The First Forum – Edition 71

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 Seventy First – 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

Caste is key in bengal 2021

Amit Shah, in a two-day visit to West Bengal sounded the poll bugle saying that the “death knell had been rung for the Mamata Banerjee government”. His visit seemed to have a single agenda – to woo the Adivasi and scheduled caste voters. However, on the eve of his visit, Mamata Banerjee announced land rights for 25,000 refugee families and a Rs 10 crore and Rs 5 crore grant from the Matua Development Board and the Namashudra Development Board respectively. Read MoreIn the context of the Bengal elections of 2021, the Matua community has been the centrepoint of the BJP’s pro-CAA push in the state whereas Trinamool has made an early start in ensuring that they don’t lose an important vote bank.

Indian candidate secures position in key committee at the UN

Indian diplomat Vidisha Maitra, was elected to the Advisory Committee on Administrative and Budgetary Questions (ACABQ) on 6^th November at the United Nations, being India’s candidate for the only post in the committee from the Asia Pacific Group. This committee controls the financial and budgetary purse of the UN and India’s win is crucial as India will also be in the Security Council as a non-permanent member for the next two years. Read MoreACABQ performs several functions including the examination of the budget submitted by the UN Secretary-General to the General Assembly and advising the Assembly on administrative and budgetary matters referred to it.

China opposes US’ move to remove ETIM from terrorist outfit list

China accused the US of applying ‘double standards’ following the state department’s move to remove the East Turkestan Islamic Movement (ETIM) from its list of terrorist organisations because it’s “an internationally recognised terrorist organisation that seriously threatens the safety of China and the world.” According to China, US is using the terrorist organisation to promote its own interests and holding back international cooperation on counterterrorism. Read MoreA counterterrorism expert speculated that not only is this decision irresponsible for international counterterrorism efforts, but it’s also irresponsible in terms of USA’s own national security. However, US Secretary of State announced that the group had been removed in accordance with the Immigration and Nationality Act.

EU slaps sanctions on Belarus President

The EU imposed sanctions on 6^th November on the President of Belarus and 14 other officials over their roles in the security crackdown launched during protests of the country’s contested August presidential election. Ever since the elections, Belarus has seen several protests and more than 15,000 people in the country have been arrested and once the results returned President Lukashenko to power with 80% of the vote they were widely seen as rigged, even by the EU. Read MoreThe sanctions listing claims that President Lukashenko “is responsible for the violent repression by the State apparatus carried out before and after the 2020 presidential election, in particular with the dismissal of key opposition candidates, arbitrary arrests and ill-treatment of peaceful demonstrators as well as intimidation and violence against journalists.”

UK revises guidance on business with China

UK has issued new guidance to British companies on safely and ethically engaging with China, highlighting “national security concerns”, after calling out China for alleged human rights violations in Xinjiang. The UK-China trade and investment relationship is worth £70 billion and Britain is one of the top destinations in Europe for foreign direct investment from China. Read MoreAccording to the guidance, those dealing with China should be aware of the country’s ‘Civil Military Fusion’, among other issues –including China’s use of facial recognition and predictive computer algorithms; automated internet and media surveillance and censorship; and the planned use of technology in the Social Credit System.

Science and Technology

FDA advisory panel declines to support a controversial Alzheimer’s treatment

The fate of a potential new Alzheimer’s drug, aducanumab, made by pharmaceutical company Biogen is still uncertain. Evidence that the drug works isn’t convincing enough for it to be approved. It targets a protein called amyloid-beta that accumulates in the brains of people with Alzheimer’s and it could slow the disease’s progression but not stop or reverse it. Read MoreWhen asked whether a key clinical study provided strong evidence that the drug effectively treated Alzheimer’s, 8 of 11 experts voted no. Although the FDA is not bound to follow the recommendations of the guidance committee, it has historically done so. If ultimately approved, the drug would be a milestone.

Scientists design magnets with outstanding properties

An international team of researchers has discovered a new way to design magnets with outstanding physical properties. In 2019, the global market for inorganic magnets was worth $19.5 billion, and is expected to reach $27.5 billion by 2025. The team has found a new chemical strategy to design magnets based coordination networks composed of an organic radical and a paramagnetic metal ion to generate a very strong magnetic interaction, and they have many desirable physical properties, Read Moreincluding high operating temperature (up to 242 °C), large coercivity and low density. Additionally, the process of synthesizing these magnets is relatively straightforward.

1,494 Indians among top 2% scientists in the world

Twenty-two faculty members and researchers of Indian Institute of Technology, Guwahati (IIT-G) and seven faculty members of Tezpur University along with faculty members from Cotton University, Gauhati University and Assam University, are among 1,494 Indian scientists who featured in a list of top two per cent of the world scientists. Read MoreA spokesperson of the IIT-G said that the report prepared by experts at Stanford University has listed over 100,000 scientists, whose published research manuscripts have accelerated progress in their respective fields.

Global food system emissions could hinder meeting Paris Agreement’s goal.

