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INDEX

1. National news

1.1 GST monthly revenue will exceed Rs 1.1 lakh cr: Goyal

1.2 Govt. Deploys 800 IAS officers for village outreach

1.3 SC says it is ready to go live, Centre moots TV channel

1.4 IISc, IIT-D chosen for special grants

1.5 INS Sahyadri wins praise for interpreting yoga into regime

1.6 Does your Thanjavur painting have fake gold?

2. International News

2.1 Interpol Red notice against Nirav Modi

3. Polity and Governance 3.1 Allow gambling in sports but regulate it says law panel

3.2 EC launches app to report electoral malpractices

3.3 Consult UPSC for selecting police chiefs, SC tells states

4. Economy

4.1 FDI growth hits 5 year low

4.2 Mehta Panel recommends setting up AMC for large stressed loans

4.3 MCX plans currency derivatives foray

4.4 Govt. tags RBI to track all transactions

4.5 Rupee may fall to 70 against dollar on oil, CAD

5. Science and Tech

5.1 Agni-V to be part of nuclear arsenal soon

5.2 PSLV bags first Australian order

5.3 This aborted mission is a success

6. Security

6.1 Centre plans stronger defences for key data

6.2 India denies shifting pillars along Myanmar border

6.3 Six bids to supply 110 flights for IAF


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Current Affairs (1 to 10 July, 2018)

1. National News

1.1 GST monthly revenue will exceed Rs 1.1 lakh cr: Goyal

Revenue from the Goods and Services Tax (GST) will exceed ₹1.1 lakh crore monthly, Finance Minister

Piyush Goyal said on Sunday, adding that he expects about ₹13 lakh crore of revenue from the new tax

regime over this financial year.

“I assure you that average monthly GST collection will cross ₹1.10 lakh crore,” Mr. Goyal said, speaking

at the government’s ‘GST Day’ celebrations to mark one year of the indirect tax regime. “I feel more

than ₹13 lakh crore revenue will come from GST this fiscal.”

The Finance Minister also went on to say that there was scope for further rationalisation of the tax rates

if tax compliance improved and the e-waybill system settled down.

‘Slabs address inequity’

“The more people get into the honest and transparent system and with the success of e-waybill system,

we will be in a better position to rationalise tax slabs,” Mr. Goyal said. “The different rate slabs were

kept after considering the social structure of the nation. Is it proper to tax luxury cars and items of

common items used by poor people?”

This argument was made several times by Union Minister Arun Jaitley while he held the Finance

portfolio, and by Prime Minister Narendra Modi. Mr. Jaitley also addressed the event through video-

conferencing, and wrote a blog post on the first year of GST, crticising the Congress for seeking the

inclusion of petroleum products within the GST framework.

“Both Rahul Gandhi and P. Chidambaram have repeatedly demanded that petroleum products be

brought within the GST,” Mr Jaitley wrote. “When I speak to the Congress Finance Ministers in the

States, they don’t seem to be ready for it. But what was the UPA’s own track record on petroleum

products...? The Constitution amendment proposed by the UPA permanently kept all petroleum

products outside the GST.”

“I worked out a formula that petroleum products would be included in the amendment providing for the

GST, but the Council can decide the date from which to bring them into GST,” Mr. Jaitley added. “For

this I would continue to make my earnest efforts and hopefully when the States are more comfortable

with the revenue position, it would be an ideal time to strike for a consensus between them.”

The Union Minister also went on to say that argue why a single tax rate under GST would be possible

only in economies where the “entire population has a similar and a higher level of paying capacity”,

which is not the case in India.


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Finance Secretary Hasmukh Adhia, in his address, said the implementation of GST in India was a success

because there was no impact on inflation, GDP growth, and “hardly any” impact on revenue collections.

1.2 Govt. Deploys 800 IAS officers for village outreach

A battalion of Central government officers has been drafted to ensure on the ground implementation as

the Centre races to saturate 117 “aspirational districts” with seven flagship social welfare schemes by

Independence Day.

Prime Minister Modi is scheduled to meet 2.5 lakh beneficiaries of these schemes in Jaipur on Saturday,

and has pointed to this campaign as a model for future implementation of welfare delivery.

Questions raised


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However, questions are being raised about Centre-State relations under this model, in an election year.

At least 800 Deputy Secretaries, Under-Secretaries and Director-level officers, drawn from Ministries as

diverse as Defence and Urban Affairs, have been assigned about 75 villages to visit, as part of the

Extended Gram Swaraj Abhiyan (EGSA) from June 1 to August 15. In total, 49,178 villages — most with a

majority SC/ST population — are being targeted.

The Hindu spoke to officers from the on-ground teams, as well as with senior officials from the

Ministries of Rural Development, Panchayati Raj, and the Department of Personnel and Training, which

are jointly coordinating the drive.

“Mostly, we are sent out in teams of two to four people,” explained a deputy secretary, who did not

want to named.

Over the two-and-a-half month period, these Central officials are being absorbed into EGSA duty for at

least 15 working days.

In each village, the Central team convenes a meeting of villagers and beneficiaries along with a State

government or district official, a lead bank representative and local officials from the agencies

responsible for enrolling people into the schemes.

“We monitor the scheme, get feedback...If there are any hurdles, we can sort it out on the spot,” said a

director-level IAS officer, who disclosed that central officers could direct the local representatives to give

immediate sanction for gas cylinders, bank accounts or electricity connections.

The teams can also directly input the day’s progress into a data system. “You can track it live on the

EGSA dashboard,” said a senior official of the Rural Development Ministry, pointing to egsa.nic.in.

