The First Forum – Edition 68

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 Eighth – 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 Gunika Vij, Ashika Deb and Shitij Goyal)

Politics

New political alliance for restoration of Article 370

Leaders of the National Conference, Peoples Democratic Party, Peoples Conference, Communist Party of India Marxist, Peoples Movement and Awami National Conference parties came together on Thursday to form an alliance to peacefully seek the restoration of the erstwhile state’s special status and fight for the rights of the people in the restive region. The coalition has been named “People’s Alliance.” Read MoreThey want to resolve the current situation through peaceful dialogue as soon as possible. The declaration was drafted on August 4, 2020 – a day before the anniversary of the effective scrapping of Article 370 which accorded the special status to the region.

Ministers, political leaders touring flood-hit areas

With incessant rain damaging crops and claiming several lives in parts of western Maharashtra and Marathwada, ministers and leaders of different political parties have decided to tour flood-hit areas to supervise rescue work. On Saturday, Deputy Chief Minister announced that farmers will be compensated. Read MoreLeader of Opposition has also decided to return to the state for a 3-day tour of flood-hit areas.  NCP president will start his own tour from Osmanabad on October 18. Relief and Rehabilitation Minister will also visit parts of Latur, Osmanabad, Solapur and Pune between October 18 and 20. State Revenue Minister has demanded urgent aid from the Centre.

U.S-Israeli envoy flies to Bahrain to advance ties

A joint American-Israeli delegation was set to fly to Bahrain on Sunday on the first direct Israeli commercial flight to the Gulf Arab state, where they’ll be signing a number of bilateral agreements. U.S. Treasury Secretary and Israel’s Prime Minister’s national security adviser are leading the delegation that is flying out of Tel Aviv’s Ben Gurion airport. Read MoreIt will be the official establishment of the diplomatic relations between the two countries. Similar to the UAE, Bahrain is expected to open its embassy at some point in the city of Tel Aviv. Meanwhile, Israel and the UAE have already signed a number of business, banking and intergovernmental agreements.

China’s new laws to handle epidemics

China has passed a new law to improve its handling of disease outbreaks, including protection of whistle-blowers. It flags the right to report “acts that endanger biosecurity” and calls for risk prevention systems, ranging from active monitoring to emergency plans, effective from April next year. Read MoreThis comes after Western criticism on coronavirus. Under the new law, those who conceal information omit making reports or prevent others from reporting infectious diseases could be given warnings or suspended and it calls for regular monitoring of biosafety risk factors and tracing origin of incidents.

G23 to take stand on issues

The Congress dissidents who wrote a letter to Sonia Gandhi are likely to issue regular statements on national issues independent of the official party platform. This move may appear to be designed to show gaps and deficiencies in the party’s articulation of criticism of the Modi government. Read MoreThe group of 23 senior Congress functionaries has decided that policy statements focused on the Centre were required to send out a message to the party as well as to the political rival BJP. On Tuesday, there was a strong buzz about recrimination and clashes within the G-23 too.

Science and Technology

Study of “Unidentified Aerial Phenomena”

The U.S. Navy recently admitted that strangely behaving objects caught on video by jet pilots over the years are concerning and to investigate these, in August, the Navy established an Unidentified Aerial Phenomena (UAP) Task Force. The recently observed UAPs purportedly have accelerations that range far higher than a human pilot could survive, no air disturbance is visible and they don’t produce sonic booms. Read MoreScientists have figured that Earth-observation civilian satellites could be used to search for UAPs. The exploration team is looking into using satellites to monitor the region of ocean south of Catalina Island where the 2004 Nimitz encounters occurred. That area will also be the target for a 2021 UAP expedition carried out by researchers.

CRISPER diagnostic technique to detect coronavirus in just 5 minutes

Researchers have used CRISPR gene-editing technology to come up with a test that detects coronavirus in just 5 minutes. It doesn’t require expensive lab equipment to run and could potentially be deployed at doctor’s offices, schools, and office buildings. They work by identifying a sequence of RNA unique to SARS-CoV-2. The initial CRISPR tests required researchers to first amplify any potential viral RNA to increase their odds of spotting a signal which added complexity, cost, and time. Read MoreNow, it can detect as few as 100,000 viruses per microliter of solution with a single guide RNA. Although that’s still not as good as the conventional setup, it has another key advantage which is quantifying a sample’s amount of virus.

