Reserve Bank Of India – It’s History & Functions

CaptureAny country needs a driver to drive its economy towards growth and to keep a check on that growth. The driver of India’s economy is the Banking System of India. Banking in India had its inception in the 18th century and since then, it has evolved a lot. Beginning from the traditional usage of humans as its resources to drive the system, it has entered the new era of modernisation by getting everything computerized. The first bank in India, the General Bank of India, was set up in 1786. Bank of Hindustan and Bengal Bank followed. Under the charters of the British East India Company, three of the presidency banks were established – Bank of Bengal (1809), Bank of Bombay (1840), and Bank of Madras (1843) as independent units. These three banks merged together to form the Imperial Bank of India in 1921, which after India’s independence has transformed into the oldest and the largest bank in India which is still in existence – the State Bank of India (formed in 1955). Allahabad Bank was established, exclusively by Indians, in 1865. Punjab National Bank was set up in 1894 with headquarters in Lahore. Between 1906 and 1913, Bank of India, Central Bank of India, Bank of Baroda, Canara Bank, Indian Bank, and Bank of Mysore were set up. For many years the three presidency banks acted as the quasi-central banks, as did their successors, until the Reserve Bank of India came into existence in 1935. The RBI began its operation on April 1, 1935, under the Reserve Bank of India Act, 1934. The Act (II of 1934) provides the statutory basis of the functioning of the Bank. The Bank was constituted to meet the following requirements:

  • Regulate the issuance of currency notes.
  • Maintain reserves with a view to securing monetary stability.
  • Operate the credit and currency system of the country to its advantage.

History of RBI:-

Here we will examine the history of RBI in two parts – Pre-Liberalization & Post-Liberalization.

Pre-Liberalization: The Reserve Bank of India was conceptualized as per the guidelines, working style and outlook presented by Ambedkar in front of the Hilton Young Commission. The bank was set up based on the recommendations of the 1926 Royal Commission on Indian Currency and Finance, also known as the Hilton–Young Commission. The Central Office of the RBI initially established in Calcutta (now Kolkata),  was permanently moved to Bombay (now Mumbai) in 1937. After the Partition of India in 1947, the Bank served as the central bank for Pakistan until June 1948 when the State Bank of Pakistan commenced operations. Though originally set up as a shareholders’ bank, the RBI has been fully owned by the Government of India since its nationalization in 1949. In the 1950s the Indian government, under its first Prime Minister- Pandit Jawaharlal Nehru, developed a centrally planned economic policy that focused on the agricultural sector. The administration nationalized commercial banks and established, based on the Banking Companies Act of 1949 (later called the Banking Regulation Act), a central bank regulation as part of the RBI. Furthermore, the central bank was ordered to support the economic plan with loans. During the period of 1960’s as a result of bank crashes, the RBI was requested to establish and monitor a deposit insurance system. It should restore the trust in the national bank system and was initialized on 7 December 1961. The Indian government founded funds to promote the economy and used the slogan “Developing Banking”. The government of India restructured the national bank market and nationalized a lot of institutes. As a result, the RBI had to play the central part of control and support of this public banking sector. In 1969, the Indira Gandhi-headed government nationalized 14 major commercial banks. Upon Gandhi’s return to power in 1980,  further six banks were nationalized. The central bank became the central player and increased its policies for a lot of tasks like interests, reserve ratio and visible deposits. These measures were aimed at better economic development and had a huge effect on the company policy of the institutes. The banks lent money in selected sectors, like agri-business and small trade companies. The branch was forced to establish two new offices in the country for every newly established office in a town. The oil crisis in 1973 resulted in increasing inflation, and the RBI restricted monetary policy to reduce the effects. A lot of committees analysed the Indian economy between 1985 and 1991. Their results had an effect on the RBI. The Board for Industrial and Financial Reconstruction, the Indira Gandhi Institute of Development Research and the Security & Exchange Board of India investigated the national economy as a whole, and the security and exchange board proposed better methods for more effective markets and the protection of investor interests. The Discount and Finance House of India began its operations on the monetary market in April 1988; the National Housing Bank, founded in July 1988, was forced to invest in the property market and a new financial law improved the versatility of direct deposit by more security measures and liberalisation.

Post-Liberalization: The national economy came down in July 1991 and the Indian rupee was devalued. The currency lost 18% relative to the US dollar, and the Narsimham Committee advised restructuring the financial sector by a temporal reduced reserve ratio as well as the statutory liquidity ratio. New guidelines were published in 1993 to establish a private banking sector. This turning point should reinforce the market and was often called neo-liberal. The central bank deregulated bank interests and some sectors of the financial market like the trust and property markets. This first phase was a success and the central government forced a diversity liberalisation to diversify owner structures in 1998. The National Stock Exchange of India took the trade on in June 1994 and the RBI allowed nationalized banks in July to interact with the capital market to reinforce their capital base. The central bank founded a subsidiary company—the Bharatiya Reserve Bank Note Mudran Limited—in February 1995 to produce banknotes. The Foreign Exchange Management Act (FEMA Act) from 1999 came into force in June 2000. The Security Printing & Minting Corporation of India Ltd., a merger of nine institutions, was founded in 2006 and produces banknotes and coins.

Functions of RBI:-

The Reserve Bank of India Act of 1934 entrusts all the important functions of a central bank with the Reserve Bank of India.

  • Bank of Issue:Under Section 22 of the Act, the Bank has the sole right to issue currency notes of all denominations. The distribution of one-rupee notes and coins and small coins all over the country is undertaken by the Reserve Bank as an agent of the government.
  • Banker to the Government:The second important function of the RBI is to act as the government’s banker, agent, and adviser.
  • Bankers’ Bank and Lender of the Last Resort:The RBI acts as the bankers’ bank.  Since commercial banks can always expect the RBI to come to their help in times of banking crisis, the RBI becomes not only the banker’s bank but also the lender of the last resort.
  • Controller of Credit:The RBI is the controller of credit, i.e., it has the power to influence the volume of credit created by banks in India. It can do so through changing the Bank rate or through open market operations.
  • Custodian of Foreign Reserves:The RBI has the responsibility to maintain the official rate of exchange. Besides maintaining the rate of exchange of the rupee, the RBI has to act as the custodian of India’s reserve of international currencies.
  • Supervisory Functions:In addition to its traditional central banking functions, the RBI has certain non-monetary functions of the nature of supervision of banks and promotion of sound banking in India. The Reserve Bank Act, 1934, and the Banking Regulation Act, 1949, have given the RBI wide powers of supervision and control over commercial and co-operative banks, relating to licensing and establishments, branch expansion, liquidity of their assets, management and methods of working, amalgamation, reconstruction, and liquidation.

