Current Affairs - 23 January 2014

Announcement of 12 subsidised cylinders

• Congress vice-president Rahul Gandhi’s appeal to raise the cap on subsidised LPG cylinders could force Finance Minister P. Chidambaram to relax the expenditure ceiling his ministry had imposed on the Oil Ministry.
• If the government raises the annual cap from nine to 12, the higher subsidy outgo will force the Oil Ministry to breach the ceiling, sources said. The Ministry estimates the additional burden at nearly Rs. 7,000 crore.
• Asked for its reaction, Finance Ministry sources said they would take a call on relaxing the expenditure ceiling on receiving the Oil Ministry’s proposal.
• Under the current LPG cylinder regime, 89.2 per cent of the 15 crore LPG consumers are covered. The remaining 10 per cent buy the additional requirement at the market price.
• If the quota is raised to 12, about 97 per cent of the consumers will be covered.
• Increasing the limit to 12 cylinders is likely to result in an additional fuel subsidy burden of Rs. 3,500 -5,800 crore.
• The government already incurs an expenditure of Rs. 46,000 crore per annum as subsidy on LPG.

RBI's initiative to tackle black money

• In a move that is likely to hit currency hoarders and counterfeiters, the Reserve Bank of India (RBI) has decided to withdraw from circulation all currency notes issued prior to 2005.
• “The public can easily identify the notes to be withdrawn as the notes issued before 2005 do not have on them the year of printing on the reverse side,” the RBI said.
• From July 1, however, those wanting to exchange more than 10 pieces of Rs.500 and Rs.1000 notes in a bank where they do not have an account will have to provide proof of residence and identity.
• The move will flush out black money, according to bankers.
• Notes issued after 2005 have added security features that make counterfeiting difficult.

Cabinet to take decision on FDI in farm land

• The UPA government has formed a three-member Cabinet committee to examine the possibility of opening up agricultural land to Foreign Direct Investment (FDI), following a proposal by the Urban Development Ministry on letting foreign realtors buy agricultural land.
• The committee includes Urban Development Minister Kamal Nath, Finance Minister P. Chidambaram and Commerce and Industry Minister Anand Sharma.
• At present, FDI is banned in farm land. Further, Indian banking rules disallow loans for the purchase of farm land even for domestic investors — except in the case of large-scale projects — to safeguard against speculative land acquisition and hoarding.
• The Ministry’s argument is that as farm land is already being acquired for township development, FDI would only help raise more funds for the purpose. Real estate developers would in any case be applying for land use change after acquiring farm land, the Ministry said.

SC's direction to UGC on faulted deemed university

• The Supreme Court has directed the University Grants Commission to consider afresh the status of 44 deemed universities which were sought to be de-recognised on the basis of the Tandon Committee report.
• Passing the order on Tuesday on a writ petition filed by advocate Viplav Sharma seeking regulation of the deemed universities, a Bench of Justices K.S. Radhakrishnan and Vikramajit Sen asked the UGC to examine the reports of the Tandon Committee and the Committee of Officers with notice to all 44 institutions.
• “The institutions are free to raise their objections to the reports and the UGC has to consider the same and take an independent decision in accordance with law, if necessary, after affording them a hearing, within two months.”
• The UGC would then tender its advice, which though not binding on the Centre, would have to be given due weight as it is an expert statutory authority.
• “We make it clear that we have not given our stamp of approval to any of the reports and it is for the UGC to consider all the reports…,” the Bench said.
• The Tandon Committee had recommended de-notifying the deemed university status to 44 institutions but they demanded that the panel report be discarded.

First woman PM of Latvia,wins confidence vote

• Latvia’s parliament on Wednesday gave the green light to a new centre-right coalition government led by its first ever woman Prime Minister.
• Laimdota Straujuma (62), won the parliamentary vote after Valdis Dombrovskis stepped down over a supermarket roof collapse that killed dozens in the capital Riga in November.
• The technocrat and former agriculture minister won by 64 votes to 27 with 2 abstentions, in the 100-seat parliament.
• She heads a broad coalition commanding a solid 66-seats comprising four of the five parties represented, plus six independent MPs.

Experts opinion on RBI’s Urjit panel report

• Many analysts, on Wednesday, said the Reserve Bank of India committee’s suggestion to keep consumer inflation at the centre of its monetary policy making indicates the hawkish stance of the central bank going ahead.
• The RBI committee, headed by Deputy Governor Urijit Patel, was set up in September last to revise and strengthen the monetary policy framework.
• On Tuesday, in its recommendation, the committee said inflation should be the ‘nominal anchor’ of the monetary policy framework, and it should be defined without any ambiguity.
• “These recommendations clearly carry hawkish implications. After all, the December headline CPI rate of 9.9 per cent is well above the current 7.75 per cent repo rate. In other words, the real policy rate is negative at a time when inflation is above even the temporary 8 per cent target rate,” global brokerage Credit Suisse said in a note.
• The panel recommends using CPI inflation as the new nominal anchor, as it is the closest reflection of cost of living and inflation expectations.
• The panel suggests adopting a longer-term target of 4 per cent for CPI inflation with a band of +/- 2 per cent.
  
  
  Source upscportal