The Paris Agreement’s goal of limiting the increase in global temperature to 1.5° or 2°C above preindustrial levels requires rapid reductions in greenhouse gas emissions but even if fossil fuel emissions were eliminated immediately, emissions from the global food system alone would make it impossible to limit warming to 1.5°C and difficult even to realize the 2°C target. Read MoreThus, major changes in how food is produced are needed if we want to meet the goals of the Paris Agreement.

Isro successfully launches earth observation satellite

ISRO has successfully launched the earth observation satellite, EOS-01, on board the Polar Satellite Launch Vehicle (PSLV from Satish Dhawan Space Centre in Sriharikota, Andhra Pradesh. It was launched as the primary satellite along with nine international customer satellites on board the PSLV-C49. The launch of EOS-01 was PSLV’s 51st mission (PSLV-C49). Read MoreThe EOS01 successfully separated from the fourth stage of PSLVC49 and injected into orbit. The Prime Minister took to twitter to congratulate ISRO on this special and unusual mission in that successfully started off even during covid.

Business

New flexi-cap category for Mutual Funds

The markets regulator has introduced a ‘flexi-cap category’ for mutual funds, which will be required to invest at least 65% of the corpus in equity but will have no restrictions on investing in large-, mid- or small-cap company stocks. In September, Sebi came up with new rules for multi-cap funds which raised concerns over the possibility of existing multi-cap funds being forced to buy mid- and small-cap stocks despite these segments not having the liquidity to absorb large flows from MFs. Read MoreHowever, the Association of Mutual Funds in India asked Sebi to create a new flexi-cap category, which will not have such stipulations, called the flexi-cap schemes wherein existing schemes will be able to reclassify themselves but such schemes will have to give investors a 30-day window to exit, without any exit load. Sebi has also restored the pre-covid cut-off timings of MFs with effect from 9 November.

Suggestion for NBFCs to convert into banks

Top central bank official is suggesting large non-bank lenders to convert themselves to banks or scale down their operations. Rao, deputy governor in charge of banking regulation and risk monitoring at RBI, called for a calibrated and graded regulatory framework for non-banking finance companies proportionate to their systemic significance. Systemically important NBFCs must be identified and subjected to a higher degree of regulation. Read MoreThey should have have incentives either to convert into a commercial bank or scale down their network externalities within the financial system which would make the financial sector sound and resilient while allowing a majority of NBFCs to continue under the regulation-light structure.

Asian share markets follow Wall Street higher

Asian share markets firmed on 2^nd November while bonds held big gains as investors awaited a clear result of the US election, with the possible prospect of policy gridlock seemingly warmly welcomed by Wall Street overnight. Morgan Stanley Capital International’s broadest index of Asia-Pacific shares outside Japan added0.5% to reach its highest since March 2018. Nikkei rose to 0.9% and South Korea put on 1.5%. Read MoreE-Mini futures for the S&P 500 firmed 0.3% adding to sharp overnight gains. Technology and healthcare stocks had led the charge higher overnight on bets a divided government would stunt chances for big reforms or corporate tax hikes while bond markets assumed a divided government would greatly reduce the chance of debt-funded spending on stimulus and infrastructure next year, thus less bond supply.

Govt to bring PLI scheme to promote domestic agro-chemicals

The government will bring a production-linked incentive (PLI) scheme for promotion of domestic manufacturing of agro-chemicals. The sector can progress adopting a multi-faceted approach by becoming globally competitive and with reforms in rules along with the “Make in India”. It has been assured that the Modi government won’t bring any laws that impact the industry and the country’s growth. Read MoreThe government has set up 2034 vision for the chemicals and petrochemicals sector to grab opportunities to strengthen domestic manufacturing, reduce imports and attract investment for manufacturing in the country. Various suggestions were made including introduction of a production-linked incentive scheme for the agro-chemicals sector with incentives of 10-20% output.

Economics

President-elect Joe Biden’s tax policies could be a boon for India: Experts

US President-elect Joe Biden’s policies of taxing corporates at a higher rate than present levels could prove to be an opportunity for India which has brought down its tax rates substantially. Experts said that multinational companies and US-based companies may end up moving a large part of their profits to overseas destinations like India to prevent getting taxed at higher rates in the US. Read MoreIndia had reduced the corporate tax rate to 22% for companies that gave up all exemptions and incentives in September last year. The effective rate without exemptions would be about 25.17%. However, a 15% rate has been offered to new companies including manufacturing firms. The rates have been set at a far more attractive levels compared to previous rate of 30%.

Economy is expected to bounce back from the next fiscal, says SBI’s Chairman

Addressing a virtual meeting, Dinesh Singh Khara, chairman, State Bank of India said that the Indian economy has shown resilience to come out from a downturn due to the coronavirus outbreak, is expected to bounce back from the next fiscal. The corporate sector will become “very careful about borrowings” and use their internal resources initially. He said the core sectors of the economy, such as steel and cement, have been doing well throughout the period starting from April 2020, and they are in a position to tap the export markets. Read MoreHowever, travel, tourism and hospitality are the worst-hit sectors in the wake of the coronavirus outbreak. He also stated that according to him, investment demand from corporate will take some time to pick up.