Article by: Ishan Mishra

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Basic roles of RBI in the Stability of the Indian Rupee and Other Financial Institutions

Basic roles of RBI in the Stability of the Indian Rupee and Other Financial Institutions

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The Reserve Bank of India controls the monetary policy and through the various tools that come under this policy, it aims to stabilize the Indian rupee and the functioning of various other financial institutions. This article will talk about the weapons that the RBI has in its arsenal.

Open Market Operations is an instrument in the monetary policy through which the Reserve Bank of India can buy or sell government securities from or to the public and banks. By selling securities, the RBI contracts the money supply through a contractionary monetary policy. By buying securities from the general public and banks, the RBI expands the money supply through an expansionary monetary policy. This causes fluctuations in the yield on government securities.

Banks are required to keep a certain percentage of their bank deposits with the RBI in the form of reserves or balances. This is determined by a Cash Reserve Ratio. A high Cash Reserve Ratio means lesser credit available to the economy, and thus reduced money supply.  A low CRR, on the other hand, means larger credit available to the public and other institutions, leading to an increased money supply. The RBI can vary the CRR between 3% and 15%. On 29th January 2013, CRR was revised to 4%, which was in effect from 9th February, 2013.

Along with the CRR, It is mandatory for banks to keep a certain amount of liquid assets like cash, precious metals, approved bonds, etc. with them at any point of time. This is determined by the Statutory Liquid Ratio. This works to contract or expand money supply in the same direction as the Cash Reserve Ratio. On 31st July, 2012, RBI announced new SLR rates as 23%, which was in effect from 11th August, 2012.

Another tool with the RBI is the Discount Rate. Also known as the Discount Rate, this is the rate of interest at which commercial banks and other financial institutions like EXIM Bank, IFM etc can take loans or funds from the Reserve Bank of India. It works to contract and expand money supply in much the same way as SLR and CRR. As of 2013, this rate is set at 8.75%.

Two of the relatively more stable rates that the RBI has are the repo rate and the reverse repo rate. Repo Rate is the rate at which the RBI lends to commercial banks, generally against government securities. As the name suggests, Reverse Repo Rate is the rate at which the RBI borrows from commercial banks. An increase in Repo Rate and Reverse Repo Rate is a symbol of a contractionary monetary policy, i.e. banks are discouraged to lend money to the public either because it is too expensive to borrow money from the RBI (increase in Repo Rate) or because it is more profitable to lend money to the RBI than to the general public (increase in the Reverse Repo Rate). With effect from 28th January, 2014, the Repo Rate has been revised to 8% from 7.75% and the Reverse Repo Rate has been revised to 7% from 6.75%.

Another way for the RBI to monitor and focus growth in the economy towards certain sectors is by imposing a credit ceiling and/or using the credit authorization scheme. If a Credit Ceiling is imposed, commercial banks can only give loans up till a certain amount to companies/organizations operating in that sector. The Credit Authorization Scheme, on the other hand, dictates that commercial banks will promote growth in certain sectors that the government decides by providing loans to them.

Apart from the tools that set out definite rules for commercial banks and other financial institutions to follow, the RBI can also simply request commercial banks and other financial institutions to do certain things like not give out unproductive loans. This is called moral suasion.

All these tools are very important for the RBI to control just how much liquidity there is in the economy, and thus, are important for the Indian Rupee to be stable against all sorts of external and internal factors.

Article by: Garima Kaushal

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How does RBI adjust repo rate and reverse repo rate for Indian economic growth?
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JOURNEY OF THE INDIAN RUPEE

one-rupee-coinJourney of the Indian Rupee can best be traced after India’s independence in the year 1947 when it was at par with the American dollar. There existed no foreign borrowings on India’s balance sheet and the economy was off to a decent start.

India adopted the fixed currency exchange rate regimen post independence. As a consequence, the Indian Rupee was pegged at 4.79 against a dollar.  For nearly forty six years India followed the practice of a fixed exchange rate policy. Consecutive wars of 1962 and 1965 added to the strain on the rupee and the government was forced to peg it down to Rs 7.57 against a dollar.  In fact the Indian Rupee slide began much earlier in the year 1951 with the introduction of the first five year plan. Government of India launched many developmental and welfare schemes and the economy resorted to external borrowings. This led to the devaluation of the Indian rupee.

1971 saw the delinking of the rupee from the British pound. The Indian rupee was then directly linked to the US dollar, the German Mark and the Japanese Yen. Meanwhile the Indian rupee continued to weaken against the dollar and it was devalued from time to time. India’s imbalance trade with rising import bill compounded the problem and by the year 1985 a dollar was worth rupees twelve.

The last decade of the century brought with it serious consequences for the Indian economy. The economy was close to a default, the Reserve Bank of India had refused credit and the foreign exchange reserves were reduced to a point where they could finance just three weeks of import bill. Desperate situation called for desperate measures and the Indian Government was forced to airlift its gold reserves as pledge for borrowings from the International Monetary Fund. The situation was precipitated by the Gulf War, the overvalued rupee, current account deficit and a weakened foreign investor confidence.  The Indian rupee was sharply depreciated against major world currencies between 1st and 3rd July, 1991. The rupee stood at Rs 17.90 against a dollar.

The collateral secured India a $2.2 billion loan from the IMF and $600 million from the Union Bank of Switzerland. Dr Manmohan Singh, then as Finance Minister kick-started the economic reforms blitzkrieg.

The Indian Rupee after 1991

With PV Narsimha Rao at the helm and Manmohan Singh as the Finance steward, the Indian economy, which was then referred to as ‘caged tiger’, was unshackled. India opened its doors to foreign investments and an era of ‘liberalization’, as it was popularly coined, kick-started. The foreign exchange reserves responded and started picking up after the implementation of the reform policies. By May 2008 the reserves had peaked to $314.61 million.

1993 was a crucial year for the Indian rupee for it was freed from its fixed exchange rate regimen. The rupee had been set free to be determined by market sentiments. However, a provision was made by the policy makers for the intervention of the Reserve Bank should a need arise to check any extreme volatility. The rupee traded at the rate of Rs 31.50 in this period.

In the decade 2000-2010 the rupee hovered between 40 and 50. The year 2007 recorded the high for the rupee when it robustly stood at Rs 39 against the dollar. 2008 brought bad news and difficult times for the economy as the world was hit by another crisis. Last two years have seen severe beating to the rupee. Rising oil import bill of India, sluggish domestic equities and lack of confidence amongst the foreign investors have contributed to the current period of volatility. The last two years have especially been difficult with the rupee breaching the Rs 64 mark. This has further fuelled inflation and the economic growth which was once touted to reach double digit percentile was struggling to keep a 5% growth rate. The 66 years of Indian independence has seen more than 60 times depreciation of the rupee.

