Current Affairs Choicest Blog: May 2021, Week 3

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 May 2021 – Week 3

1. Current Affairs – International News & Global Economy

Colonial Pipeline paid hackers $5 mn in ransom after cyber attack

US fuel supplier Colonial Pipeline reportedly paid cyber-criminal gang DarkSide nearly $5 mn in ransom after a cyberattack. Colonial, which has the largest fuel pipeline network, had earlier said it would not pay the ransom demanded by the hackers. Earlier on May 14, Japanese consumer tech giant Toshiba complained that its European division in France had been hit by the same gang. With the ransom being paid, Colonial Pipeline said it would be able to resume operations by May 13, however, cautioned that it may take several days for the supply to normalise. For details visit.

Colonial Pipeline pays $5 mn in bitcoin to hackers: New age warfare by non-state actors

As the hacking group DarkSide forces US Colonial Pipeline to pay $5 mn to recover its stolen data and to resume the supply of gas on the Atlantic Coast, Shekhar Gupta explains how this reflects a new manifestation of cyber warfare and how these groups function.
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Israeli strike on Gaza kills 7, unrest spreads to West Bank

An Israeli air raid in Gaza City killed at least seven Palestinians in the deadliest single strike since the battle with Gaza’s militant Hamas rulers erupted earlier this week. Both sides pressed for an advantage as cease-fire efforts gathered strength. The latest outburst of violence began in Jerusalem and has spread across the region, with Jewish-Arab clashes and rioting in mixed cities of Israel. There were also widespread Palestinian protests in the West Bank, where Israeli forces shot and killed 11 people. The spiraling violence has raised fears of a new Palestinian “intifada,” or uprising at a time when there have been no peace talks in years. For details visit.

Explained: Behind the clashes at Jerusalem’s Al-Aqsa

What is the significance of the mosque and its location, and why has it become the site of clashes between Israeli forces and Palestinians over the last one week? For details visit. 

How Israel’s Iron Dome defence system helps counter Hamas’ rocket attacks

The ‘Iron Dome’ is a ground-to-air, short-range, air defence system that neutralises enemy rockets and missiles. The concept was born after the 2006 Israel-Lebanon War when Israel faced thousands of rockets fired by the Hezbollah. The missile defence system took years to develop and was tested in combat for the first time in April 2011. The system is designed to mainly intercept short-range missiles and rockets coming in from the Hamas-controlled Gaza Strip.
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Mars Expedition | China lands Tianwen-1 spacecraft on the Red Planet

An un-crewed Chinese spacecraft successfully landed on the surface of Mars on May 15, making China only the second space-faring nation after the United States to land on the Red Planet. Tianwen-1, or “Questions to Heaven,” named after a two-millennia-old Chinese poem, is China’s first independent mission to Mars. China’s first Mars landing follows its launch last month of the main section of what will be a permanent space station and a mission that brought back rocks from the moon late last year. For details visit.

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KP Sharma Oli reappointed as Nepal PM as Opposition fails to prove majority to form govt

K P Sharma Oli was reappointed as Nepal Prime Minister after the Opposition parties, riddled by factionalism, failed to secure majority seats in Parliament to form a new government. However, as per rules, Oli is required to win the vote of confidence within 30 days from the date of the appointment. For details visit.

2. Current Affairs – India

India COVID update

India’s third Covid vaccine is now available: how much will you have to pay for Sputnik V?

Dr. Reddy’s Laboratories said it had launched Sputnik V in India. The vaccine is currently the second most expensive Covid-19 jab in the country. Made by the Gamaleya Research Institute of Epidemiology and Microbiology in Moscow, Sputnik V is a two-dose Covid-19 vaccine using a similar platform to Covishield — the most widely used vaccine in India since the government’s immunization program began in January. However, unlike Covishield, which uses a weakened common cold “adenovirus” that affects chimpanzees, Sputnik V makes use of two different human adenoviruses. The vaccine has an efficacy of over 91 percent, according to a publication in the scientific journal The Lancet. For details visit.

Two billion Covid-19 vaccine doses by year-end: hope and a reality check

The head of the country’s Covid-19 Task Force estimated the “emerging vaccine availability” for the period August to December at a staggering 216 crore — more than 2 billion — doses.
The government’s estimate, Dr. V K Paul said, was based on data submitted by manufacturers of eight Covid-19 vaccines. Realistically though, this would depend entirely on two key factors: massive ramping up of vaccine manufacturing, and the availability of critical efficacy and safety data of vaccine candidates. For details visit.

