US Approves Sale of Military Hardware
The US State Department has approved the sale of missiles and torpedoes worth $155 million to India.
The sale of 10 AGM-84L Harpoon Block II air launched missiles is estimated to cost USD 92 million.
The sale of 16 MK 54 All Up Round Lightweight Torpedoes and 3 MK 54 Exercise Torpedoes are estimated to cost $63 million.
Indian Government has requested the US for these military hardware.
India intends to utilize MK 54 Lightweight Torpedoes on its P-8I aircraft.
The MK 54 Lightweight Torpedo would provide the capability to conduct anti-submarine warfare missions.
The Harpoon missile system would be integrated into the P-8I aircraft to conduct anti-surface warfare missions in defense of critical sea lanes.
This will also enhance interoperability with the United States and other allied forces.
It is capable of executing both land-strike and anti-ship missions.
To strike targets on land and ships in port, the missile uses GPS-aided inertial navigation to hit a designated target aimpoint.
It can be used against a wide variety of land-based targets, including coastal defense sites, surface-to-air missile sites, exposed aircraft, port/industrial facilities and ships in port.
Torpedo is a cigar-shaped, self-propelled underwater missile, launched from a submarine, surface vessel, or airplane and designed for exploding upon contact with the hulls of surface vessels and submarines.
The MK 54 uses sophisticated processing algorithms to analyze the information, edit out false targets or countermeasures, and then pursue identified threats.
Sovereign Gold Bonds
The Government of India (GoI), in consultation with the Reserve Bank of India (RBI), has decided to issue Sovereign Gold Bonds (SGBs) in six installments, from April 2020 to September 2020.
This series of government-run gold bonds – the Sovereign Gold Bond 2020-21 scheme – comes at a time when the rapid spread of the deadly coronavirus (Covid-19) has disturbed the financial markets around the globe, but increased the appeal of the yellow metal (gold) as a safe-haven.
Sovereign gold bonds:
Sovereign gold bonds are issued by the RBI on behalf of the government. They are government securities denominated in grams of gold. They are substitutes for holding physical gold.
The sovereign gold bond scheme was launched in November 2015. Its objective is to reduce the demand for physical gold and shift a part of the domestic savings (used for the purchase of gold) into financial savings.
Buy and Sale: Investors have to pay the issue price in cash and the bonds will be redeemed (bought back by the issuer) in cash on maturity.
Issue price is the price at which bonds are offered for sale when they first become available to the public.
Apart from having a chance to gain from the rise in gold prices at the time of redemption (capital gain), the investor gets a fixed rate of interest on the investment amount throughout the tenure of the fund.
The government will pay an interest at the rate of 2.5% per annum. The interest is payable semi-annually.
Tenure: Sovereign gold bonds have a tenure of eight years, with exit options are available from the fifth year.
Eligibility: The Bonds will be restricted for sale to resident individuals, Hindu Undivided Families (HUFs), Trusts, Universities and Charitable Institutions.
The minimum permissible investment unit is 1 gram of gold.
RBI’s Quarterly Survey on Manufacturing Sector
The Reserve Bank of India (RBI) has launched the 49th round of quarterly Order Books, Inventories and Capacity Utilisation Survey (OBICUS) of the manufacturing sector.
The latest round has a reference period as January-March 2020.
The RBI has been conducting the OBICUS of the manufacturing sector on a quarterly basis since 2008.
The survey represents the movements in actual data on order books, inventory levels of raw materials and finished goods and capacity utilization.
Inventory is the amount of goods held by a company.
Capacity utilization refers to the manufacturing and production capabilities that are being utilized by a nation or enterprise.
The survey also gives out the ratio of total inventories to sales and ratio of raw material (RM) and finished goods (FG) inventories to sales in percentages.
These are considered as important indicators to measure economic activity, inflationary pressures and the overall business cycle.
Trend analysis is calculated for the survey based on quantitative data received from companies regarding new orders, backlog orders at the beginning of the quarter, pending orders at the end of the quarter.
The survey provides valuable input for monetary policy formulation.
The company level data collected during the survey are treated as confidential and never disclosed.
In the 48th round of the OBICUS for the quarter October-December 2019 as many as 704 manufacturing companies were covered. As per the survey:
Capacity Utilisation (CU) had declined to 68.6% in the third quarter of 2019-20 from 69.1% in the previous second quarter.
Also, orders received in the third quarter (Q3:2019-20) were lower compared with the previous second quarter as well as with the level of 2018-19.
Zoom- Not a Safe Platform: MHA
Recently, the Ministry of Home Affairs (MHA) has issued an advisory that Zoom video conference is not a safe platform.
