The First Forum – Edition 76

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 Sixth – 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 and Creamy Garg)

Politics

More people arrested for vandalization of a Hindu Temple in Pakistan
Concerning the vandalization of a Hindu temple by a group led by members of a radical Islamist party in the Khyber Pakhtunkhwa province, the Pakistani police have arrested additional 45 people for their alleged collusion in the same. With this, now the total number of accused arrested in this case has risen to 100. On Wednesday, the temple in Terri village in Khyber Pakhtunkhwa’s Karak district was destroyed, and set on fire by a mob that was protesting against its expansion work, and over 350 people were named in the FIR. Read MoreThe members of the Hindu community had received permission from the local authorities in order to re-develop its decades-old building. However, the mob, led by the supporters of Jamiat Ulema-e-Islam party, demolished the old structure alongside the newly constructed work. The arrested people had to be present in the anti-terrorist court (ATC) wherein the police secured three days remand of the accused. Besides, India has also lodged a protest against the accused people who were responsible for the vandalization of the temple, and is striving for a strict action.

Farmer Unions to hold tractor parade towards Delhi on January 26 if demands not met
Hardening their position ahead of the next round of talks with the government, protesting farmer unions on Saturday said they will take out a tractor parade towards Delhi on January 26, when the country will celebrate Republic Day, if their demands are not met. British Prime Minister Boris Johnson will be in the national capital on January 26. He will be the chief guest at the Republic Day parade which will be held at Rajpath. Addressing a press conference, farmer leader Darshan Pal Singh said their proposed parade will be called “Kisan Parade” and it will be be held after the Republic Day parade. Read MoreThe next round of talks between the government and protesting farmer unions is scheduled to be held on January 4. Recently, the unions had announced that they would have to take firm steps if the meeting fails to resolve the deadlock. After the sixth round of formal negotiations, the government and farm unions reached some common ground to resolve protesting farmers’ concerns over rise in power tariff and penalties for stubble burning, but the two sides remained deadlocked over the main contentious issues of the repeal of three farm laws and a legal guarantee for minimum support price (MSP).

China to convene for annual parliamentary session from Mar
China will begin the annual meeting of its top legislative body on March 5 in the capital Beijing, official state media Xinhua News Agency reported. The decision was made by the Standing Committee of the National People’s Congress (NPC) and the proposed agenda includes reviewing a government work report and a draft of the 14th Five-Year Plan, China’s blueprint for economic and social development, according to Xinhua. Read MoreThe gathering of the National People’s Congress typically takes place in early March in Beijing, but was delayed to May this year due to the coronavirus outbreak. The Chinese People’s Political Consultative Conference (CPPCC), an advisory body to parliament, was advised to meet on March 4 in Beijing, reported Xinhua. The NPC, China’s parliament, usually sits for at least 10 days. The CPPCC, a largely ceremonial advisory body, runs in parallel.

Govt. accepts farmer’s demands on stubble burning and power subsidy.
In the recent meeting between Centre and farmer trade unions pertaining to the demands of farmers for the repeal of three farm bills, the centre has agreed to the two of the four demands of unions through mutual consensus. The Centre agreed to “decriminalise” stubble burning by excluding farmers from the ambit of the ‘Commission for the Air Quality Management in National Capital Region and Adjoining Areas Ordinance 2020’, and drop those provisions of the draft Electricity Amendment Bill, 2020, which are intended to change the existing mode of subsidy payment to consumers. Read MoreHowever, there was no headway on the major demands to repeal the three newly enacted farm laws and provide legal guarantee on the MSP or minimum support price. These are likely to be discussed when the two sides meet again next week.

Trump extends immigration bans until March 31 despite opposition
U.S. President Donald Trump on Thursday extended a pair of immigration bans that block many green card applicants and temporary foreign workers from entering the country as protective measures in order to save the domestic workers from pandemic induced job losses. President-elect Joe Biden, who takes office on Jan. 20, has criticized the restrictions, but has not yet said whether he would immediately reverse them. Trump issued the bans in the form of presidential proclamations that could be swiftly undone. Read MoreThe restrictions were first imposed in April 2020 which were banned by a federal judge on the basis of irreparable harm that such bans could invite. The U.S. Department of Justice appealed the decision to the 9th U.S. Circuit Court of Appeals, which is scheduled to hear arguments on Jan. 19.

