Current Affairs Choicest Blog: June 2021, Week 1

Welcome to the Endeavor Editors Current Affairs Choicest Blog series. Get a  weekly roundup – on news from business, economy, markets, policy, and more. A quick capsule format news summary and update to keep you abreast with all the latest current affairs.

Current Affairs June 2021 – Week 1

1. Current Affairs – International News & Global Economy

G7 nations reach a historic deal to tax big multinationals

A group of the world’s richest nations has reached a landmark deal to close cross-border tax loopholes used by some of the world’s biggest companies. The Group of Seven said it would back a minimum global corporation tax rate of at least 15%, and put in place measures to ensure taxes were paid in the countries where businesses operate. The accord, which could form the basis of a global pact next month, is aimed at ending a decades-long “race to the bottom” in which countries have competed to attract corporate giants with ultra-low tax rates and exemptions. For details visit.

G7: Rich nations back deal to tax multinationals – BBC News

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G7 backs making climate risk disclosure mandatory

The G7 countries have backed moves to force banks and companies to disclose their exposure to climate-related risks, a measure seen as vital to efforts to safeguard the financial system from climate change shocks. G7 finance ministers meeting in London also called for more coordination to measure what impact companies are having on the climate and environment, warning of the risk of fragmentation as local jurisdictions adopt different approaches. For details visit.

Financial risks of climate change are bigger than any other crisis: BlackRock CEO Larry Fink

BlackRock Chairman and CEO Larry Fink are warning that the financial risks of climate change are bigger than any crisis he’s experienced in his career on Wall Street.

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US economy: Plenty of growth, not enough workers or supplies

Barely more than a year after the coronavirus caused the steepest economic fall and job losses on record, the speed of the rebound has been so unexpectedly swift that many companies can’t fill jobs or acquire enough supplies to meet a pent-up burst of customer demand. Economic forecasters, with little historical precedent to guide them through the aftermath of a global pandemic, are pondering questions they can’t answer with any confidence: Are two months of middling job growth the result of too much of a good thing – employers want to hire more than they can? Or a hint that the labor market isn’t as strong as economists think? The economy grew from January through March at a red-hot 6.4% annual pace. And in the current quarter, that pace is thought to be accelerating to nearly double-digits. Yet the full portrait of the U.S. economy is a rather more nuanced one. For details visit.

President Joe Biden: No other economy is gaining jobs as fast as the U.S.

President Joe Biden delivers remarks on the May jobs report, which saw job growth accelerate but miss expectations. 

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The global unemployment rate will be 5.7% in 2022: ILO

The International Labour Organisation said the global unemployment rate will be 5.7% in 2022 with an estimated 205 million unemployed people around the world, which will continue to be higher than the pre-Covid numbers of 187 million in 2019. Further, compared to 2019, an additional 108 million workers worldwide are now categorized as poor or extremely poor which means that the five years of progress towards the eradication of working poverty have been undone rendering the achievement of the UN Sustainable Development Goal of eradicating poverty by 2030 even more elusive. “The employment growth will be insufficient to make up for the losses suffered until at least 2023,” it said in the World Employment and Social Outlook: Trends 2021 report. For details visit.

Poverty on the rise: Is the coronavirus cure worse than the disease?

To cope with the fallout from the coronavirus pandemic, governments are spending billions to prop up their embattled economy. But will that help the world’s poorer countries? Or will the gap between rich and poor widen still further?

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‘Secrets’ go down with cargo ship MV X-Press Pearl near Sri Lanka

The sinking of the cargo ship MV X-Press Pearl carrying chemicals near Sri Lanka’s capital Colombo this week has alarmed governments in the Indian Ocean Region as the vessel, recently made in China, was carrying items that the owners allegedly wanted to hide from the Sri Lankan authorities by preventing divers from attending to the sinking ship. The incident has not only caused environmental hazards but also raised security concerns, said people aware of the matter. The sinking of MV X-Press Pearl has also prompted questions about the quality of the vessel that was manufactured at China’s Zhoushan Changhong International Shipyard Co. Ltd and was newly commissioned. The vessel was on its way from the UAE via Qatar, India, and Sri Lanka en route to Singapore and had reported a nitric acid leak before reaching Sri Lanka on May 19. For details visit.

