Current Affairs 11th Oct 2017

 

1 . WEAK   BANKS   AND   CORPORATES   LEAVE   INDIA   VULNERABLE : IMF

SOURCE – ECONOMIC  TIMES

RELEVANCE – GS MAINS III .

  • The IMF today said a combination of weak banks and corporates leaves India vulnerable to a tightening in the global financial conditions, as it pressed for more steps to ensure good capitalisation in public sector banks.
  •  A recent study by IMF showed that Indian banking sector was vulnerable given that large segments have low profitability and have large problem loans.
  • It also found that Indian corporate remains highly leveraged and at high risks. So the combination of weak banks and weak corporates leaves India vulnerable to a tightening in global financial conditions.
  •  Gross non-performing assets (NPA) of the public sector banks rose to Rs 6.41 lakh crore at the end of March 2017 as against Rs 5.02 lakh crore a year ago, according to a Finance Ministry data.

 

 

2 . WTO   MINI   MINISTERIAL   MEETING – MARRAKECH

SOURCE – ECONOMIC  TIMES

RELEVANCE – GS MAINS III .

  •  India has sought a cut in the huge farm subsidies given by developed countries in a move to reduce distortions in global agricultural trade and also raised the issue of protecting its poor farmers’ interests, end hunger and achieve food security at the two day mini ministerial meeting of the World Trade Organisation (WTO) in Marrakech on October 9-10.
  •  Commerce and industry minister Suresh Prabhu who led discussions on behalf of the developing world, also reiterated India’s commitment to the Doha Round that seeks to put in place a global agreement to lower trade barriers.
  •   He pointed out that any meaningful reform in agriculture must first seek to reduce the disproportionately large subsidies of the developed countries.
  •  India and China have said the subsidies given by developed members including the US, EU and Canada under a flexibility in the WTO norms amount to nearly US$ 160 billion which is more than 90% of the total global entitlements “resulting in a major asymmetry in the rules on agricultural trade”.
  •  India’s demands on the farm front are important as the number of people dependent on agriculture in one way or another is close to 600 million, with nearly 98% of Indian farmers being low income or resource poor and mostly engaged in subsistence farming.
  •  This informal gathering of 35 key countries is crucial in the run up to the ministerial conference of the WTO in December to provide political impetus to the negotiations and guidance on potential outcomes.
  •  Since the previous ministerial in Nairobi failed to get a clear consensus on the future of the Doha development agenda, India reiterated its stance to first deal with the issues which were already under negotiation, before moving on to new ones, as developed countries like the US, EU and Japan and a few developing ones like Singapore are opposed to these and want new subjects like e-commerce, investment facilitation, fisheries and MSMEs (Micro, small and medium enterprises) to brought in the ambit of WTO’s multilateral discourse.
  •  However, on the issue of fisheries subsidies, India stressed on the importance of suitable special and differential treatment provisions and the need to make a clear distinction between large scale commercial fishing and traditional fishing. WTO countries are trying to negotiate an agreement to cut subsidies given for fishing activities.
  •  Though India is already discussing fisheries subsidies and an outcome is likely on the issue, Prabhu pointed out that in India a large number of small, largely resource poor fish workers depended on traditional fishing activity as a source of livelihood. Hence, developing countries like India, possessing very low fishing capacity, would also need to retain policy space to promote and create such capacity.