Senior Ministry officials also make direct daily calls to a section of District Collectors to monitor progress,

while third-party observers for each district —mostly from NGOs or academia — have been drafted in to

do random checks of villages and report back to the Ministry.

One IAS officer said while most State officials were cooperative, some are not happy with the direct

involvement of central officials. Two officers said their work load back in Delhi had been put on hold

while they were on the field.

“These are central schemes although the implementation is being done by States. Government of India

wants to see total saturation. To ensure this happens, it’s better to depute our own officers,” an IAS

officer said, explaining the rationale of the exercise.

The rate of enrolment during the duration of the scheme has been the most impressive in the

Saubhagya scheme, which offers power connections to each household, and in the Indra Dhanush

Missions to vaccinate children and pregnant women, but the RD Ministry is confident of meeting its

targets.


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“By August 15, we would have reached 65,000 villages [including a target from a similar drive in May].

That is 15% of the rural population,” said a senior Ministry official. “A lot of such initiatives have to be

done in campaign mode. Saturation targets create pressure.”

Addressing the NITI Aayog Governing Council earlier this month, Prime Minister Narendra Modi had said

the Gram Swaraj Abhiyan has emerged as a new model for implementation of schemes.

However, the large-scale involvement of Central officers raises questions about the viability of such

drives, and about roles in a federal democracy.

States sidelined

“This is a deeply problematic way of going about welfare delivery...Constitutionally, while the Centre has

higher powers of taxation, the bulk of the expenditure on welfare is to be done by the States,” said

Yamini Aiyar, president of the Centre for Policy Research, pointing out that as Chief Minister,

Mr. Modi had himself vehemently opposed central intervention in matters that were constitutionally

the domain of the States.

Ms. Aiyar added that while the centralising trend in flagship welfare scheme — which allows the ruling

party at the Centre to draw political mileage and build vote banks — has been seen for some time, this

NDA government has further entrenched it, to the detriment of the federal architecture. Direct

connections to the district administration tend to bypass State administrations, while sending out large

Central teams to do the work of local officials fails to empower local human resources, she said.

“The new approach is not just centralised, but also personalised, converging his [Mr Modi’s] political

style with administrative functioning,” she pointed out. “It may create a veneer of efficiency and a high

quality publicity campaign, but it undermines the logic of federalism.”

1.3 SC says it is ready to go live, Centre moots TV channel

The Supreme Court said on Monday that it is ready to go live on camera while the government mooted a

separate TV channel for live-streaming court proceedings.

A three-judge Bench of Chief Justice of India Dipak Misra and Justices A.M. Khanwilkar and D.Y.

Chandrachud said a livestream is only an extension of the ‘open court’ system, where the public can

walk in and watch court proceedings. However, with court proceedings beamed live on air, litigants, law

students and the public can watch them as they happen.

Spared from travel

Chief Justice Misra said a livestream would help litigants follow the proceedings in their case and also

assess their lawyers’ performance. People from far-flung States such as Tamil Nadu and Kerala do not

have to travel all the way to the national capital for a day’s hearing.


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Attorney-General K.K. Venugopal proposed a dedicated channel like the Rajya Sabha TV and the Lok

Sabha TV for the Supreme Court. He agreed that a livestream would keep a check on lawyers’ conduct

inside the courtrooms. With the entire country watching them, there would be fewer interruptions,

raised voices and adjournments from the lawyers. Mr. Venugopal compared the scene inside the

courtroom to the sober atmosphere in the British courts, where proceedings are live-streamed.

He, however, expressed reservations about live-streaming cases involving national security concerns,

matrimonial disputes and rape cases. A public viewing of marital dispute and rape case proceedings

would seriously affect justice and amount to a violation of the fundamental right to privacy.

Senior advocate Indira Jaising, who filed the petition in the court in person, cautioned that agreements

with broadcasters should be on a non-commercial basis. No one should profit from the arrangement.

She also submitted that there should be no unauthorised reproduction. The Bench asked Mr. Venugopal

to address it on the issue of framing guidelines for live-streaming proceedings. The next hearing is

scheduled for July 23.

Ms. Jaising said citizens have the right to information and matters of constitutional and national

importance can be live-streamed. If livestream of the top court’s proceedings is not possible,

alternatively the video recording should be allowed, she argued.

“This writ petition is filed as pro bono for enforcement of public interest, to advance the rule of law and

to bring accessibility and transparency in the administration of justice,” her plea said.

1.4 IISc, IIT-D chosen for special grants

Institutions of Eminence list released

Six higher education institutions, including the Indian Institute of Science (IISc), Bengaluru, the Indian

Institutes of Technology at Mumbai and Delhi, and the proposed Jio Institute of the Reliance

Foundation, have been named Institutions of Eminence (IoE) by the Centre.

The Jio Institute in Maharashtra — which has been chosen in the greenfield category — is among three

private institutions to be granted the status; the Manipal Academy of Higher Education and BITS, Pilani,

being the other two.

An empowered committee, under former Chief Election Commissioner N. Gopalaswami, recommended

these institutions.

Three-year window

Mr. Gopalaswami told The Hindu that the greenfield category institutions will be issued letters of intent

for three years within which they have to commence academic operations for the notification declaring

them IoE to be issued. If they fail, he said, the committee can recommend cancellation of the IoE status.


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This sets them apart from other institutions. He added that institutions not given the IoE status in this

round could apply again till the committee finalised 10 public and 10 private institutions.

1.5 INS Sahyadri wins praise for interpreting yoga into regime

Indigenously built stealth frigate, INS Sahyadri, which is participating in RIMPAC (Rim of the Pacific

Exercise), the world’s largest international maritime exercise, has been adjudged runner-up in an

innovation competition during the harbour phase of the exercise.