Explained: The debate over vaccine GST exemption

Several states have called for removing taxation on Covid-related medicines and supplies, including a GST exemption on vaccines. In response, Finance Minister Nirmala Sitharaman has said that exemptions on domestic supplies and commercial imports “would make these items costlier” for consumers. Some experts feel categorizing domestic supplies as zero-rated might be a better option than granting a full exemption since it will pave the way for availing input tax credit. A 5% GST is levied on domestic supplies and commercial imports of vaccines; Covid drugs and oxygen concentrators attract 12%. For details visit.

Covid probably India’s greatest challenge since independence: Raghuram Rajan

COVID-19 pandemic is probably India’s greatest challenge since independence, former RBI Governor Raghuram Rajan said. Addressing a virtual event organized by the University of Chicago Center in Delhi, Rajan said India needs a quick bankruptcy process for the MSME sector. “This is a tragic time in India given the pandemic. COVID-19 pandemic is probably India’s greatest challenge since independence,” he said. “When the pandemic hit first, the challenge was largely economic as a result of lockdowns, now the challenge is both economic and personal, and there will also be a social element to it as go forward,” he added. For details visit.

Covid is testing the robustness of the relationship between Centre and states

After infecting more than 2.3 crore Indians and killing more than 2.5 lakh of them, the novel coronavirus is eating away the innards of our federalism. Here’s how. Last week, Tamil Nadu made a forceful case of discrimination in distribution of vaccines. A more bitter fight between states has been over medical oxygen. It’s not that we don’t have laws and guidelines to prevent this anarchy. The Epidemic Diseases Act, enacted in 1897 to deal with the bubonic plague in Bombay, gives special powers to the states and the Centre, but the veto lies with Parliament. Ironically, states threaten to invoke the state rules under the Act to deny medical supplies to others. This is where the Disaster Management Act of 2005 should take precedence, and the National Disaster Management Authority (NDMA) should play the role of a strict and fair referee, which, at present, it is not. For details visit.

India – Other News

Cyclone Tauktae: IAF keeps 16 transport aircraft, 18 choppers in readiness

The India Meteorological Department (IMD) said at a high-level meeting that cyclone Tauktae is expected to touch the Gujarat coast between Porbandar and Naliya around May 18 afternoon or evening with a wind speed ranging up to 175 kmph. The Indian Air Force said it has kept 16 transport aircraft and 18 helicopters in readiness in peninsular India as part of preparations to deal with the situation that could arise out of cyclone Tauktae. The IAF has also decided to focus on COVID relief operations in the coastal areas in the next few days as bad weather is likely to affect air operations later, it said. For details visit.

3. Current Affairs – Economy 

India’s once-in-a-century budget runs into trouble as coronavirus strikes back

India’s annual budget in February was lauded by many and raised hopes it would drive a sharp economic revival, but there are now fears that its promise may fall flat as it did not account for a crippling second wave of COVID-19 infections. The budget aimed to revive Asia’s third-largest economy via investing in infrastructure and health care, while relying on an aggressive privatization strategy and robust tax collections – on the back of projected growth of 10.5 percent – to fund its spending in the fiscal year. Earlier this week, Moody’s said India’s severe second wave will slow the near-term economic recovery and it could weigh on longer-term growth dynamics. It cut its GDP forecast to 9.3 percent from 13.7 percent. For details visit.

How to correctly read the IIP numbers and the scary truth it reveals about the Indian economy

The Index of Industrial Production (IIP) for March has been released. The IIP grew by 22.35% from a year earlier. This is the fastest the country’s industrial output rose in the current series of the IIP, with 2011-12 as the base year for computing growth. The base effect is at work here. The index contracted by 18.67% in March 2020 from a year earlier because of a nationwide lockdown, which brought industrial production to a standstill in many parts of the country last year. It is therefore vital to compare 2021 economic data with 2019 to get an idea of the real state of the Indian economy. On doing that, the realization will be that we are where we were two years back. And the situation might just get worse. For details visit.

