Current Affairs 17 December, 2024

Daily Current Affairs

17 December, 2024

International Affairs

1. India-Sri Lanka Meet

Context:

India and Sri Lanka on Monday agreed to ramp up defence and energy ties, including establishing electricity grid connectivity and multiproduct petroleum pipelines, as Prime Minister Narendra Modi held extensive talks with Sri Lankan President Anura Kumara Dissanayake.

Highlights of the Meeting:

• Connectivity through investment-led economic growth is India’s and Sri Lanka’s agenda on economic partnership.
• Connectivity pillars will be threefold:
  • physical connectivity, digital connectivity, and energy connectivity.
• The Sampur Solar Power Project and Liquefied Natural Gas (LNG) supply will be expedited.
  • Sampur Solar project is located in the Trincomalee district in eastern Sri Lanka
  • Liquefied natural gas (LNG) is natural gas that has been cooled to a liquid state for storage and transportation.
• A Tamil Nadu-Sri Lanka pipeline is likely to bring affordable, reliable fuel supply.

National Affairs

1. The Employment Linked Incentive Scheme Budget Cut

Context:

Labour ministry has demanded finance cut of ELI Scheme allocation for FY25.

Key Highlights:

• It has come out with reduced estimates with an almost a third reduction in it, to the tune of ₹ 6,852 crore.
• These three ELI schemes were announced during the Budget, but so far the Union Cabinet has not accorded approval to them.
• Budget
  • In the next six and a half years is ₹ 1.07 trillion.

The Employment Linked Incentive (ELI) Scheme was being launched in the Union Budget of the financial year 2024-25 aiming to generate a number of employment which is basically targeting the first time employees in the formal sector which is registered with EPFO.

• Ministry
  • Ministry of Finance

2. NPCIL raises ₹ 4,600 crore via 15 year bonds

Context:

Nuclear Power Corporation of India (NPCIL) on Monday raised ₹ 4,600 crore through 15–year bonds at a coupon rate of 7.14 per cent, sources said.

What is Bond?

• A bond is an instrument of loan to an investor to lend money to an organization such as a government or corporation for a promise to pay interest on a given sum that it would later repay.
  • Bond is a popular means to raise money from different projects for government and corporate organizations.

How they work?

• Money is lent by an investor to the bond issuer with a promise by the latter to return it along with interest at a given date.

Different aspects of bonds

• Safety:
  • Bonds have always been considered safe instruments of investment, especially government-bond issues.
• Credit rating:
  • Each bond has an individual credit rating.
• Interest rate:
  • Bonds carry a fixed or variable rate of interest.
• Bond yield:
  • This yield is calculated by the division of the coupon amount and the price.
• Debenture:
  • They are like bonds, except they are issued by a private company and not backed by collateral or any physical things.

Know about: Nuclear Power Corporation of India (NPCIL)

3. Employees Pension Scheme (EPS): Pension Hike Demand

Context:

The Parliamentary Standing Committee on Labour, headed by senior BJP leader Basavaraj Bommai, has recommended the Centre to increase the ₹1,000 minimum pension paid by the Employees Provident Fund Organisation (EPFO) under its Employees Pension Scheme (EPS). The trade unions and associations of pensioners have been demanding an increase in the minimum pension.

What is this Employees’ Pension Scheme?

• Runs by EPFO, EPS has started in 1995. The pension fund was supposed to be a deposit of 8.33% of the employer contribution towards PF corpus.
• The scheme caters to the general employee’s pensions in an established sector under the retirement age of 58 years.

Know about: Employees Provident Fund Organisation (EPFO)

Banking/Finance

1. Merchandise Export Falls

Context:

India’s merchandise exports fell 4.83% in November to a 25-month low of $32.11 billion.

Key Highlights:

• The import bill jumped 27% to a fresh all-time high of nearly $70 billion, making October’s record tally of $66.34 billion look bleak.
• Trade deficit surged to a record all-time high of $37.84 billion, representing a 77.5% rise compared to the deficit in November 2023.
• Gold import increased the spurt in import. The fresh peak on gold import reached $14.9 billion.
• Petroleum exports declined 49.6% to $3.7 billion. Gems and jewellery fell by 26% to $2.06 billion.

Key Terms:

Merchandise export is the sale of physical goods from one country to another.

A trade deficit occurs when a country imports more goods and services than it exports, resulting in a surplus outflow of a country’s currency in the international market.

2. EFTA commitment: $ 100 bn

Context:

Switzerland suspending the unilateral application of the most favoured nation (MFN) clause with India under the Double Tax Avoidance Agreement (DTAA) should not impact the $100 billion investment commitment under the recently signed trade deal between India and European Free Trade Association (EFTA) nations.

What is European Free Trade Association (EFTA) nations?

What is Double Tax Avoidance Agreement (DTAA)?

3. WPI Decline

Context:

India´s wholesale price index (WPI) in November eased to a three month low of 1.89 per cent as prices of food items, especially vegetables fell, government data showed on Monday.