The 26th edition of RIMPAC, hosted by the U.S. Indo-Pacific Command (INDOPACOM), commenced in

the middle of last week off the Hawaii coast with the participation of about 25,000 personnel and more

than 45 surface ships and submarines from 25 countries.

“INS Sahyadri presented the ‘idea of integrating yoga into our daily life as technology for well-being

during extended deployments for ships’. The topic essentially brought out the innovative ways in which

the ship is using yoga to ensure good health and high morale of personnel on-board during this

deployment,” a Navy officer said on Sunday.

The officer added that it was appreciated by representatives of participating countries.

INS Sahyadri had earlier participated in trilateral Malabar war games with Japan and the U.S. off the

Coast of Guam, and then sailed to Hawaii to join RIMPAC.

Defence Minister Nirmala Sitharaman, who was to visit the exercise, will give it a miss. She was

scheduled to take part in the 2+2 dialogue in Washington along with External Affairs Minister Sushma

Swaraj on July 6 and then visit RIMPAC. However, with the dialogue postponed, her trip too stands

cancelled.

Indian Navy said in a statement that its participation in RIMPAC 2018 provides a platform for multilateral

operational interactions, and is aimed at increased inter-operability and development of common

understanding of procedures for maritime security operations.

Admiral John C. Aquilino, Commander of the U.S. Pacific Fleet, said in a statement that RIMPAC shows

that “like-minded nations who value a free and open Indo-Pacific want this opportunity to improve our

co-operation with each other.”

While Israel, Sri Lanka and Vietnam joined RIMPAC for the first time, China is absent this year as it was

dis-invited from participating by the U.S., citing China’s military actions in the South China Sea. China

participated in the exercise in 2014 and 2016.


https://www.thehindu.com/tag/1354-1349/defence/?utm=bodytag

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1.6 Does your Thanjavur painting have fake gold?

People have long known that not every Thanjavur painting that glitters is gold. There was, however, no

way to find out if the gold foil and gemstones used in these traditional crafts were authentic or fake –

not without ruining the painting. Now there is: Raman spectroscopy.

The gold foil used liberally in Thanjavur paintings serves two objectives: the glitter makes the painting

more attractive, and it also prolongs the life of the artefact. Foils made of fake material look similar to

genuine gold, making it difficult for consumers to tell the difference.

Ramanathan Venkatnarayan from the Department of Chemistry at the Indian Institute of Technology

(BHU) Varanasi, and his team of researchers from SASTRA University, Thanjavur, Tamil Nadu have found

a solution that uses Raman spectroscopy to tell whether the foil used in the paintings is made of gold or

some other cheaper material.

Test carried out

The researchers tested ten ‘gold foils’ and found only three to be genuine. In the case of paintings, only

one or two out of ten turned out to be genuine gold foil. The gold foils and paintings (most of them

made recently) used in the study were sourced from artisans from in and around Thanjavur.

Art with GI tag

Thanjavur paintings have Geographical Indication tags, which puts a premium on their authenticity, but

there are no regulations governing the quality or authenticity.

The researchers validated their detection of fake gold by carrying out an energy dispersive X-ray analysis

(EDX) of the paintings, which confirmed the Raman spectroscopy findings. “EDX can also be used to find

out if the foil is made of gold. But unlike in the case of EDX, Raman spectroscopy does not require the

removal of the frame and the glass,” said Dr. Venkatnarayan, the corresponding author of a paper

published in the journal Spectrochimica Acta Part A: Molecular and Biomolecular Spectroscopy.

Raman spectroscopy, which helps identify molecules in ‘gold’ foil is attractive as it is non-destructive.

“We are working to find out the composition of the fake material,” Dr. Venkatnarayan said.

The research paper also suggested framing of regulations for Thanjavur paintings.


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2. International News

2.1 Interpol Red notice against Nirav Modi

The Interpol on Monday issued a Red Notice against diamond merchant Nirav Modi, his brother

Neeshal Modi, and their employee Shubash Parab on the request of the Enforcement

Directorate (ED) and the CBI, which have invoked criminal and money laundering

chargesagainst them.

The Red Notice not only restricts a fugitive's movement in 192 member-countries of the

Interpol, but also empowers enforcement agencies in the respective foreign jurisdictions to

detain the person for deportation or extradition to the requesting country.

The ED has launched a probe against Modi, his uncle Mehul Choksi, and others on the basis of

FIRs registered by the CBI to pursue those involved in the ₹13,578-crore Punjab National Bank

fraud.

Both the agencies have filed initial charge sheets against Modi and had requested the Interpol

to issue Red Notice seeking his location and detention. The current location of Modi, who flew

out of the country along with his family in the first week of January, is not clear.

Also read: Nirav Modi’s passport was revoked but not “physically” cancelled: MEA

Plea to court for permission to send extradition request

The ED has also moved the Mumbai Special Court seeking permission to send a request for

extraditing him. While the application will be sent to the United Kingdom, the agency will also

write to other countries seeking cooperation in his arrest.

After the CBI registered the cases against him, Modi has visited the U.K. at least thrice

In a bid to track him down, the CBI has also written several times to the U.K., the United States,

United Arab Emirates, Beligum and Singapore. In response to a diffusion notice, the CBI said,

the Interpol’s Manchester office had informed it about his movements till March 31.

Modi landed at London's Heathrow airport from the U.S. on February 10. He travelled from

Hong Kong to Heathrow on February 15, and a month later, from Heathrow back to Hong Kong.