Science and Technology

India approves first Covid-19 vaccine
India on Saturday approved its first and long-awaited Covid-19 vaccine, Covishield, developed by AstraZeneca-Oxford University and manufactured by Serum Institute of India (SII) for emergency use. Information and Broadcasting Minister, Prakash Javadekar, added that atleast three other vaccine candidates are in line for approval in the country. Read More Following this, Health Minister Harsh Vardhan said that around three crore frontline and healthcare workers will be vaccinated free of cost in the first base of the vaccination drive. He added that details of additional 27 Crore beneficiaries to be vaccinated by July 2021 is being finalized and will be rolled out soon. The government is ready to roll out the vaccine shots as early as next week. Oxford-AstraZeneca vaccine has already been given a nod in the UK for emergency use.

Google’s Wing warns new drone laws ‘may have unintended consequences’ for privacy
The US government made the single biggest, most impactful set of changes to drone law ruling that almost every drone in US airspace will need to broadcast their locations, as well as the location of their pilots, in order to “address safety, national security, and law enforcement concerns regarding the further integration of these aircraft into the airspace of the United States”. Google (Alphabet) isn’t too happy about those new rules. Read MoreThe company’s drone delivery subsidiary Wing wrote a somewhat fearmongering post  titled “Broadcast-Only Remote Identification of Drones May Have Unintended Consequences for American Consumers,” which argues that the FAA’s decision to have drones broadcast their location might let observers track your movements, figuring out where you go, where you live, and where and when you receive packages, among other examples. Internet-based tracking is exactly what the FAA had originally intended to do when it first proposed the Remote ID rules back in December 2019, by the way — before it received a laundry list of reasons from commenters why internet-based tracking might be problematic and decided to abandon it.

UK Scientists to Produce Low-Cost, High-Performance Ventilators
UK scientists have been awarded funding to develop a robust, low-cost ventilator to help patients in low and middle-income countries suffering from severe respiratory problems due to Covid-19. Mechanical ventilation is a small but important part of the management of pandemic virus infections that affect the lungs, including SARS-CoV-1, SARS-CoV-2 (COVID-19), and influenza. Ventilators are typically expensive to purchase and maintain, and need considerable training to use. Read MoreMost also rely on the provision of high-flow oxygen and medically pure compressed air, which are not readily available in many countries around the world. It is anticipated that these plans will be used by a wide variety of manufacturing groups across the world, thereby reducing the need for expensive transportation and maintenance. This project, known as HPLV (High Performance Low Cost Ventilator), builds on the original designs for the HEV (High Energy physics Ventilator). The HEV was developed at CERN by a group of institutes from the LHCb collaboration, with guidance from local hospitals, an international team of medical experts and organizations such as the World Health Organisation.

Spacex try to catch the boosters from space
Taking a step further in the advanced space technology, Spacex founder Elon Musk has announced of his new initiative to catch the boosters from space instead of controlled landing. Till now, the return of Falcon 9 boosters involved touching down on a boat or a launchpad using legs that were built into the rocket. Read MoreThe next generation of rockets that SpaceX is working on, the Super Heavy, won’t be landing on their way to Earth but it will involve setting up a launch tower arm to catch the booster. According to Musk, the new design will not only save the company money and trim down on the overall mass of the rocket,  it will also allow the rocket to be immediately repositioned onto the launch mount for reuse.

China launches remote sensing satellite ‘Yaogan-33’
China has successfully launched a new remote sensing satellite into space called ‘Yaogan-33’ from the Jiuquan Satellite Launch Centre in northwest China. The satellite, Yaogan-33, was launched aboard a Long March-4C rocket and entered the planned orbit successfully making it a 357th flight mission of the Long March carrier rocket series. Read MoreThe mission also sent a micro and nano technology experiment satellite into orbit. The two satellites will be used for scientific experiments, land resources survey, crop yield estimation and disaster prevention and reduction.

