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 Ninth- 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

China says village in Arunachal Pradesh beyond reproach.
In response to India’s Ministry of External Affairs statement that “it is aware of construction along the LAC”, China on Thursday said that the country’s construction activates of a village is “within its own territory” and “beyond reproach”. Chinese Foreign Ministry asserted that as it had never recognized Arunachal Pradesh and its position of Zangnan (Arunachal Pradesh) as South Tibet has been consistent since long.Read More It further said that some areas have not been demarcated hence India cannot accuse China of building a village. According to satellite images, a village of 101 homes has been built by China between November 2019 and November 2020 a couple of kilometers across LAC. According to Indian officials, the area has been under China’s control since 1959 and there are more than two dozen spots along LAC where the two countries do not agree on alignment.

China-Pakistan embroiled in major disagreement over CPEC funding
China and Pakistan are believed to be involved in their most serious disagreement over the mega Belt and Road Initiative following which the annual bilateral summit of the China-Pakistan Economic Corridor (CPEC) has been delayed. Serious disagreements have surfaced between the two countries over the Main Line 1 (ML-1) railway project and special economic zones under CPEC, ET has learnt. ML-1 is the largest CPEC project and worth $6.8 billion.Read More China is expected to lend $6 billion of this, which Pakistan wants to borrow at a concessional interest rate of less than 3%. But China is reluctant to lend money for ML-1 as it fears that local politics will delay returns on investment for China. CPCE is governed by the Joint Cooperation Committee (JCC). It is jointly chaired by Pakistan’s minister for planning, development and special initiatives and the vice chairman of China’s National Development and Reform Commission. The first JCC meeting was held in August 2013 and the last in November 2019. Pakistan is currently renegotiating its $6 billion extended fund facility with the International Monetary Fund (IMF), which was suspended last April. The IMF reportedly will only resume the program if Pakistan does not borrow any new commercial loans, and this is one of the reasons it is looking for concessions on loans for the ML-1 project.

World Economic Forum’s online Davos summit to begin
Prime Minister Narendra Modi and Chinese premier Xi Jinping will be among the top world leaders who will participate in the six-day online Davos Agenda Summit of the World Economic Forum (WEF), beginning on Sunday. In what could be the first major global summit of the year, the event will see more than 1,000 global leaders, including heads of state and government, CEOs and chairmen of big companies, heads of multilateral organisations as also members of academia and civil society, discuss economic, environmental, social and technological challenges following the COVID-19 pandemic. Read MoreThe WEF said there would be 15 special addresses from G20 heads of state and government and international organisations during the summit from January 24-29. While the WEF will host its physical annual meeting in May in Singapore, as against the regular venue of the Swiss ski resort town of Davos, the Geneva-based organisation is hosting this online event, named ”Davos Agenda” around the same time it generally hosts its yearly congregation of the rich and powerful of the world. The event has been billed as a platform that will see top world leaders deliver special addresses and engage in dialogue with business leaders at the start of a “crucial year to rebuild trust”.

Farmers reject govt. offer of postponing the farm bills for 1.5 years
A day after the Centre proposed to put the three agricultural laws on hold for at least 1.5 years, farmers union on Thursday rejected the proposal and said they want nothing but a complete withdrawal of all the three contentious agriculture laws. During the meeting on Wednesday with the ministers, several union leaders objected to the proposal saying postponing the implementation of the laws would bring no solution.Read More The leaders, however, said the final decision on Centre’s proposal will be taken only after discussing it in details. On the other hand, SC appointed 4-member committee, who has to submit its report within 2 months, had a meeting with 10 farmer organisations to discuss their grievances and apprehensions towards the new farm bills.