Managing volatility in the currency markets has become a big challenge for the economic policy makers in the country. The Reserve Bank as well as the government of India has taken a series of measures to curb the volatility in the markets. The government is now exploring structural measures to narrow the current account deficit, Finance Minister P Chidambaram said, adding that there is no plan to introduce capital controls.

Article By: Vivek Pandit

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The Lokpal Bill /Act : Its History and Idea

Lokpal Bill-797741

Lokpal is necessarily Indian model of Ombudsman, an institution which has long been established in Swedan and recently in other Scandinavian countries. A lokpal in Indian parlance as “caretaker of people” is a ombudsman (legal representative) in India. The present plight of the common man in India is largely due to the increasing weaknesses and limitations of the traditional structures of Government like Parliament, cabinet, court and other Administrative tribunals. The idea behind lokpal was to design and have a competent citizen’s grievance redressal mechanism.

“Power corrupts and absolute power corrupts absolutely”….. Lord Acton

Bureaucracy with formally established system of rules and procedures acted as a huge hindrance to the growth and development of society where individuals as citizens had a limited access to grievance mechanism under the archaic British system. Both formally and informally bureaucracy shows an attitude of apathy, callousness and arrogance towards its clientele. India too inherited the ‘steel frame’ of Bureaucracy which was status-quo in nature, in later stages after Independence in 1960s it was felt that corruption too has plagued the Indian system and there is little respite to the growing menace to common man. Thus, discussion about the idea of an Indian Ombudsman began in early sixties. The institution would be securing to the common citizen a forum where grievances can be effectively ventilated. The Indian version was coined by Dr LM Singhvi in 1963 as “Lokpal” where Administrative reforms commission in 1966 admitted the importance and urgency of providing machinery for looking into the grievances of citizens against the administration. Setting it as highest priority Commission was convinced that an Ombudsman type of institution was justified not only for removing the sense of injustice from the minds of adversely affected citizens but was also necessary to instill public confidence in the efficiency of administrative machinery.

Thus first Jan Lokpal bill was proposed by Shanti Bhusan in 1968 and passed in the 4th Lok Sabha in 1969, but did not pass through the Rajya Sabha. Subsequently, ‘lokpal bills’ were introduced in 1971, 1977, 1985, again by Ashoke Kumar Sen, while serving as Law Minister in the Rajiv Gandhi cabinet, and again in 1989, 1996, 1998, 2001, 2005 and in 2008, yet they were never passed. Fifty two years after its first introduction, the Lokpal Bill is finally enacted in India on 18 December 2013.

What is Lokpal and how it is going to a help a common Indian?

Lokpal Bill, 2013 is commonly known as Citizens’ Ombudsman Bill, 2013. This Bill is a move towards the eradication of corruption and maladministration in the country in order to prevent public abuse. This will set up a two tier system that is Lokpal at the central level and the Lokayuktas at the state level and will work as a separate agency to fight specifically against corruption. A common citizen can raise its complaint and the agency would respond to the needs of the Individual in a time bound manner.

However, even after painstaking efforts of previous governments and spending hundreds of crores of rupees in last five decades why Lok Pal bill came to fruition in 2013? Was it a coincidence or heightened political consciousness among common citizens demanding more accountability and transparency in the working of administration and government?

India being a resilient strong society had inherited a weak state where citizens became victims against maladministration and corruption. Being a young democracy where almost sixty percent of the population is under 35 years of age demanded more rights and accountability from the closed system. Armed with Social media, renewed political consciousness and Jan Lok Pal movement especially “India against Corruption” triggered the nation against anti-corruption movement. With spate of scams like 2G spectrum, CWG and the callous attitude of the government only made the movement stronger.

Social activist’s too made a strong case against government and galvanized the people across the nation reinvigorating it with a sense of duty and people’s call to cleanse the Indian administration. It was a new epoch of time with history in making with Jan Lok pal movement and India against corruption.

Thus, historic Lokpal and Lokayuktas Act 2013 was passed by Indian Parliament paving the way for establishment of an Lokpal (Ombudsman) to fight corruption in public offices and ensure accountability on the part of public officials, including the Prime Minister.

(The writer, Pramod Singh, a mentor and counsellor of students for various competitions i.e. Civil services, CAT (Current Affairs, GD/PI) 

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Currents Affairs/G.K for IIFT, XAT, SNAP, SSC, Banking, UPSC, CMAT 2014

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Tatas to bag Rs 1,000 cr combat vehicle deal

In a move that will end a decades-long monopoly of Czech-made Tatra trucks in supplying the military’s highend vehicles, Tata Motors is set to bag a Rs 1,000 crore contract with the Ministry of Defence for the supply of 1,239 heavy duty trucks. The deal for the so-called six-wheel-drive high mobility vehicles (HMV), fitted with material handling cranes, has the option of a follow-on order for 600 more units. This deal is among the three procurement projects the defence ministry kicked off in 2013 involving specialized trucks.

Google to sell Motorola phone business to Lenovo

Google is set to sell Motorola’s smartphone business to Lenovo for $2.9 billion, a price that makes Google’s biggest acquisition look like its most expensive mistake. Motorola has lost nearly $2 billion since Google took over, while trimming its workforce from 20,000 to 3,800. Google is also keeping most of the patents that came with the Motorola purchase.

Investment limit for foreign investors raised to $10 billion

The Reserve Bank of India (RBI) has hiked the investment limit for foreign investors, such as sovereign wealth funds, pension funds and foreign central banks, to $10 billion from $5 billion. However, the overall investment limit in government bonds for foreign institutional investors (FII) has been kept at $30 billion.

Infosys co-founder Kris Gopalkrisnan gives IISc Rs 225 crore

Infosys co-founder and executive vice-chairman Kris Gopalakrishnan has set aside Rs. 225 crore to develop a Centre for Brain Research at the Indian Institute of Science in Bangalore. It is one of the single largest contributions in the field of pure sciences. The money will be given under the banner of the Pratiksha Trust, a charitable organization Kris has set up with his wife Sudha. The trust funds education, research, innovation and entrepreneurship. An international scientific advisory board has been set up to guide research and operations at the centre.

Harish Rawat sworn-in as Uttarakhand’s eighth Chief Minister

Harish Rawat has been sworn in as the CM of Uttarakhand after the 33-member Congress Legislature Party unanimously elected him as their chief in the presence of senior Congress leaders Ghulam Nabi Azad, Ambika Soni and Janardan Dwivedi.

