Current Affairs December 2016 eBook 1 · 2018-03-22 · Secondly, it will derail plans of political parties that are going into the election battle in the coming four months, as everybody

Current Affairs December 2016 eBook 1

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PREFACE ............................................................................................4

Pick of the Month ..............................................................................5

National ........................................................................................... 28

International .................................................................................... 47

Economy .......................................................................................... 73

Science & Technology ...................................................................... 90

Environment & Ecology .................................................................. 113

States ............................................................................................ 127

Summit|Conference ....................................................................... 147

Report|Survey ............................................................................... 154

Corporate ...................................................................................... 160

Sports ............................................................................................ 167

Defence|Security ........................................................................... 184

At a Glance .................................................................................... 193

News Makers ................................................................................. 199

Awards|Honours ........................................................................... 204

Committees | Commissions ............................................................ 226

Exam Boosters ............................................................................... 229



Quizzes .......................................................................................... 245

Latest Government Jobs losing in December 2016 .......................... 255



PREFACE

The Current Affairs December 2016 eBook covers the current events that happened in the month of November. Current Affairs is a crucial component of any competitive exams including IAS|PCS, SSC, Banking and MBA. The lack of preparation for current affairs by the aspirants and candidates often is a main cause of their failure. Even though the candidates know it but they are often confused about how to prepare the current affairs section of the different competitive exams. To clear such doubts and confusion, Jagranjosh.com has come up with eBook concept. Although current affairs section per se is very wide to be covered, yet we have tried to cover all the possible current affairs for the month of November 2016.

The Current Affairs December 2016 eBook is divided into different section keeping in mind the need of various exams. The sections covered namely are International, National, Economy, Ecology and Environment, Science & Technology, Corporate, Sports, States News Makers and few others. Every news item in each section is arranged date wise with the most recent news being covered first and so on.

Highlight of the issue is President-elect Donald Trump and Modi’s masterstroke on the name of Demonetisation.

Presentation of the given current affairs has been planned meticulously. It has been planned in such a way that it remains in the minds of readers for a longer duration. Wherever necessary each news item is presented along with a background and analysis so as to help candidates contemplate all the important current events at the time of exam in an effective way.

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PICK OF THE MONTH

SURGICAL STRIKE ON BLACK MONEY: DECODING THE

CRACKDOWN

At the stroke of midnight hour, as the world sleeps, the Indian crooks and corrupt woke up to

bankruptcy and India fought back to its worst evil ‘Black Money’. This time again, 9/11 turned

out to be a tragedy, but only for those who were on the wrong side of the rule book.

Jokes are going around that when Americans are counting votes, Indians are busy counting

notes.

The Indian Prime Minister Narendra Modi’s declaration on overnight demonetization of 86% of

the currency of world’s third largest economy on 8 November is one of the boldest moves to

curb black money, ever since he took over the reign of power.

In a surprise address to the nation, he said that Rs. 500 and Rs. 1000 would cease to be legal

tender from midnight and subsequently will be withdrawn from circulation. The decision was

taken to uproot the menace of black money and corruption. However, the other denomination

of notes like 100, 50, 20, 10, five, two and one will remain legal tender and will not be affected

by this decision.

The PM said this step will make sure that the five hundred and thousand rupee notes hoarded

by anti-national and anti-social elements will become just worthless pieces of paper. Therefore,

all these anti-nationals and corrupt individual will be brought to the rule book. He also said that

the rights and the interests of honest, hard-working people will be fully protected, “your money

is ultimately yours” as he quipped.

This move is expected to reduce inflation as conspicuous consumption will come down.

According to him the “tumour of corruption could not be fought through tried, tested and failed

methods” and it was time to employ new methods to defeat the enemies of India. Till March

2016, Rs. 14 lakh crore out of Rs. 16 lakh crore worth currency issued by RBI were in

denominations of Rs. 500 and Rs. 1,000, as per the central bank’s official data.



WHY THIS DE-MONETIZATION?