Biden returns US to Paris Climate deal
In a serious of actions aimed at tackling climate crisis taken by Biden administration, Joe Biden has moved to reinstate the US to the Paris climate agreement just hours after being sworn in as president. USA, which is world’s second largest emitter of greenhouse gases was withdrawn from Paris deal under Donald Trump. Show MoreWith Biden signing the executive action, US rejoin the international effort curb the dangerous heating of the planet, following a 30-day notice period. The orders also included keeping the United States in the WHO, ending the ban on entries from mostly Muslim-majority countries, bolstering environmental protections, strengthening the fight against Covid-19, construction of the wall on the US-Mexico border and efforts to expand diversity and equality for minority groups in the federal government.

Science and Technology

Elon Musk offers to build underground tunnel network in Miami
Tesla CEO Elon Musk has offered to dig road tunnels under Miami in order to help the city alleviate its congested traffic. He tweeted that cars and trucks stuck in traffic generate megatons of toxic gases and particulate, but Boring Company road tunnels under Miami would solve traffic and be an example to the world. Read MoreEven though the news seems very exciting, several local residents and experts have expressed confusion at the idea, as the city is situated only a few feet above sea level and is vulnerable in regards to rising sea levels.

Virgin Orbit launches rocket off a 747 aircraft, reaches orbit for 1st time
Billionaire Richard Branson’s Virgin Orbit reached space for the first time on Sunday with a successful test of its air-launched rocket, delivering ten NASA satellites to orbit and achieving a key milestone after aborting the rocket’s first test launch last year. Read MoreThe Long Beach, California-based company’s LauncherOne rocket was dropped mid-air from the underside of a modified Boeing 747 nicknamed Cosmic Girl some 35,000 feet over the Pacific at 11:39am PT (1:09am IST) before lighting its NewtonThree engine to boost itself out of Earth’s atmosphere, demonstrating its first successful trek to space.

Scientists suspect “Virgin birth” after two female species give birth without male in tank
Two female ray fish gave birth on the New Year’s Eve to pups without any male at a tank in at SEA Life Kelly Tarlton’s aquarium in Auckland, New Zealand. Both the females delivered pups without being in contact with any male for at least 2 years. According to the curator of the aquarium, Andrew Chrsitie, possible explanation for this can be that the females stored sperm from the last encounter.Read More However, sperm storage is uncommon in rays. According to experts, it can be a case of “virgin birth”. Virgin birth (Parthenogenesis) refers to a natural process whereby an egg is developed into an embryo without being fertilized. This is therefore first such case of birth in Eagle rays ever documented.

IIT grads, ex-Google execs ready to roll out ad-free search engine Neeva
Sridhar Ramaswamy and Vivek Raghunathan, IIT alumni and former Google executives, are ready to roll out Neeva, an ad-free, private search product, which, by the middle of this year, hopes to offer a customer-paid and customer-first alternative, at a time of growing concerns over the control wielded by tech megaliths. Read MoreWith a 45-person team in the US, the plan is to roll out Neeva in “four-five months”, first in the home market of the US and then English-speaking regions like Western Europe, Australia and India. Neeva has raised $37.5 million so far, with equal investments from Greylock, Sequoia Capital and Ramaswamy himself. The product will be different from what people are used to, offering a single window for search and queries into personal data on services like Dropbox and email accounts. Neeva will also use AI and machine learning to create the secret sauce — rankings for searches.

Cyber criminals publish more than 4,000 stolen Sepa files
Data stolen from the Scottish Environment Protection Agency (Sepa) in a “sophisticated” cyber attack has been illegally published online. The Cyber criminals who stole thousands of digital files belonging to environmental regulator Sepa have published them on the internet. The public body had about 1.2GB of data stolen from its digital systems on Christmas Eve. Read MoreSepa rejected a ransom demand for the attack, which has been claimed by the international Conti ransomware group. Contracts, strategy documents and databases are among the 4,000 files released. The agency said priority regulatory, monitoring, flood forecasting and warning services were continuing to adapt and operate. Police Scotland said that organisations and individuals should not seek to search for the stolen information, as accessing the host site may place organisations, individuals and their computer infrastructure at risk.

