Daily Current Affairs for UPSC – 26th Feb 2016
Daily Current Affairs For UPSC Civil Services. News analysis – 26 February 2016
Railway Budget 2016-17 presented:
- Railways minister Suresh Prabhu presented the Annual Budget (2016-17) for Indian Railways in the parliament. Click here to read the main and important highlights of Indian Railways Budget 2016-17.
- Click Here to Download Rail Budget 2016 – Key Features
- Download Link 2
150 million US dollar Credit approved by Union Cabinet for Chabahar Port Development:
- The Union Cabinet has approved 150 million dollars credit for the development of the strategically important Chabahar Port in Iran.
- Union Ministry of Shipping to form a company in Iran for implementing the Chabahar Port Development Project and related activities.
- What is Chabahar Port?: In 2003, India and Tehran had agreed to develop Chabahar Port located in the Gulf of Oman near Iran’s border with Pakistan.
- It is the only Iranian port with direct access to the ocean.
- However, the construction of port was delayed because of the sanctions imposed over Iran’s atomic programme. But in May 2015, prior to lifting of the sanctions both countries had singed Memorandum of Understanding (MoU) to fasten the development process.
- What is the importance of Chabahar Port to India?:1. India will get an access route to land-locked Afghanistan, that would be free of Pakistan’s control.2. It is closey to the Strait of Hormuz which facilitates about 40 per cent of the world’s oil trade3. It would give India access to markets and mineral resources in Afghanistan and central Asia4. Provide access to Hajigak iron ore mine in Bamyan province of Afghanistan (largest Iron oxide deposit of Afghanistan) developed by Steel Authority of India.5. It will undermine importance of Gwadar port in Pakistan developed by China.6. India can use the facility to monitor Pakistani & Chinese activities in the Indian Ocean Region as well as Gulf and to monitor activities of Pakistani Navy.7. It will provide boost India’s trade with Europe via the Chabahar port and the and the International North South Transport Corridor (INSTC)
8. It will give access to Route 606, also known as Delaram-Zaranj Highway or A71 in the Nimruz Province of Afghanistan connecting the Delaram District in Afghanistan to the northern border of Iran. Delaram access will provide India with a base to position itself after international troops withdraw from Afghanistan in 2014.
9. It will provide Market for farm products from Afghanistan and will help in combating drug trafficking.
- What are the Obstacles in development of Chabahar port?:1. Disputes over tariffs and transit regulations2. Pressure from US on India which is seeking isolation of Iran after involvment of Iran in development of nuclear bomb3. Chinese competition for port development offering an $75 million credit line for ongoing work on the port.
- Other Projects in Iran with Indian assistanceZaranj-Delaram highway: Indian-built road, completed in 2009, connects Iran via the highway to the main Kandahar-Herat highway.Chabahar-Zaranj-Delaram-Hajigak rail: Indian-Iranian project, would link future Indian iron-ore mining operations at Hajigak to Chabahar, 900 kilometres away.
Union Cabinet approves establishment of Atal Innovation Mission (AIM) and SETU in NITI Aayog:
- This move aims to give substantial boost to the innovation ecosystem and to catalyse the entrepreneurial spirit in the country.
- In Budget 2015-16, it was announced to establish the AIM and a mechanism to be known as SETU in NITI Aayog.
- Earlier, NITI Aayog had constituted an Expert Committee on Innovation and Entrepreneurship under the Chairmanship of Prof. Tarun Khanna.
- Some important recommendations of Tarun Khanna Committee:
- The committee recommended a three-layered pyramid structure to fundamentally and sustainably boost entrepreneurship in India with focus on providing adequate support to early-stage ventures, creating an enabling environment for innovation and attaching entrepreneurship to large-scale economic and social programmes.
- The committee also recommended a ‘grand prizes’ approach to finding ultra-low-cost solutions to India’s most intractable problems
- The committee recommended that the government give tax benefits to companies willing to invest 1% of their profit towards research labs in universities.