The suggestion of a transition to a cashless economy and reduced cash transaction to help

improve tax collections has been floating around for some time now. Over the span of things,

there may be some thought that there are heaps of money lying around that can be taken

advantage of, through such a move together with the disclosure scheme. Maybe, not long after

this move, there might be an acquittal plan, which will help the government to have

significantly more money.

So, more than past governments, Modi is considering enhancing the tax revenue, as he clearly

needs to spend more on infrastructural development in the next two years of his office. Any

move of this sort will undoubtedly have a political measurement. As media reports state, it is

practically similar to a 'surgical strike', flagging the message of an extreme man who has the

capacity to take choices that should have been taken much before.

Secondly, it will derail plans of political parties that are going into the election battle in the

coming four months, as everybody would have gathered a considerable amount of money and,

clearly, they would not have just ‘sau rupay ka’ (100 rupee) notes.

Other than these, there are other reasons associated with this bold and decisive step. These are

very serious concerns for any government of the day. Some of these reasons are-

Fake Indian Currency Notes (FICN) in circulation in these denominations is very high. For a

common person, the fake notes look similar to genuine notes. Use of such notes directly

contribute to funding of terrorism and drug trafficking. These fake high denomination notes are

known to facilitate generation of black money.

The second reason is the World Bank in July 2010 estimated the size of the shadow economy

for India at 20.7% of the GDP in 1999, which rose to 23.2% in 2007. A parallel shadow economy

leads to inflation which adversely affects the poor and the middle classes more than others. It

deprives Government of its legitimate revenues which could have been otherwise used for

welfare and development activities.



Demonetization:

Demonetization is the act of stripping a currency unit of its status as legal tender. For us it

means that RBI has withdrawn all the old Rs. 500, 1000 currency notes as legal tender i.e.

official mode of payment.

Why de-monetization is used in general?

It is necessary whenever there is a change of national currency. The old unit of currency must

be retired and replaced with a new currency unit. It is also used to tackle black money into the

economy.

IS IT ALL SUDDEN OR WELL PLANNED?

No, it is not at all sudden! In fact, this decision is well crafted and well-planned move by this

government. To see the pattern, we have to connect all the dots right from the time this

government took over.

The decision to form SIT (Special Investigation Team) over black money in May 2014. Enacting a

law regarding undisclosed foreign income and assets; amending the Double Taxation Avoidance

Agreement between India and Mauritius as well as India and Cyprus; reaching an understanding

with Switzerland for getting information on bank accounts held by Indians with HSBC;

encouraging the use of non-cash and digital payments; amending the Benami Transactions Act;

and implementing the Income Declaration Scheme 2016.

Apart from these tactical moves, the government was very much in command to take this

decision with the announcement of Jan-Dhan Yojna, under which no-frills accounts were

opened for the entire section of the unbanked population. It ensured that EVERY Indian had a

bank account. Crack down on hoarders /foreign accounts, resulted into collection of Rs. 80,000

Cr., Income Declaration Scheme which gave a platform to convert black money to white by

giving some tax punishment to the defaulters. Through this step which lasted till Sept. 2016, the

government collected Rs. 65,000 Cr.

And then came this D-day of 8th November, when high denomination notes became non-legal

tender.



One only needs to connect the dots, to believe that there was always a plan. Modi himself

warned twice about impending hard decisions. If we still did not connect the dots, then we are

at fault. If someone has Black Money, this move will ensure that either they declare and

become mainstream or else that they are ruined!

FLASHING POINTS OF THIS DECISION

After this decision, Rs.500 and Rs. 1000 currency notes became invalid from 9th

November.

All these high denomination notes are to be deposited in banks and post offices

between Nov. 10 and Dec. 30

After 30th December 2016, all these notes will only be accepted by RBI along with a

personal declaration.

All the high-value transactions will go under the tax department’s scanner.

Till 30th December, all cash deposits made by people, more than Rs.2.5 lakh in a bank

account will be audited by Tax authority.

Then, it will be equated with the bank account holder's IT returns and there after

suitable action shall be taken.

If the cash deposits of more than Rs. 10 lakh is made which is not explained by the

income declared in the IT returns, Tax authority will consider it as tax evasion and the

tax amount plus a penalty of 200% of the tax payable would be levied.