New method to block coronavirus replication

Scientists have laid out an approach to block a protein that the novel coronavirus uses to cut and disable crucial components of the immune system and to produce its copies. The researchers developed two molecules that inhibit the molecular “scissor” enzyme used by the coronavirus called SARS-CoV-2-PLpro. Read MoreThe scientists developed the inhibitors, which are very efficient at blocking the activity of SARS-CoV-2-PLpro, yet do not recognize other similar proteins in human cells. This could be a key to finding a drug against COVID-19. By understanding similarities and differences of these enzymes in various coronaviruses, it may be possible to develop inhibitors that are effective against multiple viruses.

New development: Room-temperature superconductor

Previously discovered superconductors need to be cooled to very low temperatures making them impractical for most uses. Now, we have the first superconductor which is superconducting below temperatures of about 15° Celsius. However, its superconductivity appears only at extremely high pressures.. The superconductor was formed by squeezing carbon, hydrogen and sulfur between the tips of two diamonds and hitting the material with laser light to induce chemical reactions and at a pressure about 2.6 million times that of Earth’s atmosphere, and temperatures below about 15° C, the electrical resistance vanished. Read MoreIf a room-temperature superconductor could be used at atmospheric pressure, it could save vast amounts of energy lost to resistance in the electrical grid, improving current technologies.

Remdesivir doesn’t reduce COVID-19 deaths

A large international study found that Remdesivir doesn’t reduce deaths from covid-19.The tested drugs include remdesivir, the antimalaria drug hydroxychloroquine, an anti-HIV drug called lopinavir and interferon-beta1a. None of the drugs showed any benefit in reducing deaths or the need for ventilation or the length of hospital stays, but some analyses may change during the peer-review process but it currently has emergency authorization from the U.S. Food and Drug Administration for use in all hospitalized patients. Read MoreMany hospitalized patients are suffering more from overexuberant immune systems trying to fight off the virus. By that time, it may be too late for a drug that prevents viral replication like remdesivir to make a difference but giving remdesivir to sick people earlier might help.

Business

Government set to borrow for states

The central government has agreed to borrow Rs 1.1 lakh crore from the market and extend it as loans to state governments in lieu of GST shortfall so the bond market expects further flattening of the yield curve. The RBI has already assured that the borrowing programme of the Centre and states for the rest of 2020-21 will be completed in a non-disruptive manner without compromising on price and financial stability and it will conduct Open Market Operations in State Developments Loans for the first time. Read MoreThe yield on benchmark 10-year government bonds closed at 5.93% on Friday. The borrowing wouldn’t increase the central government fiscal deficit nor result in an increase in combined centre and state government issuance for this fiscal. This step will reduce the supply of state bonds in H2 FY2021.

Diesel and petrol sales pick up

Diesel sales by Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corporation rose above pre-Covid levels by 8.8% for the first time since February while the sales of petrol grew by 1.6%. The recovery of diesel sales has been slower than that of petrol with an increasing number of people preferring personal mobility over public transport. Read MoreIt is likely due to a pick-up in industrial activity before the festive season and the restoration of some public transport services.

Go ‘swadeshi’, end imports and increase exports: Nitin Gadkari

Union minister Nitin Gadkari made a pitch for ‘swadeshi’ (indigenous) production and said imports need to end, while exports should increase. Gadkari said an alternative fuel economy worth Rs 5 lakh crore could be created through rural participation. He went on to inform the gathering that turnover of village industries had increased from Rs 80,000 crore last year to Rs 1 lakh crore and the target was to take it further to Rs 5 lakh crore soon. Read MoreThe country was getting self-reliant in defence, automobiles and several other sectors and would become the world’s largest e-vehicle manufacturing hub in the next five years with products ranging from two-wheelers, three-wheelers and cars to construction equipment. RSS functionary Manmohan Vaidya also spoke at the event and laid stress on “aatmanirbharta” (self-reliance) and swadeshi.

Post-COVID: Indian Companies look towards three Central American nations for business opportunities

“Indian business establishments should look at this region with a strategy to expand market share and not just look at this region as small countries with small populations. “Minimum population and Maximum business share” should be the approach. Our products offer good quality at affordable prices. With sustained efforts, we will be able to increase our market share in these countries and that will provide adequate returns on investments,” Indian envoy to Guatemala, El Salvador and Honduras, BS Mubarak. In an exclusive virtual meet organized by FICCI for Central America, held in August the FMCG Supply Chain expo had the Guatemalan Minister of Economy, Tony Malouf, as the chief guest. “Around 15 companies from India and more than 100 companies from Guatemala, El Salvador and Honduras had participated in the event. Read MoreThere are opportunities for Indian companies for ready to eat products, allied products, packaging, agritech, diesel engines and other machines. The countries in the region prefer Indian machinery.”  Last month, major textile companies from India including Aditya Birla Group, Nagreeka Group, Rachna Art Prints, Raymond, Reliance Industries Limited and Rughani Brothers presented their textile products to 60 buyers from the three countries which fall under the India mission. The presentations were made during the Synthetic and Rayon Textile Export Promotion Council (SRTEPC) online expo.