 

Business

Jack Ma makes first public appearance in months.
Jack Ma, founder of Alibaba made his first public appearance in months since early November last year. His tech empire is currently under continuous scrutiny from Chinese regulators. Speculation about his fate began after his comment on the Xi Jinping’s government. A video of Ma attending a Rural Teachers Award Ceremony through video conferencing ended several ongoing debates. Read MoreThe video was published by Tainmu News. Alibaba’s share jumped 8% in Hong Kong after investors came to know of this. Ma made his last public appearance one week before Alibaba’s affiliate Ant Group scheduled IPO that was blocked at the last minute by Chinese regulators as part of a crackdown on the tech giant. Further on 24th December, a probe into Alibaba’s alleged monopolistic acts was initiated by the State Administration for Market Regulation of China.

GM says Maharashtra’s move to block its exit may impact investments.
General Motors (GM) said that Maharashtra governments move to block it from shutting down a plant and exiting the country sends a concerning message to all current and potential investors around the world which may impact investments. This act defies the business-friendly image of the state.Read More The government last week rejected the US automaker’s application to close operations after the protest by workers demanding it to continue its operation. The automaker has already halted selling cars in the country from 2017 due to low sales volume. While it had sold one plant to China’s SAIC Motor Corp, it continued a plant for export till December last year which it agreed to sell to China’s Great Wall Motor Co. but was delayed. GM has planned for reversal of the order at the earliest. 

Reliance Jio doubles down on 5G service pledge after record profit
Indian billionaire Mukesh Ambani doubled down on his promise to offer 5G services on his wireless network as early as this year, as his conglomerate Reliance Industries Ltd. reported a record profit aided by its consumer businesses. The group’s wireless operator, Reliance Jio Infocomm Ltd. — India’s largest — has started advance tests to prepare the fifth-generation, high-speed network. Read MoreThe tycoon’s plans hinge on the availability of spectrum as the Indian government still hasn’t auctioned the required airwaves. Jio said it’s testing the transmission speeds using locally-developed equipment. Reliance Jio, with almost 411 million users, reported a 15.5% jump in profit for the three months through December from the preceding quarter, while earnings margins before interest, taxes, depreciation and amortization touched 47%. Net income at the group rose 13% from a year earlier, beating analyst estimates. The latest quarterly results bolster Ambani’s ambitions to transform Reliance from an energy giant into a technology titan — a pivot that has received $27 billion from global investors including Facebook Inc. and Google. Ambani, Asia’s second-richest man, promised last month that Jio will be the first to roll out 5G in India in the second half of this year.

RIL started using Future Group’s supply chain unit even as approval awaits
Reliance Retail has started using Future Group’s supply chain unit for its logistics and warehousing needs in the food, groceries and fashion retail businesses, even as both firms await the final approvals for their deal for retail assets. Read MoreAlthough, the Securities and Exchange Board of India had approved Reliance Retail’s acquisition of Future Group’s retail operations, the deal still needs approval of the National Company Law Tribunal, in addition to no-objection certificates from Future Group’s creditors and minority shareholders.

Telecos want lower license fee, tax sops
Cellular Operators Association of India (COAI) plans to lobby the government to treat levies such as spectrum usage charges and licence fee paid to the Department of Telecommunications (DoT) as tax so that operators can claim input credit. Operators have always argued that Adjusted Gross Revenue (AGR) should comprise only revenue from telecom services but DoT insists that AGR should include all revenue generated by an operator, including that from non-core operations.Read More Telecom operators are liable to pay around 3-5% and 8% of the AGR as spectrum usage charges and licence fees, respectively, to DoT. The new proposal aims that govt. should treat levies as taxes itself as this way, only telecom associated revenue will get taxed.

