Current Affairs for IAS Exams – 24 October 2016

:: National ::

PM and CJI address global conference on arbitration

Prime Minister Narendra Modi and Chief Justice of India T.S. Thakur shared the dais and mutually agreed that India is a “bright spot” in the global economy.
But the top judge, in a reality check, pointed out that India continues to be one of the lowest ranked in the ‘Ease in Doing Business’ list of countries.
He said foreign investors are still wary of India’s labyrinthine and delayed justice delivery mechanism.
“We have over 3,000 foreign companies with operations in India. In 2015-16, there has been a 29 percent increase in foreign direct investments.
We wish to overtake China and the United States by 2050... Yet we are ranked 130 among a total 189 countries in the Ease of Doing Business,” Chief Justice Thakur said at a global conference on arbitration organised by NITI Aayog.

President stressed the need to develop world-class healthcare facilities

President Pranab Mukherjee has stressed the need to develop world-class healthcare facilities accessible to all citizens.
“Merely having high GDP growth figures is not enough. We have to ensure access to modern and scientific healthcare facilities for all,” the President said.
“Without an able body, an able mind cannot work. This is absolutely necessary in order to ensure our rightful place in the comity of nations,” he said after inaugurating the Sardar Patel multi-specialty heart hospital.
Mr. Mukherjee also opened a public trust-run hospital, which was originally set up by Sevashram, a voluntary organisation run on Gandhian principles in 1926 as a general medicare unit in Bharuch.
During the famous Dandi March, Mahatma Gandhi and other participants stayed at Sevashram.
After Independence, the medical unit was converted into a full-fledged public hospital and was inaugurated by the first President of India, Dr. Rajendra Prasad, in 1952.
Quoting Mahatma Gandhi, he said one should always think from the point of view of the poorest of poor before taking a new step. “If we practise this, we can transform the country.”

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:: International ::

India and Sri Lanka look to improve ties

Foreign Secretary S. Jaishankar called on Sri Lankan President MaithripalaSirisena on Sunday morning and discussed potential India-Sri Lanka partnerships in areas such as transport, energy and infrastructure.
Visiting Indian delegation is to hold sector-wise meetings with their Sri Lankan counterparts. On the agenda, official sources said, are discussions on likely partnerships in the power sector — using Liquefied Natural Gas (LNG).
Following Sri Lanka’s decision this September to scrap an NTPC-aided power project in the strategically-important Trincomalee, India has offered to partner the country in LNG and solar power initiatives.
The Foreign Secretary’s visit comes a week after Mr. Sirisena met Prime Minister Narendra Modi in Goa, on the sidelines of the BRICS Summit, where India offered to build a solar power plant in Trincomalee.
India and Sri Lanka are also negotiating a trade deal, the Economic and Technological Cooperation Agreement (ETCA).

:: Business and Economy ::

The Centre is planning to monitor flights landing

The Centre is planning to monitor flights landing at regional airports remotely instead of constructing new traffic control towers near such airports in a bid to cut costs.
Flights landing at regional airports will receive instructions from an air traffic control officer who might be sitting miles away at an air traffic control room located at a major airport in the city.
Some aviation experts have said that building an ATC tower infrastructure could cost between Rs.100 crore and Rs.300 crore.
The remote monitoring of planes has been tested in several markets such as Norway, Ireland, Australia and the United States.
Many major British airports are also considering centralised monitoring of air traffic services from a larger airport.
The Airports Authority of India (AAI), which provides air navigation services across the country, also plans to hire retired air traffic controllers to further cut down costs on training and to recruit people quickly.
At present, 69 airports receive commercial flights and AAI’s manpower requirement is set to increase with the government’s plans to revive flight operations at another 50 airports in the next three to four years.
India has about 2,300 air traffic control officers (ATCOs) at present and another 400 ATCOs will get trained by next year.

More than Rate cuts are required for Indian Economy

The policy repo rate is now 6.25 per cent – a six-year low. The RBI expects the transmission of this cut in lowering the costs of new borrowing in the economy will be more effective than the earlier cuts.
In one respect, the fourth bi-monthly policy review exercise this year is historic: it involved the maiden decision-making by RBI's first Monetary MPC, in pursuance of a primary mandate to keep consumer inflation between 2 per cent and 6 per cent.
That the adoption of a legally backed inflation-targeting discipline and the constitution of an MPC will enhance both the process and quality of monetary policy-making is widely acknowledged.
None of the documents compiled by the RBI in connection with this policy review, including the one on the post-policy conference call with media, clearly explains the rationale and necessity of the rate cut.
In fact, it is hard to reconcile some of the key points and facts contained in those documents with the decision.
It is hard to figure out how, under an inflation-targeting paradigm, a rate cut can be justified when the projected inflation over the next six months is close to the upper limit of 6 per cent and the projected GDP growth is close to 8 per cent.
The fact that the decision was unanimous will raise doubts whether all relevant issues were debated and discussed by the MPC. One wonders if the MPC felt a need to distance itself from the legacy of Dr. Rajan.
It is likely that the MPC will go through an initial phase of 'learning by doing' as it evolves and matures as a professional policy-setter.
But it is essential that it adopts a rule-based approach and methodology from the start itself and eschew too much discretion in order to find space for rate cuts for supporting growth.
As regards the impact of the rate cut, three issues loom large: credit growth, stressed assets/NPAs of banks and corporate investment.
Extremely sluggish credit growth on the part of PSU banks to sectors other than retail borrowers is going to last for quite some time.
And so long as the credit cost by way of provisioning for NPAs remains high, as is the case now, the likelihood of a reduction in borrowing cost in response to cuts in the policy rate will continue to be low.
Transmission of monetary policy will continue to remain sub-optimal till the estimated Rs.13.3 trillion (or Rs.13.3 lakh crore) of stressed assets/NPAs of banks are resolved.
While RBI has done a good job in pushing banks to recognise their NPAs, it has been quiet on the lack of progress in the resolution of stressed assets/NPAs.
Various schemes for debt resolution such as Corporate Debt Restructuring (CDR), Strategic Debt Restructuring (SDR) and the recent Scheme for Sustainable Structuring of Stressed Assets (S4A) have not had any noticeable impact so far.
Finally, the government should enable PSU banks to devise a solution to the following asymmetric incentives faced by in relation to stressed assets/NPAs: the downside of a loan becoming an NPA and unrecoverable is much less compared to the downside of a vigilance enquiry in respect of genuine debt resolution.