Economics

IMF calls for more international cooperation as the world economy recovers slowly

The IMF’s latest World Economic Outlook sums up the challenges ahead in the report’s title: ‘A long and difficult ascent’. With COVID-19 having already extracted a toll of over a million lives, accompanied by an evisceration of livelihoods and output in economies, prognosticating the economic future even as the pandemic rages on is an unenviable task. Read MoreWhile the global economy is projected to shrink 4.4% this year, reflecting a less severe contraction than the 5.2% drop estimated in June, output is seen rebounding at a marginally slower 5.2% pace in 2021. The message is clear. In a world as interconnected as it is today, the cost of economic insularity would only be more protracted pain for all.

Covid Pandemic Will Push China GDP Growth Far Beyond US, IMF Data Shows

The Covid-19 pandemic will produce lasting shifts to global growth, pushing China even more to the forefront. The proportion of worldwide growth coming from China is expected to increase from 26.8 per cent in 2021 to 27.7 per cent in 2025, according to Bloomberg calculations using International Monetary Fund data. That’s more than 15 and 17 percentage points, respectively, higher than the US share of expected global output.  India, Germany and Indonesia round out the top five largest growth engines, next year . Read MoreThe IMF estimates China will grow by 8.2 per cent next year, down a full percentage point from the IMF’s April estimate but strong enough to account for more than one-quarter of global growth. The US is expected to rally to a 3.1 per cent increase which will account for 11.6 per cent of global growth in 2021 in purchasing power parity terms.

China passes new law restricting sensitive exports

China has passed a new law restricting sensitive exports to protect national security, allowing Beijing to reciprocate against the US as tensions mount between the sides over trade and technology. Export controls under the law will apply to civilian, military and nuclear products, as well as goods, technologies and services related to national security. Read MoreCompanies and individuals who endanger national security by breaching the new export control law, including those outside of China, could face criminal charges. Violations of the law, such as exporting items without a permit, could result in fines of 5 million yuan ($746,500), or up to 20 times the business value of the illegal transaction.

India’s exports turn positive in September; up 6% at USD 27.58 billion

After contracting for six straight months, India’s exports rose 5.99 per cent to USD 27.58 billion in September on account of growth in shipments of drugs and pharmaceuticals and readymade garments, as per the government data released on Thursday. Exports stood at USD 26.02 billion in September 2019. The country’s imports contracted 19.6 per cent to USD 30.31 billion in September. It was USD 37.69 billion in the same month last year. The trade deficit narrowed to USD 2.72 billion, compared to a shortfall of USD 11.67 billion in the year ago-month. Gold imports declined by nearly 53 per cent to USD 601.43 million in September. Read MoreMajor export commodities that have recorded positive growth during September include iron ore (109.65 per cent at USD 303.42 million), readymade garments (10.22 per cent at USD 1.19 billion), rice (93.86 per cent at USD 725.14 million), and drugs and pharmaceuticals (24.38 per cent at USD 2.24 billion). Since March, the country’s outbound shipments were recording negative growth due to the COVID-19 pandemic and the resultant fall in global demand.

States’ GST gap to be fully bridged, says FM Nirmala Sitharaman

Finance minister Nirmala Sitharaman on Friday told 21 states and 2 UTs, which have chosen the incentivised Option 1 to bridge their yawning GST revenue shortfall in FY21 that, they “won’t face any cash shortfall” in the year due to the paucity of relevant cess proceeds. She wrote to the finance ministers of these states: “A total of Rs 2.16 lakh crore is unconditionally available to states under Option 1 (special window + 0.5% extra OMB sans reforms). This more than covers the funds which would have been received by them during the current financial year if total compensation were paid in full.” Read MoreWith the Centre changing its stance and agreeing to borrow on the states’ behalf, the impasse at the GST Council over the issue seems to be ending. It is also clear the compensation cess would not only stay for a considerably long period beyond July 2022, but would likely be levied on more items.