Initially, a limit of Rs. 2500 per day was set for ATM transactions, which was later revised

to Rs 4000.

RBI has released new Rs. 500 and Rs. 2000 notes. Rs. 2000 notes will be a pink colour

bills.

All the passengers arriving and departing with Rs. 500 or Rs. 1000 notes were provided

an exchange facility for up to Rs. 5000.

Foreign tourists were able to exchange foreign currency or old notes of not more than

Rs. 5000 into legal tender.



Only Rs. 24000/- in a week could be withdrawn from the bank.

CURRENCY VALUES CIRCULATED BY RESERVE BANK OF INDIA TILL

MARCH 2016

Currency values in Rs. Billion

Rs. 2 and 5 45

Rs. 10 320

Rs. 20 98

Rs. 50 194

Rs. 100 1578

Rs. 500 7854

Rs. 1000 6326

Total 16, 415



IMMEDIATE IMPACT OF THIS DECISION

The high denomination currency notes will have a serious impact on the overall economy. Some

of the sectors will see positive impact and some will see negative. Overall this step has not been

taken only to put the economy in place, but it is also targeted at Pakistan protected terrorist

organizations that harbour terrorism and actively participate in destabilizing the India’s

economy by injecting fake currency bills/notes. Enemies from across the border run their

operations using these fake currency notes.

However, the overall impacts depend on how much money is being pumped up in the economy

to smoothen/streamline the process of economic transactions. Here we’ll see how it impacts

the economy in general:

POSITIVE IMPACT

1. Inflation: Inflation is defined as too much money chasing too many few goods. After this

decision ‘too much money would be flushed out from the market, hence goods and

services would become cheaper.

2. Banks: Bank would benefit with higher CASA growth. This decision will make the owner

of these notes to deposit the legal money into their bank account, which in result will be

cumulated approx. $190 billion cash pile.

3. Loans: Housing loans and other credit loans are expected to become cheaper.

4. Credit Cards: Credit cards market is expected to gain a little momentum for quite some

time.

5. Investment: Demand for investment avenues such as gold, silver, diamonds is likely to

soar.

6. Economy: Black Money would be flushed out from the economy, which will create a

clean economy.

7. Farmers: With the black money going off from the market, it will eradicate the need for

the middle man. In the end, farmers will be rewarded with big cash.



NEGATIVE IMPACT

1. Consumption Expenditure: It will be down as new cash injection is slow due long

pending logistics issue.

2. Informal Economy: Poor people, who form a sizable part of the informal economy, are

not linked with the banking system, and they also keep high-value notes as a store of

value. They are essentially neither black money hoarders nor tax evaders. They are

financially excluded people and therefore they may face huge negative shock.

3. Share Market: Market always behaves abruptly, whenever any disruptive decisions are

taken. The recent trend is showing that share market is bleeding.

4. Real Estate: It is estimated that real estate business is booming because of black money

whose share in the entire business is calculated at 70 percent. At the moment this

sector seems to be the biggest loser of the move.

5. MFI and NBFC: The collection cycle could get disrupted temporarily due to cash crunch.

6. Consumer staples i.e. Household personal goods

7. Liquor stock and Tobacco, Restaurant, Casino, Jewellery

UNAFFECTED

1. Cheque or electronic means of payments such as Internet banking, mobile wallets,

IMPS, credit/debit cards.

2. IT services

3. International Trade

4. Hospitals

5. Petrol Pumps

IS IT FIRST EVER DE-MONETIZATION?



De-monetization is a process in which high denomination notes are taken away from the

market in an attempt to tackle counterfeit currency bills. But this time, this decision was taken

to deal with black money.

Earlier in January 1946, in order to deal with counter forgery, the government had withdrawn

the notes of Rs.1000 and Rs.10000. However in 1954, these notes were again reintroduced with

new denomination value of Rs.1000, Rs.5000 and Rs.10000.

Again these notes were demonetized in 1978 when Janta Party government came to power.