Business

Ford, M&M announce cancellation of Joint Venture
In a recent announcement, Ford Motor Company (FMC) and Mahindra & Mahindra (M&M), have mutually decided to call off an automotive joint venture. In October 2019, the two companies had entered into a joint venture for developing, marketing and distributing Ford vehicles and selling both Mahindra and Ford cars at the same time in India’s emerging market. Mahindra was to hold a 51% stake, while Ford would have the rest. The new entity formed was to absorb Ford’s assets near Chennai and Sanand and run by Mahindra. Read MoreHowever, worldwide disruptions, fundamental changes in the global economy owing to Covid-19 pandemic and the resulting change in priorities of capital allocation has led to the abandonment of the partnership. The move is a big blow for both the automakers. While FMC will continue its struggle for larger market share in India, M&M’s access to new technologies for engine and manufacturing capacities will take a hit.

China warns strict action against NYSE’s delisting of Telecoms
China on Saturday asserted on strict and necessary action against the New York Stock Exchange’s move to delist three Chinese telecom firms to safeguard their interests. The NYSE on Thursday announced delisting of China Telecom Corp., China Mobile Ltd., and China Unicom Hong Kong Ltd., with their trading suspension due to their military ties back home.  The move comes from President Donald Trump’s Nov. 12 move barring investment in companies owned or controlled by the Chinese military. Read MoreThe Chinese Ministry of Commerce said that such suppression and abuse of national security is against market rules and will weaken all parties’ interest and confidence in the US capital market. The ministry has also called to put US-China trade relations on track. US-China relation has been under strain in the four years of President Trump with a number of disputes over trade and human rights.

CBI books Shakti Bhog Foods, directors for Rs 3,269 crore bank fraud
Central Bureau of Investigation has filed a case against Shakti Bhog Foods and its officials for defrauding a consortium of 10 banks of Rs Rs 3,269 crore. The FIR was filed on the basis of a complaint from the State Bank of India (SBI). In the FIR, the central probe agency has also named Shakti Bhog Foods’ Managing Director Kewal Krishna Kumar and directors Siddharth Kumar and Sunanda Kumar as accused. The company had received over Rs 2,000 crore from a consortium of 10 lenders, led by the SBI, reported India Today. Read MoreThe FIR alleged that Shakti Bhog top officials siphoned off public money by falsifying accounts and forging documents. SBI, in its complaint, noted that Shakti Bhog Foods, during the forensic audit of financial year 2015-16 claimed that its inventory of Rs 3,000 crore was damaged by pests and had to be sold at very low price. The company claimed this led to huge losses. However, SBI pointed out that stock and receivable audit report for 2015 showed company’s warehouses had a stock of Rs 3,500 crore and none of it was obsolete or slow-moving. Shakti Bhog Foods, a 24-year-old company had posted a turnover of Rs 6,000 crore in 2014, but a year later, the company’s accounts had an outstanding of Rs 2,016.60 crore which turned into non-performing asset. In 2019, account was declared as fraud.

Centre issues notices against Flipkart and Amazon
Due to the violations of foreign direct investment (FDI) and other relevant rules, the commerce and industry ministry has asked the RBI and Enforcement Directorate (ED) to take “necessary action” on allegations made by Confederation of All India Traders (CAIT) against Amazon, Flipkart and Walmart. The Centre has directed RBI to issue relevant notices to the companies in response to the concerns received from CAIT such as the recent Rs 1,500-crore deal between Flipkart Group and Aditya Birla Fashion & Retail (ABFRL). Read MoreIt has been objected that this deal will make Flipkart prefer ABFRL on its market platforms and will violate the guidelines of FDI. The traders’ body has also alleged a misuse of the FDI policy in manufacturing by e-commerce players for multi-brand retailing of grocery. The e-commerce players have denied these allegations on their part and claim that all procedures have been duly met.

Equity investors gain a total of Rs 32.49 lakh crore in 2020.
Overcoming the major highs and lows in the pandemic ridden 2020, the equity investments have gained a total of Rs 32.49 lakh crore in the year. The BSE saw ruthless buying and selling and the Sensex gained by 15.7 per cent in 2020. For the entire year, the market capitalisation of BSE-listed firms zoomed by Rs 32,49,689.56 crore to reach Rs 1,88,03,518.60 crore. Read MoreAnalysts say that the effect of the crash in March was completely undone over a few months that followed, and markets rose much more to touch peak levels. Talking about the top five, Reliance Industries Limited remained the country’s most valuable firm with a market valuation of Rs 12,58,157.10 crore, followed by TCS (Rs 10,77,009.46 crore), HDFC Bank (Rs 7,91,312.61 crore), Hindustan Unilever Limited (Rs 5,62,378.04 crore) and Infosys (Rs 5,34,940.34 crore).