He again went from the U.S. to London on March 28, and then to Paris on March 31.


https://www.thehindu.com/news/national/pnb-case-probe-agencies-to-take-up-extradition/article24156532.ece

https://www.thehindu.com/news/national/pnb-case-probe-agencies-to-take-up-extradition/article24156532.ece

https://www.thehindu.com/topic/PNB-Nirav_Modi_case/

https://www.thehindu.com/topic/PNB-Nirav_Modi_case/

https://www.thehindu.com/news/national/nirav-modis-passport-not-cancelled-external-affairs-ministry/article24282041.ece

http://www.thehindu.com/news/national/well-locate-nirav-modi-says-uk/article24138105.ece

https://www.thehindu.com/news/national/nirav-modi-is-in-hong-kong/article23631006.ece

https://www.thehindu.com/news/national/nirav-modi-is-in-hong-kong/article23631006.ece

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3. Polity and Governance

3.1 Allow gambling in sports but regulate it says law panel

The Law Commission of India on Thursday submitted a report to the government, saying that since it is

impossible to stop illegal gambling, the only viable option left is to “regulate” gambling in sports.

The commission, headed by former Supreme Court judge, Justice B.S. Chauhan, recommended

“cashless” gambling in sports as a means to increase revenue and deal a blow to unlawful

gambling.

The money generated can be used for public welfare activities, it said. For that the revenue

from gambling should be taxable under laws like the Income Tax Act and the Goods and

Services Tax Act.

Linked to Aadhaar

Transactions between gamblers and operators should be linked to their Aadhaar and PAN cards

so that the government could keep an eye on them, the panel said.

The commission recommended a classification of ‘proper gambling’ and ‘small gambling.’

‘Proper gambling’ would be for the rich who play for high stakes, while ‘small gambling’ would

be for the low income groups, it said.

The panel wanted the government to introduce a cap on the number of gambling transactions

for each individual, that is, monthly, half-yearly and annual. Restrictions on amount should be

prescribed while using electronic money facilities like credit cards, debit cards, and net banking.

Gambling websites should not solicit pornography, it said.

Regulations needed to protect vulnerable groups, minors and those below poverty line, those

who draw their sustenance from social welfare measures, government subsidies and Jan Dhan

account holders from exploitation through gambling, the panel said.

According to the commission, Foreign Exchange Management and Foreign Direct Investment

laws and policies should be amended to encourage investment in the casino/online gaming

industry. This would propel tourism and employment, it said.

However, one of the members, Professor S. Sivakumar, expressed strong dissent in a separate

note filed with the government. He said the commission report was not “comprehensive.” A


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country as poor as India should not allow ‘legalised gambling’ on its soil. He said such a move

would leave the poor poorer and only vested interests wanted legalisation of gambling.

Mr. Sivakumar criticised the commission for exceeding the brief given to it by the Supreme

Court in 2016. The court had merely asked the commission to look into the narrow question of

legalising betting in cricket and not sports as a whole. The court’s reference had come in its

judgment in the BCCI case involving illegal betting in IPL cricket matches. The dissenting note

said the “recommendation may lead to an unhealthy and unwarranted discussion.”

Panel cites Mahabharat

But the commission report tooka page out of epic Mahabharat to justify its call for regulation of

gambling.

“There is merit in the argument that, had gambling been regulated at the time of the

Mahabharat, Yudhishtir could not have staked his wife and brothers in a gamble,” the report

signed by Justice Chauhan and five other commission members observed.

The commission said that even as Indian society had traditionally frowned upon gambling, the

argument made for ‘revenue over morality’ lacked merit. It reasoned that online gambling and

betting have acquired a global presence.


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“Such activities, if properly regulated would ensure transparency in the market, as also strike at

the underworld’s control over the illegal and unregulated gambling industry. Additionally,

revenue so generated by regulating and taxing betting and gambling may become a good

source of revenue, which in turn, could be used for public welfare,” the commission report said.

3.2 EC launches app to report electoral malpractices

The Election Commission on Tuesday launched an Android-based mobile application named

“cVigil” for citizens to share proof of malpractices by political parties, their candidates and

activists when the Model Code of Conduct is in force.

The mobile application also facilitates sharing of geo-tagged photographic and video evidence

without disclosing the identity of the sender.

The uploaded information will be transmitted to the control room, and from there the field

units or flying squads, mapped on a Geographic Information System, will be immediately

alerted for further action.

In case the complainant does not opt for anonymity, the person will also receive an action-

taken report within about 100 minutes. The application, whose Beta version has now been

released, will be made available for use during the four State Assembly elections scheduled for

later this year.

The mobile application, for which EC officials will be trained for effective back-end operations

and action against the malpractices reported ahead of the elections, was launched against the

backdrop of the inauguration of a two-day national consultation programme on “Inclusion of

Persons with Disabilities (PwDs) in the Electoral Process.”

‘Accessible elections’

At the event, Chief Election Commissioner O.P. Rawat also launched a voter education and

electoral participation portal, which has an entire section dedicated to PwDs.

3.3 Consult UPSC for selecting police chiefs, SC tells states

‘Send list of probables to service commission for shortlisting three names’

The Supreme Court on Tuesday restrained the State governments from appointing Directors-

General of Police without first consulting the Union Public Service Commission (UPSC).


https://www.thehindu.com/tag/1369-1349/election/?utm=bodytag

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The State government concerned has to send to the service commission the names of the

probables three months before the incumbent DGP is to retire. The UPSC will prepare a list of

three officers fit to be DGP and send it back. It shall, as far as practicable, choose the people

who have got a clear two years of service and must give due weightage to merit and seniority.

The State, in turn, shall ‘immediately’ appoint one of the persons shortlisted by the

commission.

