24th April 2020 Current Affairs in English
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24th APRIL 2020
TABLE OF CONTENTS
- Coronavirus | DA for Central government staff frozen till July 2021
- Coronavirus | DRDO develops mobile virology research lab
- CSIR lab defends sanitisation tunnel after Ministry’s advisory
- Kamakhya temple festival called off
- RBI to restart Operation Twist to manage yields
- Coronavirus lockdown | Industries cannot be forced to pay wages during lockdown: panel
- Listed ﬁrms can raise funds 6 months post buyback oﬀer
- Citrusy Chakota gets push from (BIAL) Bangalore International Airport Ltd., Horticulture Dept.
- Coronavirus | Clause allowing FIR against firm owners for COVID-19 cases withdrawn
- to suspend IBC rules for up to one year
- Most commodity prices will drop substantially in 2020: World Bank
1. Coronavirus | DA for Central government staff frozen till July 2021
Information in News
- The Finance Ministry on Thursday issued an order freezing the Dearness Allowance (DA) to the Central government employees and Dearness Relief (DR) to Central government pensioners at current rates till July 2021.
- In view of the crisis arising out of COVID-19, it has been decided that the additional instalment of Dearness Allowance payable to Central government employees and Dearness Relief to Central government pensioners, due from January 1, 2020, shall not be paid.
- The additional instalments of Dearness Allowance and Dearness Relief due from July 1, 2020, and January 1, 2021, shall also not be paid. However, Dearness Allowance and Dearness Relief at current rates will continue to be paid.
- The decision has been taken considering that there is a need for major increase in the expenditure on health as well as on welfare measures for various affected sections of society, including the poor and vulnerable.
- The State governments usually follow the Central government orders on Dearness Allowance and Dearness Relief.
Dearness Allowance and Dearness Relief
- Dearness allowance and dearness relief are part of salary or pension received by the employee or pensioner, respectively. They are taxed at marginal rate of tax under the head ‘income from salary.
- DA is a component of the central government employees’ compensation package. It is reviewed to factor in the inflationary trends in the economy. As inflation rises, the DA stands revised at regular intervals and it ensures that the salaries of the employees are adjusted in line with inflation. While computing DA, the consumer price index is used to account for inflation. DR does the same for the pensioners.
- DA and DR are part of salary or pension received by the employee or pensioner, respectively.
- The rate of DA and DR are reviewed half yearly. These rates for January 1, July 1.
2. Coronavirus | DRDO develops mobile virology research lab
Information in News
- Defence Minister Rajnath Singh on Thursday inaugurated through videoconference a mobile virology research and diagnostics laboratory (MVRDL).
- It has been developed by the Defence Research and Development Organisation (DRDO), together with ESIC Hospital, Hyderabad, and the private industry.
- The MVRDL is the combination of a bio-safety level (BSL)-3 lab and a BSL-2 lab and was set up in a record time of 15 days. It can process 1,000-2,000 samples a day.
- The first such MVRDL was developed by the Research Centre Imarat (RCI), Hyderabad, in consultation with ESIC Hospital.
- The mobile lab will be helpful in
- carrying out diagnosis of COVID-19
- Virus-culturing for drug screening,
- convalescent plasma-derived therapy,
- comprehensive immune profiling of patients towards vaccine development
- Early clinical trials specific to Indian population.
3. CSIR lab defends sanitisation tunnel after Ministry’s advisory
Information in News
- The Pune-based CSIR-National Chemical Laboratory (CSIR-NCL) and the Mumbai-based Institute of Chemical Technology (ICT) issued a joint statement on Thursday asserting that the Ministry advisories “did not have any scientific basis”.
- The Union Ministry of Health and Family Welfare (MoHFW) had in a recent advisory cautioned against the spraying of disinfectant on people as part of measures to mitigate the COVID-19 pandemic and had explicitly said that “disinfectants are recommended for the cleaning and disinfection only of frequently touched areas or surfaces by those suspected or confirmed to have been infected” by the virus.
- “Efficacy of sodium hypochlorite, also known as hypo or bleach, ranging from 02% to 0.05% weight concentration was studied on personnel walking through mist tunnel unit besides antibacterial activity against standard microorganisms before and after exposure in the walk-through.
- Results indicated that [sodium hypochlorite used in this weight concentration range] did not show any adverse effects on the skin.