2. Current Affairs – India

India COVID update

India’s vaccine inequity worsens as the countryside languishes

Urban Indians are getting COVID-19 shots much faster than the hundreds of millions of people living in the countryside, government data shows, reflecting rising inequity in the nation’s immunization drive. In 114 of India’s least developed districts – collectively home to about 176 million people – authorities have administered just 23 million doses in total. That’s the same number of doses as having been administered across nine major cities – New Delhi, Mumbai, Kolkata, Chennai, Bengaluru, Hyderabad, Pune, Thane, and Nagpur which combined have half the population. The disparity was even stronger last month after the government allowed private sales of vaccines for adults aged under 45 years, an offer that favored residents of cities with larger private hospital networks. For details visit.

9 private hospitals corner 50% doses raise questions of vaccine equity and access

In what both reflects and accentuates the problem of vaccine inequity, just nine corporate hospital groups in big cities have cornered 50 percent of the Covid-19 vaccine stock meant for the private sector in the month of May. These nine corporate hospital groups cumulatively bought 60.57 lakh doses of the total 1.20 crore doses of vaccines procured by private hospitals in the first full month since the Central government revised its vaccine policy and opened it to the market. The balance 50 percent of the vaccine stock was procured by 300-odd hospitals, located mostly in the country’s urban centres, with hardly any of them serving regions beyond the Tier-2 cities. For details visit.

The second wave of coronavirus targeted rural India, says report

India’s rural areas have seen a surge in coronavirus infections in the second wave and a more distressing scenario is emerging from the rural hinterland than the urban centres, according to a report by Centre for Science and Environment (CSE). CSE in its report named ‘pandemic pointers’ said that the rural areas are the worst hit and over half of the daily global cases happened in India on six days in May – triggered due to the surge in cases in rural districts or towns. The report, says that the pointers show that 53% of new cases and 52% of deaths in the country last month were recorded in rural districts. For details visit.

Explained: What is the Delta variant of Covid-19, and why is it a concern?

Multiple SARS-CoV-2 variants are circulating globally. One of these is the B.1.617 lineage, detected in India earlier this year. Early evidence suggests that its sub-lineage B.1.617.2, known as the Delta variant, is more transmissible than contemporary lineages. The World Health Organization (WHO), which has given it the label Delta, has categorized it as a variant of concern (VOC). It has said it continues to observe “significantly increased transmissibility” and a “growing number of countries reporting outbreaks associated with this variant”. In its latest risk assessment for SARS-C0V-2 variants, Public Health England (PHE) has said a staggering 61% of the samples sequenced are now of the Delta variant (B.1.617.2). This means the Delta variant, first detected in India, is more dominant in the UK than the Alpha variant that had last year triggered a surge in the UK. For details visit.

Covid-19 News: New Study on Delta Variant, dosing Gap, a worry for India?

A Lancet study is now contradicting India’s decision to increase the gap between two doses of Covishield vaccine to 12 to 16 weeks from 6 to 8 weeks, saying reducing the gap increases efficacy. India’s own study also says that the Delta variant is now dominant in India and is believed to be behind the deadly second wave.

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India – Other News

Centre sends terse warning to Twitter to comply with new IT rules

The Centre has sent out a terse warning giving one last notice to Twitter to comply with new IT rules. In its letter, the Ministry of Electronics and Information Technology (MeitY) said that if Twitter fails to comply with the new IT rules, it shall be liable for consequences under the IT Act and other penal laws. The new IT rules came into effect from May 25 and have rankled social media companies. WhatsApp has filed a case in Delhi High Court contesting the government’s demand for traceability of messages. Twitter has described these rules as a threat to “freedom of expression”. For details visit.

