Daily Current Affairs

To The Point Notes

1.Udham Singh

Context:

• India commemorated the 85th death anniversary of Udham Singh, highlighting his legacy of courage and justice.

Early Life:

• Born as Sher Singh on December 26, 1899, in Sunam, Punjab.
• Passionate patriot dedicated to seeking justice for Jallianwala Bagh massacre victims.

Jallianwala Bagh Massacre:

• Date: April 13, 1919, in Amritsar, Punjab.
• Event: British troops, under Brigadier General Reginald Dyer, fired on a peaceful assembly.
• Casualties: Over a thousand killed, more than twelve hundred wounded.
• Impact: Udham Singh, a survivor, witnessed the massacre and was profoundly affected.

Assassination of Michael O’Dwyer:

• Date: March 13, 1940, in London.
• Event: Udham Singh shot and killed Michael O’Dwyer, former Lieutenant Governor of Punjab, at Caxton Hall.
• Significance: Act symbolized a cry for justice and retaliation for the Jallianwala Bagh massacre.

Trial and Execution:

• Trial: Udham Singh was tried for the assassination and went on a hunger strike in jail.
• Sentence: Sentenced to death by the Central Criminal Court.
• Execution Date: July 31, 1940, Udham Singh was hanged in a London jail.

 

 

2.Exercise Tarang Shakti

• India’s first multinational air exercise.
• Two phases: August and September 2024.
• Aims: showcase India’s defense capabilities, enhance military cooperation.
• Participants: Nearly 30 countries, 10 with fighter aircraft (Australia, Bangladesh, France, Germany, Greece, Spain, UAE, UK, USA, Singapore).
• Activities: Flying and ground training, defense exhibitions, cultural exchange.
• Showcase of Indian aircraft: Tejas, Rafale, Mirage 2000, Jaguar, MiG-29.

 

 

3.Discarding Indexation for LTCG

In News:

• Finance Minister Nirmala Sitharaman proposed eliminating indexation for calculating long-term capital gains (LTCG) tax.

About LTCG Tax:

• Capital Gains Tax: Imposed on profits from the sale of capital assets, including properties, vehicles, stocks, bonds, and collectables like art.
• Section 45 of Income Tax Act 1961: LTCG arises from the sale of a capital asset held for a specific duration, typically 12 to 36 months, depending on the asset type.
• Taxation: LTCG is considered income in the year of the asset’s transfer and taxable under ‘Capital Gains.’

Budget 2024-25 Changes:

• LTCG Tax Rate: Increased from 10% to 12.5% for equities and equity-oriented mutual funds.
• Exemption Threshold: Raised from ₹1 lakh to ₹1.25 lakh.
• Holding Period for Equities: More than 12 months for calculating long-term capital gains.

Indexation:

• Purpose: Adjusts the purchase price of an asset for inflation, ensuring tax is paid on real gains rather than nominal gains inflated by price levels.
• Example:
  • Property bought in 2001 for ₹10 lakh.
  • Sold in 2021 for ₹75 lakh.
  • With Indexation: Taxable gain reduced to ₹43.3 lakh.
  • Without Indexation: Taxable gain is ₹65 lakh.

Impact:

• Eliminating indexation would result in higher taxable gains and increased tax liability on long-term capital gains, affecting investors and asset holders significantly.

 

 

 

4.Supply Chain Council

Context

• India elected Vice-Chair of Supply Chain Council.

Supply Chain Council (SCC)

• Part of IPEF’s supply chain resilience agreement.
• Focuses on strengthening critical supply chains for national security, public health, and economy.

Indo-Pacific Economic Framework (IPEF)

• Launched in 2022, Tokyo.
• Members: Australia, Brunei, Fiji, India, Indonesia, Japan, Korea, Malaysia, New Zealand, Philippines, Singapore, Thailand, Vietnam, US.
• Aims to strengthen economic cooperation.
• Four pillars: Trade, Supply Chain Resilience, Clean Economy, Fair Economy.
• India joined pillars II to IV (observer in Pillar I).

