Daily Current Affairs: 2nd June 2020

Daily Current Affairs for UPSC CSE

1. Moody’s downgrades India’s Rating
2. BHIM App Data Leak
3. Tiananmen Square
4. Infusion for MSMEs
5. Social Stock Exchange
6. Pradhan Mantri Street Vendor’s AtmaNirbhar Nidhi Scheme 
7. Antifa
8. Cyclone Nisarga
9. Facts for Prelims

1. Moody’s downgrades India’s rating

Context : Moody’s Investors Service (“Moody’s”) has downgraded the Government of India’s foreign-currency and local-currency long-term issuer ratings to “Baa3” from “Baa2”. It stated that the outlook remained “negative”. Moody’s had upgraded the country’s rating to Baa2 in November 2017.

About the Long term Issuer Ratings

• Moody’ s long term obligation ratings are opinions of the relative credit risk of fixed income obligations with an original maturity of 1 year or more. They address the possibility that a financial obligation will not be ordered as promised. Such ratings reflect both the likelihood of default and any financial loss suffered in the event of default

Moody’ s Ratings

What are the reasons for downgrading of India’s Rating

• Weak implementation of economic reforms since 2017
• Relatively low economic growth over a sustained period
• A significant deterioration in the fiscal position of governments (central and state)
• And the rising stress in India’s financial sector

What does “negative” outlook mean?

• The negative outlook reflects dominant, mutually-reinforcing, downside risks from deeper stresses in the economy and financial system that could lead to a more severe and prolonged erosion in fiscal strength than Moody’s currently projects”.
• In particular, Moody’s has highlighted persistent structural challenges to fast economic growth such as “weak infrastructure, rigidities in labor, land and product markets, and rising financial sector risks”.
• In other words, a “negative” implies India could be rated down further.

Implications of this downgrade?

• As explained above, ratings are based on the overall health of the economy and the state of government finances.
• A rating downgrade means that bonds issued by the Indian governments are now “riskier” than before, because weaker economic growth and worsening fiscal health undermine a government’s ability to pay back.
• Lower risk is better because it allows governments and companies of that country to raise debts at a lower rate of interest.

2 . BHIM app data Leak

Context : The report by vpnMentor alleged that 409-gigabyte of data, comprising 7.26 million records, were leaked, and the trove included personal identifiable information such as Aadhaar details, residence proof, bank records and complete profiles. NPCI denies breach of BHIM app data

Details of the Report

• The report claims that a website, http://cscbhim.in/, developed by CSC e-Governance Services, in partnership with the Indian government, was being used in a campaign to sign up users and business merchants to the BHIM app. “All related data was being stored on a ‘misconfigured’ Amazon Web Services S3 bucket and was publicly accessible.

Implications of the Leak

• The scale of the exposed data is extraordinary, affecting millions of people all over India and exposing them to potentially devastating fraud, theft, and attack from hackers and cybercriminals

About National Payments Corporation of India (NPCI)

• NPCI is an umbrella organisation for operating retail payments and settlement systems in India, it is an initiative of Reserve Bank of India (RBI) and Indian Banks’ Association (IBA) under the provisions of the Payment and Settlement Systems Act, 2007, for creating a robust Payment and Settlement Infrastructure in India.
• Considering the utility nature of the objects of NPCI, it has been incorporated as a “Not for Profit Company under the provisions of Section 25 of Companies Act 1956 (now Section 8 of Companies Act 2013), with an intention to provide infrastructure to entire banking system in India for physical as well as electronic payment and settlement systems. The Company is focused on bringing innovations in the retail payment systems through the use of technology for achieving greater efficiency in operations and widening the reach of payment systems.
• NPCI’s ten core promoter banks are State Bank of India, Punjab National Bank, Canara Bank, Bank of Baroda, Union Bank of India, Bank of India, ICICI Bank, HDFC Bank, Citibank N. A. and HSBC. In 2016 the shareholding was broad-based to 56 member banks to include more banks representing all sectors.
• Products of NPCI for Prelims – UPI, IMPS, RuPay card, BHIM, Bharat Bill Pay, NACH, Bharat QR

