Current Affairs for IAS Exams - 5 June 2017

::National::

Defence experts condems countries who provide fund to terrorists

• A day after the National Investigation Agency (NIA) combed Kashmir, Haryana, and Delhi for separatists, defence experts, including two who served in the Indian Army, condemned countries that fund terror outfits.

• In the meeting on ‘21st century terrorism: challenges for India’, former Major General Dhruv C Katoch, secretary general of Indian War Veterans Association (IWVA), asked Pakistan and China to stop funding terrorism.

• India’s conflict areas — north-east, Kashmir, and the Red corridor — have been seeing high level of intervention from countries which support terror.

• At the meet, former Lt. General Mohammad Ahmed Zaki, who served as Adviser to the Governor of J&K, said the Inter-Services Intelligence (ISI) of Pakistan has had a direct hand in terror strikes run by militants in Kashmir.

• The army veterans said terrorists have been getting moral and network support online. “They have built a narrative to support terrorists. We need to build a counter narrative to support the Indian democracy,” Mr. Katoch said.

• Speaking of the recent flare-up in Kashmir following the killing of Hizbul Mujahideen commander Burhan Wani, he said the Kashmiri Jamooriat had died in the 1970s when the region got radicalised through separatist propaganda.

Army is all set to open up combat positions for women

• In a transformational move, the Army is all set to open up combat positions for women, a gender barrier broken by only a few countries.

• Army chief Gen. Bipin Rawat said the process was moving fast, and initially women would be recruited for positions in the military police.

• Women are now allowed in a number of select areas, including in the medical, legal, educational, signals and engineering wings of the Army but combat roles are off limits for them due to operational concerns and logistical issues.

• The Army chief said he was ready to recruit women as jawans, and the matter was being taken up with the government.

• He said women would have to show grit and strength in taking up challenges in combat roles and shatter the glass ceiling.

• Only Germany, Australia, Canada, the U.S., Britain, Denmark, Finland, France, Norway, Sweden and Israel have allowed women in combat roles.

• The roles of military police include policing the cantonments and army establishments, prevent breach of rules and regulations by soldiers, maintaining movement of soldiers as well as logistics during peace and war, handling prisoners of war and extending aid to civil police whenever required.

A brown dwarf over 100 light years away from the Sun has been discovered

• A brown dwarf over 100 light years away from the Sun has been discovered using a new citizen science tool that helps astronomers pinpoint new worlds lurking in the outer reaches of our solar system.

• Just six days after the launch of the Backyard Worlds: Planet 9 website in February, four different users alerted the science team to the curious object, whose presence has since been confirmed via an infrared telescope.

• The Backyard Worlds project lets anyone with a computer and an Internet connection flip through images taken by NASA’s Wide Field Infrared Survey Explorer (WISE) spacecraft.

• If an object is close enough to Earth, it will appear to “jump” when multiple images taken of the same spot in the sky a few years apart are compared.

• Brown dwarfs, sometimes called “failed stars”, are spread throughout the Milky Way.

Govt says it would take 10 years to completely clean the Ganga

• Union Minister Uma Bharti said it would take 10 years to completely clean the Ganga, and it would be done in a phased manner.

• In order to ensure a clean Ganga, industrial units located on its banks will be shifted. The framework of this plan has been drawn. The Uttar Pradesh government is making efforts to shift the tanneries located in Kanpur to other places.

• She said once the Ganga was cleaned, mass awareness would be needed to maintain its cleanliness, for which she would undertake a ‘padayatra’ from Gangotri to Ganga Sagar.

U.S. recognises India as a major defence partner

• The U.S. recognises India as a major defence partner partly out of respect for New Delhi’s indispensable role in maintaining stability in the Indian Ocean region, Defence Secretary James Mattis has said.

• The United States is exploring new ways to address new challenges as well from maritime security to the growing threat posed by the spread of terrorism in Southeast Asia, Mr. Mattis said at the Shangri-La Dialogue.

• Mr. Mattis called upon all countries to contribute sufficiently to their own security.

• The U.S. Defence Secretary said one of the top priorities of the Defence Department was to empower countries in the region so that they could be even stronger contributors to their own peace and stability.

::International::

Britain looks for new strategies to counter terrorism

• Ms. May declared that “enough is enough.” While people should go about their lives as they “normally would” when it came to tackling extremism and terrorism, things needed to change, she said.

• As she attacked the “evil ideology of Islamist extremism,” and warned of a new trend in the threat level, as terrorists copied acts carried out by others in the past. “Terrorism breeds terrorism,” she said.

• Counterterrorism alone could not tackle Islamist extremism, which would only be defeated by persuading people that our values were better, she said.

• The ideology should not be given a safe space, whether it was in the country, abroad, or online, via social media channels that could be used to propagate their ideology.

• Military action to destroy IS in Syria and Iraq was a necessary component of this, she said. Action would also need to be taken domestically to stamp out tolerance of extremism. “The whole country needs to come together to take on extremism.”

• Britain would also need to review its counterterrorism strategy, and if necessary the powers to those involved in that strategy should be increased, including potentially the custodial sentences for those involved in supporting or promoting terrorism, she said.

• Her message contrasted with those following previous attacks, which had focussed on continuing existing counterterrorism strategies, and stressing the unity of the country against the threat.