‘IT Rules 2021 will change the online conversation in India’: Apar Gupta | The Quint

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India brings forward a target of 20% ethanol-blending in petrol to 2025

In order to cut pollution and import dependence, Prime Minister Narendra Modi said that the target for mixing 20 percent ethanol in petrol has been brought forward from 2030 to 2025, on the occasion of World Environment Day. Ethanol extracted from sugarcane as well as damaged food grains such as wheat and broken rice and agriculture waste has two positives on the environment, it is less polluting and its use also provides farmers with an alternate source of income. The government last year had set a target for blending 10 percent ethanol in petrol by 2022, and 20 percent by 2030. Currently, about 8.5 percent ethanol is mixed with petrol as against 1-1.5 percent in 2014, according to a PTI report. For details visit.

Government clears building of 6 attack submarines

The Defence Acquisition Council (DAC) gave the Indian Navy the go-ahead to select an Indian strategic partner company which, in collaboration with a foreign Original Equipment Manufacturer (OEM), will build six conventional attack submarines in the country. Project 75 India or P75I will be the first under the strategic partnership model, promulgated in 2017 to boost indigenous defense manufacturing. The first submarine built under the project is likely to be delivered by 2030. This project envisages the indigenous construction of six conventional submarines equipped with the state-of-the-art Air Independent Propulsion system at an estimated cost of Rs 43,000 crore. This is a landmark approval, being the first case processed under the Strategic Partnership model.  For details visit.

3. Current Affairs – Economy 

India likely to benefit from global minimum 15% corporate tax pact: Experts

India is likely to benefit from the global minimum 15 percent corporate tax rate pact inked by the world’s richest nations as the effective domestic tax rate is above the threshold, and the country would continue to attract investment, tax experts said. EY India National Tax Leader Sudhir Kapadia said the global corporate tax pact is a path-breaking one, especially for large and developing countries like India which would always find it very difficult to keep corporate tax rates artificially lower in a bid to increase much needed foreign direct investments in the country. For details visit.

Explained: India’s GDP fall, in perspective

The Indian government released its latest estimates of economic growth for the last financial year that ended in March 2021. India’s Gross Domestic Product (GDP) contracted by 7.3% in 2020-21. To understand this fall in perspective, remember that between the early 1990s until the pandemic hit the country, India grew at an average of around 7% every year. There are two ways to view this contraction in GDP. One is to look at this as an outlier — after all, India, like most other countries, is facing a once-in-a-century pandemic — and wish it away. The other way would be to look at this contraction in the context of what has been happening to the Indian economy over the last decade — and more precisely over the last seven years, since the Prime Minister Narendra Modi-led government just completed its seventh-anniversary last week. For details visit.

Chief Economic Adviser KV Subramanian speaks on the GDP trajectory For FY21

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India consumer confidence drops to record low, RBI survey shows

Indian consumers’ confidence is plummeting to new lows, adding to a string of grim data in an economy clobbered by the world’s worst coronavirus outbreak. The current situation index fell to a record 48.5 in May from 53.1 in March, according to the Reserve Bank of India’s consumer confidence survey, where 100 is the level that divides pessimism from optimism. Respondents were also bleak about the year-ahead prospects, with the future expectations index dropping to 96.4 from 108.8 in the period under review, the RBI said. For details visit.

4. Current Affairs – Markets, Banking, and Finance

Central Banks face a new balancing act with their huge asset piles

Central bankers around the world are mulling the future of their massive bond-buying programs in a post-pandemic world, knowing that with big balance sheets come big expectations. The G7 developed economies piled on about $7 trillion in debt last year as they spent heavily to fight the pandemic and prop up their economies. Central banks ended up owning much of that new debt, according to Bloomberg Economics. Even as asset purchases continue, with hundreds of billions of dollars spent each month, officials at the U.S. Federal Reserve and the European Central Bank are among those figuring out how—or if—they can reduce asset piles that have been a mainstay of financial markets for more than a decade. For details visit.