Europe and India plan deeper economic cooperation | DW News

The European Union and India agreed to seek closer cooperation at a virtual summit. Previous talks had stalled over differences including tariff reductions and data security. But China’s growing economic strength has brought the world’s two biggest democracies back to the negotiation table. India is the EU’s 10th biggest trading partner. Last year, some 65 billion euros worth of goods and services were exchanged – with the EU importing more than it exports. Home to some 1.4 billion people, India is a huge market for the EU, whose population is only a fraction of that size (448 m). The PACE of growth differs, too. Next year, India’s economy is expected to expand by almost 6.9% percent. That’s compared to just under 3.9% percent for the EU. The EU is hoping for improved market access, especially for its car industry. The question is, will India soften its protectionist stance?
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4. Current Affairs – Markets, Banking, and Finance

RBI tells lenders to reconsider ties with crypto exchanges, traders

India’s central bank is informally urging lenders to cut ties with cryptocurrency exchanges and traders as the highly speculative market booms, despite a Supreme Court ruling that banks can work with the industry. The guidance comes as India is crafting a law to ban cryptocurrencies and penalize anyone dealing in them, which would be among the most sweeping crackdowns on the new investing fad in the world. But with the COVID-19 crisis engulfing the country, no one is sure when such a bill may be passed, adding to investors’ confusion. With Indian banks increasingly wary of dealing with them, crypto exchanges are scrambling to find new business partners. Axis Bank, Citibank, Kotak Mahindra Bank, and others are limiting their exposure to the cryptocurrency market. For details visit.

Alarming NPAs amid second Covid Wave – Can India’s Digital Lenders weather the storm?

With most Indian states back to lockdown-like restrictions due to the disastrous Covid second wave, the digital lending ecosystem is up for another speed bump on the road to recovery from 2020 lockdowns. The first impact in the lending ecosystem due to lockdown is always on the recovery cycle. With over $2.4 Bn invested in Indian lending tech startups between 2014 and Q3 2020, digital lending has been a frontrunner in the Indian fintech ecosystem. According to a report by Redseer, loan disbursals for all the key players had taken a hit by almost 90% on value post between March-April 2020 in the immediate aftermath of the lockdown, with MSMEs being the worst impacted borrowers. Anuj Kacker, the co-founder of fintech platform MoneyTap and Executive Committee Member of DLAI (Digital Lenders Association of India), says that for the financial industry NPAs are expected to rise. “However, the recent RBI announcement of restructure 2.0 may ease the stress for both the customers and the financial organizations,” he added. For details visit.

Why does Sebi want to reclassify promoters?

With the concept of promoters slowly losing its relevance in India Inc, the Securities and Exchange Board of India (Sebi) has proposed doing away with the classification of the ‘promoter’ concept and moving to ‘person in control’ system and scrapping the ‘promoter group’. The markets regulator is expected to come out with the new regime soon, paving the way for a major change in the way the promoters and over 4,700 listed corporates function in the country. The regulator said this shift is necessitated by the changing investor landscape in India where the concentration of ownership and control rights do not vest completely in the hands of the promoters or promoter group because of the emergence of new shareholders such as private equity and institutional investors. For details visit.

5. Current Affairs – Business

Battling Covid 2.0: Q1 for sorrow, Q2 for joy, predict most businesses

Across sectors, there is the hope of a recovery in FY22 after June on the back of a good monsoon, waning infections, and a boost from pent-up demand. Recovery will be uneven across sectors, just as the extent of demand dip has been since the second wave hit India. While demand is expected to pick up from the second quarter onwards in FMCG and Real Estate while sectors like Aviation and Hospitality will have to face a long-term structural impact. For details visit.

PEs set to make a $3-4 billion bet on intermediate pharma companies

Global private equity (PE) investors are in a rush to bet on Indian firms that are in the thriving business of manufacturing active pharmaceutical ingredients (API), vaccine-related manufacturing, and producing bulk pharmaceutical chemicals. After investing close to $1.5 billion in such companies since the coronavirus outbreak, this financial year global private PE is ready with a war chest of $3-4 billion to be pumped into these intermediate firms rather than the front-end pharmaceutical companies, according to six top investment bankers involved in deals facilitating PE investments. For details visit.