Economics

RBI governor asks banks to strengthen lending capacity by raising capital
Reserve bank of India (RBI) Governor Shaktikanta Das has asked banks to take proactive measures to strengthen their resilience and lending capacity by raising capital, the central bank said in a statement. During a two-day meeting with heads of banks, including the private sector lenders, the governor emphasised on the need to remain vigilant and make provisions against bad loans proactively. Read MoreDas had held similar meetings in May as well. He had also met with representatives of other financial institutions like NBFCs and microfinance lenders. With specific reference to the financial sector, he highlighted the measures taken by the central bank since the onset of the pandemic to stabilise the economy and ensure financial stability. Assessment of the current economic situation and outlook; and monetary policy transmission and liquidity situation too came up for deliberations.

China falling short of US trade deal targets
China is falling short of its commitment to buy an extra $200bn (£146bn) worth of US goods over 2020 and 2021. China agreed to buy the goods in a trade deal with the US agreed last January in exchange for reduced tariffs on $120bn worth of goods. The agreement was seen as phase one of a deal aimed at resolving the trade war between the world’s biggest economies. Read MoreSince the Covid-19 pandemic the US trade deficit with China has surged. Medical goods and equipment used for the work from home boom helped drive US imports of Chinese goods in 2020. The January 2020 trade agreement was an attempt to wind back a tit-for-tat trade war which saw both China and the US ratchet up tariffs. The latest figures from Chinese customs show that China imported just under $135bn from the US in 2020.

RBI buying dollars to absorb surge in foreign fund flow
In a bid to prevent the rupee’s appreciation, the Reserve Bank of India (RBI) has been regularly buying dollars, absorbing the surge in foreign fund flows. Foreign equity inflows this month rose to Rs 49426 crore while forex reserves swelled by $4.277 billion to a lifetime high of $572.771 billion. This has been due to excess foreign fund flows and IPOs in the Indian market making it the only economy to receive positive net inflows for Rs 10,107 crores over 12-month period from October 2019 to September 2020. Read MoreThis trend is expected to continue as the Indian equity market has recovered as one of the fastest compared to other global markets. With this increased flow of foreign funds, rupee can significantly appreciate vis-à-vis US dollar adversely impacting the Indian exports. RBI’s buying is aimed at maintaining the exchange rate in order to avoid such adverse effects on foreign trade.

India’s retail inflation declined in December
India’s retail inflation that is calculated based on Consumer Price Index (CPI) inflation declined to 4.59% in December 2020 in contrast to 6.93% in November the same year and 7.35% in December the previous year. This is the lowest point in CPI inflation since the nationwide lockdown in March last year. Read MoreThis brings the CPI inflation in the RBI’s comfort range of 2-6% for the first time in nine months. The major contributor for this ease was food inflation that declined 3.41% in December compared to a 9.5% rise the previous month. The steep decline is being attributed to 10.41% decline in vegetable prices during the month.  However, this is the online sector that witnessed a decline. Cereals, sugar, confectionery and other products saw marginal rise during December. Milk and dairy rose by close to 4% while fruit prices grew only 2.68%.

RBI proposes four-tier regulatory framework for NBFCs
The Reserve Bank of India proposed a tighter regulatory framework for the non-banking finance companies (NBFC) sector through a four-tier progressive increase in intensity structure to prevent the occurrence of systematic risk to India’s financial system. In a Friday released discussion paper, RBI asked for comments within a month for the same. Read MoreThe four-layer structure will consist of the base layer (NBFC-BL), middle layer (NBFC-ML), the upper layer (NBFC-UL) and top layer. The threshold of Rs. 500 Crore on systematic risk is proposed to be revised at Rs. 1000 Crore. Also, the extant NPA classification norm will be reduced to 90 days from 180 days. The NBFC sector has witnessed outstanding growth in the past five years. The size of the balance sheet of NBFCs has reached Rs. 49.22 Lakh Crore in 2020 from Rs. 20.72 Lakh Crore in 2015.