He succeeds Vijay Bahuguna who was asked by the Congress to step down as part of the organizational revamp being undertaken by the party leadership ahead of the national elections, due by May 2014.

LIC is the biggest tax defaulter: Income Tax department

Life Insurance Corporation of India tops the list of top ten pending tax demands in each category given by the Income Tax department to activist Subhash Agrawal in response to his RTI application seeking the list of top tax defaulters.

The tax demand against LIC is Rs 7,027 crore which is followed by Rs 2,372 crore against Aditya Birla Telecom Limited, Rs 2,038 crore against Vodafone Infrastructure Limited, Rs 1,517 crore against Idea cellular and Rs 1,494 crore against Bharat Petroleum Corporation Limited.

Kaspersky says Facebook wants to read SMSes of Android users

Social Media giant Facebook wants to read SMSes and confidential information of people on the Android mobile phone platform according to cyber security firm Kaspersky. While installing the app, an updated feature now asks users to allow it “Read your text messages (SMS or MMS)”. Facebook justifies this by saying that this helps to confirm your phone number automatically by finding the confirmation code that it sends via SMS. However, no explicit reason is given for seeking permission to access multimedia messages. The app also asks users’ permission to read calendar events and confidential information which Facebook says allows the app to show your calendar availability (based on your phone’s calendar) when you are viewing an event on Facebook. Kaspersky has also expressed concern at the word ‘automatic’ used in the permission sought by Facebook. Facebook is one of the companies accused by US Whistleblower Edward Snowden of sharing confidential information of users with the US government for spying on a global level. Facebook has denied the claims.

Latest spectrum auction sees aggressive competition; Vodafone, Airtel

license extension cancelled

The latest spectrum allocation in the 900 Mhz band in Delhi, Kolkata and Mumbai got off to a flying start with bids worth around Rs. 40, 000 crores on the first day of the spectrum auction. Vodafone India and Bharti Airtel, who are facing stiff competition from Reliance Jio Infocomm, will have to bid the highest if they wish to remain in business after November2014. The Supreme Court has refused to extend the licenses of Bharti Airtel and Vodafone India, which they had been holding since the past two decades, by another 10 years. Reliance Jio Infocomm needs pan-India spectrum for viable 4G data services with voice.

National Green Tribunal (NGT) bans on burning tyres in Public Places

The National Green Tribunal (NGT) banned the burning of tyres at public places viz. roads, areas surrounded by residential buildings and also during protests by political and religious groups, as this leads to health hazards.

  • The decision came on a petition filed by the Sahyog Trust and other advocates against the Maharashtra Pollution Control Board (MPCB) and the state of Maharashtra.

Why burning of tyres is harmful for environment?

Burning tyres emit toxic soup of pollutants that contains harmful gases and chemicals viz. carbon dioxide, carbon monoxide, chromium, arsenic, zinc, barium, cobalt, copper, iron, aluminum, manganese and vanadium, etc. which are hazardous to the human beings as well as to the environment. Minuscule particles released during the burning can settle deep in the lungs. Tyres contain 25 % extender oils derived from benzene, 25% styrene, a derivative of benzene, and 25% 1,3 butadiene. – both benzene and 1,3 butadiene are suspected human carcinogens. (A carcinogen is any substance, radionuclide or radiation, that is an agent directly involved in causing cancer).

Google names its most senior woman Susan Wojcicki as You Tube chief

Susan Wojcicki, who has been a senior vice president for advertising and commerce at Google, has been named as the new You Tube chief. Salar Kamangar, who has had the job previously, will now be engaged in early-stage ventures. Wojcicki had been heading Google’s incredibly profitable advertising and her change of duties signifies Google’s sharp focus on advertising on You Tube. Sridhar Ramaswamy, also a senior vice president for advertising and commerce, will run the ad business. YouTube operates as its own business and Wojcicki was the one who pushed hard for Google’s $1.65 billion acquisition of YouTube in 2006. Wojcicki has been an integral part of Google given that it was her garage that Google’s founders, Page and Sergey Brin, rented to start the company, and she became Google’s 16th employee and later, Brin’s sister-in-law.

Cabinet clears Telangana Bill

The Union Cabinet cleared the bill for creation of Telangana, paving the way for its introduction in Parliament. The key demands of Seemandhra leaders that Hyderabad be made a Union Territory and that Rayala Telangana be created were rejected, putting a question mark on the fate of the Bill in Parliament. The proposed legislation does not provide for grant of Union Territory status to Hyderabad despite demands but the government will announce a special package for Rayalaseema and north coastal Andhra to address concerns of the people there.

Health Ministry objects to sale of e-cigarettes on Air-India flights

The Health Ministry has objected to the sale of e-cigarettes on Air-India flights, saying that it violates the Cigarettes and other Tobacco Products Act, 2003 (COTPA) and demeans the government, which is the implementing authority for COTPA. The law prohibits any direct or indirect promotion of tobacco products. However, it is not clear if e-cigarettes are classified as tobacco product. The tobacco control department had earlier written to the drug controller general of India to classify e-cigarettes which are electronic products that deliver a shot of vapourised nicotine, as a drug under the Drugs and Cosmetics Act and regulate it accordingly. The COTPA has been invoked for e-cigarettes as it is applicable to any product that might encourage the use of tobacco.

Thomas Cook (India) to merge with Sterling Holiday Resorts in Rs. 8.7 billion deal

Tour operator Thomas Cook will merge its operations with resort owner Sterling Holidays in a deal valued at Rs. 8.7 billion rupees. As part of the deal, 100 shares of Sterling will be swapped for 120 shares of Thomas Cook (India). The merger will give Thomas Cook access to Sterling Resorts’ 19 properties in 16 holiday destinations across India.

 
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Why MBA?

mba

Answering this question has always been a confusing task for the students. Not because they can’t answer it, but it’s because they don’t understand completely how to answer it. They have so much to say on this topic yet they fail to do so. Proper structuring and thought process is required to answer this question of “Why MBA?”

Talking about one’s professional life, everything that a person has done and whatever they are planning to do are based on certain experiences in their lives or it’s worthless. Knowledge gained in any manner is never a waste. Be it an article that you might have come across in any newspaper, magazines or the internet or be it anything that you have studied in your curriculum.  Whether you pursued Science or commerce stream in your school days, whether you did engineering or medical or any other course for your graduation and whatever you’ll do for Masters, all need to have a specific purpose in your life. In short, what all you do throughout your professional life, is all inter-related.

