Current Affairs for MBA exams (11th - 17th September, 2014)

Starred Articles

Ferrari head Montezemolo pushed out after 23 years

Corporate > Ferrari > September 10

Ferrari chairman Luca Cordero di Montezemolo is quitting the Italian sports car maker to be replaced by the boss of parent group Fiat, Sergio Marchionne, after the two auto industry heavyweights clashed over strategy and the Formula One team’s poor results.

Long-serving Montezemolo will formally step down on October 13, the day that Marchionne plans to list the newly merged Fiat Chrysler Automobiles (FCA) in New York.

Under Montezemolo’s tenure, Ferrari raced to the front of the Formula One grid, increased revenues tenfold and tripled sales volumes, helping the Italian family business become one of the world’s most powerful brands. Ferrari, which sells about 7,000 cars a year, made a record 2.34 billion euros in revenue last year with an operating profit margin of 15.6 per cent.

Disinvestment in Coal India, ONGC, NHPC to fetch record Rs 45,000 cr

Economy > Disinvestment Program > September 11

The government has kicked off the most ambitious disinvestment programme, targeting to mop up a record Rs 45,000 crore by selling shares in blue chips public sector companies - Coal India, ONGC and National Hydroelectric Power Corporation (NHPC).

While the exact dates are yet to be finalized, SAIL's disinvestment, which was cleared earlier, is likely later this month, with a 10% stake sale in Coal India expected around Diwali. This will help the government raise around Rs 23,600 crore based on its current share price. If prices hold, this sale alone is going to match the best ever disinvestment receipts of Rs 23,957 crore in 2012-13, when the government had sold shares of NTPC and NMDC, among others. ONGC, where the government can garner close to Rs 19,000 crore via a 5% sale, is expected later in the year as the government is awaiting clarity on gas prices before the issue.

Iconic Indian watch brand HMT Watches to be shut down

India > HMT Watches > September 11

The government has decided to shut down the iconic Indian watch brands HMT watches and HMT Chinar Watches Ltd., a wholly owned subsidiary of state-owned HMT Ltd. HMT Watches was set up in 1961, in collaboration with Japan’s Citizen Watch. The company’s net loss rose to Rs 242.47 crore in 2012-13 from Rs 224.04 crore in 2011-12. At the end of March 2012, it also had government loan, including budgetary support for salary and statutory dues, amounting to Rs 694.52 crore. As on March 31, 2013, the company had 1,105 employees. In 2000 although the company was restructured, it started making losses soon after, following which a revival plan was envisaged and approved. But the Finance Ministry and Planning Commission did not support the proposal. After that two consultants were appointed who came out with a revised proposal following which another plan was mooted envisaging cash infusion of Rs 252.70 crore and non-cash assistance of Rs 1,247 crore. However, the revival plan was not followed as the company performed poorly in 2012-13 due to factors like paucity of working capital, erosion of trade channel and high cost of borrowings. HMT Chinar watches also could not perform due to working capital constraints and the situation prevailing in Jammu and Kashmir.

India inks seven agreements with Vietnam, including one in oil cooperation

World > India - Vietnam > September 15

India and Vietnam inked seven pacts, including one to enhance cooperation in the strategic oil sector, as they called for freedom of navigation in the South China Sea, a remark which could irk China which has been claiming territorial sovereignty over the high seas.

• Oil and Gas

A Letter of Intent (LoI) was signed between ONGC Videsh Limited, India and Vietnam Oil and Gas Group, in which PetroVietnam offered new blocks to OVL for oil and gas exploration and production. OVL is keen to expand its presence in Vietnam and is evaluating the blocks on offer.

• Defence Equipment

India and Vietnam also signed an MoU on extension of USD 100 million Line of Credit to Hanoi for defence procurement, which provides concessional line of credit for procurement of defence equipment from India.

• Custom Matters

Both the countries also signed an agreement on cooperation and mutual assistance in customs matters. The agreement aims to strengthen, promote and develop cooperation and mutual assistance on matters pertaining to customs between India and Vietnam.

• Agriculture

An MoU was also signed between the Ministry of Agriculture of India and the Ministry of Agriculture and Rural Development of Vietnam in the field of animal health, which establishes cooperation between India and Vietnam in the field of animal health, including protecting territory of each other from introduction of animal diseases and infection caused by the trade of animals, products of animal origin and materials of animal reproduction.

• Fisheries

The fifth MoU was signed between National Fisheries Development Board, Hyderabad, Department of Animal Husbandry, Dairying and Fisheries, Ministry of Agriculture of India and the Directorate of Fisheries, Ministry of Agriculture and Rural Development of Vietnam on cooperation in the field of setting up of pangasius breeding and farming in India.