CHALLENGES FOR GOVERNMENT

So far, India’s banking network has been the nerve centre of the government's demonetization

drive. Bank branches in metro areas are struggling to cope with the demand for new currency

notes. For customers banking on branches in rural areas, the situation is even worse. About

93% of the 595,000-odd rural areas remain `unbanked’, they have no physical branch. And

there are 629 million Indians, or about 81% of the population in rural areas, residing in these

554,000 odd unbanked centres. This unbanked number should be tempered by two new supply

channels. The first is the 125,000 'Bank Mitras’ bank agents assigned to a fixed unbanked area

under the Pradhan Mantri Jan-Dhan Yojana.

The second is the 531,000 roving banking correspondents in rural areas, whose coverage details

are unavailable. Both these channels along with the post office network need to come into play

in rural areas. If they don't, the yawning gap in branch coverage between rural areas and other

areas can greatly inconvenience rural Indians during this period of transition.

However, there are other challenges associated with this move. Some of them are:

1. Printing the new currency notes: Supplanting all the Rs. 500 and Rs. 1000 high values

notes with different denominations, as requested by the authority, could cost the

Reserve Bank of India approx. Rs. 15000 cr.-20000 Cr., in terms of the quantity of notes

available for use and the cost, incurred in printing them.

2. Replacing old notes: According to the RBI report on cash flow in the economy, more

than Rs 15 lakh crore worth of high-value currency notes are being withdrawn from

circulation. Mostly these will be deposited in banks by people. Therefore, outright

replacement of 2300 crore banknote pieces will be an obvious logistical nightmare.



3. Introduction of Rs 2000 note is still a puzzle with many questioning its role in

preventing the generation of new black money

4. Disruption to trade: The temporary disruption to trade (Excluding real estate

transactions) of ordinary purchases of household items like vegetables and other

important things in markets, which require dealing in cash, would be badly impacted.

5. Since the last demonetisation, in India had failed big time; hence, it’ll still be a challenge

for the government to make it a success story and achieve its goal.

However, the opposition have their own share of criticism for the government. Their argument

is that, India is currency based economy where even the farmers and daily wage earners are

paid in Rs 500 and Rs 1000 denomination. They will be unable to comprehend the new

mechanism and will wind up knocking on banks in the days to come. Small traders and vendors

need to pick goods and pay money, to sell in the market or to support their livelihood. They

would not know how to respond to this move or how to survive in the following few days.

Another criticism coming from some people is regarding the timing of announcement was little

odd. The decision was announced late in the evening when most shops had shut down their

shutters. They had no option to get some change for high denomination currencies.

These arguments, however, don’t hold water. When we make some tough decision, initially it

looks bizarre but in the longer period of time it brings goods for society. Larger interest of the

society is always bigger than individual interest. As Nehru said in his famous speech

“At the stroke of the midnight hour, when the world sleeps, India will awake to life and freedom.

A moment comes, which comes but rarely in history, when we step out from the old to the new,

when an age ends, and when the soul of a nation, long suppressed, finds utterance.

It is fitting that at this solemn moment we take the pledge of dedication to the service of India

and her people and to the still larger cause of humanity."

At the moment, this speech would hold true for nation in the years to come and somehow it

also depends upon how we lead our society.

POSITIVE IMPACTS OF DEMONETISATION WE MUST KNOW

The Demonetszation move, which is now considered as a mother of all reforms in India, has

started showing its positive implications in a very short time. The Demonetszation declaration



states that Rs. 500 and 1000 notes are no longer a legal tender. Of course, this reformative

move has brought some hardships for common people, but it will pass soon. The people of this

country seem to be very enthusiastic about it and are ready to take this pain. This is how

democracy works where citizen participate in nation building and policy making.

HERE, WE’LL SEE HOW THE DEMONETSZATION HAS BROUGHT MANIFOLD IMPACTS ON

COUNTRY AND SOCIETY

Over Black Money: Black money is considered a Cancer in any economy. It is a parallel

economy, which weakens the foundation of any country. It is estimated that in India, the total

amount of black money is Rs. 3 lakh crore. It is huge if we see that the total money in circulation

is only Rs.17 lakh crore. With this single master stroke of Demonetszation, all the black money

will either come to the account books or will be destroyed.