Now, 100 people have 100s of reasons to pursue MBA. The main reasons that they may give are as follows:

  • It adds value to us in terms of knowledge acquisition.
  • For my personality development.
  • For nurturing my managerial skills.
  • For better career opportunities
  • For building a good network
  • Last but not the least – for getting higher pay packages.

My question to all of you here is – why do YOU want to pursue the degree of MBA?

The answer to this question lies within you only. No one can tell you to pursue this degree unless you want to. The reasons are very much similar to those mentioned above, but, that you need to try and find out within yourself that what is their relevancy for you.

To cut short, one must answer the question of “Why MBA?” in accordance to the following points:

  1. To develop new skills and acquiring knowledge to become the future leaders:You may think it sounds trivial and may say to yourself – isn’t that what any study programme is supposed to do? Yes, it is, but an MBA education is usually pursued in a very specific situation by a young professional with a few (2, 3 or more) years of experience and sometimes even by senior employees that feel up for the challenge. After some time in the professional life (even as little as 2 years) it is in the human nature to conform to certain repetitiveness and to stagnate in a comfort zone. This limits your disposition for learning and new skill acquisition, why should I learn something new when what I know works just fine; it’s safer to stick to what I know best. Studying a Master of Business Administration forces you to get out of your comfort zone, deal with the latest issues, apply the newest management techniques and just constantly challenge yourself, your practices and your approaches. And that will continue after graduation as well, as an MBA also provides you with the channels that will keep this challenge alive and push you to continuously improve.
  2. A holistic perspective of the business world: As mentioned before, through studying an MBA you become part of a great network of professionals and companies and you constantly challenge yourself with the newest problem-solving. These things together give you a great overview of the business world, a deep understanding and certain receptiveness to the slight changes of this environment. This type of overview and sensitivity is very hard to achieve without spending a lot of time on it. Also, as regular employee, your access will be restricted to much of the relevant information. As an MBA student or graduate this insight comes with the territory and is a great asset, not only to you as a manager, but also to any potential employer. If you are the type of person that can handle the challenge of holding a leadership position, of having a lot of responsibility and of being in a constant learning and development cycle, then you are probably a good candidate for an MBA.
  3. Building up a better consolidated network: As an MBA student you have great networking opportunities. Through this type of study you get to know and interact in a relevant manner (in a context that accentuates your business management capabilities) with colleagues (future high level managers), professors and teaching staff (usually former or current potent business people, with great on-field experience). Furthermore if you are not doing a part-time MBA next to your job or within your company you have good chances to meet potential employers through the various internships that are part of most top MBA programme. Last but not least you gain access to the extensive alumni network of that particular MBA programme and of others (professionals with key positions to whom you already have a direct link through the MBA education you possess). This extensive, well consolidate business network is bound to pay off throughout your whole career making you the first-hand recipient of all relevant information in the field and giving you better chances at seizing the best opportunities.
  4. Aiming at better career opportunities: Graduates of an MBA programme have, due to their qualification, higher chances of obtaining and holding a high level management position. It is estimated that 70% of the MBA graduates worldwide are senior managers or board directors. This type of position brings along a higher salary but of course also a higher responsibility and longer working hours. Whether you wish to further your current career by advancing in a leadership position, or you want to pursue a new career, an MBA is definitely going to boost your chances of achieving these goals.
  5. You get a treat for your hard-work:The average salary for an MBA graduate is considerably higher than that of an employee with a regular master qualification. For MBA graduates the average salary ranges from 10 lacs (in governmental or non-profit Institutions) to 25 lacs (in consultancy, finance or healthcare). That is almost twice as much of what you can expect to earn with a regular University degree. In this case, in 2-3 years, you cover the investment made in your MBA education which is estimated to cost, for a 2 year MBA at a top business university, 12-15 lacs on average.

Hope you find the inputs useful and practical enough to make sure that you are able to answer the Easiest Questions of all – “Why MBA?”

(The writer, Ishan Mishra, a FORE Delhi alumnus, a mentor and counsellor of students for CAT and Associate Vice President(Academics & Marketing) at Mindworkzz).

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Important concepts in marketing

mrktDon’t find customers for your products, find products for your customers.”

Seth Godin

Marketing is an organizational function and a set of social and managerial processes for creating, communicating and delivering value to the customers as well as for managing customer relationships in dynamic ways that benefit the organization and its stakeholders. Peter Drucker, inventor of management by objectives concept said, “There will always be need for some selling. But the aim of marketing is to make selling superfluous. The aim of marketing is to know and understand the customer so well that the product or service fits him and sells itself. Ideally marketing should result in a customer who is ready to buy. All that should be needed is to make the product or service available.”

The world of marketing is dominated by the needs, wants and demands of various stakeholders. It incorporates exchange and transaction of diverse marketing offers in a marketplace aimed at building relationships by delivering value and satisfaction. A holistic marketing approach is an amalgamation of internal marketing, integrated marketing, relationship marketing and socially responsible marketing which envelopes the marketing department of organization, its products and services along with channel partners focused on all stakeholders taking into due consideration environment, ethics and legal regulations.

The 4Ps, expressed by E J McCarthy is one of the best known way for marketing mix. This model is helpful is testing one’s existing marketing strategy or development of a new strategy to enter new market or launch new offers. The 4 Ps are Product, Price, Promotion and Place. These factors of marketing mix are aligned to customer demands which brings us to our next concept of 4Cs. These takes into consideration customer solution, customer cost, convenience and communication. The integrated analysis of 4Ps and 4Cs help us to innovate new methods to maximize customer equity, customer profitability and overall customer lifetime value.

Achievement of greater value in an organizations plays significant role in driving its business and growth. This value created can captured by a firm in terms of its profit margin. Hence the concept of value chain was introduced in 1985 by Michael Porter in his book, “Competitive Advantage”. Porter’s value chain tells us how to deliver or produce higher customer value and satisfaction. This tool identifies five primary activities, representing actual product creation and four secondary activities representing support actions. Primary activities encompasses inbound logistics, operations, outbound logistics, marketing and sales and after sales services. While secondary activities comprises of procurement sources, technological development, human resource management and infrastructure of the firm. Task of the business entity is to examine the cost and performance in each value creating activity along with its improvisation. Success depends on performance of each unit as well as co-ordination between individual units.  The core business processes involving cross functional inputs and cooperation needs to be managed smoothly.