• Youth Affairs

India and Vietnam also signed an MoU between the Ministry of Skill Development, Entrepreneurship, Youth Affairs and Sports of India and the Central Committee of the Ho Chi Minh Communist Youth Union of Vietnam on cooperation in youth affairs.

• Airlines

An MoU between Jet Airways (India) and Vietnam Airlines Company Limited has also been signed, which will enhance their presence in each other's markets. The scope of the MoU involves code sharing on services of each other.

US identifies India among 22 major illicit drug-producing or drug-transit countries

World > Narcotics production > September 16

US President Barack Obama has identified India among 22 major illicit drug-producing or drug-transit countries that "significantly affect the United States". Besides India, other countries on the list were: Afghanistan, the Bahamas, Belize, Bolivia, Burma, Colombia, Costa Rica, Dominican Republic, Ecuador, El Salvador, Guatemala, Haiti, Honduras, Jamaica, Laos, Mexico, Nicaragua, Pakistan, Panama, Peru, and Venezuela. The US has however clarified that a country’s presence on the list does not necessarily reflect its counter-narcotics efforts or its level of cooperation with the US on illegal drug control. The designation can reflect a combination of geographic, commercial, and economic factors that allow drugs to be produced and/or trafficked through a country. The President also noted the ill-effects of the opium poppy trade in Afghanistan and said that Afghanistan’s immediate neighbours such as Iran, Pakistan, Russia and others such as India and China should support Afghanistan in its counter-narcotics efforts.

Others

UNCTAD predicts 5.6 percent growth for India in 2014

Economy > India > September 11

A report by the United Nations Conference on Trade and Development (UNCTAD) has said that the Indian economy will grow at a rate of 5.6 percent in 2014, while developing economies as a whole will see between 4.5 and 5 percent rise in economic expansion. China Economy is poised to grow by 7.5 percent in 2014. India’s improved performance in the mining, manufacturing and services sector pushed India’s economic growth rate to two-and-a-half- year high of 5.7 per cent in the April-June quarter.

Philippine President submits draft law to create autonomous region for Muslims

World > Philippines > September 11

Philippine President Benigno S. Aquino III has submitted a draft law to the Philippine Congress that would create a self-governed, predominantly Muslim autonomous region in the country’s south, The region would be called the Bangsamoro region, based on the traditional name of Filipino Muslims. This is a major step to end more than four decades of fighting with Muslim rebels that has killed thousands of people and displaced more than three million. It has also left Mindanao, the largest island in the southern Philippines, embroiled in poverty and lawlessness despite being rich in resources that include natural gas, gold and other valuable minerals. The draft law is the outcome of an October 2012 peace agreement with the Moro Islamic Liberation Front, the largest of the Muslim rebel groups and the government. About four million people would live in the Bangsamoro region. The region would have local self-government, including locally recruited law enforcement officials — a critical demand by the rebels who allege human rights abuses in the region by the Philippine police and military, many of whom are Christians from the north. The region would also retain most of the tax revenue generated from its natural resources.

Number of billionaires in China reaches 300

World > China > September 11

A new annual ranking of China’s wealthiest individuals by the Hurun Report of the “China Rich List," said that the personal fortunes of 300 Chinese had topped 10 billion yuan (USD 1.6 billion) in 2013. The Hurun Report, a monthly magazine best known for its annual rich list, attributed the increase to the country's overall GDP growth and appreciation in the value of real estate.

New EU Commission gives key economic posts to France, Britain

World > European Commission > September 11

France and Britain have won powerful positions in the new European Commission led by Jean-Claude Juncker, who has vowed to revive a stagnant economy, rebuild trust in Brussels and deal with threats on the EU's borders. Britain, whose place in the EU is under threat from a surge in euroscepticism at home, surprisingly won the financial services post it wanted for its nominee Jonathan Hill, the former head of Britain's House of Lords. But gains for older European powers were balanced by posts for eastern member states in a new squad of so-called super commissioners who will oversee huge policy areas. Juncker said a key task for his new team was winning back disillusioned voters who swung towards eurosceptic parties in European Parliament elections in May.

Foreign brokerages expect upgrade in India's credit outlook

India > Credit Rating > September 11

Global brokerage Bank of America Merrill Lynch today said "worst is over" for India and rating agencies are likely to upgrade their outlook for the country sooner rather than later. British brokerage Barclays said that it expects India's foreign currency ratings to move to the 'BBB' level from the current 'BBB-' by 2017. "Such a move is likely to occur against a backdrop of sustained higher growth, relatively stable inflation and continued fiscal consolidation," it said in a note.

BBB - is the lowest investment grade and a downgrade would mean pushing the country's sovereign rating to junk status, making overseas borrowings by corporates costlier. The report noted that there are three "compelling" reasons for an upgrade in outlook - growth is bottoming; inflationary pressures are softening and risks from twin deficits have proven to be overdone.

