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Insights Daily Current Events, 25 May 2015

Insights Daily Current Events, 25 May 2015

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China sets up Silk Road gold fund

China, the world’s biggest gold producer, has set up a gold sector fund involving countries along the ancient Silk Road which is expected to raise $16.1 billion.

  • The fund, led by Shanghai Gold Exchange (SGE), is expected to raise an estimated 100 billion yuan ($16.1 billion) in three phases and is said to be the largest fund set up by China.
  • In February 2015 China had also created a $40 billion infrastructure fund for Silk Road Initiative.

Silk Road Initiative:

The Silk Road, or Silk Route, is a series of trade and cultural transmission routes that were central to cultural interaction through regions of the Asian continent connecting the West and East by linking traders, merchants, pilgrims, monks, soldiers, nomads, and urban dwellers from China to the Mediterranean Sea during various periods of time.

new silk road initiative china

  • The new project is an initiative by China to resurrect the ancient maritime Silk Road. It is perceived to be an attempt by China to ameliorate relations with South and Southeast Asia
  • The new initiative is a pet project of President Xi Jinping for connecting Asia with Europe along a land corridor, with China as its hub.
  • Under the new Silk Route, the Chinese want to open up the transportation channel from the Pacific to the Baltic Sea, from which would radiate rail and road routes, which would also connect with East Asia, West Asia, and South Asia.
  • The Silk Road strategy’s ambitious vision aligns with Beijing’s goals much more closely than the Trans-Pacific Partnership (TPP), which is a reflection of the U.S. international trade model writ large.
  • The Silk Road strategy aims to facilitate large-scale infrastructure construction, energy sale and transport, and relocation of manufacturing industries.
  • This initiative aspires to deepen linkages between China and its neighbours via trade, investment, energy, infrastructure, and internationalization of China’s currency, the renminbi.

Indian and Silk Road Initiative:

  • Aware of India’s sensitivities regarding the perceived expansion of Chinese influence, a Beijing-Kathmandu-New Delhi trilateral development partnership is proposed as a confidence building step.
  • Relations between China and India are mutually reinforcing. From a historical point of view India is the converging point of the Maritime Silk Road and the Silk Road on land.
  • Based on that, the Chinese government believes inevitably that naturally India is one of the important partners to build one belt and one road.
  • India also benefits from at least reasonable ties with most stakeholders in the New Silk Road, including Iran, where India has invested heavily in the Chabahar Port. But India must also make serious efforts to strengthen its links with Southeast Asia, and for this it must develop stronger ties with Bangladesh.
  • India will also need to work towards a manageable relationship with Pakistan, which would not only facilitate pipeline projects like TAPI, but also enable access to Afghanistan and Central Asia.
  • India needs to change its approach towards border regions, and not allow security to cloud its overarching vision. One of the important cornerstones of China’s Silk Road vision has been its emphasis on utilizing border regions, while also making use of their strategic location.

Sources: The Hindu, Wiki.

 

Bilateral Exercise SIMBEX

Two Indian naval ships, INS Satpura and INS Kamorta, are participating in the bilateral naval exercise SIMBEX with the Singapore Navy which began in Singapore recently.

Background:

  • Operational interaction between Indian Navy (IN) and Republic of Singapore Navy (RSN) commenced with Anti-Submarine Warfare (ASW) training exercises in 1994, which has grown steadily over the past 20 years. The operational interaction was formalised as an annual bilateral exercise ‘SIMBEX’ in 1999.
  • Since its inception, SIMBEX has grown in tactical and operational complexity. It has transcended the traditional emphasis on ASW to more complex maritime exercises, involving various facets of Naval operations such as Air Defence, Air and Surface Practice Firing, Maritime Security and Search and Rescue.

Sources: The Hindu.

 

Balance in accounts opened under PMJDY in Gujarat exceeds Rs 550 cr

The latest data shows that balance in accounts opened under the Pradhan Mantri Jan-Dhan Yojana (PMJDY) has exceeded Rs 550 crore in Gujarat by end of May 15, 2015.

  • According to the data provided by the State Level Bankers Committee (SLBC) of Gujarat, balance in accounts opened under PMJDY has touched Rs 550.85 crore in the state. More than six million accounts have been opened in this scheme by May 15 this year.
  • Urban areas constitute majority of the account openings. Close to 3.20 million accounts have been opened under PMJDY in urban areas while in rural areas, 2.85 million accounts have opened.

PRADHAN MANTRI JAN DHAN YOJANA:

The PMJDY was conceived as a national mission on financial inclusion with the objective of covering all households in the country with banking facilities and having a bank account for each household.

  • It is a scheme for comprehensive financial inclusion. Accounts can be opened with zero balance.

The mission mode objective of the PMJDY consists of 6 pillars.

During the 1st year of implementation under Phase I (15th August, 2014-14th August,2015), three Pillars namely:

  • Universal access to banking facilities
  • Financial Literacy Programme and
  • Providing Basic Banking Accounts with overdraft facility of Rs.5000 after six months and RuPay Debit card with inbuilt accident insurance cover of Rs 1 lakh and RuPay Kisan card, will be implemented.

Phase II, beginning from 15th August 2015 upto15th August, 2018 will address the other three pillars:

  • Creation of Credit Guarantee Fund for coverage of defaults in overdraft accounts
  • Micro Insurance and
  • Unorganized sector Pension schemes like Swavlamban.

In addition, in this phase coverage of households in hilly, tribal and difficult areas would be carried out. Moreover, this phase would focus on coverage of remaining adults in the households and students.

The implementation strategy of the plan is to utilize the existing banking infrastructure as well as expand the same to cover all households.

Benefits under PMJDY Scheme:

  • Interest on deposit.
  • Accidental insurance cover of Rs.1.00 lac
  • No minimum balance required.
  • Life insurance cover of Rs.30,000/-
  • Easy Transfer of money across India
  • Beneficiaries of Government Schemes will get Direct Benefit Transfer in these accounts.
  • After satisfactory operation of the account for 6 months, an overdraft facility will be permitted
  • Access to Pension, insurance products.
  • Accidental Insurance Cover, RuPay Debit Card must be used at least once in 45 days.
  • Overdraft facility upto Rs.5000/- is available in only one account per household, preferably lady of the household.

Sources: The Hindu, Wiki., PMJDY.

 

John Nash

John Nash, the Princeton University mathematician and Nobel laureate whose towering intellect and descent into paranoid schizophrenia formed the basis of the Academy Award-winning movie A Beautiful Mind,” has died. He was 86.

john nash

Contributions:

The Royal Swedish Academy of Sciences awarded the 1994 Nobel Prize in economics to Nash, John Harsanyi of the University of California-Berkeley and Reinhard Selten of the University of Bonn in Germany for their work in game theory, which seeks to understand how people, governments and companies cooperate and compete.

Nash was honoured for his early insights, still widely used in economics, into how rivals shift or maintain strategies and allegiances. The Nash Equilibrium describes the moment when all parties are pursuing their best-case scenario and wouldn’t change course even if a rival does. It has been widely applied to matters including military face-offs, industrial price wars and labour negotiations.

Sources: The Hindu, BS.

 

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