- Thus, we recommend using 0.02% to 0.05 wt. % sodium hypochlorite solution (200 to 500 ppm) for external body surface sanitisation of personnel walking through the mist tunnel by following standard safety precautions, these two Scientific Establishment said.
Uses of Sodium hypochlorite
- Sodium hypochlorite is a chemical compound with the formula NaOCl or NaClO and is industrially synthesized by the Hooker process.
- It is most often encountered as a pale greenish-yellow dilute solution commonly known as liquid bleach or simply bleach, a household chemical widely used (since the 18th century) as a disinfectant or a bleaching agent.
- Its corrosive properties, common availability, and reaction products make it a significant safety risk.
- Sodium Hypochloriteis the main ingredient in laundry bleach. It is used extensively as a bleaching agent in the textile, detergents, and paper and pulp industries. It is also used as an oxidizing agent for organic products. In the petrochemical industry, sodium hypochlorite is used in petroleum products refining.
4. Kamakhya temple festival called off
Information in News
- The temple atop the Nilachal Hills, whose northern face slopes down to the Brahmaputra river, was built by the demon king Narakasura.
- Nilachal Hill is also called Neelachal Parbat or Kamagiri in the city of Guwahati
- Records are available only from 1565 when Koch King Naranarayana had the temple rebuiltin 1665.
- Kamakhya is one of the 51 shaktipeeths, or holy sites, for the followers of the Shakti cult, each representing a body part of Sati, Lord Shiva’s companion. The temple’s sanctum sanctorum houses the yoni — female genitals — symbolised by a rock. The festival marks the menstruation of the goddess.
- It is believed that female genitalia (yoni) of dead Sati fell down while her corpse was being carried by her husband Shiva turning the hill blue, therefore the name Neelachal (Blue Spread).
5. RBI to restart Operation Twist to manage yields
Information in News
- The Reserve Bank of India (RBI) has announced simultaneous purchase and sale of government bonds in a bid to soften long-term yields .
- The central bank will buy ₹10,000 crore of bonds maturing between 2026 and 2030 and sell the same amount of T-bills.
- On a review of current and evolving liquidity and market conditions, the Reserve Bank has decided to conduct simultaneous purchase and sale of government securities under open market operations (OMO) for ₹10,000 crore each on April 27, 2020.
- Such open market operations are known as ‘Operation Twist,’ which was used by the RBI in December last year for the first time.
- Following the announcement, the yields on the 10- year bonds dropped by 20 basis points (bps).
- The move will also aid monetary transmission by prompting banks to pass on interest rate cut benefits to their customers.
- The RBI had reduced key policy rate or the repo rate by 75 bps to 4.4% in the monetary policy review, announced in the last week of March.
Open Market Operation
- Open market operations is the sale and purchase of government securities and treasury bills by RBI or the central bank of the country.
- The objective of OMO is to regulate the money supply in the economy.
- When the RBI wants to increase the money supply in the economy, it purchases the government securities from the market and it sells government securities to suck out liquidity from the system.
- RBI carries out the OMO through commercial banks and does not directly deal with the public.
- OMO is one of the tools that RBI uses to smoothen the liquidity conditions through the year and minimise its impact on the interest rate and inflation rate levels.
- The monetary policy tool called “Operation Twist” was first used by the US Federal Reserve in 1961 when the US economy was recovering from recession post the Korean War.
- The name comes from the Chubby Checker song and dance popular at that time in the US.
- In this operation, the RBI regularly buys and sells government securities (G-Secs), essentially loans to the Indian government, of varying maturities as part of its monetary management.
- Operation twist involves the simultaneous purchase and sale of government securities to bring down long-term interest rates and shore up short-term rates.
- The central bank is keen that long-term rates are brought down to kickstart investment and revive the economy.
Why Operation Twist is conducted?
- If there is a shortfall in long term investment in the country and the investors are reluctant to do long term investment in the economy, then the government tries to reduce the interest rate for the long term investment ventures.
- These long term investment venture includes; purchase of land/house, investment in infrastructure and securities, etc.
- The long-term investment will create jobs in the country which would lead to an increase in the demand for other products.
- So due to a positive atmosphere in the country, the holistic development of the entire country would take place.
How RBI conducted Operation Twist?
- On 23 December 2019, the Reserve Bank of India, sold short-term securities worth Rs 10,000 crore through the Open Market Operations (OMO) and purchased long term securities of the same value.