In addition, it said, RBI Governor Raghuram Rajan is recouping forex reserves to stabilize rupee in Rs 58-62/USD.

Manmohan Singh knew about 2G scam, alleges ex-CAG Vinod Rai

Politics and Government > 2G Scam > September 12

Taking a scathing attack on the UPA government and former Prime Minister Manmohan Singh, former CAG Vinod Rai said that even after being informed about unfolding the 2G scam, the PM chose to look the other way. Rai also alleged that Singh was not fully aware of the econometric machinations that caused colossal loss to the public exchequer.

He further claimed that Congress leaders had sought to apply pressure on him to keen the PM’s name out of audit reports naming Sandeep Dixit, Ashwini Kumar and Sanjay Nirupam as the three.

Mr. Rai, whose loss estimates in 2G spectrum and coal block allocations pushed the then UPA government into a corner, was also critical of the coalition politics under Dr. Singh and alleged suggested that he was more interested in remaining in power.

US FDA reveals Indian arm of Apotex sells defective drugs in Canada

World > Generic drugs > September 12

Drugs manufactured at the Indian plant of Canadian generics giant Apotex came under severe criticism from regulatory experts after it was revealed that the company sold prescription drugs that it knew were defective. Records published by the U.S. Food and Drug Administration regulator show that numerous cases happened where Apotex employees retested drug products when the first test yielded “unknown impurities” and didn’t report the undesirable results. However, Health Canada gave a “thumbs-up” to Apotex’s three factories in Bangalore when FDA inspections at the same sites, before and after the Canadian visits, uncovered “blatant and repeat problems at the plant.” There were also instances of violations of Good Manufacturing Practices. The FDA has imposed multiple import bans against Indian generics firms, the most notable case among which was that of Ranbaxy which had to pay a $500 million fine for manufacturing fraud. Other Indian generics manufacturers such as Wockhardt and Sun Pharmaceutical Industries Ltd. have since been in the radar of regulators in the U.S. and India.

Law panel recommends repeal of 72 archaic laws

Politics and government > Outdated laws > September 12

The Law Commission has recommended revoking 72 obsolete statutes reiterating an urgent need to ensure that legal structures are responsive to the changing legal scenario. Laws recommended for revoking belong to period dating from 1838 to 1898. One of the laws the Bengal District Act — recommended for repeal dates back to 1836. The Commission has further said that it will study 261 more statutes to recommend repeal of those laws which are obsolete and inconsistent with modern times. The government has already said that it is preparing to bring a fresh bill into parliament to repeal archaic laws. One such Bill seeking to repeal 32 Acts is already pending in parliament.

SC clears 3% reservation for disabled in jobs, promotions

Politics and Government > Reservations in Govt Jobs > September 12

The Supreme Court has ruled in favour of three per cent reservation for differently-abled candidates in civil services, not only at the stage of their appointments but also for departmental promotions. Giving a level-playing field to more than four crore people with disabilities in India, the apex court held that the Centre, states and Union Territories were obligated to implement the rules of reservation for this class in the matters of appointment, selection, direct recruitment, deputation and also for promotions. It asked the Centre to show a big heart and give the differently-abled people their due in all central and state government jobs.

A bench led by Chief Justice of India R M Lodha reiterated its earlier verdict that the principle of not exceeding 50 per cent reservation would not be applicable while granting quota for differently-abled people.

42% of Indian girls are sexually abused before 19: UNICEF

India > Sexual Abuse > September 12

One in every 50 girls in India is forced to have her first intercourse or other forced sexual acts when she is less than 10 years old, says Hidden in Plain Sight, a Unicef report on violence on children and adolescents across the world.
The report is an outcome of a study of demographic and health surveys conducted between 2005 and 2013. According to the study, about 10% of Indian girls would have faced sexual violence when they are aged 10-14, and 30% in the 15-19 age group. In all, about 42% of Indian girls face sexual violence before they cross their teens.

Indian girls, though, are in a better condition than their counterparts in Africa, Middle East, Eastern Europe, Pakistan and Nepal.

Discussion on mandatory pre-marital potency test sparks heated debate

India > Pre-marital potency test > September 14

A special sitting of the Madurai High Court on whether pre-marital potency test for the bride and the groom should be made mandatory has incited a heated debate. Some people have termed the move outrageous and medical professionals have said that there is no test to prove potency. But some women, who have filed for divorce on the grounds of potency, voiced their opinion in favour of such a test. The key argument against the move is that a semen analysis and Doppler study will be done but they cannot determine potency. Also, there is no test available to test female sexual arousal disorder. Doctors argue that a majority of such issues are psychiatric in nature and a perfectly potent person could have issues due to anxiety or other reasons. Also, technological progress has made proper intervention possible in most sexual problems and hence doctors suggest that instead of potency tests, proper sexual education should be made a part of premarital counselling.