RBI Monetary Policy 2021 Highlights | Have major concerns about cryptocurrencies, no change in our position: Governor Shaktikanta Das

In line with expectations, Reserve Bank of India (RBI) Governor Shaktikanta Das announced that the RBI’s central bank’s Monetary Policy Committee (MPC) has decided to maintain the status quo and keep its stance accommodative. This is the sixth consecutive time rates have been unchanged. In a virtual address on June 4, Das said this comes amid economic impact due to the second wave of coronavirus cases in India, expectation of a normal monsoon, ability of businesses to adapt to pandemic working, and need to maintain adequate liquidity in the economy. The RBI announced a separate liquidity window of Rs 15,000 crore to mitigate the adverse impact of the second COVID-19 wave on certain contact-intensive sectors. Further, an additional Rs 16,000 crore funding has been earmarked for SIDBI for lending to MSMEs, directly or indirectly over and above the quantum of Rs 50,000 crore, which was set aside for government financial institutions in the April policy. For details visit.

RBI Monetary Policy: Key Highlights

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Explained: Why is the NCP opposing RBI supervision of cooperative banks?

During a meeting with his party, NCP chief Sharad Pawar approved a plan to set up a task force to prepare an action plan against a recent change in the law that has brought cooperative banks under the supervision of the Reserve Bank of India (RBI). The proposed task force will be headed by Balasaheb Patil, NCP leader and Cooperation Minister in Maharashtra’s Maha Vikas Aghadi (MVA) government. NCP spokesperson Nawab Malik said the Centre was trying to weaken the cooperative banking sector through changes to The Banking Regulation Act, 1949, and the NCP would stop its “game”. Malik said Pawar had worked to boost cooperative banks, but the central government was now taking away its rights, and making private banks powerful instead. For details visit.

India Fx reserves will help tide Global spillovers, RBI Says

India’s foreign exchange reserves have by all indications crossed $600 billion, central bank chief Shaktikanta Das said, a huge buffer that will help insulate Asia’s third-largest economy from global spillovers and volatile external flows. Earlier this year, the country’s foreign exchange reserves briefly surpassed Russia’s to become the world’s fourth-largest, as the Reserve Bank of India continued to hoard dollars to cushion the economy against any sudden outflows. The reserves are enough to cover around 15 months of imports and have been bolstered by rising inflows into the booming stock market and foreign direct investments. For details visit.

PNB eyes 3-fold rise in profit at nearly Rs 6,000 crore in FY’22

The country’s second-largest lender Punjab National Bank (PNB) said it is expecting a nearly three-fold jump in its net profit to Rs 6,000 crore during the current fiscal as the consolidation process is over. Despite COVID-19, the bank’s profit surged over five times to Rs 2,022 crore during the financial year ended March 2021, against Rs 363.34 crore during 2019-20. “Our projection for FY’22 overall net profit should not be less than Rs 6,000 crore at the conservative level. It all depends on credit growth, demand in the economy,” PNB Managing Director SS Mallikarjuna Rao said while speaking to media on FY21 fourth-quarter numbers. For details visit.

5. Current Affairs – Business

India ratings see a worrying sign for evergreen Commercial Real Estate

India’s commercial real estate thrived prior to the pandemic even as the housing suffered because of an overnight cash ban, a strict Real Estate Regulation Act, and a credit crunch. Investors bet on demand for office space, driven by information technology firms, startups, and data centres. The slowdown-proof corner, however, couldn’t escape the pandemic’s disruption. And the decline in occupancy came even prior to a devastating second wave of the virus. The trend sends “worrying signals” for the commercial real estate market, India Ratings said, reiterating its negative outlook on under-construction office space providers. For details visit.