- The maturity period of the short term securities was up to 2020 but the maturity period of long term securities is for 10 years or up to 2029.
- The sole purpose of this twist is to moderate high long-term interest rates in the market and bring them closer to the repo rate.
- The advantage of this operation is that now people will get the loan at cheaper rates to invest in long term securities. So people will be interested in taking loans in large quantities to purchase houses, set up industries,etc.
- Since there is a situation of the slowdown in the country at this juncture, people are not investing, so the demand is decreasing in every sector like the reduction in demand for homes, cars, etc.
- Now the government wants to provide cheaper loans through operation twist.
Benefits of Operation Twist
- The interest rate for the long term investment will come down so the investor will take more loans for long term investments.
- The flow of money will increase in the country, and aggregate demand in all sectors of the economy will boost.
- The overall increase in productive activities will further create jobs in the economy.
6. Coronavirus lockdown | Industries cannot be forced to pay wages during lockdown: panel
Information in News
- The Parliamentary Committee on Labour in its report on the Industrial Relations Code, 2019, submitted on Thursday, has recommended that “in case of natural calamities, payment of wages to the workers until the re-establishment of the industry may be unjustifiable”.
- Committee Chairman and senior BJD leader Bhartruhari Mahtab added that the ongoing lockdown to check the spread of COVID-19 can be counted as one such calamity.
- The Industrial Code makes it incumbent upon the employer to pay 50% wages to the workers/employees who are laid off due to shortage of power, coal, raw material etc for 45 days.
- The Committee has, however, expressed reservations for payment of the prescribed percentage of wages to the workers in the event of closure of an establishment due to “natural calamity” .
- In case of natural calamities like earthquake, flood, super cyclone etc. which often result in closure of establishments for a considerably longer period without the employer’s fault, payment of wages to the workers until the re-establishment of the industry may be unjustifiable,” the report says.
- The Committee has suggested that “clarity” be brought in so that employers “not responsible for closure or lay off, are not disadvantaged in case of such natural calamity of high intent.
- The Industrial Relations Code 2019 is an amalgamation of three laws
- Industrial Disputes Act, 1947,
- Trade Unions Act, 1926, and
- Industrial Employment (Standing Orders) Act, 1946.
- It was introduced in the Lok Sabha in November last year and referred to the Standing Committee on Labour in December.
- With the ongoing lockdown, the draft report was circulated to the members on April 15 via e-mail and they were given eight days to respond.
- And the final adopted report was accepted by the Speaker Om Birla on Thursday.
7. Listed ﬁrms can raise funds 6 months post buyback oﬀer
Information in News
- SEBI move to reduce time gap for quicker access to capital.
- As part of measures to ease fund-raising for companies amid the ongoing volatility due to the COVID-19 pandemic, the Securities and Exchange Board of India (SEBI) has allowed listed companies to raise funds after six months of making a buyback offer.
- Under normal circumstances, SEBI norms stipulate a minimum gap of 12 months between a buyback offer and any fund raising activity by a listed company.
- To enable relatively quicker access to capital, it has been decided to temporarily relax the period of restriction provided in Regulation 24(i)(f) of the buy-back Regulations. Accordingly, the words ‘one year’ shall be read as ‘six months’ in the said regulation,”
- While the relaxation will come into force with immediate effect, it will be applicable until December 31.
- The latest move comes following a relaxation in norms for preferential allotment by companies with stressed assets.
Some Other Relaxations
- The watchdog has also relaxed certain compliance norms for entities that are planning to come with an initial public offer (IPO), while enlarging the definition of entities eligible for making fast track rights issue.
- In another circular regarding valuation of money market or debt securities held by mutual funds, the regulator has said that if an issuer defaults on payment obligations due to the lockdown or the moratorium allowed by RBI, then valuation agencies should not term it a default.
Securities and Exchange Board of India (SEBI)
- Securities and Exchange Board of India (SEBI) is a statutory regulatory body entrusted with the responsibility to regulate the Indian capital markets.
- It monitors and regulates the securities market and protects the interests of the investors by enforcing certain rules and regulations.
- SEBI was founded on April 12, 1992, under the SEBI Act, 1992.
- Headquartered in Mumbai, India.
- SEBI has regional offices in New Delhi, Chennai, Kolkata and Ahmedabad along with other local regional offices across prominent cities in India.