- It also suggested that all contracts with foreign defence companies above $5 billion include a clause for 5% of contract value to be directed to establish research centric universities with strong emphasis on its core product areas in particular and broadly focused on the related areas in general, thus harnessing corporate funds to finance research and development.
- Besides, a ‘Make in Universities’ programme, which will involve setting up 500 tinkering labs with one 3D printer per institute and trained people to operate this can be introduced across the country, including in smaller cities, to boost the spirit of production and collaboration.
- The committee further recommended that the one-time budget allocation of Rs 1,000 crore to SETU (self-employment and talent utili sation) should be used to jumpstart innovation through two concrete initiatives at scale.
MSP of raw jute increased from Rs 2,700 to 3,200 per quintal:
- The Cabinet Committee on Economic Affairs (CCEA) has hiked Minimum Support Price (MSP) of raw jute from 2,700 to 3,200 rupees per quintal.
- This hike has been done for the year 2016-17 to boost production which has been declining in recent years.
- In 2015-16, the area under raw jute has reduced to 7.5 lakh hectare from little over 8 lakh hectare in year 2016-17.
- Jute farming provides livelihood to more than 40 lakh farmers in West Bengal, Odisha, Assam and eastern Bihar.
- What is Minimum Support Price (MSP)?: MSP is a form of agricultural market intervention undertaken by the indian Government in order to insure agricultural producers are protected against any sharp fall in farm prices.
- It is announced for certain crops by the Union Government prior to the sowing season. The prices are decided by CCEA on the basis of the recommendations of the Commission for Agricultural Costs and Prices (CACP).
- CACP considers factors such as the cost of production, change in input prices, market price trends, demand and supply, and a reasonable margin for farmers.
Yes Bank wins inaugural Green Bond Award in UK:
- India’s leading lender Yes Bank has been awarded inaugural Green Bond Pioneer Award .
- Yes Bank was the first Indian Bank to issue Green Infrastructure Bonds (GIBs) in India.
- It had issued India’s first-ever GIBs worth 1,000 crore rupees in 2015.
- Proceeds from these green bonds will be used to fund Renewable Energy projects including solar power and wind power projects Yes Bank along with International Finance Corporation (IFC) also had opened trading of the world’s first Green Masala Bond worth 3.15 billion rupees listed on the London Stock Exchange.
- What is a Bond and What are Green Bonds?:
A bond is a debt instrument with which an entity raises money from investors. The bond issuer gets capital while the investors receive fixed income in the form of interest. When the bond matures, the money is repaid.
A green bond is very similar. The only difference is that the issuer of a green bond publicly states that capital is being raised to fund ‘green’ projects, which typically include those relating to renewable energy, emission reductions and so on. There is no standard definition of green bonds as of now.
Last year, Exim Bank of India had issued a five-year $500 million green bond, which is India’s first dollar-denominated green bond.
Why are green bonds important for India?
India is on an ambitious target of building 175 gigawatt of renewable energy capacity by 2022, from just over 30 gigawatt now. This requires a massive $200 billion in funding. Higher interest rates and unattractive terms under which debt is available in India raise the cost of renewable energy by 24-32 per cent compared to the U.S. and Europe.Budget allocations have been insufficient. Renewable energy is still part of the larger power/infrastructure funding basket in most banks, and with most financing going towards coal power projects, there is very little funding left for renewable energy. Currently, options for raising funds and investing in the “renewable energy story” in the public markets in India is very limited. That’s why green bonds can prove to be a good option.
Why are green bonds an attractive option?
Green bonds typically carry a lower interest rate than the loans offered by the commercial banks. Hence, when compared to other forms of debt, green bonds offer better returns for an independent power producers
Why will an investor get excited with lower interest?
Because, it inherently carries lower risk than other bonds. The repayment is tied to the issuer, not the success of the projects
Union Cabinet gives nod to India-Maldives double taxation Agreement on airlines:
- Under this agreement Airlines operating from India will be exempted from income derived from the operation of aircraft in international traffic in Maldives from Maldivian tax and vice-versa.
- Profits from the operation of aircraft in international traffic will be taxed in one country alone. The taxing right is conferred upon the country to which the enterprise belongs.
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