Crisil says two-third of its rated mid-sized companies eligible for restructuring 2.0

Almost two-third of Crisil-rated mid-sized companies will be eligible for the restructuring window offered under the resolution framework 2.0 announced by the Reserve Bank of India (RBI) for contact-intensive sectors to alleviate liquidity challenges faced by companies in these sectors. The apex bank has announced a slew of measures aimed at mitigating the pandemic’s impact, raising the aggregate debt threshold for struggling businesses to ?50 crores from ?25 crores and provided an on-tap liquidity window of ?15,000 crores to companies in the contact-intensive sectors. For details visit.

IndiGo reports fifth straight quarterly loss

InterGlobe Aviation Ltd, India’s largest domestic airline, reported a fifth straight quarterly loss as travel demand remained muted due to the covid-19 pandemic. The airline’s consolidated net losses widened to ?1,147.16 crores during the March quarter from ?620.14 crores during the December quarter and ?1,194.83 crore losses in the quarter to September. IndiGo had reported a profit of ?871 crores during the March quarter of the previous year. “This has been a very difficult year with our revenues slumping hard due to covid, showing some signs of recovery during the period December to February and then slumping again with the second wave of the covid,” said IndiGo’s chief executive officer Ronojoy Dutta in a stock exchange notification. For details visit.

IndiGo CIO Sourav Sinha on using tech to reboot air travel

IndiGo CIO Sourav Sinha spoke to TechCircle about how the company plans to increase passenger number post the second wave of the Covid-19 pandemic. Watch video:

6. Current Affairs – Technology

TCS announces new partnerships to develop blockchain, RAN testing solutions

Tata Consultancy Services (TCS) has announced new partnerships to develop blockchain and open radio access network testing solutions. The company plans to create a blockchain ecosystem in Latin America and the Caribbean in collaboration with LACChain, a global Alliance led by the Innovation Lab of Washington DC-based Inter-American Development Bank (IDB Lab). As part of this engagement, TCS will work with the alliance to create a marketplace of blockchain solutions for implementation in healthcare, energy, education, and financial services, it said in a statement. For details visit. 

IPO-bound Paytm’s revenue drops 14% in FY21, losses narrow to Rs 1,701 crore

The parent entity of online payments firm Paytm, One97 Communications’ consolidated revenue from operations fell 14% to Rs 2,802 crore for the financial year 2021, according to its annual report. Losses, however, narrowed to Rs 1,701 crore during the period, from a loss of Rs 2,942 crore in the 2020 financial year. Paytm has been steadily focusing on reducing losses, though the Covid-19 pandemic-led slowdown in the consumer economy has hurt growth. The company, backed by China’s Alibaba and Japan’s SoftBank, aims to go public by November and is expected to file its Draft Red Herring Prospectus (DRHP) with markets regulator, the Securities and Exchange Board of India (SEBI), by next month. For details visit. 

Dogecoin bolstered by Coinbase addition as Elon Musk tweets continue

Dogecoin, the Shiba Inu-themed cryptocurrency that started as a joke in 2013, outperformed top rivals in the week as it launched on the Coinbase exchange. Dogecoin is up more than 14,000% in the past year, in a run-up that’s surprised even the crypto community and gives it the sixth-biggest market value. Its gains have been cited as an example of the power of retail traders, the attraction of memes, and a case study of what can happen in a world where the Federal Reserve and other central banks are practicing relatively loose monetary policy to try to overcome Covid-19’s economic damage. And it wouldn’t be Dogecoin without a little social-media action to liven things up. There’s little denying the Twitter pronouncements of Tesla Inc. founder Elon Musk have moved the prices of Bitcoin and Dogecoin multiple times. For details visit. 

Crypto conviction is falling among investors; numbers showing it

Speculative investors may have been pushing meme stocks “to the moon” earlier this week, but their crypto counterparts have been coming back down to Earth en masse. Hedging activity is on the rise and bullish bets are finding limited demand, even with Bitcoin still almost 40% below its peak. These are rare times of restraint among day traders, who until last month’s $500 billion crash were famously in the throes of bullish mania. Support from Bitcoin’s star promoter Elon Musk has wavered and there are new regulatory hurdles in China and the U.S. For the past two weeks, prices have wobbled around $40,000, unable to move much in either direction. Retail demand for long positions across the curve is vanishing. For details visit. 