- The objective of SEBI is to ensure that the Indian capital market works in a systematic manner and provide investors with a transparent environment for their investment.
- To put it simply, the primary reason for setting up SEBI was to prevent malpractices in the capital market of India and promote the development of the capital markets.
Functions of SEBI
The functions and powers of SEBI have been listed in the SEBI Act,1992. SEBI caters to the needs of three parties operating in the Indian Capital Market. These three participants are mentioned below:
- Issuers of the Securities: Companies that issue securities are listed on the stock exchange. They issue shares to raise funds. SEBI ensures that the issuance of Initial Public Offerings (IPOs) and Follow-up Public Offers (FPOs) can take place in a healthy and transparent way.
- Protects the Interests of Traders & Investors: It is a fact that the capital markets are functioning just because the traders exist. SEBI is responsible for safeguarding their interests and ensuring that the investors do not become victims of any stock market fraud or manipulation.
Financial Intermediaries: SEBI acts as a mediator in the stock market to ensure that all the market transactions take place in a secure and smooth manner. It monitors every activity of the financial intermediaries, such as broker, sub-broker, NBFCs, etc.
Powers of SEBI
8. Citrusy Chakota gets push from (BIAL) Bangalore International Airport Ltd., Horticulture Dept.
Information in News
- Number of farmers growing the fruit had come down owing to urbanisation and change in landscape
- Armed with its unique taste and flavour and a Geographical Indication tag, the Devanahalli Pomelo, the fruit popularly known as chakota, is set to get a push from various quarters.
- Devanahalli is known for chakota.
- Farmers in these areas grow chakota on the border of their fields or near their homes. This has been the practice for years. After the fruit got the GI tag, farmers are coming forward to grow the plant.
- However, due to lockdown, the demand has come down.”
- Bangalore International Airport Ltd. (BIAL), the operator of Kempegowda International Airport, too has taken measures to cultivate the fruit. In a release, BIAL said that under its CSR programme ‘Namma Ooru’, it will come up with an orchard of 500 chakota plants.
- BIAL intends to promote cultivation of the fruit around the region and create a viable market by collaborating with Indian Council of Agricultural Research and other institutions.
- The Devanahalli pomelo (also called Devanahalli Pomello in official documents) is a variety of the citrus fruit pomelo (Citrus maxima) of the family Rutaceae.
- It is exclusively grown in the region around Devanahalli taluk, Bangalore Rural District, India, as an exotic crop variety.
- Its officially designated name is “Devanahalli Pomello (Chakkota).
- It is locally known as chakkota.
- The Devanahalli pomelo is protected under the Geographical Indications of Goods (Registration & Protection) Act (GI Act) 1999 of the Government of India.
- It was registered by the Controller General of Patents, Designs, and Trademarks under the title “Devanahalli Pomello” and recorded at GI Application number 131 under Class 31 as a horticulture item.
- The fruit enjoys a strong market demand. Its sweet taste and flavour are considered to be better than those of other varieties in the market.
9. Coronavirus | Clause allowing FIR against firm owners for COVID-19 cases withdrawn
Information in News
- The government has withdrawn the clause allowing filing of an FIR against a company and its management if an employee tests positive for COVID-19, following concerns raised by India Inc.
- There is no mention of sole responsibility fixed of owner/director on detection of COVID-19 positive case/s,” states the reworked guidelines sent to business owners. “The policy has been revised and the FIR clause removed. All the confusions on this matter should end.”
- He said some apprehensions had been raised in the media based on a wrong interpretation of the guidelines. It was believed that States may take legal action, including imprisonment of the CEO, if a COVID-19 positive employee was found in the factory, and that in such a scenario the factory would be sealed for three months.
- I would like to clarify that there is no such clause in the consolidated revised guidelines and therefore there is no basis for such misplaced apprehensions and also stressed that subject to compliance with the Standard Operating Procedure on social distancing, no fresh license or statutory approval was needed for resumption of permitted activities.
- Penalties under Disaster Management Act, 2005, would be applicable if the offence occurred with the consent and cognisance or due to the negligence of the employer.
- Govt. has not issued any directive that if any Coronavirus case is detected in the factory, there will be FIR against the factory. This is a rumor and absolutely false.