A Bench, led by Chief Justice Dipak Misra, passed the directions on an application by the Centre

for modification of a September 22, 2006 judgment on a petition filed by former DGPs Prakash

Singh and N.K. Singh for reforms in the police forces.

In 2006, the court passed seven directives, primarily to “ensure that State governments do not

exercise unwarranted influence or pressure on the police.”


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4. Economy

4.1 FDI growth hits 5 year low

Foreign direct investment (FDI) in India seems to be petering out with the growth rate of

inflows recording a five-year low of 3% at $44.85 billion in 2017-18, according to the latest data

of the Department of Industrial Policy and Promotion (DIPP).

Foreign inflows in the country grew by 8.67% in 2016-17, 29% in 2015-16, 27% in 2014-15, and

8% in 2013-14. However, FDI inflows recorded a negative growth of 38% in 2012-13.

‘Policy uncertainty’

According to experts, it is critical to revive domestic investments and further improve ease of

doing business in the country to attract foreign investors.

Anil Talreja, partner, Deloitte India, said the low growth of FDI in the consumer and retail

sectors could be mainly attributed to uncertainty and complexity of the FDI policy.

“While the government has taken substantial efforts in relaxing the regulations as well as

removing ambiguities, global consumer and retail companies are still hesitant to take decisions

to invest in India,” he said.

India has done ‘considerably’ well in terms of moving up the ranking for ease of doing business;

however, it needed to reach a level that creates enthusiasm for overseas investors, he added.

Biswajit Dhar, professor at Jawaharlal Nehru University, said, “The status of the economy

reflects the magnitude of the FDI in a country. In the past couple of years, we have seen a

decline in the domestic investment rate and now, FDI is following suit.”

He said the Centre needed to take steps for reviving domestic investment to attract foreign

investors.

An UNCTAD report, too, had recently stated that FDI in India decreased to $40 billion in 2017

from $44 billion in 2016. However, outflows from India, the main source of the FDI in South

Asia, more than doubled to $11 billion, it added. UNCTAD Secretary-General Mukhisa Kituyi had

said, “Downward pressure on FDI and slowdown in global value chains are a major concern for

policymakers.“

Sectors that received maximum foreign inflows in the last fiscal include services ($6.7 billion),

computer software and hardware ($6.15 billion), telecom ($6.21 billion), trading ($4.34 billion),

construction ($2.73 billion) automobile ($2 billion) and power ($1.62 billion).


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4.2 Mehta Panel recommends setting up AMC for large stressed loans

The Sunil Mehta Committee, set up to look into the faster resolution of stressed assets, has

recommended the creation of an asset management company for the resolution of stressed

loans worth more than ₹500 crore, Finance Minister Piyush Goyal announced on Monday.

The committee had also laid out a plan to resolve SME loans within 90 days.

“The committee set up under Sunil Mehta has submitted its report and recommendations,” Mr.

Goyal told the media. “The report comprises a bank-led resolution process and a five-pronged

strategy to resolve stressed assets called Project Sashakt.”

The idea is to resolve SME loans of less than ₹50 crore in less than 90 days.

“Banks should create a focussed vertical for management of stressed assets for priority

resolution of SMEs,” according to a presentation by Mr. Goyal.

“Resolution should be non-discretionary, non-discriminatory and completed within a time-

bound manner within 90 days.”

Monitoring mechanism

In addition, the committee had recommended the setting up of a “robust monitoring and

review mechanism” to track resolution with clear escalation metrics for breached timelines.

“The key difficulty is in arriving at a consensus approach among a large number of lenders,” the

Finance Minister said.

“And exposure in the ₹50-500 crore category is usually by multiple banks.”

In light of this, the committee recommended that such lenders enter into an inter-creditor

agreement to authorise the lead bank to implement a resolution plan in 180 days.

“The lead bank would then prepare a resolution plan including empanelling turnaround

specialists and other industry experts for operational turnaround of the asset,” according to the

presentation. “The resolution plan should be approved by lenders holding at least 66% debt,” it

said.

For loans above ₹500 crore, the committee recommended the setting up of an independent

asset management company which would act as a ‘market maker’ and ensure healthy

competition, fair prices and cash recovery.


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4.3 MCX plans currency derivatives foray

The Multi Commodity Exchange of India (MCX), the country’s largest commodity bourse in

terms of market share, plans to enter the currency derivatives segment.

The exchange has been mulling an entry in the currency arena for a while now and the idea has

even been discussed among the board of directors who are not averse to the idea, said a

person familiar with the matter.

‘Continuous evaluation’

“Starting a currency derivatives segment has been under continuous evaluation within the

exchange and it has been discussed at the board level as well,” the person said, on condition of

anonymity. “While the board has been receptive, they have sought more clarity and hence the

exchange is seeking further feedback from market participants,” he added. The unified licence

regime kicks in on October 1 and will allow equity and commodity exchanges to expand their

offerings by starting new segments. The BSE and the National Stock Exchange (NSE) have

already announced plans for commodity trading under the new regulations framework.

“The advent of universal exchanges provides multiple opportunities,” said an MCX

spokesperson, replying to a query from The Hindu. “However, at this point of time we see

better opportunities in the commodity ecosystem. We continue to evaluate over time and

expedite appropriately as and when needed.”

Currency derivatives see average daily volumes in excess of ₹60,000 crore. The BSE is the

largest player in the currency segment followed by the NSE with the Metropolitan Stock

Exchange of India (MSEI) having small share. In June, it reported an average daily turnover of

₹33,961 crore on its currency derivatives platform while the NSE clocked ₹29,161 crore. MSEI

reported a daily average turnover of only ₹239 crore in June.