About BHIM

• Bharat Interface for Money (BHIM) is an app that lets you make simple, easy and quick payment transactions using Unified Payments Interface (UPI).
• You can make instant bank-to-bank payments and Pay and collect money using just Mobile number or Virtual Payment Address (UPI ID).
• Features of BHIM for Prelims – Send and Request Money, Scan and Pay, Can link multiple bank accounts, Available in 13 languages, split bills etc

3.  Tiananmen Square

Context : Hong Kong police banned an upcoming vigil marking the Tiananmen crackdown anniversary citing the COVID-19 pandemic, the first time the gathering has been halted in three decades.

About Tiananmen Crackdown

• The Tiananmen Square protests were student-led demonstrations calling for democracy, free speech and a free press in China.
• The 1989 Tiananmen crackdown occurred when China’s leaders sent tanks and troops to quell student protesters calling for democracy and an end to corruption. Hundreds were killed, with some estimates suggesting that more than 1,000 perished.

Tiananmen Square History

• While the events of 1989 now dominate global coverage of Tiananmen Square, the site has long been an important crossroads within the city of Beijing. It was named for the nearby Tiananmen, or “Gate of Heavenly Peace,” and marks the entrance to the so-called Forbidden City.
• The location took on added significance as China shifted from an emperor-led political culture to one that was governed by the Communist Party.
• The Qing dynasty was the last dynastic power to rule China. It governed the country from the middle of the 1600s until 1912.
• The Xinhai Revolution of 1911-1912 resulted in the overthrow of the Qings and led to the establishment of the Republic of China. The early years of the Republic were marked by political turmoil, however, and the country fell under Japanese rule during the lead-up to World War II.
• During the Japanese occupation, some 20 million Chinese were killed. As Japan faded in the aftermath of Second World War, China entered a period of civil war. At the end of the civil war, in 1949, the Communist Party had gained control of most of mainland China. They established the People’s Republic of China under the leadership of Chairman Mao Zedong.
• A celebration to honor the occasion was held in Tiananmen Square on October 1, 1949. This celebration came to be known as National Day, and it is still observed annually on that date, with the largest events set in the square.
• Mao Zedong, considered the founding father of the People’s Republic of China, is interred at Tiananmen Square, in a mausoleum on the plaza.

4. Cabinet committee okays ₹50,000 cr. infusion for MSMEs

Context : Cabinet approves Upward revision of MSME definition and modalities/ road map for implementing remaining two Packages for MSMEs (a)Rs 20000 crore package for Distressed MSMEs and (b) Rs 50,000 crore equity infusion through Fund of Funds

Importance of MSMEs

• Micro, small and Medium Enterprises (MSMEs) popularly called as MSMEs are the backbone of Indian economy. Silently operating in different areas across the country, more than 6 crore MSMEs have a crucial role to play in building a stronger and self-reliant India.
• These small economic engines have a huge impact on the country’s GDP-making a contribution of 29 percent.
• They contribute to almost half of exports from the country. Additionally, more than 11 crore people are employed in the MSME sector.

Details of the Upward Revision

• In the package announcement, the definition of micro manufacturing and services unit was increased to Rs. 1 crore of investment and Rs. 5 crore of turnover. The limit of small unit was increased to Rs. 10 crore of investment and Rs 50 crore of turnover. Similarly, the limit of a medium unit was increased to Rs 20 crore of investment and Rs. 100 crore of turnover.
• It was decided to further increase the limit for medium manufacturing and service units. Now it will be Rs. 50 crore of investment and Rs. 250 crore of turnover. It has also been decided that the turnover with respect to exports will not be counted in the limits of turnover for any category of MSME units whether micro, small or medium.
• Benefits : This is yet another step towards ease of doing business. This will also help in attracting investments and creating more jobs in the MSME sector.