Government to modify IT act to simplify e-transactions and boost e-commerce

Economy > E-commerce > September 14

In order to further boost the ever-expanding over USD 2 billion online shopping market in the country, the government plans to modify the IT Act 2000 under the proposed Communications Convergence Bill to provide legal recognition for transactions carried out using electronic data interchange and other means of electronic communication. Besides, the government also aims to draft a set of globally acceptable guidelines to increase the legal predictability for electronic commerce (e-commerce) and adopt the United Nations General Assembly's (UNGA) recommended Model Law on Electronic Commerce (MLFC).

TCS opens Saudi Arabia's first all-woman BPO centre

Corporate > TCS > September 14

India's largest software exporter TCS has opened Saudi Arabia's first all-female business process centre, which will provide employment to up to 3,000 women in three years.

TCS, in a statement, said that Saudi Aramco and GE are the centre's first customers. The all-female employee business process service centre, that was announced in September of 2013, will offer customers specialised Finance & Accounting, HR, Materials Supply and Office services to improve their operational efficiency.

J & K floods were predicted in 2010, still no action was taken; IPCC predicts more floods and droughts in India

India > Floods > September 14

In 2010, The Flood Control Department of Jammu and Kashmir had formulated an accurate warning that Srinagar was likely to be flooded by an intense spell of rain in the next five years and that there was nothing in place to save lives and property. The department formulated a Rs 2,200-crore plan, seeking about a fourth of that immediately to put basic infrastructure in place. Then Prime Minister, Manmohan Singh, had backed the suggested plan, promising priority release of a first installment of money. However it is seen clearly that no notable steps had been taken to avert the calamity.

The Intergovernmental Panel on Climate Change (IPCC) has said that floods and droughts are likely to increase in India, with more rainfall in lesser days. The Centre for Science and Environment (CSE) has called the government for commissioning of a detailed study into the connection between extreme weather events and said that it is imperative that the government must act fast.

The United Nation’s meteorological agency has issued a video in which it warns of floods in Florida, a mega-drought in Arizona and high temperatures in Chicago that could possibly happen just 36 years from now. The scenarios are based on “the most up-to-date climate science” and present a picture of weather forecasts if the world fails to take action against climate change.

Female jihadists joining ISIS, countries pass new rules

World >ISIS > September 14

British female jihadists are running brothels for Islamic State militants in the Raqqa province of Syria and forcing kidnapped Yazidi women into sex slavery. As many as 3,000 women and girls have been taken captive from the Yazidi tribe in Iraq as Islamic State militants continue their reign of terror across the region. ISIS chiefs have reportedly given British women such prominent roles in the ultra-religious all female militia because they see them as the most committed of the foreign female fighters.

The rapid surge of Islamic State in Iraq & Syria and its ability to draw fighters from across the globe have set off alarm bells worldwide. Countries are now trying to blunt its recruitment drive, passing new rules that they hope will stop their citizens from joining extremist groups abroad. Recruits from 74 countries are among the estimated 12,000 foreign militants in Syria and Iraq, many of them fighting with ISIS. The largest blocs of these fighters come from nearby Muslim countries, like Tunisia and Saudi Arabia, but smaller contingents come from countries as far away and disparate as Belgium, China, Russia and the United States.

Cognizant to buy TriZetto for $2.7 billion to boost healthcare business

Corporate > Cognizant > September 16

Cognizant Technology Solutions Corp acquired healthcare IT services provider TriZetto Corp for $2.7 billion, its biggest deal till date, to invigorate its slowing healthcare business. Cognizant's healthcare business, which accounted for about 26 percent of total revenue in 2013, has declined in the last three quarters. Cognizant provides services such as claims processing, billing and call center operations to insurers, hospitals and some state-run healthcare exchanges in the US. TriZetto, on the other hand, provides information technology services, including care management and the administration of benefits. The company said it reaches 245,000 healthcare providers, representing more than half of the insured population in the United States.

Single permit for vehicles across SAARC

World > SAARC > September 16

In a bid to facilitate easy movement of both passenger and goods vehicles across the SAARC countries with a single permit, member countries are likely to finalise the draft terms and conditions.

As per the draft proposal, permits would be issued after verification of all the required documents and these would be issued by the competent authority of the respective national government. Permits for regular passenger and cargo transportation shall be for multiple entries and would be valid for one year. These permits would be renewed every year "subject to a maximum of five years".

The proposal says that any vehicle entering and plying in other country must pass only through immigration checkpoints/ custom stations and must ply on the routes authorised by the member nation concerned by mutual agreement. Any deviation would be treated as violation.