Steady rise in turnover

The average daily turnover of the currency segment of NSE was ₹12,705 crore in 2014-15,

which rose to ₹18,603 crore in 2015-16 and thereafter to ₹20,779 crore in 2017-18.

This fiscal till date, the average daily turnover is pegged at ₹29,008 crore.

Market experts are of the view that while a commodity exchange would not benefit much by

venturing into equity or equity derivatives, the currency segment could help in hedging for

existing participants of the commodity markets


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“MCX adding currency derivatives alongside commodity markets may facilitate hedging by

import- / export-focused commodity merchants,” said Patrick Young of D.V. Advisors, a Europe-

based capital markets advisory firm.

“Dislodging incumbent market leaders in derivatives is difficult but forex contracts are

homogenous and not subject to licensing such as Nifty futures. At the same time, MCX has

nothing to lose here and market participants are likely to enjoy lower fees through competition,

at least for a while.”

Just like the equity segment, the commodity market is dominated by two entities — MCX and

the National Commodity & Derivatives Exchange (NCDEX). While MCX mostly has energy,

bullion and metal contracts, NCDEX has created a niche for itself with agri-contracts.

4.4 Govt. tags RBI to track all transactions

In a move aimed at widening the crackdown on black money and following the money trail

flowing in and out of thousands of shell companies, the Centre is planning to set up an

information technology (IT)-based mechanism to keep a tab on all non-cash, financial

transactions in the country.

Highly-placed government sources involved in devising the initiative said the Reserve Bank of

India (RBI) had been asked to develop the IT infrastructure for this purpose. There have been a

series of interactions over the past one month to discuss the issue, with these parleys attended

by top government officials from the Ministries of Finance and Corporate Affairs as well as RBI

officials. Currently, the idea is to make the RBI the sole repository of such information, which

will not be made available to other agencies such as the income tax department and the

enforcement directorate as a default. Such agencies may be required to make specific requests

to the central bank if they want information on a particular set of entities.

An official aware of the development said that although the data will be captured for all

transactions irrespective of the size of the transactions, the large ones would be relevant for

enforcement purposes. Under the Prevention of Money Laundering Act, banks and financial

institutions are already required to alert the Financial Intelligence Unit, under the Finance

Ministry, to any suspicious transactions, cash or otherwise. Cash transactions of more than ₹10

lakh (including a series of transactions integrally connected to each other and exceeding ₹10

lakh in a month), need to be reported to the FIU.

7-day deadline


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All suspicious transactions need to reported to the unit within seven days after it is concluded

that those are suspicious in nature.

The move to track all financial transactions is the latest in a series to curb black money and

identify shell companies, sources said. Following the 2016 demonetisation exercise that

rendered more than 86% of the currency in circulation invalid, it was found there had been a

significant spurt in the operations of shell firms that typically have no assets or active

businesses.

The Centre has shut down more than two lakh such entities. More than two lakh other firms

that have not been carrying out operations have been sent notices. Depending on their

responses, a decision would be taken on how many would be deregistered.

In FY17, the FIU had received more than 15.9 million Cash Transaction Reports and 4.73 lakh

Suspicious Transaction Reports.

4.5 Rupee may fall to 70 against dollar on oil, CAD

The Indian rupee is likely to touch 70 a U.S. dollar as weakness in the currency market is

continuing with the upward trend in crude oil prices and strengthening of the U.S. dollar index,

aided by a widening current account deficit (CAD) and steady capital outflows which have

weighed on the rupee, according to experts.

The outlook for the Indian rupee, in the near term, would be dominated by the sentiment

towards the U.S. dollar, the risk of trade wars, movements in yuan, as well as the trend charted

by crude oil prices, said Aditi Nayar, principal economist, ICRA.

While the yuan movement would affect many emerging market currencies, crude oil prices

would have a substantial impact on the currencies of oil importing nations such as India. If

crude oil prices chart a sustained uptrend, the negative sentiment related to a rising current

account deficit as well as inflationary concerns may spur the rupee to intermittently test the

previous all-time lows.

‘Swift reversal’

“In the near term, the dollar-rupee cross rate temporarily breaching 70 can’t be ruled out,

although it would likely record a swift reversal,”Ms. Nayar added.


20


“The 70 level could continue beckoning Indian rupee and U.S. dollar exchange rate. Surging oil

price is a major worry,” said Anand James, chief market strategist, Geojit Financial Services Ltd.

Brent crude price is hovering at about $78 per barrel in the international market.

“It’s hardly surprising that Indian rupee is on an accelerated depreciation phase against U.S.

dollar. Probably, this trend might continue until May 2019,” said Bhaskar Panda, senior regional

head — treasury advisory group, HDFC Bank.

“Commodity prices have had a sharp rally in the previous two to thee years along with global

crude prices. We have seen the 10-year dollar benchmark yield going past 3% mark this year

and U.S. Fed still on the way to get more rate hikes,” Mr. Panda added.

Lately, the sentiment in the foreign exchange market had been further weakened by the

reported comments of government officials that the rupee needs to retain trade-weighted

parity against competing exporter nations, especially in the face of a likely global trade conflict.

Private investment

Given the present scenario, said Mr. James, the prospects of rupee hinges on the extent of

private investment that can come in, for which the debt overhang had been a cause of big

worry.

Forecast for normal monsoon may cool inflation expectations for now, but the pace of

resolution of debt-ridden companies as well as revival of capital expenditure cycle and lending

growth would be closely watched.

“We believe that, for now, given the strength in oil and dollar, 70 is a fair possibility,” Mr. James

added. FIIs have become more reluctant in Indian equities lately. CAD is also projected to edge

higher, while inflation at both consumer and wholesale level has reversed the declining trend.