SWOT analysis, coined by Albert s Humphrey is a useful technique for understanding one’s strengths and weaknesses, explore new opportunities and manage and eliminate threats. It helps us to carve a sustainable niche in the market. S signifies strengths which unravels the unique selling proposition (USP) of the organization, advantages, unique or low-cost resources in relation to the competitors. W symbolizes weaknesses which focuses on the areas of improvement or factors leading to loss of sales. O denotes opportunities which can be explored further to develop them as strengths. It can result from change in technology, government policies, social patterns, population demographics, change in lifestyle etc. And T implies threats enlisting the obstacles faced, intense competition, bad-debt or declining cash flow issues, degrading quality standards and so on.

The STP model i.e. Segmentation, Targeting and Positioning is one of the most popular marketing models in practice. It comes in handy while developing marketing communication plan assisting the marketers in prioritizing their propositions aimed at delivering customized messages to engage with target audience. The markets can be segmented based on geography, demographics, psychograph and behavior. The identified market segment should be accessible, measurable, substantial and viable.  The segmented markets can be targeted after evaluating their potential and commercial attractiveness. Positioning of the product is the last step of STP process aimed at formulating suitable marketing mix for each target segment.

However customers can’t tell what they want, but they can always tell you what’s wrong. Hence these tools only acts as helping hand in taking an informed decision. It is always you, who has to decide as marketing managers giving due importance to the emotional aspect of people as well.

Article By : Anupam Akansha

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Current Affairs – 2014 (March 2014)- Part 2

cfDrought conditions might be responsible for collapse of Indus Valley and other great civilizations

A new research has found out that climate change was the main factor behind the collapse of the world’s first great civilizations, the Bronze-Age ‘megacities’ of the Indus Valley region of Pakistan and north-west India. The research, carried out by the University of Cambridge and India’s Banaras Hindu University (BHU), reveals that a series of droughts lasting some 200 years hit the Indus Valley zone. It’s now thought likely that the droughts were partly responsible for the collapse not only of the Indus Valley Civilisation, but also of the ancient Akkadian Empire, Old Kingdom Egypt and possibly Early Bronze Age civilisations in Greece. Scientists have found evidences of severe drought by examining deposits from the bottom of the Arabian Sea and the Gulf of Oman as well as stalactites from caves in North east India and southern Arabia. Scientists have also detected the climatic conditions by examining isotopic evidence from the shells of snails that had lived between 6500 years ago and 1500 years ago in a dried-up lake bed near Delhi, 64 km east of the eastern region of the Indus Valley Civilization.

After Penguin, another publisher recalls Wendy Doniger’s previous book

Following Penguin, another publisher, Aleph, has recalled Wendy Doniger’s book, ‘On Hinduism’. Penguin had earlier recalled Dongier’s work, The Hindus: An Alternative History’. Aleph Book Company, promoted by Rupa publishers has said that it doesn’t want to get involved in any controversy and hence was recalling the book. ‘On Hinduism’ was published in 2013 while ‘The Hindus: An Alternative History’ was published in 2009. Bookshops across the country have seen a rise in sale of Doniger’s books following renewed interest in Doniger’s work post- Penguin’s withdrawal of her book. Penguin had recalled the books following protests by an organization called the ‘ Shiksha Bachao Andolan Samiti, on grounds that its contents were “derogatory and offensive to Hinduism” and misrepresented facts. The Samiti scaled up the protests last week and demanded ‘On Hinduism’ be withdrawn as well, as it too was “malicious and offending.

Lok Sabha polls to be conducted from April 7 to May 15, votes to be counted on May 16

The schedule for Lok Sabha polls 2014 has been announced by the Election Commission. The polling process consists of nine phases between April 07 and May 12 and May 16 is when the counting of votes will be held. More than 81.4 crore voters will exercise their ballot in this election. The number of voters is 10 crore more than the last general election held in 2009. The current Lok Sabha term will expire on June 1 and the new House has to be constituted by May 31.

The electoral roll has been updated till January 1, 2014 and the final rolls have been published in all states. Still camps will be set up on March 9 at all polling booths, which is around 9,30,000 across the country, to let people enroll themselves. Introduction of paper trail system for electronic voting in some constituencies on a trial basis is an important feature of the polls. The introduction of “None of the Above” (NOTA) option, which was introduced in the assembly elections a few months ago, is another new feature in the Lok Sabha elections. From the coming elections, candidates in a parliamentary constituency in bigger states can spend up to Rs 70 lakh on their campaign, more than Rs 40 lakh in 2011. In the 2009 elections, it was Rs 25 lakh.

Four new ozone-depleting gases discovered

Scientists have discovered four new man-made gases in the atmosphere that they say are depleting the ozone layer more than 20 years after governments started phasing out such substances. Three of the gases discovered are a type of chlorofluorocarbon (CFC), a compound once used in aerosol sprays and refrigerator coolants until it was found to be causing the hole in the ozone layer. The fourth gas is a ydrochlorofluorocarbon (HCFC), a compound that replaced CFCs because it is less harmful to the ozone layer. Measurements show that all four new gases have been released into the atmosphere recently – and that two are significantly accumulating.The gases were discovered by comparing today’s air samples with air trapped in snow that acts as a century old natural archive of the atmosphere.

Crimea Parliament asks to join Russia

Members of Parliament from Crimea, the peninsula on the southern Ukraine region, have requested Russia to include it as part of the Russian Federation. Pro-Russian and Russian forces have been in de facto control of the Crimean peninsula for several days. The parliament said if its request was granted, Crimean citizens could give their view in a referendum on 16 March. The ballot released for the referendum shows that Crimean citizens will be given two options: either immediate “reunification” with Russia, or adopting the “1992 constitution”, which gives parliament the power to vote to join Russia. There is no room in the ballot paper for voting against control by Russia. However, Russia has till now not responded to the issue. America, the European Union and Ukraine’s own government have promised not to recognize any change in Crimea’s status.

Malaysia Airlines flight with 227 passengers goes missing in air, no evidence of crash

A Malaysia Airlines flight Flight MH370 carrying 227 passengers, including two infants, and 12 crew members bound for Beijing lost contact with air traffic control after leaving Malaysia’s capital Kuala Lumpur on Saturday 8th March, 2014. The flight has been missing since then and there has been no trace of a crash anywhere in the South China Sea region. The plane, captained by a veteran MAS pilot, had relayed no indications of distress, and weather at the time was said to be good. There had been rumours of plane debris being found near the coast of Vietnam, where flight controllers lost contact with it. It was later proved to be untrue. Ships and aircraft from seven countries and high-capacity satellites of the US and China have been scouring the seas around Malaysia and south of Vietnam for trace of the aircraft. Conspiracy theories have been doing the rounds including that of a terrorist attack on the plane. However, the US has ruled out any such possibility. The passengers on board were of 14 different nationalities, with majority of them Chinese. There were also 5 Indians on the flight. Airlines experts have said that the flight might have disintegrated mid-air and the vast expanse of water was making it difficult for search parties to find any remains.

