The First Forum – Edition 64

The First Forum is an initiative that focuses on covering the latest happenings in a brief format. This is in lieu of the importance of knowledge about current happenings in this fast-changing world.
In the Sixty Fourth Edition of The First Forum we would be covering the following topics:
1. Politics
2. Science and Technology
3. Business
4. Economics
5. Finance

(By Divyansh Gupta, Ayush Harlalka, Creamy Garg)

Politics

Biden or Trump, no guarantee of a post-Brexit U.S.-UK trade deal
With the rising speculations of revocation of Northern Ireland’s 1998 peace agreement due to the repeated proposal of no-deal Brexit by administrators of United Kingdom, there comes a threat to Britain from USA in form of loosening trade ties. The no-deal Brexit can significantly bring hard borders and excruciating tariff checks between Northern Ireland and Republic of Ireland and thus can repeal the peace agreement, popularly known as ‘Good Friday Agreement’.Read More Both Joe Biden and Donald Trump, the respective candidates of US presidency have made it clear through their stances and have warned UK to honor the 1998 agreement, which can, otherwise, lead to abrogation of trade deal between UK and USA. Hence, the decision to opt for no-deal Brexit can severely, impact the trade relations of US and UK, no matter, whichever party wins USA elections to be held in November.

China sends fighters and bombers towards Taiwan
Amid the rising tensions between India and China on the LAC border in Ladakh, China has booted up tensions on its eastern front, with 18 Chinese fighters and bombers crossing the mid-line of the Taiwan Strait and flying towards Taiwan in a major show of military force. PLA held combat-ready patrols and joint air-sea exercises in the Taiwan Straits to test the joint operations capability of multiservices. The development comes on the time when the most senior official of USA, Keith Krach, U.S. Undersecretary for Economic Affairs Keith, has visited Taiwan in four decades. Read MoreThe PLA claimed in a statement that they are ready to suppress any attempts that carry out separatist activities in the Island of Taiwan and in order to safeguard national unity, territorial sovereignty and security, the moves are necessary and they will enhance the capacity of troops under PLA.

Yoshihide Suga Becomes Japan’s Prime Minister
Yoshihide Suga took over Wednesday as Japan’s first new prime minister in almost eight years, replacing the country’s longest-serving premier, Shinzo Abe, who stepped down citing health concerns. Suga, 71, was sworn in by Emperor Naruhito at the Imperial Palace after parliament elected him as prime minister. Suga was Abe’s chief Cabinet secretary and head government spokesman. Now he pledges to forge ahead with his predecessor’s key policies, including his efforts to jump-start the economy and to revise Japan’s postwar constitution, which restricts the use of its military. He takes office at a time when Japan is managing the coronavirus outbreak and planning for the Tokyo Olympics that were delayed because of the pandemic. Read MoreJapan also faces a difficult security environment and is increasingly vulnerable to North Korean and Chinese missiles. He has kept key Cabinet members in place, with some minor reshuffling. Continuity weighs on Japanese minds as, before Abe’s record tenure, the country went through six prime ministers in six years. That included a one-year term by Abe that was cut short by the same chronic bowel ailment he says has forced his retirement now.

India welcomes Abraham Accords, calls for talks on ‘two-state solution’
India has welcomed the signing of the Abraham Accords by the US, Israel, Bahrain and the United Arab Emirates (UAE) and reiterated its call for direct negotiations between Israel and the Palestinians for a “two-state solution”. US President Donald Trump and Israeli Prime Minister Benjamin Netanyahu joined the foreign ministers of Bahrain and the UAE for the signing of the historic agreements aimed at normalising relations between Israel and the Arab countries.Read More They came almost 26 years after the signing of a declaration for a peace deal between Israel and Jordan. Under the Abraham Accords, the UAE and Bahrain will normalise their relations with Israel and expand engagements in politics, security, trade and connectivity. More Arab states are expected to ink similar agreements with Israel, while some countries such as Saudi Arabia have said they stand with the Palestinian people and sought a comprehensive solution to the Palestinian issue.