For getting its $1.2-bn arbitration, Cairn sues Air India in the US

British oil company Cairn Energy Plc has initiated the process to seize Indian assets and has brought a lawsuit in the US against national carrier Air India to enforce the $1.2-billion arbitration award it won against the Indian government in a longstanding tax dispute. Sources in New Delhi said that the Centre will take “all necessary steps to defend against any such illegal enforcement action”. The Government had challenged in a court in The Hague the arbitration tribunal verdict that overturned its demand for back taxes from Cairn. The Permanent Court of Arbitration (PCA) at The Hague in December 2020 had ruled that the Indian government’s retrospective tax demand on Cairn Energy was “in breach of the guarantee of fair and equitable treatment”, and against the India-UK bilateral treaty. For details visit.

6. Current Affairs – Technology

Overnight Crypto sensation sets out to undo the Internet’s failings

The cryptocurrency that shot to a more than $45 billion valuation since it began trading could be just the tip of the iceberg for a new type of blockchain that hopes to remake how people interact with the world wide web. While the surge in value attracted headlines, the Internet Computer project run by the Dfinity Foundation and its founder Dominic Williams has actually been in development for several years. The goal is twofold — to improve the slow pace of most blockchain technology and remove gatekeepers like Amazon Web Services as the centralized, for-profit entities that both blockchain and websites rely on. The token, dubbed Internet Computer Price, or ICP, allows holders to govern the network. For details visit. 

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Explained | India’s crypto covid relief fund: What is it and how it works?

With Russian-Canadian cryptocurrency, Ethereum co-founder Vitalik Buterin’s announcement to donate cryptocurrency worth $1 billion to support Covid-19 relief work in India, debates over India’s Covid Crypto Relief Fund has begun. The experts are looking at how Buterin’s donation — in the form of cryptocurrency Shiba Inu, which is part of a growing number of joke digital currencies — would help India. The reason being, both Shiba Inu and Dogecoins aren’t backed by tangible value and hence are less valuable than competitors Bitcoin or Ethereum. Also, they don’t have serious investors behind them too. For details visit. 

Everything you need to know about Bitcoin and its impact on the environment

“Tesla has suspended vehicle purchases using Bitcoin” And just like that, cryptocurrencies saw a massive slide with Bitcoin plunging as much as 17 percent, all with one single tweet. The tweet was so significant because it was seen as a massive U-Turn by Tesla after it had announced a $1.5 billion investment in Bitcoin in February and had made plans to accept the cryptocurrency as a mode of payment. What caused this sudden pull-out? Bitcoin’s impact on the environment. To understand its impact on the environment, we must look at Bitcoin as ‘mined’ in the first place. The process of creating a new coin involves the analysis and computation of complex mathematical equations. These are done on computers. An estimate by the University of Cambridge says that Bitcoin mining consumes more than 120 TWh per year which means it uses more electricity than some countries like Argentina or Sweden. For details visit. 

Can Groww supercharge its Banking ambitions with the IndiaBulls AMC acquisition?

Despite posing massive entry barriers, India’s banking and financial services industry is perhaps the ideal sector for technology disruption. Age-old banking behemoths have been slow to embrace technology or fully utilize it, but tech startups are relying on the ever-liberalizing financial services policy to make inroads, slowly but surely. This week’s major acquisition story where fintech startup Groww bought out the IndiaBulls mutual funds business underlines the ambitions of tech startups fuelled by billions of VC dollars. Four-year-old Groww has acquired 13-year-old Indiabulls Asset Management Company Limited (IAMCL), along with its trustee Indiabulls Trustee Company Limited for INR 175 Cr. The acquisition is subject to the approval of market regulator Securities and Exchange Board of India (SEBI) and is seen as a big deal within the fintech ecosystem by most observers. Given that Groww satisfies the eligibility criteria for mutual funds asset management business — opened up late last year by SEBI — there should be no hurdles in the launch of its MF business once it gets the go-ahead from the regulator. For details visit. 

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7. Current Affairs – Sports

Explained: How Manchester City won their third Premier League title in four years

Manchester United’s 1-2 home loss to Leicester City ensured that while there was disappointment in one half of the city, there was euphoria in the other as the result handed the English Premier League title to Manchester City, who have now won the crown in three of the last four seasons. City, on 80 points, are 10 ahead of their nearest rivals and have won the league with three games to spare. In yet another COVID-19-hit season that saw City suffer their worst start to a Premier League campaign since 2008 and a striker conundrum that was solved with some Pep Guardiola ingenuity – the club was the best at dealing with adversity in their run to glory.  For details visit. 

