Current Affairs for IAS Exams - 7 June 2017

::National::

The country is likely to get more rain than was originally forecast

• The country is likely to get more rain than was originally forecast in April, the India Meteorological Department (IMD) has said.

• Rainfall would be ‘normal’ and around 98% of the Long Period Average (LPA), the IMD said in an update. This is 2% more than the 96% or ‘near normal’ rain it had forecast in April.

• In the update, the IMD also said rains in July and August, the most important monsoon months for the kharif crops, would be 96% and 99% respectively, of what was normal.

• Spatially too, the IMD expects a balanced geographical distribution.

• The season rainfall is likely to be 96% of the historical average in north-west India, 100% of the LPA over central India, 99% of the LPA over the south peninsula, and 96% of the LPA over north-east India, with a model error of ± 8 %.

• The LPA is a 50-year average of the monsoon rains in India.

child-friendly HIV drug in oral pellet form

• The Central Drugs Standard Control Organisation (CDSCO) has registered the child-friendly HIV drug in oral pellet form, ending months of uncertainty for the HIV community.

• This has opened up crucial supplies from Cipla Pharmaceuticals, a market leader in the HIV segment, to the National AIDS Control Programme (NACO), which had been struggling to source quality assured paediatric formulations of the drug.

• India ran out of Lopinavir syrup, a child-friendly HIV drug, in March after Cipla — the sole manufacturer of the drug — stopped production consequent to non-payment by the Health Ministry.

• The drug’s adult version has to be swallowed whole and thus cannot be administered to infants and young children.

• In March, over 600 children had written a letter to Prime Minister Narendra Modi, asking for a quick resolution to the matter.

• On May 25, an expert committee of the CDSCO had permitted the child-friendly and heat-stable pellet formulation of the HIV drug lopinavir/ritonavir (LPV/r) to be registered.

• The pellets, which come in capsules and are dosed by weight, can be sprinkled (but not stirred or crushed) over a small amount of soft food. For infants — who must be able to swallow them — the pellets can be added to a spoonful of breast milk or put on the infant’s tongue.

IMD says El Niño is weaker than predicted

• The India Meteorological Department’s optimism about more rainfall is largely premised on hopes that a strong El Nino, which, as per its earlier forecast, was expected to surface in the later half of the monsoon, would now be much weaker than anticipated.

• In April, the IMD had said there was a 38% chance of near normal rains (96% of the LPA). Now the models showed a 50% chance.

• The El Nino — characterised by surface waters of the equatorial Pacific warming up by more than half a degree — is known to dry up monsoon rain every six out of 10 years.

• A positive Indian Ocean Dipole (IOD) is said to buffer the impact of El Nino and contribute to better rains.

• The IOD is a swing in surface temperatures that turns the western Indian Ocean alternately warmer and then colder than the eastern part of the ocean.

• In April, the IMD shifted to using a new monsoon forecast system, called a dynamical model that works by supercomputers simulating the weather and extrapolating it.

• It plans to make this as the base for all future forecasts, ranging from short-term weekly forecasts to the trajectory of the four-month- long monsoon.

• However, for its June update, the IMD chose to rely on its workhorse statistical model that forecasts the monsoon based on six meteorological parameters.

• The dynamical model, according to the IMD statement, showed monsoon rains to be 89 cm or 100% of the LPA.

• Private weather forecaster Skymet said it was sticking to its “below normal” forecast at 95% (with an error margin of +/-5%) of the LPA. Rainfall for July stood at 94%, while for August it was 93% of the historical average.

Scientists have discovered the hottest known planet

• Scientists have discovered the hottest known planet located 650 light years from Earth, which is warmer than most stars in the universe and sports a giant, glowing gas tail like a comet.

• The Jupiter-like planet orbits a massive star KELT-9 every day and a half, researchers said.

• With a day-side temperature peaking at 4,326 degree Celsius, the newly discovered exoplanet, designated KELT-9b, is hotter than most stars and only 926 degree Celsius cooler than our Sun.

• The ultraviolet radiation from the star it orbits is so brutal that the planet may be evaporating away under the intense glare, producing a glowing gas tail.

• The gas giant 2.8 times more massive than Jupiter but only half as dense, because the extreme radiation from its host star has caused its atmosphere to puff up like a balloon.

::International::

Afghanistan’s President made another offer for talks to the Taliban

• Afghanistan’s President Ashraf Ghani made another offer for talks to the Taliban, even as he hit out at Pakistan for not acting “according to the global consensus on terror”.

• Mr. Ghani has appointed a new Chairman of the High Peace Council, Mohammad Khalili, to take forward the talks, which he said could take place in “any mutually acceptable location”.

