Endeavor Careers Choicest Blogs: Weekly Current Affairs: October 2022, Week 01

Welcome to the Endeavor Editors’ Weekly Current Affairs Choicest Blog series. Get a weekly roundup – of news from business, economy, markets, policy, and more. A quick capsule format news summary and update to keep you abreast with all the latest current affairs.

1) International News and Global Economy

Russia abandons annexed Ukrainian city, Putin ally wants a nuclear response

Russia said on Saturday its troops had abandoned their bastion of Lyman in Ukraine’s east for fear of encirclement and the leader of Chechnya, a close Kremlin ally, said Moscow should consider using a low-yield nuclear weapon in response. The fall of the town is a major setback for Moscow after President Vladimir Putin proclaimed the annexation of the Donetsk region, along with three other regions, at a ceremony on Friday that was condemned by Kyiv and the West as a farce. Russia has used Lyman as a logistics and transport hub for its operations in the north of the Donetsk region. Its fall would be Ukraine’s biggest battlefield gain since a lightning counteroffensive in the northeastern Kharkiv region last month. The Ukrainian military spokesperson said the capture of Lyman would allow Kyiv to advance into the Luhansk region, whose full capture Moscow announced at the beginning of July after weeks of slow, grinding advances.

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Putin annexes Ukraine regions in Europe’s biggest land grab since WW2 – BBC News

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Ukraine retakes key city in region Putin annexed | DW News

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World Bank President David Malpass sees risk of stagflation, likely recession in Europe

World Bank President David Malpass has warned that it could take years for global energy production to diversify away from Russia after its invasion of Ukraine, prolonging the risk of stagflation, or a period of low growth and high inflation. In a speech at Stanford University, Malpass said there was an increased likelihood of a recession in Europe, while China’s growth was slowing sharply and U.S. economic output had contracted in the first half of the year. Malpass said the bank’s upcoming “Poverty and Shared Prosperity” report showed that decades of progress in reducing poverty had slowed by 2015, even before the COVID-19 pandemic, which sent an additional 70 million people into extreme poverty. The report, due out next week, also showed a 4% decline in the global median income, the first decline since the bank began measuring that indicator in 1990, he said.

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Hurricane Ian swamps southwest Florida, trapping people in homes

Hurricane Ian, one of the most powerful storms ever recorded in the U.S., swamped southwest Florida, turning streets into rivers, knocking out power to 1.8 million people, and threatening catastrophic damage further inland. A coastal sheriff’s office reported that it was getting many calls from people trapped in homes. The hurricane’s center struck near Cayo Costa, a protected barrier island just west of heavily populated Fort Myers. The Category 4 storm slammed the coast with 150 mph (241 kph) winds and pushed a wall of storm surge accumulated during its slow march over the Gulf. More than 1.8 million Florida homes and businesses were without electricity, according to PowerOutage.us. Nearly every home and business in three counties were without power.

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German inflation is at the highest level in more than 25 years

German inflation was at its highest level in more than a quarter of a century in September, driven by higher energy prices no longer dampened by popular relief measures, data showed. Consumer prices, harmonized to make them comparable with inflation data from other European Union countries (HICP), increased by 10.9% in the year, the federal statistics office said. A Reuters poll of analysts predicted a rise of 10.0%. That was the highest reading since comparable data going back to 1996. Germany’s non-harmonized inflation rate in September rose to 10%, the office said, the highest since the early 1950s. The increase was due to higher costs for energy – which were 43.9% higher compared with September 2021 – after a cheap transport ticket offer and a fuel tax cut expired at the end of August.

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IMF and Moody’s censure UK policy, Bank of England says will act big

The International Monetary Fund (IMF) and rating agency Moody’s criticized Britain’s new economic strategy, as investors braced for more havoc in markets that have already forced the Bank of England to promise “significant” action. The rare intervention from the global lender of last resort piled more pressure on new finance minister Kwasi Kwarteng to reassess a policy that has sparked a collapse in the value of British assets and dragged the UK and European borrowing costs higher. It has also sowed turmoil in the mortgage market, leading to warnings of a sharp drop in house prices. The latest crisis to hit the British state was triggered on Friday when Kwarteng and Prime Minister Liz Truss set out their vision of a return to the Thatcherite and Reaganomics doctrines with deep tax cuts and deregulation to snap the economy out of years of stagnant growth. The IMF said the proposals, which sent the pound to an all-time low of $1.0327 on Monday, would likely increase inequality.

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UK economy: is there worse to come?