Economics

Report says Indian economy me add only 1% in real terms in 2021-22
According to a report by the India Ratings, the Indian economy may add just 1% in real terms to reach Rs. 147.17 Lakh Crore as against Rs. 145.66 Lakh Crore in 2019-20 in real terms measured at 2011-12 prices. This comes in contrast to the 9.6% expected growth rate in a year-on-year basis in the next fiscal. Read MoreIndia Ratings justified that a strong V-shaped expected recovery is creating an impression that India is out of trouble. However, owing to extreme decline in growth of 23.9% in Q1 and 7.5% in Q2, even a slight improvement in Q1 and Q2 of the upcoming fiscal will reflect a decent and good annualized GDP growth rate due to low base. This means that the Indian economy will only recover its loss in the next fiscal and actual meaningful growth will only take place from 2022-23.

Fiscal deficit passes 135% of full-year target
India’s fiscal deficit stood at Rs. 10.75 Lakh Crore in the 8 months ending November 2020 to cross 135% of the Budget target of around Rs. 8 Lakh Crore for this fiscal according to the data released by the Controller General of Accounts. The deficit is largely due to a decline in revenue and capital receipts with non-tax revenue at only 32% of the budgeted amount. Read MoreDespite having a year-on-year increase in government spending in November, the total spending in the initial 8 months of the fiscal stood at 62.7% compared with 65.3% at the same time the previous fiscal. ICRA has estimated total government expenditure at Rs 30.2 Lakh Crore for this fiscal. According to Madan Sabnavis, chief economist at CARE Ratings, if all the atmanirbhar program allocations are made, the deficit may rise to Rs 17 Lakh Crore. 

States, UTs set to borrow Rs 3.16 trillion through SDLs in March quarter
State governments and Union Territories (UTs) plan to raise Rs 3.16 trillion through state development loans (SDLs) in January-March 2021, the last quarter of the current fiscal year (Q4FY21). The Reserve Bank of India (RBI), in consultation states and UTs firmed up, has the indicative borrowing plan for raising funds from the market. Read MoreICRA quotes the indicative amount is lower than the estimate of Rs 3.5 trillion. The revenues from goods and services tax (GST) in December and the remaining part of the current financial year will have bearing on the actual amounts raised by states from the market. States and UTs have raised Rs 5.51 trillion in April-December 2020. Overall, in Q3FY21, gross SDL issuance stood at Rs 2.02 trillion, 24.9 per cent more than 1.61 trillion in Q3FY20. In an encouraging development, the RBI conducted open market operations (OMOs) in SDLs for the first time in Q3FY21.  The central bank purchased Rs 100 billion SDLs in each of the three SDL OMOs held in Q3FY21, in the nine-11-year maturity buckets.

Exports slip 0.8% in December 2020; trade deficit widens to $15.71 billion
The country’s exports declined marginally by 0.8 per cent to USD 26.89 billion in December 2020, due to contraction in sectors like petroleum, leather and marine products, according to preliminary data released by the commerce ministry. The trade deficit in December widened to USD 15.71 billion, as imports grew by 7.6 per cent to USD 42.6 billion. Read MoreExports in December 2019 was USD 27.11 billion, while imports stood at USD 39.5 billion. In November 2020, the exports were down by 8.74 per cent. India is thus a net importer in December 2020, with a trade deficit of USD 15.71 billion, as compared to a trade deficit of USD 12.49 billion, widened by 25.78 per cent, the ministry said in a statement. In December 2020, oil imports declined by 10.37 per cent to USD 9.61 billion. During April-December this fiscal, the imports dipped by 44.46 per cent to USD 53.71 billion.

More than Rs 70,000 crore economic loss in Q3 due to farmers’ agitation
PHD Chamber of Commerce and Industry (PHDCCI) has said that the farmers’ agitation against new agri laws will lead to economic loss of over ₹70,000 crore in the December quarter owing to supply chain disruptions, particularly in Punjab, Haryana and border areas of Delhi. The chamber’s President Sanjay Aggarwal mentioned that there are around 25 lakh MSMEs in Punjab and Haryana which employ more than 45 lakh workers contributing more than ₹4 lakh crore in the total ₹14 lakh crore worth Gross State Domestic Product (GSDP) of Punjab and Haryana. Read MoreThe GSDP of Punjab and Haryana was estimated at ₹5.75 lakh crore and ₹8.31 lakh crore respectively in 2019-20. But sectors such as food processing, cotton textiles, garments, automobile, farm machinery, information technology, trading, tourism, hospitality and transport have been severely impacted by the agitation which has disrupted supplies of many raw materials to the industry and has resulted in a major economic loss for the region.