Union Minister Harsimrat Kaur Badal resigns over three anti-farmer bills
Minister of Food Processing Industries, Harsimrat Kaur Badal resigned from the Modi cabinet in support of farmers to protest against three “anti-farmer” bills on 17^th Sep 2020. This comes after the Lok Sabha passed three bills that have sparked protests from farmers in Punjab and Haryana among which two have been passed by the Rajya Sabha this Sunday. The three bills aim at allowing inter-state free trade of farmers produce, providing an ecosystem to sell produce outside Mandis under state APMCs, accelerating growth through private sector involvement etc. Read MoreHowever, the farmers believe that this will render the current Minimum Support Price (MSP) system ineffective and favor corporates and leave them at their mercy.  The farmers of Punjab have announced a “Rail-Roko” protest from 24^th to 26^th September to oppose the bills.

Science and Technology

Hyderabad based Dr. Reddy Laboratories to partner with RDIF for Sputnik V trials
The Russia Direct Investment Fund (RDIF), which is piloting Russia’s Sputnik V candidate vaccine and is currently in the phase 3 trials has partnered with the Hyderabad based Dr. Reddy Laboratories to test, and subject to regulatory approvals in India and supply 100 million doses of the vaccine. Read MoreThe agreement, however, does not include manufacturing the vaccine in India. The Dr. Reddy’s-RDIF agreement constitutes the second major international deal for supplying a potential vaccine after the agreement between British company AstraZeneca and the Pune-based Serum Institute of India (SII). The latter will manufacture 100 million doses of the vaccine, of which reportedly half will be for India.

Tata group to launch India’s first low cost Covid-19 test ‘Feluda’
Drug Controller General of India (DCGI) has approved India’s first CRISPR Covid-19 test developed by the Tata Group and CSIR-IGIB. Tata group has worked closely with CSIR-IGIB and ICMR to create a high-quality test that will help the nation ramp up Covid-19 testing quickly and economically.Read More In a recent release issued Ministry of Science and Technology, it said that this test uses an indigenously developed, cutting-edge CRISPR technology for detection of the genomic sequence of SARS-CoV-2 virus. “The Tata CRISPR test is the world’s first diagnostic test to deploy a specially adapted Cas9 protein to successfully detect the virus causing Covid-19,” it added.

Astronomers spot possible marker of life on Venus
A rare molecule — phosphine — has been detected in the atmosphere of Venus, an international team of astronomers announced on Monday leading to speculation of life on Earth’s nearest planetary neighbour. On Earth, this gas is only made industrially or by microbes that thrive in oxygen-free environments. Astronomers have speculated for decades that high clouds on Venus could offer a home for microbes — floating free of the scorching surface but needing to tolerate very high acidity. Read MoreThe detection of phosphine could point to such extra-terrestrial “aerial” life. The study was published in a new paper in the journal Nature Astronomy. Confirming their discovery required using 45 antennas of the Atacama Large Millimeter/submillimeter Array (ALMA, in Chile, a more sensitive telescope in which the European Southern Observatory (ESO) is a partner. Both facilities observed Venus at a wavelength of about 1 millimetre, much longer than the human eye can see — only telescopes at high altitude can detect it effectively.

Zhenuha Digital Data Leak
A Shenzen-based Chinese technology company Zhenhua having links with the Chinese Communist Party is snooping on top Indian leaders, VVIPs, with the list including 10,000 prominent people and organisations. The leak suggests that a Chinese tech company has gathered the data of millions of users from around the world. There were also some details about the data being linked back to the Chinese military. There were approximately 2.4 million user data in the database that also included influential people. The database was built in a way that can be used to mass influence the public.Read More The database was leaked to American academic Christopher Balding, who was previously based in Shenzhen but has returned to the US because of security concerns. He shared the data with Internet 2.0 for recovery and analysis. The findings were first published on Monday by a consortium of media outlets including the Australian Financial Review and the Daily Telegraph in the UK.

Astronomers spot giant planet orbiting a dead star
In a first, astronomers detected a giant intact planet about the size of Jupiter closely orbiting a dead star’s corpse around 80 light-years from Earth using NASA’s Transiting Exoplanet Survey Satellite (TESS) and retired Spitzer Space Telescope. While the leftover of the Sun-like star which is merely 40% larger than the Earth is known as WD 1856, the exoplanet (which is seven times larger than the white dwarf) has been named WD 1856b and completes one full orbit every 1.4 days (60 times faster than Mercury orbiting Sun). Read MoreAstronomers are amazed to see the exoplanet coming very close to the white dwarf and remaining in one piece as the white dwarf creation process destroys anything close to it. According to the team, future observations will confirm whether WD1856b is exactly a planet or a failed star known as “brown dwarf”.