What is Wholesale Price Index (WPI) & Consumer Price Index (CPI)?

4. P2P bad loans doubled: Report

Context:

Bad loans in the peer to peer (P2P) lending industry more than doubled in FY24 to ₹ 1,163 crore from ₹ 472.1 crore in FY23, according to a report published by Capital mind Financial Services on Monday.

Highlights:

• Bad loans in the peer-to-peer loan industry increased from ₹472.1 crore in FY23 to a staggering ₹1,163 crore in FY24: Capital mind Financial Services.
• A bad loan is a loan that a borrower is unlikely to repay. It’s also known as a non-performing loan (NPL). 

What is Bad Bank?

5. Sebi issues administrative warning letter to HDFC Bank

Context:

India´s market regulator, the Securities and Exchange Board of India (Sebi), has issued an administrative warning letter to HDFC Bank, the country´s largest privatesector bank, for noncompliance with listing regulations.

Sebi Regulations?

6. SME IPOs Reveals Data

Context:

The small-and-medium enterprises stock market is fast being occupied by institutional investors as opposed to traditional, retail investors considered to be part of mainstream in the country with relatively much smaller quantum IPOs usually below Rs 50 crore.

Highlights:

• Institutional investors are currently entering the segment of IPOs for small and medium enterprises as opposed to individual investors.
• Institutional portion of SME IPOs neared almost 50%, as of December 2024, from the low single-digit shares in the past three years.

 Small and Medium Enterprise Initial Public Offering (SME IPOs):

• SME IPO means Initial Public Offering publicly operated by privately owned small and medium companies to their shares to the public for the first time.
• Purpose
  • The objectives of these SME IPOs are to raise funds for purposes such as working capital, repayment of debts, and other needs for business operation.
• Platforms
  • Such IPOs are listed on dedicated platforms like BSE SME and NSE Emerge.
• Eligibility
  • Eligible companies fulfill the eligibility. Minimum paid up capital of a company should be ₹3 crores and distribute profits in at least two out of the last three financial years to be eligible.
• Process
  • This comprises appointing a merchant banker, conducting legal compliance and due diligence, draft prospectus filing, and marketing the IPO.
• Participation:
  • This describes both retail and institutional investors participating in them, but, of late, institutional investors are coming to dominate SME IPOs.

Economy

1. Circular Economy: Kant

Context:

India´s circular economy could generate a market value of over $ 2 trillion and create 10 million jobs by 2050, Sherpa Amitabh Kant (pictured) said Monday.

• A circular economy is a model of production and consumption that aims to reduce waste and extend the life of products. It involves reusing, repairing, recycling, and refurbishing products and materials, rather than following the traditional “produce, use, dispose” model. 

2. GDP Prediction by CRISIL

Context:

High-interest rates and fiscal consolidation have greatly slowed down India’s economic growth for FY25. According to CRISIL, the GDP of India may reach trend growth of 6.7% during the year.

Key Highlights:

• In the first half of FY25, growth in private consumption improved, and its contribution above the decade pre that of the pandemic has been around investment growth, which has moderated.
• Gross fiscal deficit for FY25 is likely to be 4.9% of GDP as compared to 5.6% in FY24.
• There is some policy shift in the last two months by RBI in even reducing cash reserve ratio to 3.5%.

CRISIL is a global analytics company that provides research, data, ratings, and solutions to a variety of clients.

About: CRISIL

3. Impact of Digitisation on Inflation

Context:

Digitalisation’s impact on monetary policy, particularly inflation, requires close monitoring, as price disparities between online and offline goods could potentially steepen the Phillips curve, prompting a reassessment of traditional inflation models said RBI Governor.

Key Highlights:

• The effect of digitization would likely be closely monitored on monetary policies that deal with inflation.
• Differences in prices between goods sold on the Internet and in retail affect the Phillips curve and may require a rethink of classical inflation models.
• They all draw interest from researchers to study the effects digital payments, FinTech, central bank digital currencies, and AI have on the transformation of monetary policy transmission.

Phillips Curve: Inflation-Unemployment Relationship

• The Phillips curve states that inflation and unemployment
• Inflation and unemployment have inverse relationship.
• Concept 20th-century macroeconomic policy.

Digital Currency

Digital currency, also known as electronic money, is a type of money that is stored, managed, and exchanged primarily through digital systems, like the internet.

Type of Digital Currency

• Cryptocurrencies: These are digital currencies that operate on decentralized blockchain networks and use cryptography to secure transactions. Bitcoin was the first cryptocurrency, released in 2009. 
• Central bank digital currency (CBDC): India launched its CBDC in November 2022. 

4. India’s Trade and Economic Integration Approach

Context:

India is implementing a pragmatic approach to trade and economic integration, utilizing existing free trade agreements and seeking new ones.