Finance

Ministry of Finance kick-starts Budget making exercise amid contraction pressure

The finance ministry on Friday kicked off the exercise to prepare the annual Budget for 2021-22 amid the urgency to push economic growth hit by the COVID-19 pandemic. The upcoming Budget will be crucial for the country as it will have to deal with impact of pandemic which has affected all segments of the economy, including revenue collection, disinvestment, expenditure, exports and food price.  The economy is projected to contract by a massive 10.3 per cent this year, according to an IMF forecast. Even the Reserve Bank of India expects the economy to shrink by 9.5 per cent in the current financial year. As per the finance ministry schedule, the nearly one-month long exercise to finalise the Revised Estimate (RE) for 2020-21 and Budget Estimate (BE) for 2021-22 began last week. The meetings will conclude on November 12. Read MoreOfficials of the Department of Financial Services, as well as ministries of MSMEs, housing, steel and power were among those who participated in the first meeting, as per the schedule. “This year, however, keeping in view the COVID-19 situation and the need to maintain social distancing, the number of participants for the pre-budget meetings may be restricted to a maximum of 5 officers (for each meeting) from a Ministry/Department, not below the rank of Director/DS,” the Budget Division of the finance ministry had said in a notice. It will be the third Budget of the Modi 2.0 government and Finance Minister Nirmala Sitharaman. Budget 2021-22 is likely to be presented on February 1 2021.

Adani Group, Piramal among 4 bidders for DHFL, lenders stare at over Rs 60,000 crore write-off

Four entities — Adani Group, Piramal Group, US-based asset management company Oaktree Capital Mangement, and SC Lowy — have submitted bids for Dewan Housing Finance Corporation (DHFL). While Oaktree submitted a bid for the entire company, others bid for select portfolios. While Adani Group has submitted bids only for the construction finance portfolio and slum rehabilitation loans, Piramal Group has bid for the retail portfolio, and SC Lowy for the construction finance business, putting it in competition with Adani Group. Read MoreDHFL was the first finance company to be referred to NCLT by the RBI using special powers under section 227. Prior to that, the company’s board was superseded and R Subramaniakumar was appointed as the administrator. He is also the resolution professional under the Insolvency and Bankruptcy Code (IBC).

Taxpayers will have to report only transactions pertaining to FY19 in annual GST return: Finance ministry

In a statement, the ministry said certain representations have been received stating that certain tables in the auto populated GSTR-9 for the year 2018-19 also include the data for the financial year 2017-18. However, this information for 2017-18 has already been furnished by the taxpayers in the annual return (GSTR-9) filed for 2017-18 and there is no mechanism to show the split of two years (2017-18 and 2018-19) in Form GSTR-9 for 2018-19. “It is clarified that the taxpayers are required to report only the values pertaining to the financial year 2018-19 and the values pertaining to the financial year 2017-18 which may have already been reported or adjusted are to be ignored,” it said. Read MoreIt added that no adverse view would be taken in cases where there are variations in returns for taxpayers who have already filed their GSTR-9 of 2018-19 by including the details of supplies and input tax credit (ITC) pertaining to 2017-18 in the annual return for 2018-19.  Last month, the government extended the deadline for filing GST annual return and audit report for the financial year 2018-19 by a month till October 31.

Railway Ministry resorted to “window dressing” for projecting its finances in a better light: CAG report

The Ministry of Railways resorted to window dressing for presenting its working expenses and operating ratio in a better light, the Comptroller and Auditor General of India said in its report on assessment of railways’ finances for FY 19. Pointing that the net surplus in 2018-19 was Rs 3,773.86 crore, the Indian Railways would have ended with a negative balance of Rs 7,334.85 crore but for receipt of advance freight and less appropriation to Disaster Relief Fund and Pension Fund.Read More The Railways could not achieve even revised earnings target of Rs 1,97,214 crore, the report, tabled in the Parliament on Wednesday said. “Ministry of Railways (MoR) resorted to window dressing for presenting the working expenses and operating ratio in a better light,” it said.

Finance Ministry plans stake sale in Indian Railway Finance Corp, RailTel

The finance ministry is looking at launching the initial public offering (IPO) of Indian Railway Finance Corp Ltd (IRFC) and state-owned telecom infrastructure provider RailTel Corporation. Officials said the plan is to sell about 25 per cent in IRFC and 27 per cent stake in RailTel.  “The government is planning to sell 20-25 per cent stake in IRFC through an IPO and 27 per cent stake in RailTel,” said Tuhin Kanta Pandey, Secretary of Department of Investment and Public Asset Management (DIPAM). Read MoreRailTel has already filed Draft Red Herring Prospectus (DRHP) with the market regulator SEBI for an IPO of up to 8.66 crore equity shares. Earlier this month, the government had asked the department to go aggressive with the divestment plan. Apart from RailTel, divestment of another railway entity Container Corporation of India Ltd (ConCorp)  is also on the cards. For this financial year, the Centre has set an ambitious disinvestment target of Rs 2.1 lakh crore.