Business

Tik Tok to continue operations in USA
US President Donald Trump has expressed his approval of a deal that would allow Chinese-owned video-sharing app TikTok to continue operating in the US. TikTok and ByteDance both welcomed President Trump’s approval of a proposed deal, which would still need to be signed off by the Chinese government. TikTok said the deal would ensure US national security requirements were fully satisfied, while ByteDance said it was working to reach an agreement that was “in line with US and Chinese law” as soon as possible. The deal would see the establishment of a new company, dubbed TikTok Global. Read MoreThat company would be headquartered in the US, possibly in the state of Texas, with a majority of American directors. Oracle and Walmart are expected to take significant stakes in the company, and ByteDance has agreed to security safeguards on the data of US users. TikTok’s data would be stored by Oracle, which would have the right to inspect its source code. Reportedly Of that 20% stake, Oracle will take 12.5%, while Walmart will take 7.5%. The deal will see TikTok Global become majority-owned by American investors, but Bytedance will retain a share of the US operation.

Paytm listed back on Play Store after Google rap
The popular financial services platform, Paytm was listed back on its Play Store by Google a few hours after it had been pulled down for violating Google’s policies related to gambling on Friday. The accusations came in the wake of a recent launch of the campaign called ‘Paytm Cricket League’ where players receive stickers after each regular transaction, collect them and receive Paytm cashback by redeeming those points. Read MoreAfter the removal, Paytm assured its uses that their account balances are safe and said that all of its activities are completely legal. It also added that the cashback facility has been temporarily removed from the app to meet the play store policy rules.  A few hours later, however, the app was restored.

Cabinet note ready for vehicle scrappage policy
A note has been formulated by Ministry of Road Transport and Highways (MoRTH) on creation of a platform for voluntary and eco-friendly phasing out of misfit and old polluting vehicles.  The proposed policy will be applicable on all vehicles once it gets approved and it has been sent for the process of consultations with various stakeholders. Read MoreThe government views the policy as a strategic contributor in making India the hub of automobile industry as recycling of raw material available from scrapping steel, aluminium and plastic can significantly reduce the prices of vehicles by 20-30%.Moreover, this policy will further, incentivize the adoption of e-vehicles by allowing the scrappage of vehicles older than 15 years.

Rajya Sabha passes Second Amendment in IBC
The Upper House of the parliament passed the Insolvency and Bankruptcy Code (IBC) (Second Amendment) Bill 2020, on Saturday through a voice vote after rejecting opposition amendments. This bill seeks at replacing an ordinance promulgated in June 2020. Now, no fresh insolvency proceedings will be initiated for at least six months to a year beginning from 25^th March 2020. Read MoreAs per the Bill, for beginning insolvency proceedings default on repayments post 25^th March 2020 will not be considered due to the coronavirus pandemic. Justifying the promulgation, Finance Minister Nirmala Sitharaman said that the intention of the Insolvency and Bankruptcy Code (IBC) is not to liquidate companies, rather it wants companies to be a “going concern”. She added that the step was necessary due to rising apprehensions that India’s economy is likely to be adversely affected due to the ongoing pandemic.

US-China investment at 9 year lows amid souring ties
The capital flow between China and the United States tumbled to a nine-year low in the first half of 2020 amid bilateral tensions and economic strain due to the COVID-19 pandemic. According to the figure of National Committee on US-China Relations and Rhodium Group, both direct and venture capital investment between the two fell 16.2% from the same period previous year and totaled US$ 10.9 Billion in January-June half. This is in sharp contrast to nearly US$ 40 Billion investment observed during 2016 and 2017. Read MoreWhile Chinese FDI increased by 38%, US FDI in China declined by 31%. The U.S. President Donald Trump citing security reasons has taken sharp actions against ByteDance by asking it to divest from Tiktok in the U.S. and telecom giant Huawei Technologies by blacklisting it. According to the research, the situation is unlikely to recover this year, regardless of the outcome of U.S. presidential election to be held in November.