Other Approvals

• Approval for provisioning of Rs 20,000 crore as subordinate debt to provide equity support to the stressed MSMEs. This will benefit 2 lakh stressed MSMEs.
• Approval for equity infusion of Rs. 50,000 crore for MSMEs through Fund of Funds (FoF). This will establish a framework to help MSMEs in capacity augmentation. This will also provide an opportunity to get listed in stock exchanges.
• Implications : With today’s approval, implementation Modalities and Road Map for entire components of the Atmnirbhar Bharat Abhiyan package are in place. This will help in attracting investments and creating more jobs in the MSME sector.

5. Social stock exchanges

Context : A working group constituted by the Securities and Exchange Board of India (SEBI) on social stock exchanges has recommended allowing non-profit organisations to directly list on such platforms while allowing certain tax incentives to encourage participation on the platform.

Background

• The idea of a social stock exchange (SSE) for listing of social enterprise and voluntary organisations was mooted by Finance Minister Nirmala Sitharaman while presenting the Union Budget 2019-20.

About Social Stock Exchange

• The social exchange platform is an innovative measure to involve public participation in social causes through the equity route
• Social Stock Exchange allows investors to buy shares in social enterprises vetted by an official exchange.
• As per the budget Social Stock exchange will meet various social welfare objectives related to inclusive growth and financial inclusion. Budget proposed to initiate steps towards creating an electronic fund raising platform – a social stock exchange – under the regulatory ambit of Securities and Exchange Board of India (SEBI) for listing social enterprises and voluntary organizations working for the realization of a social welfare objective so that they can raise capital as equity, debt or as units like a mutual fund.

Recommendations of the working group:

1. Allowing non-profit organisations to directly list through issuance of bonds while recommending a range of funding avenues, including some of the existing mechanisms such as Social Venture Funds (SVFs) under Alternative Investment Funds (AIFs).
2. The group has also suggested a new minimum reporting standard for organisations that raise funds on social stock exchanges.
3. It also suggested that for-profit social enterprises be allowed to list on the platform but with enhanced reporting requirements.
4. The social stock exchange can be housed within the existing national bourses like the BSE and the National Stock Exchange.

Benefits:

1. This will unlock funds from donors, philanthropic foundations and CSR spenders, in the form of zero coupon zero principal bonds.
2. This will also help the SSE leverage existing infrastructure and client relationships of the exchanges to onboard investors, donors, and social enterprises [for-profit and non-profit].

6 . Pradhan Mantri Street Vendor’s AtmaNirbhar Nidhi Scheme 

Context : The Ministry of Housing and Urban Affairs on Monday launched a micro-credit scheme for street vendors, which was announced by Finance Minister Nirmala Sitharaman on May 14 as a part of the economic package for those affected by the COVID-19 pandemic and lockdown.

About the Scheme

• The Pradhan Mantri Street Vendor’s AtmaNirbhar Nidhi Scheme is aimed at benefiting over 50 lakh vendors who had their businesses operational on or before March 24.
• The vendors will be able to apply for a working capital loan of up to ₹10,000, which is repayable in monthly instalments within a year.
• On timely/early repayment of the loan, an interest subsidy of 7% per annum will be credited to the bank accounts of beneficiaries through direct benefit transfer on a six monthly basis. There will be no penalty on early repayment of loan
• The scheme is valid till March 2022

7 . Antifa

Context : As massive protests following the death of George Floyd continued to rock the United States, President Donald Trump on Sunday announced that the far-left group Antifa would be designated as a terrorist organisation by his government

Who are the members of antifa?

• It is impossible to know how many people count themselves as members. Its followers acknowledge that the movement is secretive, has no official leaders and is organized into autonomous local cells. It is also only one in a constellation of activist movements that have come together in the past few years to oppose the far right.
• Antifa members campaign against actions they view as authoritarian, homophobic, racist or xenophobic. Although antifa is not affiliated with other movements on the left — and is sometimes viewed as a distraction by other organizers — its members sometimes work with other local activist networks that are rallying around the same issues, such as the Occupy movement or Black Lives Matter.

What are its goals?

