Daily Quiz: UPSC Prelims Marathon- August 8

The term Tiger Cub Economies collectively refers to the economies of the developing countries of Indonesia, Malaysia, the Philippines and Thailand the four dominant countries in Southeast Asia

Tiger Cub Economies are so named because they attempt to follow the same export-driven model of technology and economic development already achieved by the rich high-tech industrialized developed countries of Taiwan and South Korea along with the wealthy financial centers of Hong Kong (China) and Singapore, which are all collectively referred to as the Four Asian Tigers

Explanation:

Capital gains tax is a tax that is charged on the profits that is made by selling  capital asset. For making it easy for taxation, the capital assets are classified to ‘Short-Term Capital Asset; and ‘Long-Term Capital Asset’.

Short-Term Capital Asset:

If the shares and securities are held by the taxpayer for a period not more than 36 months preceding the date of its transfer will be treated as a short-term capital asset.

Long- Term Capital Asset:

If the taxpayer holds the shares and securities for a period exceeding 36 months before the transfer will be treated as a long-term capital asset.

Equity shares which are listed in a recognised stock exchange, units of equity oriented mutual funds, listed debentures and Government securities, units of UTI and Zero Coupon Bonds’ period of holding will be considered for 12 months instead of 36 months.

Transfer is giving up your right on an asset it includes sale, exchange, compulsory acquisition under any law and relinquishment.

Capital Gains include any property held by the assesse except the following:

• Stock in trade.
• Consumable stores or raw materials held for the purpose of business or profession.
• Personal effects that are movable except jewellery, archaeological collections, drawings, paintings, sculptures or any art work held for personal use.
• Agricultural land. The land must not be located within 8kms from a municipality, Municipal Corporation, notified area committee, town committee or a cantonment board with a minimum population of 10,000.
• 5 percent Gold Bonds, National Defence Gold Bonds and Special Bearer Bonds.
• Gold Deposit bonds under Gold Deposit Scheme.

Statement 3 is incorrect:

NCLT have the same powers as assigned to the erstwhile Company Law Board (which are mostly related to dealing with oppression and mismanagement), Board for Industrial and Financial Reconstruction (BIFR)(revival of sick companies) and powers related to winding up of companies (which was available only with the High Court’s).

Important Learning:

The NCLAT has the power under the Companies Act to adjudicate proceedings:

• Initiated before the Company Law Board under the previous act (the Companies Act 1956);
• Pending before the Board for Industrial and Financial Reconstruction (BIFR), including those pending under the Sick Industrial Companies (Special Provisions) Act, 1985;
• Pending before the Appellate Authority for Industrial and Financial Reconstruction; and
• Pertaining to claims of oppression and mismanagement of a company, winding up of companies and all other powers prescribed under the Companies Act.

Decisions of the NCLT may be appealed to the National Company Law Appellate Tribunal. The decisions of NCLAT may be appealed to the Supreme Court of India.

Explanation:

• Union Government has launched e-Rashtriya Kisan Agri Mandi (e-RaKAM) portal to provide a platform for farmers to sell agricultural produce.
• It is a digital initiative that aims to bring together the farmers, PSUs, civil supplies and buyers on a single platform to ease the selling and buying process of agricultural product.

e-RaKAM is a first of its kind initiative that leverages technology to connect farmers from the smallest villages to the biggest markets of the world .

Statement 2 is incorrect:

When collateral is being pledged, the degree of the haircut is determined by amount of associated risk to the lender. These risks include any variables that may affect the value of the collateral in the event that the lender has to sell the security due to a default by the borrower.

Price predictability and lower associated risks result in compressed haircuts, as the lender has a high degree of certainty that the full amount of the loan can be covered if the collateral must be liquidated.

For example, Treasury bills are often used as collateral for overnight borrowing arrangements between government securities dealers, which are referred to as repurchase agreements (repos). In these arrangements, haircuts are negligible due to the high degree of certainty on the value, credit quality and liquidity of the security, especially over a short time frame.

Securities that are characterized by volatility and price uncertainty, on the other hand, have steep haircuts when used as collateral. For example, an investor seeking to borrow funds from a brokerage by posting equity positions to a margin account as collateral can only borrow 50% of the value of the account due to the lack of price predictability, which is a haircut of 50%.
Important Learning:

• A haircut is the difference between the loan amount and the actual value of the asset used as collateral.
• It reflects the lender’s perception of the risk of fall in the value of assets.
• But in the context of loan recoveries, it is the difference between the actual dues from a borrower and the amount he settles with the bank.

Haircuts are not common in India. However, there have been instances in the past when a lender settles for some equity of a borrower to compensate for a loan loss.

Explanation:

In WTO terminology, subsidies in agriculture and agricultural produce are identified by “Boxes”.

Green Box

Subsidies that do not distort trade fall in this box. According to WTO, green box subsidies do not distort trade, or at most cause minimal distortion.

These green box subsidies must be government-funded — not by charging consumers higher prices and they must not involve price support.
Usually these subsidies are not directed at specific products and are not targeting subsidies and they may include direct income supports for farmers who are distressed due to crop loss or market breakdown.

Example – environmental and conservation programs, research funding, inspection programs, domestic food aid including food stamps, and disaster relief , farmer training programs, pest-disease control program

Amber Box

The subsidies that distort the international trade by making products of a particular country cheaper as compared to same or similar product from another country is slotted under this box.

They distort trade balance because they encourage excessive production,therefore given country’s product becomes cheaper than others, in the international market.

Example: – Input subsidies such as subsidy on electricity , seeds , fertilizers , irrigation etc. Market support price (MSP) subsidies also fall under this box.

Blue Box

These are basically Amber Box subsidies but they tend to limit the production. . Any support that would normally be in the amber box is placed in the blue box if the support also requires farmers to limit their production.

B is incorrectly matched because the report is released by UNEP and not IUCN

Important Learning:

World Wildlife Crime report:

The World Wildlife Crime Report by United nation office of Drug and crime takes stock of the present wildlife crime situation with a focus on illicit trafficking of specific protected species of wild fauna and flora, and provides a broad assessment of the nature and extent of the problem at the global level

Global Environment Outlook:

Global Environment Outlook (GEO) is a series of reports on the environment issued periodically by the United Nations Environmental Programme (UNEP). The GEO project was initiated in response to the environmental reporting requirements of UN Agenda 21 and to a UNEP Governing Council decision of May 1995 which requested the production of a new comprehensive global state of the environment report.

World Economic Outlook:

The World Economic Outlook (WEO) is a survey conducted and published by the International Monetary Fund. It portrays the world economy in the near and medium context, with projections for up to four years into the future.

Global Assesment Report:

The Global Assessment Report on Disaster Risk Reduction (GAR) is a biennial global assessment of disaster risk reduction and comprehensive review and analysis of the natural hazards that are affecting humanity.