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Brazil’s heated presidential election divides the nation

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2) India

Lt Gen Anil Chauhan (retired) appointed next Chief of Defence Staff

The Centre on Wednesday appointed Lt General Anil Chauhan (Retired) as the next Chief of Defence Staff (CDS) who will also function as Secretary to the Government of India, the ministry of defence said in a statement. Lt General Anil Chauhan (retired) will be the second CDS of the country after Gen Bipin Rawat who died in a helicopter crash in December last year in Tamil Nadu. In a career spanning nearly 40 years, Lt Gen Anil Chauhan (Retd) had held several command, staff, and instrumental appointments and had extensive experience in counter-insurgency operations in Jammu & Kashmir and North-East India, the statement read.

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Lt Gen (Retd) Anil Chauhan is the First… | Here’s All You Must Know About India’s New CDS

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Arming Armenia: India to export missiles, rockets, and ammunition

DefenceIndia has signed a significant export order for missiles, rockets, and ammunition to Armenia as the Asian nation is engaged in a prolonged border conflict with neighbor Azerbaijan. The government-to-government route was used to sign a number of contracts for the supply of arms and ammunition to Armenia earlier this month. While the value of the contracts has not been revealed, it is estimated that weapons worth over Rs 2,000 crore will be supplied to the country over the coming months. India has been making significant efforts to increase weapons exports, with policy reforms and active support of the government to secure overseas orders.

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India to supply lethal weapons to Armenia in response to Turkey

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PFI, associated entities banned for five years

The Centre has imposed a five-year ban on the Popular Front of India (PFI) and its associated entities under the anti-terror law – the Unlawful Activities (Prevention) Act, 1967 (UAPA). The Union home ministry would announce a tribunal to assess whether the restrictions on PFI and other entities were legitimate or if there was not enough evidence for the ban. The home ministry was responsible for the coordination between the central and state agencies and monitoring of the law and order situation, officials said. In its notification, the MHA said some of the PFI’s founding members were the leaders of the Students Islamic Movement of India (SIMI) and the PFI has links with Jamaat-ul-Mujahideen Bangladesh (JMB) – both of which are proscribed organizations. There have been instances of PFI having links with global terrorist groups such as the Islamic State of Iraq and Syria (ISIS). Some PFI activists have joined ISIS and participated in terror activities in Syria, Iraq, and Afghanistan.

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Why radical PFI is banned now & why it wasn’t for so long & why a rare opposition consensus on it

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The US sanctions Indian company, and seven others for Iran energy dealings

The US has imposed sanctions on Mumbai-based petrochemical trading company Tibalaji Petrochem Pvt Ltd, the first such action against an Indian company for dealing with Iran. The US Treasury Department said the company “purchased millions of dollars worth” of petrochemical products from Iran for “onward shipment to China”. It claimed that Tibalaji bought “petrochemical products, including methanol and base oil, for onward shipment to China” through deals brokered by Triliance Petrochemical Co Ltd Network, which had been sanctioned earlier. The company is one of eight entities sanctioned by the US in the latest round. The others are located in the UAE, Hong Kong, and China. While India is yet to react, the government here is believed to be closely studying the US move. People familiar with the matter termed the timing of the US decision a “matter of concern”.

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India proposes 15 pc retaliatory duties on 22 items imported from the UK

In retaliation to Britain’s decision to impose restrictions on steel products, India has proposed additional customs duties of 15 percent on the import of 22 products, including whiskey, cheese, and diesel engine parts, from the UK. In a communication to the World Trade Organisation (WTO), India said it is estimated that the safeguard measures taken by the UK on steel products have resulted in the decline of exports to the tune of 2,19,000 tonnes on which the duty collection would be USD 247.7 million. Accordingly, India’s proposed suspension of concessions would result in an equivalent amount of duty collected from products originating in the UK, it said.

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PM Narendra Modi launches the first phase of 5G services in 13 cities

PM Narendra Modi on Saturday launched the first phase of 5G services in 13 cities across India in Pragati Maidan, New Delhi. The launch took place during the four days inauguration of India’s biggest technology festival India Mobile Congress (IMC) 2022. PM Modi also inaugurated the sixth edition of the India Mobile Congress (IMC) with the theme of “New digital Universe”. It will bring together leading thinkers, entrepreneurs, innovators, and government officials to discuss and showcase unique opportunities emerging from the rapid adoption and spread of digital technology. In July, the Government of India auctioned 51,236 MHz of 5G airwaves and allocated by the telecom department to telcos and the government garnered a gross revenue of Rs 1,50,173 crore.