• Quality Control Orders” (QCOs)
  • The government has introduced a new license permit system, introducing “quality control orders” (QCOs) to restrict imports of goods unless certifications are obtained.
  • The QCOs are seen as a protection against substandard goods and to minimize the presence of Chinese manufacturing in Indian supply chains.
• Impact of QCOs
  • The introduction of nontariff barriers, such as QCOs, is harmful to consumer interests and hurts both traders and manufacturers.
  • The overuse of QCOs has affected steel dumping by China, affecting other manufacturing companies that require imported or speciality steel.
  • The bureaucratic hurdles for importers, even if not covered by QCOs, lead to inferior quality steel and reduced competitiveness.
  • The QCOs are particularly harmful to small and medium enterprises, making them comparatively costly and their goods of poorer quality.

Read more>>

Agri Business

1. Di-Ammonia Phosphate (DAP) price Hike

Context:

After a gap of nearly four years, the prices of Di-Ammonia Phosphate (DAP) are expected to increase by 12-15 per cent, from ₹ 1,350 per bag to ₹ 1550-₹ 1590 per bag. The revised rates could be effective from January 1, 2025.

What is Di-Ammonia Phosphate (DAP) and it’s related issue?

2. HML to Launch Modern Farming Practices

Context:

• Aimed at enhancing crop yield by utilizing existing resources also through innovations, Harrisons Malayalam Ltd is set to introduce modern farming practices and diversification in its tea plantations.

Key Highlights:

• The initiative hopes to increase crop production while addressing the added challenge of costlier production and less remunerative prices of the produce for farmers.
• Strategic initiatives include investments in alternate crops and modernization of traditional agricultural practices.

Harrisons Malayalam LTD is an Indian agricultural business corporation, and a part of the RPG Group

• Headquarter:
  • Kochi, Kerala 
• HML is in pilot testing and trials on satellite-based weather prediction models and pest and disease detection models.
• It is among largest tea producers in South India and cultivator of natural rubber and pineapple.

3. Credit Guarantee Scheme

Context:

Union Food Minister Pralhad Joshi unveiled the ₹1,000-cr scheme to provide a credit guarantee to post-harvest loans for farmers.

Key Highlights:

• Union food and civil supplies minister Pralhad Joshi launched a ₹1,000 crore credit guarantee scheme to enable farmers get their post-harvest loans
• The corpus fund for bank loans against approved warehouse receipt will encourage banks to lend loans so it will bring financial inclusion and also benefit the vendors that pay maximum share of their profit in the form of interest to money lenders while implementing the Mudra.
• The scheme would prevent distress sales by farmers by bringing all warehouses in its fold.
• Chopra emphasized the need for improving the e-Kisan Upaj Nidhi portal, increasing farmer awareness about pledge finance, reviewing depository charges and increasing warehouse registrations.

E-Kisan Portal

• Online platform for farmers to avail post-harvest loans.
• Jointly created by Department of Food and Public Distribution, WDRA, Department of Financial Services, and NABARD.

4. APEC Climate Centre predicts La Nina

Context:

The APEC Climate Centre has predicted that La Nina, which brings heavy rainfall and floods to Asia, particularly India, will probably emerge during January-March 2025.  

Know about La Nina?

Asia-Pacific Economic Cooperation (APEC)

• Inter-governmental forum for 21 Pacific Rim economies.
• Promotes free trade in the region.
• Established in 1989, after ASEAN’s post-ministerial conferences.
• Intended to create new markets for agricultural products and raw materials.
• Headquartered
  • Singapore.
• Chairperson
  • Dina Boluarte

India is not a member of the Asia-Pacific Economic Cooperation (APEC): 

• Membership
  • India requested to join APEC in 1991, but was not included. Some reasons for India’s exclusion include:
    • A membership freeze that was there from 1997 until 2012 
    • Opposition from some members over India’s record on economic reforms 

5. India’s Green Hydrogen Vision and Challenges

Context:

India’s ambitious target of producing 5 million metric tonnes (MMT) of green hydrogen annually by 2030 signals its bid to establish early leadership in this emerging sector

The Vision and Potential of Green Hydrogen

• On the green hydrogen front, India has set a target of producing 5 million MMT of hydrogen per year by 2030.
• Because the cost of producing green hydrogen is still very far away from the cost of the conventional gray or blue production, really a long way from achieving those target goals.

What is Green Hydrogen?

Green hydrogen is a clean energy source that’s produced by splitting water molecules into hydrogen and oxygen using electricity from renewable sources like solar, wind, or hydropower. 

Facts to Remember

1.  Preeti Lobana country manager, V P for India

2. Cyclone Chido

Cyclone Chido claims nearly 1,000 lives in France´s Mayotte

Also read: Impact and Reasons for Cyclone Fengal

3. 53rd Vijay Diwas celebrations

The 53rd Vijay Diwas celebrations were observed at Fort William in Kolkata, the headquarters of Eastern Command, on Monday.

4. Simultaneous polls Bill may be introduced in LS today

Know more: Simultaneous polls