Economics

Human Capital Index 2020
India has been ranked at the 116th position in the latest edition of the World Bank’s annual Human Capital Index that benchmarks key components of human capital across countries. However, India’s score increased to 0.49 from 0.44 in 2018, as per the Human Capital Index report released by the World Bank. Read MoreThe 2020 Human Capital Index update includes health and education data for 174 countries – covering 98% of the world’s population – up to March 2020, providing a pre-pandemic baseline on the health and education of children, with the biggest strides made in low-income countries. The analysis shows that pre-pandemic, most countries had made steady progress in building human capital of children, with the biggest strides made in low-income countries. Despite this progress, and even before the effects of the pandemic, a child born in a typical country could expect to achieve just 56% of their potential human capital, relative to a benchmark of complete education and full health.

Govt permits up to 74% FDI under automatic route in defence sector
The Department for Promotion of Industry and Internal Trade (DPIIT) has issued a press note permitting foreign direct investment (FDI) in defence production above 74 per cent on the automatic route. This would be subject to access to modern technology or for ‘other reasons’ that needs to be recorded. FDI in defence production is automatic upto 74 per cent, the department notified. Till now, 100 per cent foreign investments were permitted in the defence industry – 49 per cent under the automatic route and government approval was required beyond that. Read MoreThe press note has stipulated that foreign investments in the defence sector would be subject to scrutiny on the grounds of national security and the government reserves the right to review any foreign investment in the sector that affects or may affect national security. DPIIT also said that infusion of fresh investment up to 49 per cent in a company not seeking industrial licence or which already has government approval for FDI in defence, shall require “mandatory” submission of a declaration with the defence ministry in case change in equity/shareholding pattern or transfer of stake by existing investor to new foreign investor for FDI up to 49 per cent within 30 days of such change. The decision will take effect from the date of Foreign Exchange Management Act notification.

Net direct tax collection dips 31% in August
The net direct tax collection has been reported to be 1.92 lakh crore for the five month period of April-August 2020, which is 31% less than the previous year. The indirect tax collection has also been adversely hit down by 11% to Rs 1,92,718 crore for the same period last year. Read MoreGST collections, which were estimated to be Rs 6,90,500 crore for FY21, stood at just Rs 1.81 lakh crore for these five months. 287708.3, which is nearly 37% less than the estimated figure.  Last year, GST collections were almost 97% of the estimated figure of Rs 6,12,327 crore.

Rs. 1350 Crore mega relief economic package announced for Jammu and Kashmir
Jammu and Kashmir Lieutenant Governor (L-G) Manoj Sinha announced a mega Rs. 1350 Crore revival package and interest subsidy on Saturday to boost business, tourism and overcome difficulties of COVID-19 crisis. The government has waived 50% of water and electricity bill amounts across the union territory for an entire year to bring relief to farmers and families. Read MoreThe main component of the package is 5% interest subvention to every borrower for six months which will cost about Rs. 950 Crores. Mr. Sinha also announced that stamp duty will be exempted up till March 2021 and that this economic package is over and above the benefits of Atma Nirbhar Bharat. He added that a new industrial policy will be announced soon for the sector. According to a report released last month, several lockdowns since August last year has dented Rs. 45000 crore to Kashmir’s economy. 

 New Zealand enters in its deepest recession in years
New Zealand entered into recession for the first time post Global Financial Crisis after having the biggest quarterly GDP contraction in decades. Its GDP contracted a seasonally adjusted 12.2% quarter-on-quarter between April and June. Although tackling Covid-19 comparatively well with only 25 deaths and a few cases, it had to bear its brunt economically.Read MoreThis is New Zealand’s worst recession post-1987, however, economists believe the quick recovery in the third quarter as the outbreak is under control. According to Stats NZ spokesman, retail, accommodation, transport and restaurants saw significant declines due to the international travel ban and nationwide lockdown. During the period, household domestic spending dropped 12%. New Zealand’s economic slump is higher compared to its neighbor Australia’s 7%, but it is less than that of the U.K. and India.