USOPC to Congress: Beijing Olympic boycott not the solution

A boycott of next year’s Beijing Olympics will not solve any geopolitical issues with China and will only serve to place athletes training for the games under a cloud of uncertainty, the head of the U.S. Olympic and Paralympic Committee wrote to Congress. Activists, along with some members of Congress, have been pushing for a boycott, or to relocate the games. Last month, the Biden Administration got mixed up in articulating its own policy about a possible boycott; the U.S. State Department suggested an Olympic boycott was possible, but a senior official later had to clarify by saying keeping the U.S. team home had not been discussed. The choice of whether to boycott would ultimately be up to the USOPC, but political pressure could weigh heavily. For details visit. 

8. Current Affairs – Opinion

How Bitcoin is edging toward Financial Mainstream: QuickTake

Bitcoin investors are having a wild ride. The best-known cryptocurrency rocketed to a series of records in 2021, just three years after its price collapsed. Once seen as the province of nerds, libertarians, and drug dealers, there’s still little sign that it will evolve into a useful form of money for most transactions. Yet the latest bout of roller-coaster volatility comes as more big investors are speculating that Bitcoin will gain wider acceptance and shake up the financial world. For details visit. 

Could digital currencies put banks out of business? | The Economist

Cryptocurrencies like Bitcoin have been billed as a major disruptor to finance. But digital currencies issued by governments might be even more radical—they may even threaten the future of traditional banking.
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India needs policy-change reforms

The Indian economy has been slowing, now at 5-6 percent range, and will need quite a bit of policy-change reforms, in a difficult world environment, to be successful in the decade ahead,” said Martin Wolf, Chief Economics Commentator, Financial Times. He cautioned, “India is de-globalizing, not back to what it was before but more than the world is; owing to policy choices: increased protection and decreased attention to export competitiveness.” He opines that with the US-China relationship deteriorating, India should “seize the opportunity” and “reopen the economy”, become a trade-growth hub, raise international competitiveness, start a green revolution, reform education, labor markets and financial sector to be the “fastest-growing economy, at 8-plus percent, in 20 years”. For details visit. 

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View: India and the elusive demographic dividend

India has long been touted as the next big economic growth story after China. One of the primary reasons for that has been its young population. The hope has remained that as the young Indian population enters the working-age, it will lead to higher economic growth – a demographic dividend. As this ‘pandemic generation’ joins the workforce in an economy that is failing to provide adequate employment opportunities to its current strength, India’s chances of levering upon its demographic dividend are soon becoming obscure. There is little to no hope that things will be any different moving forward. For details visit.

India needs to restore deterrence to stop China from attempting to nibble at LAC: Shivshankar Menon

India needs to restore deterrence if it wants to stop China from attempting to nibble at the Line of Actual Control (LAC) and changing its status quo, noted strategic affairs expert and former National Security Adviser and foreign secretary Shivshankar Menon said. In an online discussion, he said making noises or building some international coalition in response to what China has been doing will be ineffective and India needs to strengthen itself along the LAC to make sure that the neighboring country is not able to change the situation in its favor. Menon, whose book ‘India and Asian Geopolitics: Past, Present, and Future’ has just been released, was replying to a question at the discussion organized by the Indian Women’s Press Corps. He also called for a broader vision of India’s relationship with China. For details visit. 

This overlooked energy source could supply 50% of electricity

Miles below the Earth’s surface, there’s enough thermal energy to power all of humanity for the foreseeable future. It’s called geothermal energy, and it’s poised to play an increasingly large role as a source of always available, renewable power. Now, there are a number of startups in the geothermal space, working to figure out how to access this heat in difficult-to-reach geographies, at a price point that makes sense. And it’s even gotten the attention of oil and gas industry giants, who are interested in greening their portfolios while sticking to their core competencies – extracting energy resources from deep within the Earth. 

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A bit too socially restrictive, SEBI

A Sebi-appointed panel’s proposal as to the eligibility for raising funds on the Social Stock Exchange is a trifle too restrictive. It bars political organizations and professional associations, which is fine. However, the outright bar on corporate foundations and religious organizations is not. Eligibility should be determined by the activities and goals of the outfit seeking to raise funds. Instead of banning trusts, the regulator must monitor the end-use of funds that are raised on the SSE platform. This will also help trustees fulfill their duty to use the funds only for legitimate social purposes. For details visit. 

With that, we come to an end for our Weekly Current Affairs May 2021 -week 3. 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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