Over Fake Currency: According to the ISI (Indian Statistical Institute), the circulation of total

amount of fake currency in India is Rs.400 crore at any given point of time. It is also estimated

that around Rs 70 crore fake currency notes are being injected into India every year.

Demonetszation will surely curb the menace of fake currency.

Over Bank Deposits: It is a well-known fact that nearly 86 percent of currency circulation in

India was composed of Rs 500 and Rs 1000 currency notes. And Demonetszation of these notes

compelled people to deposit their money which was in the form of 500 and 1000 Rs notes into

the banks. RBI had declared Bank had received Rs 5.12 trillion worth of deposits until 18th

November. This additional cash deposits can boost Indian GDP by 0.5 to 1.5 percent. India’s

largest public sector bank State Bank of India (SBI) said it had received Rs.1.27 trillion worth of

cash deposits.

Over Lending Rates: Increase in overall cash deposit reserve will enable banks to cut down the

cost of funds because higher deposits will replace the high cost of borrowing and reduce overall

costs of funds. It is expected that banks can reduce deposit rates by ~125 bps over the next six

months. The new directives of MCLR (Marginal Cost of Funds based Lending Rate) will

instantaneously take into account the lower cost. This will pave the way for a decline in lending

rates, which will expedite the economic activity in the medium term.

Over Real estate cleansing: It is repeatedly said that real estate industry is built on black

money. The extent of black money circulation in the sector is huge. According to a report, at

least 40 percent of real estate transactions in Delhi-NCR are being done in black money. The

Demonetszation move will curb the flow of black money into the real estate sector.



Over Hawala transactions: Demonetszation has badly affected the the hawala rackets. Hawala

is a method of transferring money without any actual money movement. Intelligence reports

indicate that Hawala route is mainly used as a means to ease money laundering and terror

financing. With black money suddenly being wiped out of the market hawala operations have

come to an instant halt.

Over Financial inclusion: The inflow of cash into the banks will enable them to offer subsidized

loans and other facilities to Jan Dhan account holders. The share of Jan Dhan accounts in total

deposit base of the banking system is under 1%. The Demonetszation drive of higher

denomination notes might propel cash deposits in Jan Dhan accounts. And this move will also

make Jan Dhan Account holders to be accustomed to banking system.

Over government finances: The unaccounted money will make way in the formal channels. This

will raise the income tax collections. This raised amount from income tax will help government

to reduce the fiscal deficit in fiscal year 2017. The latest move will shift the economy from the

unorganized to organized sector. And the formalization of unaccounted money will also

facilitate the implementation of GST scheme.

Over Bond Market: The ban on currency notes will enhance the demand of government bonds

in the market. As we know, it will improve cash deposits in the Banks which will eventually lead

to higher SLR (statutory liquidity ratio) demand.

Over Kashmir unrest: If anywhere Demonetszation has shown its instant impact, it is the

Kashmir Valley. The four-month long turbulence in Kashmir has come to rest because of lack of

monetary support. An intelligence report suggests that separatists receive Rs 1,000 crore

annually from the Pakistan for causing unrest in the Kashmir. The money is transferred through

hawala route. Demonetszation completely choked up hawala transactions. As a result, the

separatists are now clueless. Demonetisation has dealt a death blow to the counterfeit Indian

currency syndicate operating both inside and outside the country.

Demonetszation also brought peace to the stone-pelters in the Kashmir valley. Since

Demonetsation has given a severe blow to the funding of separatist, they are unable to

instigate the young people to agitate against the army or the state.

Over Naxalites and North-East insurgency: They are the group, whose oxygen is black money.

They are the worst victim of Demonetszation. Therefore they term this move as “Financial

Emergency”. It is estimated that their yearly turnover is more than Rs.500 crore through terror

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Current Affairs December 2016 eBook 1 · 2018-03-22 · Secondly, it will derail plans of political parties that are going into the election battle in the coming four months, as everybody