Finance

Indian Forex reserves down by $353 million to $541.66 billion
After touching a life-time high in the previous week, the country’s foreign exchange reserves declined by $353 million to $541.660 billion in the week ended September 11, according to the Reserve Bank of India (RBI) data. In the previous week ended September 4, the reserves had increased by $582 million to a record high of $542.013 billion. During the reporting week, the fall in reserves was due to a decline in foreign currency assets (FCAs), a major component of the overall reserves. FCAs decreased by $841 million to $497.521 billion in the reporting week. Expressed in dollar terms, the foreign currency assets include the effect of appreciation or depreciation of non-US units like the euro, pound and yen held in the foreign exchange reserves. Read MoreThe gold reserves rose by $499 million in the reporting week to $38.02 billion. The special drawing rights with the International Monetary Fund (IMF) marginally declined by $1 million to $1.482 billion during the week. The country’s reserve position with the IMF declined by $11 million to $4.637 billion during the reporting week, the data showed.

NPCI introduces auto debit option in UPI for recurring payments
National Payments Corporation of India (NPCI) launched AutoPay feature in UPI which will auto debit customer accounts for regular payments, easing the burden to remember recurrent bill payments. The UPI AutoPay option enables users to set up an e-mandate and pay the recurring expenses like insurance premium, mobile bills, electricity bills, DTH payments, EMI payments, bus or metro card payments, UPI eligible streaming subscriptions and other utility bills. The Repeat mandate functionality gives seamless convenient usage for people to set up repeat payments across a variety of applications.Read More To enable auto payments, customers have to authenticate their accounts through UPI PIN once for amounts under ₹2000. For payments above ₹2000, UPI pin authentication is required at every mandate. Consumers have to set up a date for auto debit after which their account will be automatically debited on the scheduled day. Users will continue to have control over payments being made even when they are set for auto-debit. They will receive notifications on setting up a mandate, pre- and post-transaction alerts, to let the users know that it is made on time, and with their knowledge. Mandates can be set up for different frequencies like daily, weekly, monthly, annually, as required. Consumers can also change, pause or revoke an auto debit mandate as required. The RBI committee on digital payments chaired by Nandan Nilekani, co-founder of Infosys, recommended to introduce recurring payments in UPI, in May 2019.

Fitch Solutions revises its forecast to 11.5% decline in fuel demand in 2020
Fitch Solutions has revised its earlier forecast of a 9.4% decline in fuel demand in India in 2020 to 11.5% contraction. The agency has done so looking at the deterioration in India’s economic outlook. It said that demand weakness is being observed in both industrial and customer fuels as they are set for a “steep decline”. Read MoreDue to the lockdown, the total fuel consumption declined a massive 48.7% on a year-on-year basis in April. In terms of percentage, Jet fuel took the biggest hit with 91.4% decline, however, LPG remained strong with a 4.3% rise in year to date. The agency has also forecasted close to 5% year-on-year growth in 2021 and 2022 with normalized economic activity and pandemic under control. The agency earlier revised its India GDP contraction forecast to 8.6% in 2020-21 from 4.5% as the strained economy his hit hard by COVID-19 with services and manufacturing sectors likely to remain under pressure.

Rolls-Royce in talks to raise £2.5 Billion from investors next month
Rolls-Royce Holdings Plc, the aero-engine maker, said it is considering a variety of options including a right issue to boost its balance sheet and to raise close to 2.5 Billion pounds (US$ 3.2 Billion). According to a Financial Times report, the company was in talks with Singapore’s GIC and several sovereign wealth funds for the same. Read MoreThe report added that an equity raise will be launched in the initial weeks of October. The company has been reviewing funding options for a few months now after a blow from restrictions on travel worldwide. The Derby based company’s share price is down 74% this year due to the COVID-19 pandemic. The company earlier waved off 9000 jobs in May in civil aviation due to massive decline in air travel. It also revealed its plans to sell some assets and Spanish unit ITP Aero last month.

External debt increases almost 3% to $559 billion at March-end
The total external debt of India has rose 2.8% to 558.5 billion as on March 31 compared to last year on the account of increase in commercial borrowings. The External debt account for 20.6% of GDP compared to 19.8% last year. The rise in foreign borrowing points to the shortage of domestic savings and reflects the policy of enabling private sector to access foreign debt over the years. The biggest chunk of this debt is owed by the non-financial corporations which account for 42% of total debt. Read MoreThe share of deposit-taking corporations and general govt. comes out to be 28.3% and 18.1% respectively.  The momentum of private debt, however, was reduced at March end due to slow economic activity. It has also been assured that with the normalization of business activity in coming months, domestic savings are expected to rise that will counterbalance the rise in foreign debt.