‘Nirbhaya’ the play opens in London

Playwright and director Yael Farber’s play “Nirbhaya” premiered at London’s prestigious Southbank Centre. It is based on the rape of a young girl in a moving bus in Delhi. This comes after the play’s successful run at the Edinburgh Fringe festival.

The play, which bagged the Amnesty International Freedom of Expression Award 2013 after its opening in Scotland, will have a short run at the Southbank Centre in London until March 12. It will then travel to

Mumbai, Delhi and Bangalore over the coming months.

CEO of Bitcoin exchange First Meta found dead

Autumn Radtke, the 28 year old American CEO of Bitcoin exchange First Meta, has been found dead in her home in Singapore. The police have said that there was no suspicion of foul play in the death of Radtke. First Meta allowed users of virtual currencies such as bitcoin to trade and cash out the currencies.

Background:

Bitcoin is a peer-to-peer payment system and digital currency introduced as open source software in 2009 by developer Satoshi Nakamoto. It is a cryptocurrency, so-called because it uses cryptography to control the creation and transfer of money. Bitcoin has been a subject of scrutiny amid concerns that it can be used for illegal activities. The scrutiny has increased all the more after one of the largest bitcoin exchanges, Mt. Gox shut down on February 26, after reporting how it had lost some 744,000 Bitcoins to theft over several years and was on the verge of bankruptcy.

Gene editing technique may offer ‘functional’ cure for HIV

A technology called ‘gene editing’ that genetically modifies cells from people infected with HIV could help to control the virus that causes AIDS, without the use of antiviral drugs. The data from a human trial of the technology called the Sangamo BioSciences therapy (code name SB-728-T) has been published for the first time in the New England Journal of Medicine. The technique is designed to disrupt a gene, CCR5, used by HIV to infect T-cells, the white blood cells that fight viral infections. A patient’s cells are removed and processed to alter the DNA that codes for the CCR5 receptor. The altered cells are multiplied and tested, then infused back into the patient. The Phase 1 trial, led by the University of Pennsylvania, enrolled 12 HIV patients. The study’s main goal was safety, but it also showed that the modified T-cells persisted and the presence of HIV DNA in the patients decreased.

Google might face $ 5 billion penalty from CCI, Facebook-WhatsApp deal might also come under the scanner

Internet search giant Google, which is facing investigation from the Competition Commission of India (CCI), might end up paying a $ 5 billion penalty, if it is found to have violated competition norms of India. The case relates to Google abusing its dominant position in the internet search engine space and has been before the CCI since the last two years. Google said that it has been cooperating fully with the CCI and that the US Federal Trade Commission had already given Google a clean chit in a related case in the United States. The complaint against Google was first filed by advocacy group CUTS International way back in late 2011. Later, matrimonial website matrimony.com also filed a complaint.

Facebook’s $19 billion deal to acquire WhatsApp may also face a detailed scrutiny by the CCI, especially since both players have significant presence in India. All merger and acquisition deals of companies having their presence in India have to get approval from the CCI. The CCI has still not received an application from Facebook or

(The writer, Pramod Singh, a mentor and counsellor of students for various competitions i.e. Civil services, CAT (Current Affairs, GD/PI) 

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Green Revolution

green-revolution

By the 1940s, the developing world was on the brink of mass famine. The Green Revolution refers to the period between the 1940s and the 1960s which led to significant amounts of research and development, and technology transfer steps taken to improve the overall productivity in the agriculture sector. This involved,  the development of high-yield variety of seeds, massive irrigation infrastructure, distribution and use of hybridization seeds, pesticides, fertilizers, and modernization of management techniques specifically for the agriculture sector. Through these transfers, technologies that already existed in industrialized developed nations were now spread to and implemented in the developing world.

The Revolution really took up in the 1960s. Norman Burlaug, credited with the title of “Father of the Green Revolution”, was invited to India by the Ministry of Agriculture to help solve the issue of mass famine that India was on the brink of. Wheat seed was imported through CIMMYT, after collaboration between the Ford Foundation and the Indian government, despite red tape. Thanks to reliable water supply and history of agricultural success, Punjab was chosen as the initial test site. And thus, India began its own program of plant breeding, irrigation development and agrochemical-financing.

A semi-dwarf variety of rice grain called IR-8 became one of the highest producing varieties to be developed and used in Asia. It was found that IR-8 could produce 5 tons of rice per hectare with no fertilizer, and almost 10 tons per hectare under optimal conditions. These findings were verified in 1968 by Dr. SK De Dutta, a proclaimed Indian agronomist. India, too, adopted this “miracle rice” and became one of the most successful rice producers, from 2 tons per hectare in the 1960s to 6 tons per hectare by the mid-1990s.

A novel contribution of the Green Revolution was the development of the wheat cultivar. High Yield Variety (HYV) wheat, maize and rice seeds are those that absorb more nitrogen than other varieties of seeds. Through molecular genetics, semi-dwarf genes were bred into their genomes. In the presence of adequate irrigation, fertilizers and pesticides, these HYVs can significantly outperform regular varieties. However, in the absence of these inputs, regular varieties may outperform these seeds.

This use of science in the field of agriculture led to multifold increases in agriculture production in the developing world between 1961 and 1985. Alongside, the energy input required to produce crop has also increased. Green Revolution techniques also rely heavily on pesticides, fertilizers, herbicides, and machines. Since these machines run on crude oil and derived products, this has led to an increased need for crude oil extraction.

Due to the complexities involved in study of food systems, it is difficult to ascertain the effect of the Green Revolution on food security. World population has increased by about 4 billion since the adoption of these practices. Also, an average person in the developing world consumes 25% more calories than he/she did at the time of the Revolution. World grain production has increased by 250% as a result of the Green Revolution. It is indicated that without the Revolution, famine and malnutrition would have been more widespread. On the flip side, it is said that food security has actually decreased as a result of shift from subsistence agriculture to commercial/animal feed/export-oriented agriculture. This has meant a reduction in production of crops such as pulses, which formed a major part of peasant diets, with a simultaneous increase in production of wheat, which is not a major part of peasant diets.

Norman Burlaug’s reply to the criticism has been that it has been “a change in the right direction, but it has not transformed the world into a Utopia.

