Current Affairs for IAS Exams - 11 January 2017

:: National ::

Supreme Court allows auditing of NGO’s

• The Supreme Court directed the government to audit nearly 30 lakh NGOs which received public funds but consistently failed to explain how they spent the money.
• It ordered that any NGO found to have cooked its books or indulged in misappropriation should be subject to immediate criminal prosecution.
• Besides, the government should initiate civil recovery proceedings against such rogue organisations.
• The judicial order is unprecedented because defaulting NGOs so far have been only blacklisted by the government.
• Pulling up the government for failing to put in place a regulatory mechanism to keep a watch on the financial activities of NGOs and voluntary organisations.
• The manner in which these organisations should maintain their accounts and the procedure for recovery in case they fail to submit their balance sheets.
• Though public funds to the tune of thousands of crores are spent on NGOs and voluntary organisations annually, the CBI submitted that only about three lakh of about 32 lakh NGOs file their balance sheets with the government.

Govt gave reply to EC for deferring the Union Budget

• The Election Commission (EC) received the Centre’s reply to a reference on the Opposition parties’ demand for deferring the Union Budget presentation due to the elections in five States. The Commission is examining the response.
• While the Commission remained tight-lipped over the government’s exact response, Union Finance Minister had said that there was no need for a delay in the Budget presentation. It is scheduled for February 1.
• The minister said the date for the Budget had been planned well before the election schedules were announced and that all the preparations had already been made.
• The Budget presentation is not likely to be deferred in case the government declines to postpone it.
• However, as the Model Code of Conduct is in place, the government will not be in a position to make any announcement specific to the poll-bound States.

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:: International ::

Chinese submarine has docked at a port in Malaysia for first time

• For the first time, a Chinese submarine has docked at a port in Malaysia, signalling deepening military ties between the two countries, which are already partners in the development of the Beijing-led Maritime Silk Road.
• The four-day stopover of the submarine from January 3 at the port of Kota Kinabalu is being seen as a trigger for elevated tensions in the South China Sea (SCS). The Malaysian port has a naval base facing the SCS.
• Analysts say docking of Chinese submarine signals the emergence of special ties between Beijing and Kuala Lumpur.
• The visit of the submarine is adding a prominent military dimension to China’s ties with Malaysia which is fast emerging as Beijing’s top partner, close to the Strait of Malacca, along the Maritime Silk Road (MSR).
• The MSR is part of the China-led Belt and Road Initiative (BRI) — a massive connectivity undertaking on land and sea, which covers 65 countries.
• The Malacca industrial park is part of the giant Malacca Gateway Project that China and Malaysia signed last year. It also includes the establishment of the strategically vital deep water port in the Strait of Malacca in Malaysia.

:: Business and Economy ::

Real estate sector lost Rs. 22000 crore due to demonetisation

• The real estate sector is estimated to have suffered notional revenue loss of Rs. 22,600 crore in the fourth quarter of 2016 due to demonetisation as home sales plunged 44%, according to real estate consultancy Knight Frank India.
• The drop in sales volume during Q4 of 2016 due to the demonetisation move had resulted in a “massive notional revenue loss of Rs. 22,600 crore to the real estate industry across the country, across top eight cities.
• If the Centre had not taken the demonetisation move, the residential segment would not have suffered such a huge revenue loss, it said. State governments had also suffered a notional loss of Rs. 1,200 crore on account of loss on stamp duty in the fourth quarter.
• The fourth quarter numbers were a testament to the effect that the demonetisation move had had on the real estate market of the country that was barely recovering from its earlier sloth.
• Sales volume dropped by 44% year-on-year in Q4 of 2016 and new projects fell by a massive 61% year-on-year during the same period,” it said.
• The new projects number was much worse at just 24,300 units in Q4 2016, which was not even one-fifth of peak quarterly levels during 2010, the report said.
• All cities in India witnessed a crash during the fourth quarter of 2016. Mumbai with notional sales revenue loss at Rs. 9,100 crore bore the maximum brunt while the impact in Chennai was Rs. 1,100 crore and for Bengaluru it was Rs. 4,800 crore.
• The notional revenue loss witnessed in Hyderabad and NCR Delhi was Rs. 800 crore and Rs. 3,700 crore respectively.

Former RBI governors say RBI’s autonomy should be maintained

• A day after former RBI Governor Y.V. Reddy flagged ‘reputational risk’ being faced by the central bank, another former Governor, Bimal Jalan, said its autonomy was fundamental and needs to be maintained.
• “The autonomy of the RBI — that is a very fundamental fact and we have to maintain it and I hope the government would give attention to that part also,” Dr. Jalan said in an interview to a private television channel.
• Mr. Reddy regretted on January 9 that the institutional identity of the RBI has been damaged and stressed that for a central bank “reputational risk is worst risk.”
• Dr. Jalan said one would have to wait and see how the relationship between the government and RBI develops which ultimately is a matter of coordination.
• On the impact of demonetisation on growth, he said, “It is very difficult to go through the percentage points...but everybody agrees that there would be a decline in the rate of growth.
• How far it is due to demonetisation and how far it is the trend from 7.6 to 7.1, you have seen last year itself...Let us wait and see.”

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