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3) Economy

India’s unemployment rate drops to 6.43 percent in September: CMIE

India’s unemployment rate dropped drastically to 6.43 percent in September on the back of an increase in labor participation in the rural and urban areas, data released by the Centre for Monitoring Indian Economy (CMIE) on Saturday said. Last month, the unemployment rate surged to 8.3 percent as employment sequentially fell by 2 million to 394.6 million. In the rural areas, the unemployment rate tanked to 5.84 percent in September from 7.68 percent in August, while in the urban areas it fell to 7.70 percent against 9.57 percent in the previous month. CMIE managing director Mahesh Vyas said that the nearly 8 million increase in labor participation was a sign that the economy was doing well.

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4) Markets, Banking, and Finance

MPC meets key announcements: 50 bps repo rate hike, weaker GDP growth forecast, inflation outlook retained

The Reserve Bank of India Governor Shaktikanta Das on Friday announced that the country’s rate-setting panel has raised the benchmark lending rate by 50 bps to 5.9%, the fourth consecutive rate hike after a 40 bps increase in May and 50 bps hike each in June and August. RBI has now hiked the benchmark rate by 190 basis points since May 2022. The real GDP forecast for FY23 has been revised downwards to 7.0% from the 7.2% projected earlier. The inflation projection for FY23 has been retained at 6.7%. RBI sees inflation for Q2 at 7.1%, Q3 at 6.5%, and Q4 at 5.8%, with risks evenly balanced.  MPC expects inflation will likely remain above the tolerance ceiling of 6% through the first three quarters of 2022-23, with core inflation remaining high. “The outlook is fraught with considerable uncertainty, given the volatile geopolitical situation, global financial market volatility, and supply disruptions,” Das said.

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RBI goes for equal online & offline payment aggregator norms

The online payment aggregator guidelines will be extended to offline players as well, RBI governor Shaktikanta Das said during the monetary policy speech. He stated that presently the regulations do not cover offline payment aggregators (platforms that handle face-to-face transactions, especially point-of-sale (PoS) platforms). But considering that both online and offline payment aggregators undertake the same nature of activities, the current regulations will apply to offline players as well, Das stated. The payment aggregator framework was launched in 2020 and mandated only RBI-approved companies to offer payment services to merchants. The payment aggregators had to apply with the apex bank and were expected to show a net worth of INR 15 Cr on the date of their application (or as of FY21). The limit will be increased to INR 25 Cr by the end of FY23. The fintech startups that receive RBI authorization will come under the direct purview of the central bank. Accordingly, merchants working with unauthorized payment aggregators would have to delist the PAs within three months of application rejection.

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Credit Suisse is at a ‘critical moment’ as the bank prepares for its latest overhaul, CEO says

Credit Suisse Group AG’s Chief Executive Officer Ulrich Koerner said the bank is at a “critical moment” as it prepares for its latest overhaul while stressing the bank’s strength. In the second carefully-worded memo sent to reassure staff in as many weeks, Koerner told employees not to confuse the “day-to-day” stock price performance with the Swiss firm’s “strong capital base and liquidity position.” The shares are hovering near a record low. Credit Suisse is in the throes of what is expected to be a major restructuring of the investment bank as Koerner seeks to return the lender to profitability and put an end to a string of scandals.

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5) Business

Airtel rolls out 5G Services in 8 cities today, across India launch by 2024

Telecom operator Bharti Airtel is set to roll out 5G services in 8 Indian cities today. In August, Bharti Airtel’s MD and CEO Gopal Vittal said that the telecom operator would roll out 5G services in that month. He further added that the company would cover every town and rural area of India by March 2024. According to a PTI report, Bharti Airtel’s chairman Sunil Bharti Mittal said, “Bharti Airtel will today start 5G services in 8 cities of India. The telecom operator will cover the entire country by 2024.” Earlier in September, Bharti Airtel entered the content delivery network (CDN) segment by rolling out Edge CDN. To use Edge CDN, the telecom operator also partnered with Qwilt, which enables CDN.  Besides, Bharti Airtel along with other telecom operators participated in the auction of 5G spectrum worth INR 1.50 Lakh Cr.

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6) Technology

Tata’s digital loss widens over 5X to Rs 3,052 Cr in FY22, with revenue at over Rs 16,000 Cr

Tata Digital, the new-age vertical of the Tata Group which houses its eCommerce business, saw its consolidated net loss widen 5.6X to Rs 3,052 Cr in the financial year 2021-22 (FY22) from Rs 536.7 Cr in FY21. Tata Digital, which holds majority stakes in unicorn startups such as Tata 1mg and BigBasket, saw its total income jump 3X to Rs 16,201 Cr during the year from Rs 5,463.3 Cr in FY21. Similarly, its expenses jumped to INR 19,316.3 Cr in FY22 from INR 6,069.4 Cr in FY21. Tata Digital’s consolidated financial statements include its subsidiaries – Tata Digital Private Limited, BigBasket, Tata 1Mg, Croma, Tata Payments Limited, Protraviny Private Limited, and Tata Fintech Private Limited.