“All of these put pressure on rupee,” said Mr. James.

Looking at current scenario, IFA Global research advises traders that the pair has higher chances

to move above the 69-mark by July end, but upside can be capped below 70.

Index trading high

The U.S. Dollar Index is moving in a band of 93.80 support level and the 95.20 resistance

barrier.

The price jumped to an almost fresh one-year high of 95.22 on June 28, 2018. The dollar

internationally has clearly broken the downtrend and now the index is trading high, said

Abhishek Goenka, founder and CEO, IFA Global.


21


Furthermore, rate hikes in the U.S. are very much on the cards and according to Mr. Singhvi,

“the possibility of the rupee hitting 70 soon is increasing.”


22


5. Science and Tech

5.1 Agni-V to be part of nuclear arsenal soon

India’s longest-range ballistic missile, Agni-V, will be inducted into the nuclear arsenal very

soon, according to official sources.

The Intermediate Range Ballistic Missile (IRBM) with a range of over 5,000 km can reach most

parts of China. “It is a strategic asset which will act as a deterrent. We are at the fag end of the

strategic project,” said an official with the Agni-V programme.

Improved accuracy

The official said the missile features the latest technologies for navigation and improved

accuracy. Earlier variants of the Agni family of long-range missiles have already been deployed.

Last month, the canisterised variant of the missile was successfully test-fired by the user, the

Strategic Forces Command (SFC). A few more user trials are planned in the next few weeks.

The Agni series of missiles constitute the backbone of India’s nuclear weapons delivery, which

also includes the Prithvi short-range ballistic missiles and fighter aircraft. The submarine-based

nuclear arsenal, which assures second strike capability in the face of the proclaimed no-first-use

policy, is taking shape.

While one nuclear ballistic missile has been inducted, more submarines and longer range

submarine-launched ballistic missiles are under various stages of development.

5.2 PSLV bags first Australian order

The Indian PSLV launcher has broken into a rising Australian space market and bagged its first

small but promising order from Down Under. Fleet Space Technologies, an IoT (Internet of

Things) startup, disclosed last week that its first 10-kg nanosatellite Centauri I would fly to

space on a PSLV later this year.

The prospect for the PSLV is in the fact that Adelaide-based Fleet plans to put up a constellation

of an unstated number of tiny satellites — all of which will need a suitable, timely launch

vehicle to take them to space.


23


Australia is in the throes of setting up its space agency and an industry around it. Adelaide in

South Australia is the current hub of this activity. The second nanosat, Centauri II, is to be

launched on the U.S. SpaceX's Falcon 9 rocket later this year.

The Indian Space Research Organisation (ISRO) has planned a part-commercial PSLV flight

around August. Neither Fleet nor Antrix Corporation, ISRO's business arm, could immediately

say if Centauri I would go on it.

For lighter payloads

The PSLV's three versions can lift satellites of 1,000-1,750 kg to distances of around 600 km in

pole-to-pole orbits. A neat launch record has made the booster a trusted and affordable space

vehicle for small satellites. Big rocket players are focussed on taking heavy, multi-tonne

satellites to space.

Since its first commercial launch in 1999, the PSLV has put in orbit 237 small satellites of 28

countries, About half of them are from the US. Antrix recently said it has many more orders

confirmed or under discussion.

Low-cost connectivity

A news release from the Australian company quoted its co-founder and CEO Flavia Tata Nardini

and said it is developing a series of 10-kg nanosatellites about the size of a shoebox to enable

low-cost connectivity for agriculture, logistics, mining and other industries.

"The first satellite," it said, "will establish a global network that will connect [75 billion] sensors

and devices, for free." A single nanosat can apparently cover 90% of the globe.

5.3 This aborted mission is a success

The Indian Space Research Organisation (ISRO) inched a small step closer to its ambition of

sending Indians to space by conducting the first ‘pad abort’ test on Thursday.

The test proves that the agency can bail out future astronauts with their capsule in case of an

early danger to them at the launch pad.

The test lasting over four minutes was conducted at 7 a.m. at the Satish Dhawan Space Centre,

Sriharikota.

1,260-kg crew module

A 1,260-kg crew module lifted off propelled by seven complex rockets built unconventionally

around it. In a pre-programmed, automatic sequence, it reached a height of 2.7 km and curved


24


down into the Bay of Bengal on parachutes. It landed in the sea at a distance of 2.9 km from the

launch centre.

The module was retrieved later by three boats. A five-hour countdown preceded the test.

“The Pad Abort Test [PAT] demonstrated the safe recovery of the crew module in case of any

exigency at the launch pad,” ISRO said.

It described PAT as a major technology demonstrator and the first in a series of tests to qualify

a larger Crew Escape System of the future. The U.S., Russia and China which have sent human

missions have developed their own systems.

ISRO Chairman K. Sivan, who was in Sriharikota, said the test met all their expectations. ISRO

has been readying technologies like pad abort — that are necessary for a future manned

mission — as part of its R&D activities.

There is no approved human space programme yet. However, “We have started the process of

preparing project documents for other projects of such a mission,” he said. A decade-old

estimate for a manned mission had put its cost at over Rs. 12,000 crore.

During the test, he said, teams from various centres tried out at least five new technologies —

such as those related to wireless satellite communication, navigation, Ka-band altimeter and

telemetry. Nearly 300 sensors recorded various functional aspects. More technology trials

related to astronaut safety would be taken up later.

S. Somanath, Director of the Vikram Sarabhai Space Centre in Thiruvannathapuram that led the

pad abort test, said the escape mechanism activated when it sensed something wrong in the

health of the mission or module. The rockets powered by fast-acting solid fuels quickly eject the

crew and the module.

