Disaster Response Fund (NDRF).
  2. There is, however, no provision in the law or rules for the government to designate a disaster as a “national calamity”.
  • How are the NDRF and the SDRFs funded? 
  1. The NDRF is funded through a National Calamity Contingent Duty levied on pan masala, chewing tobacco and cigarettes, and with budgetary provisions as and when needed.
  2. A provision exists to encourage any person or institution to make a contribution to the NDRF. However, this source of funding has not been tapped so far, according to the government.
  3. The 14th Finance Commission recommended changes to this structure once the cess was discontinued or subsumed within the Goods and Services Tax.
  4. The SDRF corpus is contributed by the Union government and the respective State governments in a 75:25 ratio for general category States and 90:10 for Special Category States.
  5. The allocation of the SDRF for each State is done by the Finance Commission, and the Centre contributes its specified share each financial year. The Central share of SDRF is released in two equal instalments, in June and then in December.
  • What has been the trend in budgetary allocations to the NDRF and SDRFs?
  1. The Union government has maintained a steady flow of funds to the NDRF each year, ranging from ₹5,690 crore in 2015-16 to a budgeted amount of ₹2,500 crore for the current financial year. In addition, the Centre has also been contributing to the SDRFs every year, amounting to ₹8,374.95 crore in 2016-17 and ₹7,281.76 crore in 2017-18.
  • How have NDRF funds been allocated to States in the recent past?
  1. In 2017-18, up to December 27, 2017, the Union government released NDRF funds to nine States — Arunachal Pradesh, Bihar, Himachal Pradesh, Karnataka, Kerala, Nagaland, Rajasthan, Tamil Nadu, and Telangana — over and above its contributions to their respective SDRFs. The recipient of the highest amount was Karnataka, which got ₹913 crore that year.
  2. Over the four years till December 27, 2017, the Centre has released the most cumulative funds to Maharashtra (₹5,244.69 crore), Karnataka (₹5,122.45 crore), Uttar Pradesh (₹4,949.04 crore), Tamil Nadu (₹3,115.31 crore), and Madhya Pradesh (₹1,958.93 crore). For specific calamities, the Centre released ₹1,365.67 crore for the Chennai floods of 2015 and ₹218.76 crore after Cyclone Vardah in 2016. Andhra Pradesh received ₹400 crore and ₹230 crore after Hudud ravaged Visakhapatnam.

ECONOMY

Credit registry: RBI Act may need tweak
  • The Reserve Bank of India Act, 1934, may need to be amended to facilitate the setting of a public credit registry (PCR), RBI Deputy Governor Viral Acharya said
  • Underscoring the vital need for the registry — the PCR is planned as an extensive database of credit information for all credit products in the country from point of origination of credit to its termination — Dr. Acharya said its main benefit would be to provide lenders with a 360 degree view of the borrower’s outstanding credits and past performance. 
  • This would allow better screening at the time of providing credit and superior monitoring during the life of the borrowing.
  • Highlighting some legal issues around setting up the PCR, Dr. Acharya said while the PCR is initially being set up within the existing RBI infrastructure, the fact that the RBI as a statutory corporation can only engage in those activities that are permitted by the RBI Act, or other relevant legislation, creates complications.
  • He said in addition to its core central banking functions, RBI also performs certain promotional functions which is only limited to ‘financial institutions’.
  • “Since no financing activity is contemplated for the proposed PCR, it might be difficult to label PCR as a ‘financial institution’. This takes it out of the purview of a promotion under the Reserve Bank of India Act, 1934,” he said.
  • Another option, would be to promote an organisation for a matter incidental to the functions of RBI — as part of the RBI Act or Banking Regulation Act, 1949.
  • In October 2017, RBI had set up a high-level task force (HTF) chaired by Y.M. Deosthalee to review the availability of information on credit and assess the gaps.
  • “The HTF submitted its report on April 4, 2018, recommending that a PCR should be set up by the RBI in a phased and modular manner,” Dr. Acharya said.
Sembcorp’s India unit wins Bangladesh power tender
  • Singapore-listed Sembcorp Industries said its power plant in India won a tender to supply 250 megawatts of power to Bangladesh for 15 years.
  • Sembcorp’s Gayatri Power Ltd. power plant, wholly owned by Sembcorp Energy India Ltd., has received letters of intent from Bangladesh Power Development Board, the parent company said 
  • It will start supplying power to Bangladesh upon completion of procedural requirements and relevant government approvals, Sembcorp said. 
‘Southern States outshine rest of India in mobile banking’
  • Southern States are outshining the rest of India in mobile banking adoption in savings accounts, according to a report by The Boston Consulting Group (BCG).
  • The report was prepared in association with FICCI and Indian Banks’ Association.
  • The theme of the report is “Providing financial services to SMEs in an increasingly digital ecosystem.”
  • Telangana tops the table with 10% of savings bank accounts having at least one mobile banking transaction in the last six months of FY18, according to the report.
  • This is followed by Andhra Pradesh (6.30%), Karnataka (5.50%), Puducherry (5.80%), Tamil Nadu (5%) and Kerala (4.70%). The all-India average is 3.40%.
  • Mobile banking activation stood at 21% for private banks and 3% for PSU banks for FY18, the consulting firm said in the report.
  • More than 20% of the active savings banks accounts in Telangana, Manipur and Mizoram had at least one Internet banking financial transaction in the last six months of FY18 compared with the national average of 11.30%.
SPORTS

Vinesh Phogat crowns herself in style
  • She overpowered Japan’s Yui Irie 6-2 in the 50kg final after a dominant performance in the initial rounds.
Deepak and Lakshay provide the silver lining
  • Deepak Kumar and Lakshay Sheoran, shooters with contrasting career paths, made major breakthroughs on Monday by winning silver in the men’s 10m air rifle and men’s trap.
  • The 33-year-old Deepak did not mind the long wait for a major medal, 14 years after he took up the sport. Lakshay, on the other hand, picked up the gun only four years ago as a teenager and at 20, is now a silver medallist at Asiad, equalling the feat achieved by Manavjit Singh Sandhu at Doha 2006.
Djokovic breaks Cincinnati jinx 
  • Novak Djokovic ended a career-long jinx as he completed a matched set of Masters 1000 titles on Sunday with a 6-4, 6-4 victory over Roger Federer in the final.
  • The former World No.1 became the first man to win all nine of the ATP’s elite Masters 1000 events since the ATP was formed in 1990.