Article By: Garima Kaushal

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Current Affairs – 2014 (March 2014)- Part 3

Daily-Current-Affairs

‘Upskirt’ ban in Massachusetts signed into law

Massachusetts lawmakers have passed a bill banning “upskirting” in response to a ruling by the state’s highest court that said a law aimed at criminalizing voyeurism did not apply to the snapping of secret photos up a woman’s skirt. The new law would make photographing or recording video under a person’s clothing illegal. Earlier, the Supreme Judicial Court of Massachusetts declared that the man who was caught taking cellphone photos up women’s skirts on a Boston subway in 2010 did not violate state law because the women weren’t nude or partially nude. And the women weren’t in a place where they need privacy, like a bathroom or dressing room.

Study reveals three out of four working women in India have health problems

A recent survey by Associated Chamber of Commerce and Industry (ASSOCHAM) has found that three out of four working women in the country suffer from health disorders. The survey found that about 42% of working women are suffering from lifestyle diseases such as hypertension, obesity, depression, backache, heart ailments while 22% are afflicted with chronic diseases such as obesity, depression, diabetes, high cholesterol, heart, kidney disease, etc. The study was conducted in ten cities including, Bangalore, Chennai, Delhi, and Mumbai to mark International Women’s Day on March 8.

Not a single vote cast against Kim Jong Un

With no one else on the ballot, supreme leader Kim Jong Un was not only elected to the highest legislative body in North Korea, he won with the unanimous approval of his district, which had 100 per cent turnout. It was his first election since the 2011 death of his father, Kim Jong II, and the national turnout topped the nation’s traditional 99 percent showing.

Vodafone accused of secretly sharing data with British agency: Home ministry

The Union Home ministry has accused Vodafone of secretly sharing subscriber data with a British intelligence and security organisation. According to documents of the Internal Security Division of the Home Ministry, Vodafone is alleged to have given the UK-based Government Communication Headquarters (GCHQ) “secret unlimited access to their network of under-sea cables, which carry much of world’s phone calls and Internet  traffic”. The charges were denied by Vodafone.

Supreme Court sets deadline for trial against MPs and MLAs

The Supreme Court set a deadline for lower courts to complete trial in cases involving lawmakers within a year of framing of charges. A bench headed by Justice R.M. Lodha also said that trial courts will have to give explanation to the Chief Justice of the respective high court if the trial is not completed within a year. The bench, however, said the period can be extended by the Chief Justice of the High Court if he is satisfied with the reason given by trial judge for not completing the trial within this period.

NTPC to setup Kajra Thermal Project in Bihar

NTPC will set up a 1,320 MW thermal power project at Kajra in Lakhisarai district of Bihar. A Memorandum of Understanding (MoU) signed between NTPC, Bihar State

Power Generation Company Limited (BSPGCL) and Lakhisarai Bijlee Company Private Limited (LBCPL)atPatna in Bihar.

  • Estimated cost of the project: Approx Rs. 9200 crore.
  • The plant would have two units of 660 MW each.

Zero AIDS discrimination Day Launched on March 1

For the first time, the Joint United Nations Programme on HIV/AIDS (UNAIDS) launched its Zero Discrimination Day on March 1 in Beijing, China, to support those who are infected by HIV/AIDS.

About Zero Discrimination Day 2014

Motto: To call the people everywhere to promote equal rights for AIDS victims and celebrate everyone’s   right to live a full life with dignity no matter what they look like, where they come from or whom they love.

  • Transformative Symbol: Butterfly.
  • Vision: Zero new HIV infections, zero discrimination and zero AIDS-related deaths.
  • An initiative of UNAIDS advocate and Nobel laureate Ms. Daw Aung Suu Kyi.
  • Offers an unprecedented opportunity for raising awareness; for speaking up to support people who have been discriminated against; for promoting diversity; and for becoming champions of tolerance, compassion and peace.
  • Discrimination against HIV/AIDS victims is a serious barrier preventing the provision of equal services.

Chennai’s Ennore Port officially renamed as Kamarajar Port 

The Ennore Port Limited of Chennai officially renamed as Kamarajar Port Ltd. after the veteran Congress leader and former Chief Minister of Tamil Nadu Mr. Kumarasami Kamarajar. Mr. Kamarajar was known for his pioneering efforts including introducing the free noon-meal scheme for children in schools besides heralding the state’s industrialization.

About Kamarajar Port

  • Location: Ennore, Chennai.
  • Owned by: Kamarajar Port Limited.
  • Opened: 2001.
  • The 12th major port of India and the first port in India which is a public company.
  • The Centre holds a stake of about 68% and the remaining 32 % is held by the Chennai Port Trust.
  • Category-I Mini Ratna status.

MTDC and Mehair launched seaplane service 

The Maritime Energy Heli Air Services (MEHAIR) jointly with Maharashtra Tourism Development Corporation (MTDC) launched the India’s first seaplane service from mainland at Mumbai, through which tourists will be taken by two Amphibian aircraft to tourist spots like water bodies where there are no runways. The first service took off on March 10, 2014 from Mumbai to AambyValleyCity.

“Venom GT”- world’s fastest car recorded 435 km/hr (270 Miles/hr)  

The US car manufacturer Hennessey developed the world’s fastest car “ Venom GT” with a top speed of an incredible 435 km/hr. The firm set a new record for the fastest car in the world during a test run at the Kennedy Space Centre in Florida. Venom GT beat the previous best record of 431km/hr set by Bugatti Veyron Super Sport

Indian Navy Chief Mr. DK Joshi resigned after accident on Indian sub Sindhuratna 

The Indian Naval Chief Admiral DK Joshi (59) resigned in the wake of submarine INS Sindhuratna accident. The Defense Ministry has accepted his resignation.   Vice Admiral RK Dhowan took over as the Acting Chief till regular Naval Chief is appointed.

What is the issue behind the resignation of Navy Chief Mr. DK Joshi?

  • Recently, India’s Russian-built submarine, INS Sindhuratna was at sea off Mumbai for routine training and workup (inspection) when smoke was reported in the sailors’ accommodation. In that accident, seven sailors were injured and two officers were dead. The cause of the fire remains unknown.
  • This accident was the 10th involving an Indian Navy warship and the third involving a submarine in the last seven months.
  • In August 2013, the Navy lost another Kilo, INS Sindhurakshak, in a fire that gutted the boat and killed all 18 crew on board.
  • Due to the repeated accidents of naval vessels and submarines, Mr. Joshi took the moral responsibility and resigned from the post of Naval Chief.
  • He became the first Indian naval chief to resign.

(The writer, Pramod Singh, a mentor and counsellor of students for various competitions i.e. Civil services, CAT (Current Affairs, GD/PI) 

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