Daily newspaper article’s summary 16/7/2018
*Summary of Newspaper articles from ‘The Hindu’ and ‘Economic Times’ *
————————————————————————- *Transatlantic rift: on Trump and NATO* ————————————————————————-
1.The summit of North Atlantic Treaty Organisation leaders in Brussels was expected to be tense , given the widening rift in the Western alliance over the U.S.’s imposition of trade tariffs.
2.But President Donald Trump’s call to member-countries to double their annual defence expenditure to 4% of GDP has the potential for greater harm than his repeated denigration of NATO or his disregard for diplomatic niceties.
3.European countries have for some time been smarting under Washington’s persistent attack on their failure to honour the current commitment to raise their defence budgets to 2% of annual output by 2024.
4.Besides putting Chancellor Angela Merkel in a spot, it served to deflect attention from criticism across the Atlantic of Mr. Trump’s proximity to Russian President Vladimir Putin and their bilateral meeting in Helsinki.
5.Conversely, exploiting Europe’s greater dependence on the U.S. security umbrella serves to bolster Mr. Trump’s domestic nationalist constituency ahead of the November mid-term Congressional elections.
————————————————————————- *Wholesale price inflation hits 4-year high in June at 5.77%* ————————————————————————-
1.Inflation in ‘fuel and power’ basket too rose sharply to 16.18 per cent in June from 11.22 per cent in May as prices of domestic fuel increased during the month in line with rising global crude oil rates.
2.Data released last week showed retail inflation scaled a 5-month high of 5 per cent in June on costlier fuel.
3.RBI mainly takes into account retail inflation data while formulating monetary policy.
4.In its second monetary policy review for the fiscal, the Reserve Bank last month hiked interest rate by 0.25 per cent — the first hike in more than four years — due to growing concerns about inflation stoked by rising global crude oil prices as well as domestic price increases.
5.The next meeting of the RBI’s interest rate fixing panel is from July 30 to August 1.
————————————————————————- *Ghosts of past loans coming back to haunt state governments* ————————————————————————-
1.Borrowings by states have almost doubled between fiscal years ended 2013 and 2018, with the trend picking up after the 2008 global financial crisis when there was a step up in spending as part of the federal government’s stimulus measures.
2.“The wedge in the net and gross market borrowings indicates the increasing redemption pressure, which is likely to persist,” the RBI said.
3.And there is no respite in store from state governments either, with some like Rajasthan and Madhya Pradesh stepping up debt issuance as they go to polls later this year.
4.The central bank has already flagged fiscal slippages due to populist measures like farm loan waivers as well as higher salaries to government officials.
————————————————————————- *Social security for 100 million workers likely by 2019* ————————————————————————-
1.The labour ministry is finalising a universal social security scheme for all, including agriculture, workers.
2.JNU professor Santosh Mehrotra-led committee, appointed by labour ministry, has taken the Tendulkar poverty line 2011-12 to identify potential beneficiaries for the universal social security scheme that, in the first phase, aims to provide retirement pension, medical insurance and death and disability benefits to all workers.
3.Labour ministry has proposed a comprehensive social security system to provide retirement, health, old-age, disability, unemployment and maternity benefits to 50 crore workers in the country.
4.The first tier would comprise destitute and people below poverty line who cannot contribute for their security; the cost for whom will be entirely borne by the government under tax-based schemes.
5.Labour ministry has proposed a comprehensive social security system to provide retirement, health, old-age, disability, unemployment and maternity benefits to 50 crore workers in the country.
————————————————————————- *India raises trade deficit issue with China at WTO* ————————————————————————-
1.NEW DELHI: India has flagged concerns of its large trade deficit with China, visa restrictions for Indian professionals and the challenges faced in exporting IT services, meat, rice and medicines to Beijing at the World Trade Organization (WTO).