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7) Politics

30 Congress leaders including Gehlot, Digvijaya back Mallikarjun Kharge’s nomination for party prez poll

A total of 30 Congress leaders including Ashok Gehlot, Digvijaya Singh, and Manish Tewari have backed Mallikarjun Kharge in the party’s presidential polls against his primary challenger Shashi Tharoor. The Leader of the Opposition in the Rajya Sabha has been backed by many senior leaders and others of the Group of 23 (those who are fighting for reforms in the party) and his candidature was proposed by senior leaders including AK Antony, Ashok Gehlot, Digvijaya Singh, Mukul Wasnik, Pramod Tiwari among others. Notably, Congress MP and G-23 member Shashi Tharoor and Jharkhand leader KN Tripathi have also filed their nominations for the party president post today. Both Tewari and Tharoor belong to the G-23 grouping of senior leaders within the party.

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8) Sports

Indonesia football match Stampede kills 174, among worst sports tragedies

At least 174 people died at an Indonesian football stadium when thousands of angry home fans invaded the pitch and police responded with tear gas that triggered a stampede, authorities said Sunday. Police, who described the unrest as “riots”, said they tried to force fans to return to the stands and fired tear gas after two officers were killed. President Joko Widodo ordered an investigation into the tragedy, a safety review into all football matches, and directed the country’s football association to suspend all matches until “security improvements” were completed.

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Novak Djokovic into Fourth Final of Season in Tel Aviv

Novak Djokovic reached his fourth final of 2022 on Saturday when he defeated Roman Safiullin in straight sets in the Tel Aviv semi-finals. The 35-year-old Djokovic triumphed 6-1, 7-6 (7/3) and will look to win his third title of the season, and 89th of his career, when he tackles either Croatia’s Marin Cilic or Constant Lestienne of France in Sunday’s final. Former world number one Djokovic raced to a 5-0 lead on his way to capturing the opening set in just 23 minutes without facing a break point. Djokovic, who has titles in Rome and at Wimbledon this year, is currently seventh in the rankings and as a Grand Slam winner only needs to finish in the top 20 to guarantee a place in the ATP Finals.

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9) Opinion

Potential sabotage: What’s behind the Nord Stream pipeline leaks? | DW News

Danish and Swedish officials said two leaks had been identified on the Nord Stream 1 Russia-Europe gas pipeline in the Baltic Sea. The news came only hours after a similar development on its twin pipeline, Nord Stream 2. Both conduits have become flash points in the escalating energy war that has sent gas prices rocketing since Russia’s invasion of Ukraine. Officials said a pressure drop was detected in the Nord Stream 1 undersea gas channel soon after a similar fall was detected in its sister pipeline, Nord Stream 2. Both of Nord Stream 1’s two lines are affected, while one of Nord Stream 2’s pipelines showed a drop in pressure. Marine authorities identified a gas leak southeast of the Danish island of Bornholm as the likely cause of the issue affecting Nord Stream 2. Danish officials warned of a threat to shipping in the area and asked vessels to steer clear.

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India can’t ignore the dangerous adventures of ‘3 Brothers’ in Armenia and elsewhere

The emergence of Azerbaijan as a successful symbol and a possible template for Turkey-Pakistan military cooperation is a warning signal India can no longer ignore, especially in the backdrop of Azerbaijan’s fresh attempt for a military offensive on Armenia earlier this month. The trio also launched a joint exercise last year called ‘Three Brothers’, which came soon after Azerbaijan’s successful 44-day 2020 military campaign against Armenia. For India, the conflict by itself may not be of any immediate consequence but the positive impact it would have in cementing the Turkey-Pakistan alliance, particularly on the military side, would be of concern. It could lay the basis for acting jointly in other theatres including Pakistan Occupied Kashmir given the existing political understanding on the subject.

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Leading economies of the world are driving global instability. What can India do to retain its balance?

Governments (including a struggling China’s) wrestle to break free from slowing or anemic growth, but are hobbled by debt and trapped between the contradictory pulls of recession and inflation — the latter caused partly by an economic war that has accompanied the military one. Britain’s desperate answer has been a budget-buster disguised as a “mini-budget”, provoking a currency plunge and risking a heart-stopping freeze of the bond market, Lehman style. The US, China, and Europe — remain the financial, strategic, and economic centers of the world, but they are all systemically challenged simultaneously. One, therefore, has to look beyond the headlines signaling chaos and focus on the structural fault lines. Could the real problem in China be that it now confronts the middle-income trap, unable to find new growth engines to replace labor-intensive exports and an artificial property boom? What then of the power shift to Asia, and its future form when neighboring Japan, Korea, and Taiwan are all high-income success stories?