- According to the guidelines issued by the MHA on April 15, any person violating lockdown measures will be liable to be proceeded against as per the provision of section 51 to 60 of the Disaster Management Act 2005, and for legal action under section 188 of the IPC and other legal provisions as applicable.
- Section 58 of the DMA states that, “…every person who, at the time the offence was committed, was in charge of, and was responsible to the company, for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the contravention and shall be liable to be proceeded against and punished accordingly: Provided that nothing in this sub-section shall render any such person liable to any punishment provided in this Act, if he proves that the offence was committed without his knowledge or that he exercised due diligence to prevent the commission of such offence.”
- It adds that, “…where an offence under this Act has been committed by a company, and it is proved that the offence was committed with the consent or connivance of or is attributable to any neglect on the part of any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also, be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly.
10. Govt. to suspend IBC rules for up to one year
Information in News
- In a major relief for corporate borrowers hit hard by the coronavirus pandemic, the government has decided to amend the insolvency law to suspend up to one year provisions that trigger insolvency proceedings against defaulters, according to PTI sources.
- The IBC (Insolvency and Bankruptcy Code) would pave the way for banks to restructure loans.
- An ordinance would be promulgated to suspend three sections of IBC for up to one year and a decision in this regard was taken by the Union Cabinet on Wednesday.
- Section 7, 9 and 10 of the IBC would be suspended for six months and the suspension time can be extended up to one year.
- An enabling provision with respect to extending the time would be part of the ordinance, they added.
- Section 7 and 9 pertain to initiation of corporate insolvency proceedings by a financial creditor and an operational creditor, respectively.
- Section 10 relates to filing an application for insolvency resolution by a corporate.
- As per existing norms, if a payment default exceeds 90 days then the lender concerned has to refer the account for resolution under IBC or any other mechanism permitted by the Reserve Bank of India (RBI). The lender does not have the option to restructure the loan.
- Currently, RBI norms prohibit restructuring of loans and resolution has to be done under IBC.
11. Most commodity prices will drop substantially in 2020: World Bank
Information in News
- COVID-19 is projected to bring most commodity prices down substantially in 2020, the World Bank said in its ‘April Commodity Markets Outlook’, released on Thursday.
- Prices of energy and metals have been worst hit.
- While there has been only a moderate impact on the agricultural commodities outlook, supply chain disruptions and export restrictions and stockpiling by governments have raised food security concerns.
- The outlooks are “exceptionally uncertain” and depend on the severity and duration of the pandemic and when mitigation measures are unwound.
- Energy prices, which fell 18.4% quarter-on-quarter in 2020 Q1, are expected to average at 40% lower in 2020 than in 2019.
- With crude benchmarks trading at below zero earlier this week, the bank projects oil prices to average at $35 per barrel in 2020.
- Agricultural prices are likely to stay broadly stable in 2020 because of relatively stable demand and all-time high levels of staple production and stock.
- However, supply chain disruptions and trade policy announcements and stockpiling could create food shortages. the report said, highlighting a theme that has repeatedly emerged from the bank over the last few days..
- In addition to the devastating human toll, the economic impact of the pandemic will dampen demand and cause supply disruptions, negatively affecting developing countries that rely heavily on commodities,” World Bank economist.
- Gold prices were up 6.9% in the last quarter – its sixth consecutive quarterly rise. This was caused by safe-haven buying and historically low interest rates, the Bank said.
- Additionally, supply side disruptions due to the pandemic –such as suspension of mining in South America and South Africa helped support prices as did reduced or suspended refining operations.
- These factors and strong investor demand propped gold up despite weak jewelry demand in India and China.
COVID’s long-term impact on commodity markets
- Importers and exporters of commodities are likely to see some long-term shifts in their markets due to the pandemic.
- These include increasing transport costs due to enhanced border checks, unwinding supply chains (companies might prefer to source from closer by for instance), substituting for imports with domestic goods as transport costs rise and changing consumer behaviour.
- For instance, people may choose to work remotely, travel less, and this could impact result in permanent drops in demand for oil, favourably impacting the current accounts for oil importers.
- The break in emissions caused by the restrictions may also increase public pressure for greener transport and lowered fossil fuel use.
Commodity Markets Outlook
- Commodity Markets Outlook by World Bank provides market analysis for major commodity groups — energy, metals, agriculture, precious metals, and fertilizers.
- The report forecasts prices for 46 key commodities, including oil.
- It is published in April and October.