• Supporters generally seek to stop what they see as fascist, racist and far-right groups from having a platform to promote their views, arguing that public demonstration of those ideas leads to the targeting of marginalized people, including racial minorities, women and members of the L.G.B.T.Q. community.
• Many antifa organizers also participate in more peaceful forms of community organizing, but they believe that using violence is justified because of their views that if racist or fascist groups are allowed to organize freely, 

Background of the movement

• Antifa was first used in 1946 and was borrowed from a German phrase signaling an opposition to Nazism

What distinguishes antifa from other protest groups?

• Antifa groups often use tactics similar to anarchist groups, such as dressing in all black and wearing masks.
• The groups also have overlapping ideologies, as both often criticize capitalism and seek to dismantle structures of authority, including police forces.

8 . Cyclone Nisarga

Context : Less than two weeks after a powerful cyclone passed through West Bengal on its way to Bangladesh, India is bracing to face another cyclone, this time on its western coast. In strength and intensity, this would be much weaker than Cyclone Amphan that struck on May 20. In fact, it is not even a full-fledged cyclone right now, just a ‘depression’ that is likely to intensify into a ‘deep depression’, and eventually into a cyclone, after which it would be called Nisarga.

Where is it headed?

• It is headed towards the coastline of north Maharashtra and south Gujarat. It is likely to hit the coastline on Wednesday, between Harihareshwar in Raigad district, just south of Mumbai, and Daman, just below Gujarat coast. By that time, it is likely to evolve into a Severe Cyclonic Storm, which, roughly stated, is of strength 2 on a 1-to-5 of strength of cyclones that arise in the Indian Ocean.

What does that mean?

• The strength of the cyclones are measured by the wind speeds they generate. At its strongest, Nisarga would be associated with wind speeds in the range 95-105 km per hour. Amphan, on the other hand, was classified as a super-cyclone, of category 5, though it had weakened to category 4, ‘Extremely Severe Cyclonic Storm’, ahead of its landfall, at which time the wind speeds were in excess of 180 kph.

Cyclones formed in Arabian Sea

• Cyclones formed in the Bay of Bengal side of the north Indian Ocean are more frequent and stonger than those on the Arabian Sea side. Meteorologists suggest the relatively cold waters of the Arabian Sea discourage the kind of very strong cyclones that are formed on the Bay of Bengal side; Odisha and Andhra Pradesh face the brunt of these cyclones every year.
• Last year, however, was slightly unusual as the Arabian Sea saw the most frequent and intense cyclonic activity in more than 100 years, according to India Meteorological Department.
• Five cyclones originated in the area in 2019 — Vayu, Hikka, Kyarr, Maha and Pavan – when normally only one or two are formed.

9 . Facts for Prelims

India – Australia MLSA and AUSINDEX

• The Mutual Logistics Supply Agreement will allow the two countries to use each other’s military bases for logistics support, including food, water, and petroleum.
• The mutual LSA makes it easier for defence forces of both countries to conduct exercises like AUSINDEX and to facilitate access to each other’s bases.
• AUSINDEX is a naval exercise conducted between India and Australia

Operation ‘Samudra Setu’

• Indian Navy has launched Operation ‘Samudra Setu’ as a part of national effort to repatriate Indian nationals stranded in the Maldives due to the COVID-19 chaos. Two Indian Naval Ships– Jalashwa and Magar are en route for this Operation and are a part of ‘Vande Bharat Mission’.
• Phase 2 of Samudra Setu will bring Indian nationals stranded in Sri Lanka
• Ships used – INS Jalashwa, INS Magar
  • INS Jalashwa is an amphibious transport dock currently in service with the Indian Navy. 
  • INS Magar is the lead ship of Magar-class amphibious warfare vessels of the Indian Navy.

Constitutional Provision regarding the Name of the Country

• Context : The Supreme Court is scheduled to hear a petition that says the nation should be called by one name, be it ‘Bharat’, ‘India’ or the ‘Republic of India’.
• Article 1 state both India and Bharat. As per Article 1 India, that is Bharat, shall be a Union of States.