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Current Affairs for IAS Exams - 18 November 2017

::NATIONAL::

Moody’s improved India’s rating from Baa3 to Baa2

Global credit rating agency Moody’s Investors Services raised India’s sovereign rating for the first time in 13 years, citing the country’s high growth potential in the years to come, thanks to economic and institutional reforms.
“The decision to upgrade the ratings is underpinned by Moody’s expectation that continued progress on economic and institutional reforms will, over time, enhance India’s high growth potential and its large and stable financing base for government debt,” the rating agency said.
Upgrading the Indian government’s rating as a local and foreign currency issuer from Baa3 with a positive outlook to Baa2 with a stable outlook. Obligations rated Baa2 are subject to moderate credit risk.
They are considered medium grade and as such may possess certain speculative characteristics. Baa3, by contrast, was the lowest investment grade rating.
For the government, the upgrade serves as a strong rebuttal for critics who have panned its handling of the economy — coming on the back of India’s rise in the World Bank’s ease of doing business index.
The financial markets reacted positively to the development, with the BSE Sensex rising 236 points and the rupee rising to Rs. 64.62 per dollar before closing at Rs. 65.02 per dollar, up 0.47%.
Acknowledging that some steps such as the GST and demonetisation have ‘undermined’ growth in the near term as reflected by the slower GDP growth of 5.7% in the first quarter of 2017-18, Moody’s said it expects real GDP growth in India to moderate to 6.7% in this fiscal year.
But the agency believes that the disruption effect of these reforms will fade as the government helps small and medium enterprises and exporters with compliance issues under the new indirect tax regime and growth will rise to 7.5% in 2018-19, and remain robust, thereafter.
“Longer term, India’s growth potential is significantly higher than most other Baa-rated sovereigns,” the agency said.
Although the rating agency agreed that a lot remains to be done such as fixing the GST’s implementation challenges, weak private sector investment and the slow resolution of banks’ bad loans.
Moody’s said it expects at least some of these issues to be addressed over time and will help further improve the Indian government’s effectiveness and overall institutional framework.

SC wants a move towards nationwide ban on the use of pet coke and furnace oil

The Supreme Court requested all States and Union Territories (UTs) to move forward towards a nationwide ban on the use of pet coke and furnace oil to power up industries, in a bid to fight pollution.
The Environment Bench of the Supreme Court had already ordered a ban on the industrial use of pet coke and furnace oil in the States of Uttar Pradesh, Haryana and Rajasthan on October 24.
This ban specifically came after an Environment Pollution Control Authority Report recommended the ban on sale, distribution and use of furnace oil and pet coke in the National Capital Region (NCR).
Their use is already prohibited in Delhi.

Under India’s pressure China may change the route of CPEC

China may consider alternative routes through Jammu and Kashmir to address India’s concerns regarding the China Pakistan Economic Corridor (CPEC) that passes through Pakistan-occupied Kashmir (PoK).
In an interaction with experts on Chinese affairs and students, Beijing’s envoy Luo Zhaohui suggested the alternative routes, and said he was keen on accomplishing a bilateral friendship and trade treaty during his stint in India.
“We can change the name of CPEC [China Pakistan Economic Corridor]. Create an alternative corridor through Jammu and Kashmir, Nathu La pass or Nepal to deal with India’s concerns,” said the envoy.
The Ambassador made a detailed presentation of the expectations on both sides and said that while the Dalai Lama’s presence and activities remain an issue for China, Beijing recognised that India’s expectations on the CPEC and Masood Azhar were also issues that both sides need to be deal with.
“One of my goals is to have a treaty of friendship and free trade with India,” he said, elaborating that both sides need to find more areas to collaborate like the Delhi smog. “Beijing also has smog and two sides can jointly deal with this issue.”

Ban on Construction activities lifted by NGT

After the Central Pollution Control Board (CPCB) and the Delhi Pollution Control Committee (DPCC) submitted data on the present pollution levels in the Capital, NGT lifted the ban on construction activities in Delhi-NCR.
Directing the authorities to strictly monitor the movement of trucks, the green panel said that heavy vehicles would also be permitted to enter the National Capital Region.
A Bench headed by NGT chairperson Justice Swatanter Kumar also asked Delhi, Punjab, Haryana, Rajasthan and Uttar Pradesh to submit detailed action plans with regard to the steps that they would take to curb pollution.
The Bench stated that ‘exemplary costs’ would be imposed on authorities if the action plan is not submitted within two weeks.
Further, the green panel stated that the construction of both the Eastern and the Western express highways will be permitted subject to preventive and precautionary steps taken by the authorities.
The Tribunal maintained that directions related to the burning of waste and crop residue would continue to remain in force.
Additionally, the NGT observed that sprinkling of water had proved to be successful in bringing down pollution levels.
Directing the States to implement the measure in order to tackle the pollution levels, the Bench said: “We direct all the governments concerned, particularly the government of NCT Delhi, to ensure that such steps are taken in future without any hesitation in the interest of the environment and public health.”
Meanwhile, the CPCB and the respective State pollution control boards have been asked to file ambient air quality analysis before the NGT on a monthly basis.