Each of the seven motors that powered the crew module had a different role and worked in

sequence — at low altitude, high altitude, for pitching the module away.


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6. Security

6.1 Centre plans stronger defences for key data

Worried about sensitive information making its way into the Internet, the Home Ministry is

upgrading policy to secure government data and control access to it.

A senior Ministry official said that earlier the files were locked in a cupboard and accountability

could be fixed, but with the advent of Digital India, a number of issues were in a grey area.

Home Minister Rajnath Singh, who recently presided over a meeting to review the evolving

cyberthreats, directed that the National Information Security Policy and Guidelines (NISPG) be

upgraded and updated for the government sector.

In 2013, cybersecurity, which was the sole preserve of the Home Ministry, was moved to the

National Security Council Secretariat (NSCS) under the Prime Minister’s Office. The critical

infrastructure was moved to the National Technical Research Organisation and the non-critical

part to the Ministry of Electronics and Information Technology.

An official said the new policy would cover issues pertaining to the Official Secrets Act.

Hardware issues


https://www.thehindu.com/tag/1385-1349/government/?utm=bodytag

26


“There are issues relating to physical security of a computer. Like what happens if the device

becomes obsolete? What about the hard disk, will it be destroyed before the computer is

discarded? Then there are issues relating to the network as well. If information is riding on own

cyber cable, then everything can be encrypted, but if it is riding on a commercially available

one, then you will have to make sure that guidelines are complied with,” the official said. Home

Ministry spokesperson Ashok Prasad said the consultation process to revise the guidelines was

on.

“Basically, the whole policing system in India that began in 1860 is now being replicated in

cyberspace. It will evolve gradually. The new guidelines will also take care of that,” the official

said.

“If 50 people are accessing some data, it requires a wider security network. Audit trail has to be

left, red flags should be raised,” the official said.

Gulshan Rai, Chief Information Security Officer in the Prime Minister’s Office, said there were at

least four versions of NISPG. “We need to take cognisance of the threats and accordingly

upgrade the measures,” Mr. Rai told The Hindu.

6.2 India denies shifting pillars along Myanmar border

India has not shifted pillars demarcating the international border with Myanmar, the External

Affairs Ministry said here on Sunday.

The statement came after media reports suggested that India had given up land to Myanmar

while carrying out a survey.

“We have come across media reports stating that certain boundary pillars in the Manipur sector

of the India-Myanmar international boundary have been allegedly shifted. These reports are

completely baseless and unsubstantiated. This sector of the international boundary is settled

and there is no confusion as to its alignment,” the official spokesperson of the Ministry said.

The Hindu had reported earlier that Manipur Chief Minister N. Biren Singh had said that the

border survey with Myanmar had not led to surrender of Indian territory to Nay Pyi Taw. The

spokesperson explained that bilateral border surveys were conducted in keeping with the India-

Myanmar Boundary Agreement of 1967.

Routine survey


https://www.thehindu.com/tag/361-244/myanmar/?utm=bodytag

27


“Recently, routine survey work has been carried out jointly by the Indian and Myanmar survey

departments during which work on construction of subsidiary pillars in between already settled

main boundary pillars 81 and 82 along zero line, that is, agreed and settled international

boundary, has also been undertaken. This has been done with the objective of apprising the

local residents on both sides of the border of the exact alignment of the international

boundary,” the spokesperson said. Some reports had suggested that India surrendered tracts of

land to Myanmar to please the country’s pro-China government. But both the Chief Minister of

Manipur and the External Affairs Ministry denied the same.

6.3 Six bids to supply 110 flights for IAF

Six global aircraft manufacturers have responded to a Request for Information (RFI) from the

Indian Air Force to supply 110 fighter aircraft. The deadline for the RFI was July 6. All six

manufacturers have earlier bid for the Medium Multi-Role Combat Aircraft (MMRCA), which

was cancelled in 2015.

Officials confirmed that six bids have been received, of which Lockheed Martin F-16 and SAAB

Gripen are single-engine fighters, while Boeing F-18, Dassault Rafale, Eurofighter Typhoon and

United Aircraft Corporation MiG-35 are twin-engine ones.

“The bids will be evaluated after which the IAF will issue the Request For Proposal (RFP) with

the exact specifications of the aircraft to be procured. The RFP is expected by early next year,”

an official source said.

The RFI, issued on April 6, states that the government plans to buy 110 fighters jets, of which

85% will have to be built in India under the ‘Make in India’ programme in partnership with a

“Strategic Partner/Indian Production Agency.”

The procurement will be processed through the Strategic Partnership (SP) model under the

Defence Procurement Procedure. However, the SP model itself needs some clarification which

could delay the process.

Air Force sources expressed confidence that the technical evaluation and trials can be

completed very quickly, as all the aircraft have been extensively tested earlier.

“Once the process starts, from the technical evaluation to the down select of one aircraft, can

be completed in less than two years. After that, it depends on how fast the contract

negotiations can be completed,” a source said.


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Earlier, the IAF was looking for a single-engine jet to replace the MiG-21s and MiG-27s being

phased out of service, but the RFI did not specify it, opening up the contest to both single-and

twin-engine jets. Officials said both configurations were equally competent and the final choice

would depend on the price and extent of technology transfer.

According to informal estimates, the entire cost could be worth over $15 billion. Single-engine

aircraft will cost lower than the twin-engine jets, both in unit and operational costs.

The move comes almost two decades after the IAF began the last major effort to acquire

fighters in large numbers. The effort culminated in the global tender for 126 fighters under the

MMRCA deal which was cancelled in 2015 after the Modi government decided to buy 36 Rafale

fighters from France under a government-to- government deal.


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