 

 

 

 

5.Regulation for Safer Digital Payments

Context:

• The Reserve Bank of India (RBI) released a draft circular to enhance the security of digital payment transactions.

Key Points:

1. Alternative Factor Authentication (AFA):

• Introduction of AFA to add an additional layer of authentication beyond usual methods (passwords or PINs).

2. Robust Authentication:

• AFA must be robust, significantly enhancing security.
• One authentication factor should be dynamically generated and usable only once to prevent replay attacks.

3. Risk-Based Approach:

• Authentication type based on parameters like customer’s risk profile and transaction value.
• Ensures stronger authentication where necessary.

4. Customer Consent:

• Explicit customer consent required before introducing new authentication factors.
• Customers should have the option to withdraw consent and deregister from specific methods.

5. Exemptions:

• Not all transactions require the same level of authentication:
  • Contactless Cards: Transactions below ₹5,000 exempt.
  • Insurance Premium Payments: Exempt from AFA.
  • High-Value Credit Card Payments: Payments above ₹1,00,000 exempt.
  • Other Transactions: Transactions up to ₹15,000 exempt.

6. Stakeholder Feedback:

• RBI invites comments and feedback from stakeholders.
• Feedback window open until September 15, 2024.

Impact:

• Enhanced security for digital payments.
• Customizable security measures based on transaction risk.
• Increased customer control and consent over authentication methods.

 

 

6.Liquidity Coverage Ratio (LCR)

Origin and Development:

• Developed by the Basel Committee on Banking Supervision (BCBS).
• Proposed in 2010, finalized in 2014.
• 100% minimum requirement implemented from 2019.

Purpose:

• Ensures financial institutions maintain highly liquid assets to meet short-term obligations over a 30-day period.
• Aligns with the typical response time of governments and central banks during a financial crisis.

Definition:

• A stress test confirming banks have sufficient capital for short-term liquidity disruptions.

LCR Formula:

• Formula: LCR = High-Quality Liquid Asset Amount (HQLA) / Total Net Cash Flow Amount.
• Calculation involves dividing HQLA by total net cash flows over a 30-day stress period.

High-Quality Liquid Assets (HQLAs):

• Definition: Assets that can be quickly and easily converted into cash.
• Categories:
  • Level 1: Includes coins, banknotes, central bank reserves, marketable securities (no discount).
  • Level 2A: Includes securities from sovereign entities, multilateral development banks, US government-sponsored enterprises (15% discount).
  • Level 2B: Includes investment-grade corporate debt, publicly traded common stock (25-50% discount).

Target Ratio:

• Banks aim for an LCR of 3% or more.
• Often maintain higher levels for added financial security.

Limitations of the LCR:

• Increased Cash Holdings: Requires banks to hold more cash, potentially reducing available loans.
• Uncertainty in Crisis: True effectiveness only assessed during a financial crisis, potentially after significant damage has occurred.

 

 

7.Seine River- A Challenge for Paris Olympics

River Seine

• France’s second-longest river.
• Flows through Paris, empties into English Channel.
• Source: Source-Seine, northeastern Burgundy.
• Mouth: English Channel.
• Length: 754 km.
• Major cities: Paris, Rouen, Le Havre.
• UNESCO World Heritage Sites: Paris banks, Le Havre, Versailles, Chartres Cathedral, Fontainebleau Palace, Provins.
• Pollution: Untreated sewage, E. coli bacteria.
• Initiatives: Cleaning project ($1.5 billion), underground rainwater storage.
• Flooding: 1910 Great Flood, major floods in 2016 and 2018.

Olympics and Seine

• Paris hosting Olympics for third time (1900, 1924, 2024).
• Swimming and triathlon events in Seine.
• Water quality concerns due to sewage issues.
• Goal: Clean river for high-performance competitions.