Finance

Bitcoin at all-time high
The world’s largest virtual currency, Bitcoin, has now surpassed US$ 33000 and is valued at an all-time high. The virtual currency has nearly doubled in December, tripled since September and has risen from 52 week low of around US$ 4000 to high of around US$ 33000. Bitcoin had a similar run in 2017 where it reached the then record-high of US$ 20000. Read MoreHowever, owing to China’s crackdown on cryptocurrency business, it fell to nearly US$ 3000 in early 2019. As the US dollar has weakened over the year, investors have been drawn to the cryptocurrency market, especially Bitcoin. Its limited supply and store of value function have only added to its rise in 2020. Institutional investors are now accepting Bitcoin more than ever before. However, high volatility has always been a concern for cryptocurrency traders and investors.  

RBI constructs index to capture digital payments penetration in country
The Reserve Bank of India on Friday said it has constructed a composite Digital Payments Index (DPI) with March 2018 as the base period to capture the extent of digitisation of payments across the country. Going forward, RBI-DPI will be published on the central bank’s website on a semi-annual basis from March 2021 onwards with a lag of four months. The RBI-DPI comprises of five broad parameters that enable measurement of deepening and penetration of digital payments in the country over different time periods. Read MoreThe parameters are payment enablers (weight 25 per cent), payment infrastructure demand-side factors (10 per cent), payment infrastructure supply-side factors (15 per cent), payment performance (45 per cent) and consumer centricity (5 per cent). Each of these parameters have sub-parameters which, in turn, consist of various measurable indicators. The RBI-DPI has been constructed with March 2018 as the base period, meaning DPI score for March 2018 is set at 100.

IFSCA becomes member of International Organization of Securities Commissions
International Financial Services Centres Authority (IFSCA) on Friday said it has become an associate member of the International Organization of Securities Commissions. The International Organization of Securities Commissions (IOSCO) works closely with the G20 and the Financial Stability Board in setting up the standards for strengthening the securities markets. The IOSCO Objectives and Principles of Securities Regulation have been endorsed by Financial Stability Board as one of the key standards for sound financial systems. Read MoreThe membership of IOSCO would provide IFSCA the platform to exchange information at the global level and regional level on areas of common interests. Further, the IOSCO platform would enable IFSCA to learn from the experiences and best practices of the regulators of other well established financial centres, it said. The first International Financial Services Centre (IFSC) in the country has been set up at the Gujarat International Finance Tec-City (GIFT) in Gandhinagar.

India receives record Foreign Direct Investment (FDI) in September quarter
India received net Foreign Direct Investment (FDI) of record US$ 25 Billion in the September Quarter as investors around the world believed and focused on economy revival through restoration in private capital expenditure and government spending. Along with the equity investment of US$ 25 Billion, portfolio investment of US$ 7 Billion was also recorded in the same quarter. Read MoreAccording to Rahul Bajoria, chief economist at Barclays Capital, major contributor to the Net FDI jump was several inflows in Reliance Jio’s fundraising initiative. He added that the net FDI had risen to $24.6 Billion because of the large inflows in Reliance Jio’s fundraising initiative. Apart from this, several global private equity investors also increased their investments in Indian Equities. Participation from big global investors in Reliance Industries’ acquisition of Future Group’s retail assets have been expected.

GST collection touches all-time high in December
The gross revenues from the Goods and Services Tax in December 2020 hit an all-time high since the introduction of the tax in 2017, with collections of ₹1,15,174 crore. December’s collections of the indirect tax are 12% higher than December 2019. According to department of revenue, revenues from import of goods was 27% higher and the revenues from domestic transactions (including import of services) are 8% higher in December than those from these sources during the same month last year. Read MoreThe Finance Ministry says that this has been due to combined effect of the rapid economic recovery post pandemic and the nation-wide drive against GST evaders and fake bills along with many systematic changes introduced in recent times.