• It would allow the Taliban to set up a representative office, as long as it follows the established guidelines of abiding by the Constitution, and abjuring violence.

• However, he added that if the Taliban failed to take up the offer, Afghanistan would push for the UN to sanction the group as a “perpetrator and sponsor” of terror.

• Even as Mr. Ghani began to speak at the Kabul Process meeting, attended by 24 countries, including India, militants launched a rocket that landed inside the compound of the Indian Embassy in the diplomatic zone.

• In another blast at Herat’s Grand Mosque, seven people were killed on Tuesday.

• Officials see the Kabul Process as an attempt by the Afghan government to replace other processes on reconciliation like the Moscow meetings held since December 2016, and the American-backed Murree Process in Pakistan in 2015.

• India, Afghanistan and the U.S. had protested the Russian decision to hold a trilateral meeting on Afghanistan with China and Pakistan only, in December 2016.

• In subsequent meetings in Moscow, India, Iran and Central Asian countries were included, but the U.S., which was invited to a meeting in May, refused to join.

• Previously, India had objected to the Murree Process, which saw Taliban leaders meet with Afghan and Pakistan representatives, in a process that included the U.S. and China.
   

::Business and Economy::

CBDT comes up with final notification about capital gains tax

• The Central Board of Direct Taxes (CBDT) has come out with a final notification specifying the securities transactions that would attract capital gains tax where the securities transaction tax (STT) hasn’t been paid.

• An amendment has been made in the Finance Act 2017 to curb the declaration of unaccounted income as exempt long-term capital gains under the previous provisions of the Income Tax Act by entering into fake transactions.

• The amendment notification specifies the transactions on which the tax would apply and and those on which tax would be exempt.

• According to the notification, the chargeability to STT provision will not apply to all transactions of acquisitions of equity shares entered into on or after October 1, 2004.

• However, it was noted that this would also apply to genuine cases where the STT could not have been paid, and so the government sought to define the transactions that would attract tax and which would not.

• Crucial aspect included in the final notification is the exemption granted to taxpayers who have received shares in the course of employment (ESOPs). In addition, the rules seem to leave the door open for some contradiction.

RBI says privates banks are cutting rates at a slow pace

• While the median benchmark lending rate of commercial banks have fallen 90 basis points (bps) to 8.55% since April last year, the median rate of private banks has fallen by 70 bps from 9.8% to 9.1%, latest data released by Reserve Bank of India (RBI) showed.

• The median rate for the one year marginal cost of fund based lending rate (MCLR) of public sector banks, that accounts for 70% of the market, fell by 90 bps from 9.50% to 8.60% between April 2016 and May 2017, according to the data.

• Foreign banks’ median rate was the lowest in May 2017, at 8.55%, and came down from 9.45% in April 2016.

• State Bank of India, the country’s largest lender, reduced its one-year MCLR by 120 bps to 8%, while ICICI Bank, the country’s largest private sector lender, lowered it by 100 bps to 8.20% in the last one year.

• The MCLR regime came into effect on April 1, 2016, replacing the earlier base rate regime.

• All the loans are linked to MCLR rate. Most loans are linked to one-year MCLR. Since April 2016, RBI has reduced the key policy rate or the repo rate by 50 bps to 6.25%.

• Since January 2016, the policy rate has been reduced by 175 bps.

• RBI has been prodding banks to enable monetary transmission by lowering lending rates. After demonetisation, banks cut the MCLR sharply in January, as their cost of funds fell.

Banks’ exposure to telecommunications sector does not pose a systemic risk

• Banks’ exposure to the troubled telecommunications sector does not pose a ‘systemic risk,’ Fitch Ratings said.

• This is because banks’ exposure to the sector was only Rs. 91,300 crore which is 1.4% of the total bank loans, Fitch said citing RBI data. A stressed sector like power accounts for 8.7% of loans while the iron and steel sector accounts for 4.7%.

• The rating agency said: “Indian banks’ exposure to troubled telecom companies is not large enough to pose a systemic risk, but defaults could add to problems at banks with weak balance sheets.”

• Fitch said not all telcos faced financial difficulties. For example, market leader, Bharti Airtel, was likely to meet repayments comfortably on the more than $1 billion that it owes to banks.

• “Vodafone and Idea Cellular are in the process of merging their operations, which will give the new entity a market-leading share.

• Idea’s balance sheet is stretched, but the combined company is unlikely to experience serious problems in servicing its debt,” the report said.

• The rating agency said loans to telcos were also generally backed by spectrum assets, which should provide a better chance of recovery.

• However, the credit profiles of Indian telcos were under pressure from fierce competition arising out of the entry into the market of Reliance Jio last year and rising capex required for the rollout of 4G services.

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