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::International::

India and France to act against the Terrorism

Gravely concerned over growing terrorism, India and France decided to strengthen counter-terror cooperation, and asked the international community to oppose countries which are financing, sheltering and providing safe havens to terrorists.
External Affairs Minister held wide-ranging talks with her French counterpart Jean-Yves Le Drian, during which they also decided to strengthen cooperation in the Indian Ocean Region (IOR).
This development which comes barely days after India held quadrilateral talks with Japan, Australia and the U.S. in Manila on the sidelines of India-ASEAN Summit.
The two Ministers held discussions on key regional and international issues as well as the proposed visit of the French President to India next year.
As part of the 2008 nuclear cooperation agreement between India and France, Paris is to help build atomic power reactors for New Delhi.
The French Minister said he was here to lay the groundwork for the visit of the French president which would take place early next year during the summit of the International Solar Alliance.

Zimbabwe President appeared during military coup

Zimbabwean President Robert Mugabe attended a university graduation ceremony, making a defiant first public appearance since the military takeover that appeared to signal the end of his 37-year reign.
Mr. Mugabe, 93, had been confined to house arrest after the military took over the country.
The generals took over late after Vice-President Emmerson Mnangagwa was abruptly sacked and Mr. Mugabe’s wife Grace emerged in prime position to succeed her increasingly frail husband.Mr. Mugabe has ruled Zimbabwe since independence from Britain in 1980.
Many citizens were stunned by the military’s intervention, sparked by the bitter succession battle between Grace Mugabe and Mr. Mnangagwa.
Government television showed Mr. Mugabe, the world’s oldest head of state, at talks standing smiling alongside army chief General Constantino Chiwenga.
Mr. Mnangagwa, 75, was previously one of Mr. Mugabe’s most loyal lieutenants, having worked alongside him for decades. But he fled to South Africa following his dismissal and published a scathing rebuke of Mugabe’s leadership and Grace Mugabe’s presidential ambitions.
The military said they had detained some “criminals” in Mr. Mugabe’s government.Grace Mugabe has not been seen since the takeover of the military, which has not overtly called for President Mugabe’s resignation.
The leader of Zimbabwe's war veterans association, an influential voice in national politics, said Mr. Mugabe must step down at once and urged people to protest against the President.

::Business and Economy::

Indian equities, which had been under pressure in the last few days, rebounded strongly as investors cheered Moody’s Investors Service’s decision to upgrade the country’s sovereign credit rating after a gap of 13 years.
The benchmark stock barometers, which climbed more than 1% during morning trading, surrendered some gains later in the session in the face of profit booking.
The BSE’s 30-share Sensex gained more than 400 points during the day to touch an intraday high of 33,520.82. The index closed at 33,342.80, up 235.98 points or 0.71%. Sensex constituents like Cipla, HDFC, Maruti Suzuki and Tata Steel all gained more than 2% each.
The overall market breadth was also strong with 1,615 stocks gaining ground, as against 1,135 declines. The broader Nifty of the National Stock Exchange (NSE) closed at 10,283.60, up 68.85 points or 0.67%.
The U.S.-based credit rating agency, which upgraded India’s sovereign credit rating by a notch to ‘Baa2’ with a stable outlook, had last raised the rating to ‘Baa3’ in 2004. In 2015, Moody’s had changed the rating outlook to ‘positive’ from ‘stable’.
The rupee wiped out almost all the losses it had sustained so far in November after Moody’s rating upgrade buoyed the outlook for the Indian currency. Intraday, the rupee strengthened as much as 1% against the dollar — its biggest gain in more than one month — and ended the day at 65.01 per dollar.
However, the rupee still continues to be among the worst performing currencies in Asia this month. Going ahead, the rupee is expected to strengthen on the back of foreign inflows.
Yields on the 10-year benchmark government bond fell by about 12 basis points (bps) intraday, before closing 1 bps lower at 7.05%, as compared to its previous close.

Industry welcomes the Moody’s rating upgrade

Global credit ratings agency Moody’s Investors Service’s decision to upgrade India’s sovereign rating for the first time in almost 14 years has got a thumbs up from India Inc.
The recent improvement in ease of doing business and now the rating upgrade underscores the direction that India is moving in. It should result in better investor sentiment towards India. The credit ratings agency raised India’s rating by one notch to Baa2 from Baa3.
Sunil Bharti Mittal, chairman, Bharti Enterprises, said the ratings upgrade underlines the efficacy of the ‘bold’ structural reforms undertaken by the government in recent years.
Welcoming the move, Larsen & Toubro’s MD & CEO S.N. Subrahmanyan, said, “We believe that the private sector capital will still take some time to come back into the economy. The central government, public sector undertakings, and state governments are expected to drive capital expenditure for another 9-12 months,” said Mr. Subrahmanyan.
State owned firms have a reason to cheers as the ratings of infrastructure government-related issuers (GRIs) NTPC, NHPC, NHAI and GAIL have also been upgraded to Baa2 in line with India’s sovereign ratings.
Besides, Moody’s has upgraded the foreign currency issuer ratings of BPCL, HPCL, IOCL, Petronet LNG Limited to Baa2 from Baa3, while ONGC has been upgraded to Baa1 from Baa2.
Moody’s also upgraded the long-term rating of four financial institutions, Export-Import Bank of India, HDFC Bank, Indian Railway Finance Corporation, and State Bank of India, to Baa2 from Baa3.
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