Newly minted Unicorn Urban Company aims to repeat 2X revenue growth feat this year

Home services startup Urban Company announced that it has become a unicorn after a new round of funding that values the company at $2.1 Bn. The Series F funding of $255 Mn was led by Prosus Ventures, Dragoneer, and Wellington Management, with participation from Vy Capital, Tiger Global, and Steadview. With this latest investment, Urban Company is now the 13th unicorn to be minted this year. The company had reported operating revenue of Rs 212 Cr in FY20, up 84.2% from Rs 115.2 Cr in FY19. Its losses grew 95.5% in the same period. Urban Company claims that its operating model focuses on service professionals with the aim of turning them into micro-entrepreneurs, multiplying their earnings by 2-3 times. It has more than 35K service partners, including over 10K beauticians and hairdressers. For details visit. 

Govt’s Financial Stability Council to start addressing regulatory challenges in Fintech

Government affiliated financial Stability and Development Council has set up a new inter-regulatory body for addressing regulatory quagmires within the fintech industry. The move comes after several fintech platforms especially online mutual funds platforms faced regulatory hurdles in their business operations. Unclear regulations pose risk to fintech and its users and hence the new inter-regulatory body will look to streamline laws through consultation with all financial regulators. For details visit. 

7. Current Affairs – Opinion

Why China’s about-turn shows restrictive population policy doesn’t work

Recently China announced that married couples may have up to three children, officially marking an end to the population control experiment that led to the draconian one-child policy in 1980. This policy reversal came as data from the 2020 Chinese census showed a sharp increase in the proportion of the population above age 60 to 18.7 percent, up from 1.3 percent in 2010. Whether this relaxation will be successful remains unclear. For India, an even bigger question pertains to the lessons we might draw from this about-turn. The success of this announcement signaling a pro-natalist turn will depend on the answer to two questions. First, how strong was the impact of the original policy? Second, what can governments do to encourage people to have more children? For details visit. 

Couples can have three children: Reasons behind China’s big policy shift

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The digital payment boom is indicative of Centre’s success in enabling financial inclusion

Amid the gloom of the Covid-19 pandemic, the past year has shown some pleasant surprises in the efforts to promote India’s digital journey. It turns out that India overtook China to register the highest number of countrywide digital payments. Real-time transactions crossed 25 billion, much higher than China’s 15 billion in 2020, as reported in the annual research report of ACI Worldwide. The report also stated that digital payments in India are set to account for 71.7 percent of all payments by volume by the year 2025. The digital payment boom is indicative of a larger paradigm shift in the ease of access to financial services. For details visit. 

Does India have less competitive dynamics than in the US for tech start-ups?

Regarding technology, tech-pundits believe that India is an applied tech hub instead of a manufacturing and creative hub. The US is more about creating newer technology and thought processes. Lately, however, this has started happening in India too. India offers infrastructure facilities and low costs, thereby offering a significantly conducive environment for start-ups. Practically, there is a huge mismatch with regards to infrastructure maintenance, approvals, licensing work, etc. as they might require a good amount of time investment. Whereas, the US has a level of efficiency in terms of formalities which help businesses grow efficiently and faster. It is here that one becomes aware of the lingering doubts in the minds of those who believe that political connections are at the root of all successful start-ups. The counterargument presented is that the political angle can provide funding but the business needs to be efficient. For details visit. 

Are Swiss banks in trouble? | CNBC Explains

A global clampdown on tax evasion, led by U.S. law authorities, has transformed the banking industry in Switzerland. Without its famed reputation for secrecy, wealthy foreigners no longer see it as a haven to hide their money. So how have Swiss banks adapted?

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With that, we come to an end for our Weekly Current Affairs June 2021 -Week 1. Hope you have liked it. Write your feedback in the comments below and let us know if there is anything else you would like us to cover.

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