Finance

RBI proposes 4-layered framework for regulation of shadow banks
The Reserve Bank of India (RBI) has proposed a four-layered structure for regulating non-banking finance companies (NBFCs) aimed at tighter capital, lending and governance norms in order to prevent defaults such as those at Infrastructure Leasing & Financial Services (IL&FS) and Dewan Housing Finance Corp. Ltd (DHFL). Not more than 25-30 large non-bank lenders will be constituents of the upper levels of the pyramid, according to the RBI discussion paper released this week.Read More Norms will get more stringent as the NBFCs get bigger toward the apex. Those in the upper tier could include Housing Development Finance Corp. (HDFC), Bajaj Finance, Shriram Capital, Tata Capital and Mahindra & Mahindra Financial Services. The regulator has also proposed common equity tier-1 capital requirements of 9% for NBFCs in the upper layer as well as similar standard asset provision norms. Both these measures could significantly increase capital requirements, although most large NBFCs are well capitalised.

Finance Minister launches Union Budget mobile app
On the occasion of traditional Halwa ceremony before union budget presentation, the Finance Minister launched the ‘Union Budget Mobile App’ for hassle-free access of Budget documents by Members of Parliament (MPs) and the general public using the simplest form of digital convenience. Unlike the past, the voluminous budget documents will not be printed this year following the COVID-19 protocol and will instead be distributed electronically to the MPs. Read MoreThe App can also be downloaded from the Union Budget Web Portal (www.indiabudget.gov.in). Previously, the Halwa ceremony marked the launch of printing exercise for the budget. This will be the first time since the presentation of independent India’s first budget on November 26, 1947, that the documents containing income and expenditure statement of the Union government along with the finance bill, detailing new taxes and other measures for the new financial year, will not be physically printed.

Banks sanction additional Rs 15,571Cr to MSMEs under ECLGS 2.0: Finance ministry
To help distressed MSMEs which have been impacted by COVID-19, banks have sanctioned additional Rs 15,571 crore under the Emergency Credit Line Guarantee Scheme (ECLGS), the finance ministry said on Wednesday. ECLGS 2.0 is aimed at providing guarantee credit support for stressed sectors. Read MoreWith this, the total sanctioned amount under ECLGS 1.0 and 2.0 have increased to Rs 2.14 lakh crore, where 90.57 lakh MSMEs have been benefited. The loans provided under ECLGS 2.0 have a five-year tenure, with a 12-month moratorium on repayment of principal. The entire scheme (ECLGS 1.0 and ECLGS 2.0) is valid till March 31, 2021.

Sensex crosses 50000 mark for the first time ever.
India’s BSE Sensex crosses 50000 mark for the first time this week following a major crash in March 2020 where it fell close to 27000 amid global sell-off due to virus spread. Sensex touched the intraday high on Thursday at 50184. However, the benchmark index fell 1.5% on Friday to settle at 48878. Expectations of improved earnings by companies in the third quarter and regular purchases from Foreign Institutional Investors led the road to 50000. Read MoreFollowing the achievement, BSE’s MD and CEO Ashish Kumar Chauhan said “it is a historic day” as “In 1979 Sensex was 100”. According to experts, the ongoing rally is broad-based across market caps and sectors. Sensex has been positive since its crash in March. RBI Governor Shaktikanta Das, however, said that this situation shows disconnect as the economy is contracting.

UltraTech Cement posted more than double profit in Q3
Cement subsidiary of Aditya Birla Group, Ultra Tech Cement more than doubled its profit in the Q3 ended on 31st December 2020. It posted a net profit of Rs. 1548.58 Crore as against Rs. 711.17 Crore a year earlier, a rise of 123% on Year-on-Year basis. While its total expenses decline 6.29% YOY to Rs. 10190.03 Crore in the quarter, its revenue surged 17.4% to Rs. 12254.12 Crore. Read MoreOverall volumes grew 22.82 million tonnes. According to the firm, recovery from the pandemic has been stable through supply-side restoration, better cost efficiencies and demand stabilization. Apart from the stable rural and semi-urban demand in housing, government-led infrastructure allowed incremental cement demand. Tight control over cost, operation efficiencies contributed to 26% operational margin despite the hike in fuel prices.

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