The Indian Cyber Crime Coordination Centre (I4C) of the MHA issued a set of guidelines for the safe usage of Zoom by private individuals.
Zoom has seen an exponential rise in usage in India as office-goers remain at home due to the lockdown, imposed to curb the Covid-19 pandemic.
Over 90,000 schools across 20 countries have started using it regularly.
The maximum number of daily meeting participants of approximately 10 million at the end of December 2019 grew to more than 200 million daily meeting participants in March.
It has been used extensively by everyone including the central and state ministers for official purposes and conducting meetings.
Zoom is a US-based video communication and videoconferencing platform.
This Silicon Valley-based company appears to own three companies in China through which at least 700 employees were paid to develop Zoom’s software.
This arrangement is apparently an effort at labor arbitrage in which Zoom can avoid paying US wages while selling to US customers, thus increasing their profit margin.
However, this arrangement may make Zoom responsive to pressure from Chinese authorities.
Reportedly, few calls made through the app are routed through servers in China.
Suggestions by the Ministry:
The users are suggested to set strong passwords and enable “waiting room” features so that call managers could have better control over the participants.
Users should also avoid using personal meeting ID to host events and instead use randomly generated meeting IDs for each event.
People using the app should not share meeting links on public platforms.
AI-based Voice Tool to Detect Covid-19
A University in Rome (Italy) is conducting a pilot run for a patented Artificial Intelligence (AI)-based tool developed by students and a professor from Mumbai, which they claim can test Covid-19 through voice-based diagnosis using a smartphone.
The tool has already been tested on 300 individuals and has detected Covid-19 patients with 98% accuracy.
The tool is based on a voice-based diagnosis through an app. It can find coronavirus from the tone of the voice.
As someone speaks to the microphone on the app, the tool breaks down the voice in multiple parameters such as frequency and noise distortion.
These values are then compared to a normal person’s values and the patented technique then determines if the patient is positive or not.
Each human voice has 6,300 parameters, and only a few units, less than a dozen, specifically characterise individuals. The human ear, apart from colds, is not able to distinguish them, but artificial intelligence does.
Each one of an individual’s internal organs is sort of a resonator, so if anyone has a problem with lungs or heart, this will be reflected in his/her voice.
The current novel coronavirus cases could be detected this way.
Benefits of the voice-based diagnosis tool :-
This tool can be of great impact in doing the first level of screening to identify positives and only those who tested positive can go for the lab tests.
This can reduce the current bottleneck on the medical infrastructure, and help the government to identify hotspot regions in advance.
It is possibly the best way to reach out to the remotest part of India by testing through a smartphone, without the risk of exposure, both to the patient and the lab personnel.
This voice-based diagnosis will fetch zero cost testing to the patient and no wait time.
Liquidity Boost to NBFCs
The Reserve Bank of India (RBI) has announced a host of measures to provide liquidity support to Non Banking Financial Companies (NBFCs), apart from giving them certain benefits for loans extended to the commercial real estate sector.
TLTRO 2.0 :-
The RBI would conduct Targeted Long-term Repo Operations (TLTRO 2.0) for an aggregate amount of Rs 50,000 crore, in installments of appropriate sizes.
The banks have to invest the funds availed under TLTRO 2.0, in investment grade bonds, commercial paper, and non-convertible debentures of NBFCs.
RBI stipulated that small and mid-sized NBFCs and Micro Finance Institutions (MFIs) should receive at least 50% of these funds.
The investments made by banks under this facility would be classified as ‘Held-to-Maturity’ (HTM), even in excess of 25% of the total investment permitted to be included in the HTM portfolio.
Held to Maturity securities are securities that companies purchase and intend to hold until they mature.
This will help in easing the liquidity problem faced by NBFCs and MFIs to some extent.
NBFCs are facing liquidity pressure since banks have not extended any repayment moratorium to these entities even if NBFCs have to provide the same for their borrowers.
Refinance facility: The RBI has also decided to provide a special refinance facility of ₹50,000 crore to National Bank for Agriculture and Rural Development (NABARD), Small Industries Development Bank of India (SIDBI) and National Housing Bank (NHB) to enable them to meet sectoral credit needs. This would comprise:
1) ₹25,000 crore to NABARD for refinancing Regional Rural Banks (RRBs), cooperative banks and Microfinance Institutions (MFIs).
2) ₹15,000 crore to SIDBI for on-lending/refinancing.
3) ₹10,000 crore to NHB for supporting Housing Finance Companies (HFCs).
Extension of loans to the Real Estate Sector: The RBI has allowed extension of the loans by NBFCs to delayed commercial real estate projects by a year without restructuring.