::Business and Economy::

India’s real GDP growth skidded sharply to 6.1% in the January-March quarter

• The CSO’s provisional GDP estimates for the fourth quarter and full year FY17, released recently, had dire news to impart.
• They revealed that India’s real GDP growth skidded sharply to 6.1% in the January-March quarter of 2017, after averaging 7.2% in the first nine months of the fiscal year.
• This slump lost India the ‘fastest growing economy’ tag allowing China to edge ahead. But some commentators are cheering.
• Most sectors of the economy bore the brunt of the note ban in the fourth quarter of 2016-17 and not in the third quarter, when the thunderbolt move was announced.
• When the CSO released its second advance estimates in February, many commentators expressed surprise that GDP growth held up at 7% in the critical October-December quarter.
• But the latest estimate says that growth gave way to 6.1% in January-March 2017. Gross Value Added (a closer measure of economic activity) slid to 5.6% in Q4 from 6.7% in Q3.
• A sector-wise break-down tells us that the sectors that were expected to be hit hard by the note ban did take a knock. In Q4, the construction industry saw a 3.7% contraction compared with a 3.4% increase in Q3.
• Manufacturing growth fell to 5.3% from 8.2%, despite the new series of Index of Industrial Production (IIP) showing factory output in better light. Services such as trade, hotels and transport slowed to 6.5% growth, from 8.3%.
• Why did demonetisation have a delayed impact? One explanation is that strong festival season sales in October masked the disruption to consumption in November and December in Q3. In Q4, without such one-offs, the real impact was evident.
• It should be kept in mind that even the latest GDP estimates may get revised downwards in the coming months, as they do not fully reflect the performance of the informal sectors of the economy.
• The latest estimates show all private sector components of the economy decelerating in FY17. Growth in mining GVA fell off a cliff from 10.5% in FY16 to 1.8% in FY17. Manufacturing slumped from 10.8% to 7.9% and services from 9.1% to 6.9%.
• However, a good South-West monsoon boosted growth in agriculture GVA to 4.9%, from 0.7%. Pay Commission largesse saw Government expenditure expanding by 11.3% in FY17 compared with 6.7% in FY16, providing a mini-stimulus to the economy.
• But over-reliance on the government is not great news for the long-term health of the economy, or the aspiration towards ‘less government’. Given fiscal constraints, a government spending binge extracts a toll on taxpayers.
• A repeat of that agricultural growth depends on a munificent monsoon this year. Much, therefore, depends on the private sector regaining its mojo.
• For economic growth to create jobs, demand for goods and services has to fuel investments in new factories and offices. But the investment leg of the economy remains in a moribund state.
• Of the four key legs of GDP on the expenditure side, in FY17, private spending (despite the demonetisation shock) registered healthy growth of 8.7% compared with 6.1% in FY16.
• Government spending zoomed to 20.8% from 3.3%. But growth in new investments slumped to 2.4% from 6.5%. During the boom years from FY03 to FY08, the number averaged above 15%.
• Of late, conditions have turned favourable for a restart of the investment cycle. The Government has been ironing out issues in stalled projects. Interest rates have plummeted.
• But the private sector is still saddled with excess capacity and only an exceptional rebound in consumer demand can revive its animal spirits.
• It is nominal GDP growth that determines increases in income for farmers, entrepreneurs and the salaried. Profit and sales growth for India Inc. are also pegged to nominal rather than real GDP growth.
• Overall, if the rain gods prove benevolent and the private sector regains its animal spirits, the economy may see its sporadic green shoots sprout into foliage this fiscal.

Venture capital funding in India has bounced back after a slowdown last year

• Venture capital funding in India has bounced back after a slowdown last year. Top venture capitalists said that now there is focus on leaders that are emerging in each sector and on companies that are capital efficient.
• Among India-headquartered tech companies, there were nine fewer instances of funding compared with Q4 ’16, but total capital invested in the quarter jumped 550%, according to the ‘Asia Tech Investment Report’ by CB Insights.
• Notable investments this year included Flipkart’s $1.4 billion Series J, a $330 million Series H to Olacabs, and a $200 million Series A to Paytm E-Commerce, according to the CB Insights report.
• There is now more focus on companies that are building businesses in a capital-efficient manner compared with the past.
• Investors are also eyeing start-ups that survived the last two years in difficult industries, like food tech where scores of companies shut down. Last month, food delivery start-up Swiggy raised $80 million led by the South African Internet and media group Naspers.
• This year, $4.74 billion has been invested till date in Indian tech start-ups compared with $4.55 billion and $8.94 billion invested in the years 2016 and 2015 respectively, according to data from start-up and venture capital tracker Tracxn.
• Top sectors that attracted capital this year include enterprise tech, health tech, fintech, retail and pure technology — which include companies focused on artificial intelligence, drones, 3D Printing and Internet of Things, according to Tracxn.

RBI may do course correction in the second bi-monthly monetary policy review

• The Reserve Bank of India may well be on a course correction in the second bi-monthly monetary policy review scheduled on June 7, as price increases have been lower than what the central bank had projected.
• In the last policy review in April, the central bank projected retail inflation to average 4.5% in the first half of 2017-18 and 5% in the second half.
• However, as consumer price index-based inflation dropped below 3% in April (aided by food prices not rising as expected and with international crude oil prices staying benign), economists said inflation will trend far below the central bank’s projected trajectory.
• The question is whether the RBI also agrees that inflation would be trending below the projected figures and would change its tone, if not stance, accordingly.
• Technically, a neutral stance means there is a scope for further reduction of the repo rate — which is at 6.25% — but the central bank’s hawkish tone in the last two policy reviews made the yields on benchmark government bonds head north since the market interpreted interest rates have bottomed out.

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