2.Citing complex requirements for participating in contracts of Chinese state-owned enterprises (SOE) and issues related to qualification requirements, licensing and taxation, Delhi has sought transparency in export of agriculture products including bovine meat and providing services such as IT.
3.“Indian professionals are facing visas restrictions like permits being granted only for a year,” it said.
4.The US said China has caused “serious harm” to WTO partners by failing to live up to free-trade principles as it employs preferential treatment for SOEs, discriminatory regulatory requirements and unique national standards.
5.EU voiced its concerns over China’s “potentially distorting effects of public intervention in commercial activities,” behind-the-border measures related to the attribution of licences, insufficient enforcement of intellectual property rights and overcapacity in China’s steel sector.
————————————————————————- *India becomes vice-chair of Asia Pacific region at global customs body* ————————————————————————-
1.India has become the vice-chair (regional head) of the Asia Pacific region of the World Customs Organisation (WCO) for a period of two years to June, 2020, the finance ministry said today.
2.Each of the regions is represented by an elected vice-chairperson to the WCO council .
3.”India is a wealth of experience in promoting security and facilitation of cross border trade,” it said.
4.To mark the assumption of vice chair, an event is being organised tomorrow here by the Central Board of Indirect Taxes and Customs (CBIC) in partnership with industry body CII.
5.WCO represents 182 customs administrations across the globe that collectively process approximately 98 per cent of world trade.
————————————————————————- *Natural gas, ATF in GST this week?* ————————————————————————-
1.When Goods and Services Tax (GST) was introduced on July 1 last year, five commodities – crude oil, natural gas, petrol, diesel, and aviation turbine fuel (ATF) – were kept out of its purview for the time being.
2.While considerations of revenue loss to both Centre and states are holding back bringing all of them under GST net immediately, natural gas and ATF are considered fit case to begin the process, they said.
3.The GST Council, headed by Union Finance Minister and comprising representatives of all states and Union Territories, is slated to meet on July 21 and a proposal to bring natural gas and ATF under the new indirect tax regime may come up for discussion, they said.
4.Sources said this essentially means that if ATF is taxed at a maximum of 28 per cent, there would be a huge revenue loss.
5.In the case of natural gas, the situation may lead to an increase in prices at the consumer level.
————————————————————————- *RBI gets global praise for targeted communication tools* ————————————————————————-
1.”Communication can explain the objectives, strategy and policy process to the public, and thus build political support.
2.In addition, it can help the authorities share their risk assessment with both the affected parties and the broader public, which can enhance effectiveness,” the BIS said.
3.The BIS said such reviews are useful in communicating with specialists, but they can easily prove opaque for the broader public and therefore several central banking authorities also use more targeted channels.
4.”For instance, the Reserve Bank of India issues short and simplified press releases for an audience with limited financial literacy.
5.It further said that communication might even be viewed as a macroprudential tool in its own right and central bank warnings, in theory, might head off adverse developments, obviating the need for any subsequent remedial action.
————————————————————————- *India has a billionaire problem* ————————————————————————-
1.Mallya’s party was a high point for the flamboyant tycoon, as he welcomed hundreds of guests to his Kingfisher Villa mansion in Goa on the evening December 18, 2015, for the third day of a lavish four-day birthday celebration.
2.It was only in 2011, as that boom began to taper off, that I came across the idea that India was going through a period of development similar to the US Gilded Age, which ran from the end of the Civil War in 1865 to the turn of the 20th century.
3.The mid-2000s was an era of remarkable change in the world economy, as the global commodity “super-cycle”, driven in particular by rising demand in China for minerals like iron ore, kicked off a dash for natural resources across India too.
4.Over this period India’s tycoon class — the “Bollygarchs” as some call them — borrowed huge sums from state-backed banks and invested it — with gleeful abandon —in one of the largest deployments of private capital since America built its railroad network more than a century and a half earlier.
5.Ending corruption is part of this battle, but it also involves the more complex objective of building a state machinery able to create and implement wise public policies, while remaining impartial between different social groups.