10 October 2020
A) RBI keeps key lending rates unchanged, tweaks home loan rules to aid real estate sector.
On 9 October, the Governor Shaktikanta Das said that the monetary policy committee (MPC) of the RBI has unanimously decided to keep the key lending rates unchanged. The MPC voted to leave the policy repo rate unchanged at 4%. He said that the monetary policy committee has also decided to continue with their accommodative policy stance as long as required this year and next year as well. After the steep decline into which the global economy plunged in the second quarter of this year, there is a rebound in activity in the third quarter but it is not even. The Indian economy is entering a decisive phase in the fight against Covid-19. By all indications, the deep contractions of Q1 2020-21 are behind them. Silver linings are among them. Online commerce is booming, and people are getting back to offices he added that he expected Q4 to record a positive growth. In a bid to boost the real estate sector, the RBI has also decided to rationalize the risk weights on home loans and link them only to the LTV (loan to value) ratio. This provision will apply to all new home loans sanctioned up to March 31, 2022. At present, risk weights are applied to home loans for both the size of the loan as well as the LTV ratio that is, how much of the value of a property a bank can lend to a borrower. The greater the risk weights, the greater the provisions the bank must make to address the risk, and accordingly, the lower would be its capacity to lend. By eliminating risk weights with regard to size of loan, the RBI is aiming for an uptick in home loans growth, which, if it happens, would put more money in the real estate sector, thereby boosting construction and related economic activity.
B) Lalu Prasad gets bail but will stay in jail.
On 9 October, the Jharkhand High Court has granted bail to jailed Rashtriya Janata Dal (RJD) president Lalu Prasad in connection with the ₹959 crore fodder scam case. The case pertained to fraudulent withdrawal of ₹33.67 crore from the Chaibasa treasury in Jharkhand during 1992-93, when he was Chief Minister of undivided Bihar. While granting bail, the Court has asked Lalu Prasad to submit 2 personal bonds of ₹50,000 each and deposit ₹2 lakh for securing the bail. He has been in jail for half of the punishment of five years in the case. However, Lalu Prasad will not come out of jail for now as he has been convicted in many other cases as well. The RJD chief has been undergoing treatment at Rajendra Institute of Medical Sciences (RIMS) for multiple illnesses. Following his conviction in the fodder scam cases, Prasad has been at Birsa Munda central jail in Jharkhand since December 2017.
C) Bhima Koregaon case: NIA files supplementary charge sheet.
On 9 October, the National Investigation Agency (NIA) has filed a second supplementary charge sheet against seven accused and one absconding accused in the Bhima Koregaon violence case. The central agency has named 83-year-old activist Father Stan Swamy, Anand Teltumbde, 70, Gautam Navlakha, 67, Hany Babu, 54, and members of cultural group Kabir Kala Manch, Sagar Gorkhe, 32, Ramesh Gaichor, 38 and Jyoti Jagtap 32. The absconding accused is the brother of Teltumbde, Milind Teltumbde. Father Stan Swamy, a Jesuit priest who works with tribals, was arrested from his home in Jharkhand capital Ranchi by a team of NIA officials from Delhi in a late night operation. He has been sent to jail till October 23 by the special court. The press release which was issued by NIA says that all these accused has conspired with other accused persons to further the ideology of terrorist organization CPI (Maoist) and abetted violence incited disaffection towards the Government established by law and promoted enmity between different groups on grounds of religion, caste and community.
D) Covid watch: Numbers and Developments.
The number of reported coronavirus cases from India stood at 69,59,166 with the death toll at 1,07,109. On 9 October, the active caseload of India fell below 9 lakh for the first time after a month. India had registered about 8.93 lakh active cases on 9 October after registering 8.97 lakh on September 9. Entry to the Padmanabhaswamy temple which is situated in Kerala has been banned till 15 October because at least 10 priests, including the chief priest and the joint chief priest were tested positive for covid-19. The chief executive officer of the temple V Ratheesan has said that the tantri, who usually performs special ceremonies, will perform daily pujas without the devotees.
A) World Food Programme wins Nobel Peace Prize 2020.
On 9 October, the Nobel Peace Prize was awarded to the World Food Programme for feeding millions of people, starting from Yemen to North Korea. Berit Reiss-Andersen who is the chairwoman of Nobel committee has said that on unveiling the winner in Oslo the WFP was honoured for its efforts to combat hunger, for its contribution to bettering conditions for peace in conflict-affected areas, and for acting as a driving force in efforts to prevent the use of hunger as a weapon of war and conflict. Whether delivering food by helicopter or on the back of an elephant or a camel, the WFP prides itself on being the leading humanitarian organization in a world. Reiss-Andersen said that with this year’s award, the Norwegian Nobel Committee wishes to turn the eyes of the world towards the millions of people who suffer from or face the threat of hunger.
B) World Bank slashes India forecast, says FY21 GDP will contract by 9.6%
The World Bank, in its South Asia Economic Focus report which was released on 8 October, sharply revised its June forecast of a 3.2% contraction of the Indian GDP to 9.6%, for the year 2020-21. This revision reflects the impact of the national lockdown and the income shock experienced by households and firms. The World Bank Chief Economist for South Asia Hans Timmer has said that it is an exceptional situation in India, the situation is the worst in India than we have ever seen before. A very dire outlook. This slowdown in India is expected to depress manufacturing and exporting industries, and the construction sector which relies on Indian migrant workers is likely to experience a protracted slowdown due to a limited pipeline of public sector infrastructure projects as well. The Bank reckoned that there will be a rebound to 5.4% growth in 2021-22, but largely due to base effects and hinging on assumptions that the pandemic-related restrictions are completely lifted by 2022. It said significant disruptions to jobs have likely worsened India’s poverty rate, with 2020 rates back to 2016 levels.
C) Taking potshots at Quad meet, China says it’s against “organising closed and exclusive cliques’
On 9 October, China has said that it was opposed to organizing closed and exclusive cliques, underlining its wary response to this week’s ministerial meeting of the Quad grouping, which comprises India, Australia, Japan and the United States. At the ministerial meet in Tokyo, U.S. Secretary of State Mike Pompeo had singled out China as a threat to the region, although the three other foreign ministers, including External Affairs Minister S. Jaishankar, did not directly mention China. Speaking at a press briefing in Beijing , the first following the week-long national holiday in China, Foreign Ministry spokesperson Hua Chunying said in response to a question on the Quad meet, this is now the 21st century and they are living in an era of globalization. The interests of all the countries are so intertwined that organizing closed and exclusive cliques will not help to build mutual trust and cooperation, especially when we are faced with urgent tasks of fighting the pandemic and reviving the economy of the whole world.