Increased digital payment to better assess country’s GDP: Nirmala Sitharaman

Finance minister Nirmala Sitharaman said wider adoption of digital payments will help improve assessment of GDP. “As we move towards digital transactions, we expect that the temptation for dealing with cash will be brought down, and if each of these transactions is brought into a monitorable network, Read Morethe GDP calculation can be much closer to the actual strength of this Indian economy,” Sitharaman said at the national conference of All India Federation of Tax Practitioners.

The UK economy is heading back into recession

The Bank of England is pumping another £150 billion ($195 billion) into the UK economy after warning of a double-dip recession because of the coronavirus pandemic and an uncertain outlook because of Brexit. The UK central bank said that it would keep interest rates unchanged at a record low of 0.1% but would increase its purchases of UK government bonds to £875 billion ($1.1 trillion). Read MoreRestrictions introduced to tackle a rapid rise in Covid-19 cases would weigh on consumer spending to a greater extent than the bank projected in August, “leading to a decline in GDP” in the fourth quarter of this year, it added. The UK economy is expected to have rebounded strongly in the third quarter after suffering the biggest GDP fall of any major economy in the second. It also shrank by 2.5% in the first three months of 2020.

Indian economy to fare better in the Covid, Goldilocks and the three bears phase: Morgan Stanley

India along with Indonesia and the Philippines are better placed than most Asian economies in the post Covid pandemic recovery stage, a Morgan Stanley research said. According to the research paper, titled Asia Economics: Read MoreGoldilocks and the Three Bears, while India lags in Covid-19 containment, high frequency macro indicators have continued to show a clear recovery into

Finance

Not fresh fiscal stimulus, more important is to spend committed amount: Former RBI Governor Bimal Jalan

Former Reserve Bank Governor Bimal Jalan opined against a fresh fiscal stimulus to boost pandemic-hit economy saying it is more important to spend the amount already committed by the government than to increase the deficit. If the government have finished the total amounts of resources that they have already announced, then they should increase the fiscal deficit, he said. Read MoreRecently, Economic Affairs Secretary Tarun Bajaj had said that Finance Minister Nirmala Sitharaman will soon announce the next set of stimulus packages to boost the coronavirus-hit economy.

Rajasthan takes Rs 1.1 lakh crore option to meet GST compensation shortfall

Rajasthan has become the second among the dissenting states following Puducherry to take the option to borrow Rs 1.1 lakh crore to meet the goods and service tax GST compensation shortfall.
The finance ministry said in a statement  that Rajasthan will get Rs 4,604 crore through special borrowing window and Read Morewill be permitted to raise an additional Rs 5,462 crore through borrowings under the relaxation of availing 0.5% of the state gross domestic product.

Centre extends Emergency Credit Line Guarantee Scheme till the end of November

The government has extended the Emergency Credit Line Guarantee Scheme (ECLGS) by a month till November 30 until the entire Rs 3 lakh crore made available under the scheme is sanctioned, according to a finance ministry statement. Lending institutions under the scheme have sanctioned loans amounting to Rs 2.03 lakh crore to 60.67 lakh borrowers and disbursed loans totaling Rs 1.48 lakh crore as of date, it said. Read MoreThe decision was taken in view of the further easing of Covid-19 restrictions on various sectors of the economy and the expected rise in demand during the festive season, it said. It would provide borrowers who had not yet availed loans under the scheme with the opportunity to benefit from the relaxed terms.

E-way bills: 64.1 million e-invoices generated in October, highest since the introduction of the system

E-way bills for October clocked 64.1 million, the highest since the introduction of the system more than two years ago. About 49.5 million electronic invoices were generated by 27,400 taxpayers within its first month of launch in October, the ministry of electronics and IT said Monday citing data from NIC. The e-invoice system under goods and services tax (GST) was launched on October 1, 2020 for the businesses with aggregate turnover of more than Rs 500 crore in the financial year. Read MoreStarting with 8.4 Lakh e-invoices on 1st October, 2020, the usage has gradually picked up and 31st October, 2020 saw generation of as many as 35 lakh e-invoices in a single day.

RBI announces co-lending scheme for banks, NBFCs

In a bid to improve the flow of credit to the underserved sections of the economy, the Reserve Bank of India (RBI) on Thursday issued guidelines under the co-origination model so that non-banking finance companies (NBFCs) and banks can jointly lend. The model envisages a joint lending process such that risks and rewards are shared. As per the guidelines, NBFCs need to retain a minimum of 20% share of the loans on their books. Read MoreThe regulator has also prohibited banks from entering into a co-lending arrangement with an NBFC belonging to their promoter group. RBI had earlier permitted housing finance companies (HFCs), along with other NBFCs to adopt co-lending model with banks. Lenders believe that co-lending will bring down interest rates for HFCs.