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What does the Terra & Luna crash mean for the Indian crypto market?

The recent failure of TerraUSD (UST) and its sister currency Luna has jolted the Indian and global cryptocurrency markets.  The effects of the stablecoin’s 80% drop in currency value, which wiped out investors worth up to $45 Bn, are being felt by more established tokens such as Ethereum and Bitcoin. The depreciation of Terra and Luna has reignited speculation in the cryptocurrency market about their advantages and disadvantages. Even bullish crypto investors are taking precautions to protect their financial interests. Indian markets have not been immune to the meteoric fall of Luna and Terra. Several Indian trading platforms quickly removed UST and Luna from their platforms.  Furthermore, according to CoinMarketCap data, some of the popular coins or tokens traded in India, such as Bitcoin, Ethereum, Cardano, Binance, and others, have seen 30-60% drops in value. As a result, investor confidence has been shaken and must be restored.

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Why are government and regulators uneasy about fintech’s rise?

Taking note of a host of complaints, the Reserve Bank of India had come out with the first leg of the digital lending norms in August. It allowed loan disbursals only by entities regulated by the banking regulator. The government too recently launched a cracked down on several illegal lending apps which were exploiting gullible customers, charging high-interest rates, and issuing threats. Some of them are said to have Chinese connections. The authorities have good reason to be concerned. According to the government, India has the highest fintech adoption rate in the world at 87 percent, which is significantly higher than the global average rate of 64 percent. Fintech companies are also expected to have $1 trillion as assets under management by 2030. In 2021, India’s real-time transactions crossed 48 billion, which was 6.5 times the combined volume of the US, Canada, UK, France, and Germany. Up to that point, that had been the largest absolute number of real-time transactions in the world. Furthermore, the country’s digital payments market is expected to more than triple to $10 trillion by 2026, from $3 trillion at present. As a result, by value, two out of three transactions in India will be digital by 2026.

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Can NavIC dethrone GPS?

The global positioning system isn’t exactly a global entity. It’s owned and operated by the United States Government. And they aren’t alone in building such things. There are other global navigation satellite systems that do pretty much the same thing. There’s Russia’s Global Navigation Satellite System (GLONASS), China’s BeiDou Navigation system, the European Union’s Galileo, and India’s regional navigation satellite system called NavIC. The only difference is?—?Unlike the others, our navigation satellite system isn’t exactly a global version. You can find the location (longitude/latitude) of any object fitted with a receiver in India. But we can’t map the location globally. However, that doesn’t matter because the regional navigation system is built specifically to address our domestic needs.

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10) Weekly special

The Rise of Neo banking in India: Decoding growth drivers, funding trends & more

Neobanking is one of the major fintech innovations to have come over the last few years, the next evolutionary step in banking after net banking, mobile banking, app-based banking, and online payments.  The Indian neo banking ecosystem has become one of the most lucrative opportunities for fintech startups, witnessing a high inflow of funds over the past few quarters. While neo banking startups raised $416 Mn across 18 deals in 2021, they secured funding of $322 Mn in 14 deals in just the first six months of 2022 and seem to be on track to surpass 2021’s cumulative funding this year. These factors have seen neo banking become a huge market opportunity in recent times. According to the Inc42 report, neo banking in India is a $48 Bn market opportunity in 2022 and is set to increase 281% to reach $183 Bn by 2030. Neobanks will account for 9% of India’s total fintech market size in 2030, which is estimated to reach $2.1 Tn by then.

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11) Did you know?

What’s the Delhi vs Centre ‘control of services’ dispute being heard by the SC constitutional bench

A constitutional bench of the Supreme Court began hearing a petition concerning the row over control of administrative services in Delhi Wednesday. A five-judge bench headed by Justice D.Y. Chandrachud said it will fix the schedule for the hearing of the Arvind Kejriwal-led Delhi government’s plea on the contentious issue on 27 September. The issue concerns the scope of the legislative and executive powers of the Centre and the Delhi government over control of administrative services, which include appointments and transfers, in the national capital. A bench headed by Chief Justice of India (CJI) U.U. Lalit had said Monday that the matter required urgent examination.

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With that, we come to the end of our Weekly Current Affairs October 2022 -Week 1. We hope you have liked it. Write your feedback in the comments below and let us know if there is anything else you would like us to cover.

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