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9 PM Daily NEWS Brief

9 PM Daily Brief – 27th October 2016


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Front Page / NATIONAL

 

[1]. Poll freebies tantamount to bribing voters: CJ

The Hindu

Context

In 2013, the Supreme Court replied that a promise in the election manifesto did not amount to an electoral corrupt practice under the Representation of People Act (RPA).

Backdrop

In 2013, the Supreme Court replied that a promise in the election manifesto did not amount to an electoral corrupt practice under the Representation of People Act (RPA).

  • The court was then deciding a challenge against the free distribution of 30,000 colour TVs by the DMK after its victory in the 2006 Assembly polls. The party’s manifesto had promised TVs for every household.
SC’s changed opinion

Chief Justice T.S. Thakur, presiding over a seven-judge Constitution Bench, contradicted the apex court’s 2013 stand.

  • The Chief Justice said promises like free TVs and money in election manifestos were nothing short of bribery.
  • Chief Justice Thakur asked how instruments of amusement like free colour TVs could be camouflaged as “welfare measures” by political parties.
  • The CJ made the observations while examining the question of whether Section 123(3) of the RPA prohibited a candidate or his agent or any other person with the candidate’s consent from appealing for votes or refrain from voting on the grounds of his religion, race, caste, community or language.

 

 

[2]. Civilian border postings ruffle Army brass

The Hindu

 

Context

Parrikar approves plan to post ADGs to Northern, Eastern commands

What is the news?

The MoD recently issued orders, with Defence Minister Manohar Parrikar’s approval, to create the new posts of Additional Director General (ADG) for both Udhampur-based Northern Command and Kolkata-based Eastern Command.

  • Most engineering projects in the two commands would now be administered by the newly appointed ADGs, whose offices are not to be based in command headquarters but in Jammu and Guwahati.

Impact of the decision

As a consequence, Command Chief Engineers, who now look after all engineering and construction projects, will be merely responsible for engineering regiments.

  • Key projects such as construction of forward military bases, facilities for the new Strike Corps against China, and modernisation of Advanced Landing Grounds along the China border will come under the civilian officer, because Military Engineering Service (MES) offices and Chief Construction Engineers (CCE) will report to the civilian ADG.

Army’s grouse

The Army’s top brass is upset with the Ministry of Defence’s (MoD) move to create two senior civilian positions to look after engineering projects in army commands responsible for both Pakistan and China borders.

  • Army has termed it as a disruption of the military’s functioning
  • None of the stakeholders were taken into confidence, neither the Engineer-in-Chief, nor the chiefs of the three services, nor the Army commanders
  • Army officials have said that there was a “great deal” of coordination between the MES and Corps of Engineers in the command areas in executing strategic projects. Now that they are splitting the command authority, it could lead to serious coordination issues and ego clashes

Why such orders were passed?

Promotions: Civilians get promoted to only staff appointments beyond the rank of Zonal Chief Engineers. And they have regularly petitioned the government about ‘discrimination’. The new ADG posts might have been devised to address the issue

Backdrop

Tensions between civilians and military engineers increased after the 6th Pay Commission recommendations were implemented in 2008. Junior civilian officers got better perks, such as business class tickets and better pay bands, than military officers senior to them.

 

[3]. Judicial panel on one rank, one pension submits report

The Hindu

Context

  1. Narasimha Reddy committee has submitted its report to Defense Ministry.

What is the news?

A one-man judicial committee appointed to look into anomalies in the one rank, one pension scheme for retired military personnel submitted its report

  1. Narasimha committee

The committee, headed by L. Narasimha Reddy, retired Chief Justice of the Patna High Court, was appointed in December 2015 for six months and was later given a six month extension.

  • The judicial committee had held hearings in nearly 20 cities and towns across the country and interacted with cross-sections of ex-servicemen and their associations
  • The panel received 704 representations from individuals and various ex-servicemen associations and had held extensive interactions with all stakeholders before submitting its report

 

Editorial/OPINION

[1]. Building synergy for energy security:

The Hindu

Context

The acquisition of stake by ONGC in Gujarat State Petroleum Corporation’s Krishna-Godavari block is meant to help secure India’s energy security.

In the article, author has tried to answer few questions being raised in the media over the recent proposed acquisition by the ONGC of the stake in GSPC’s KG block

  • The centre is forcing ONGC to make the deal
  • The current proposition is non-viable

Acquisition, not a buyout

The proposed transaction between ONGC and GSPC is limited only to the ‘acquisition of stake’ by ONGC into the latter’s KG offshore block, which in no way amounts to ONGC buying GSPC

Gaseous claims

Initial estimates of gas reserves: 20,000 tcf (trillion cubic feet)

Actual initial estimate: 20 tcf “Gas Initially In Place” (GIIP)

What is GIIP?

It is an industry term which means an estimate of hydrocarbons resources which lie in the area under exploration. It is also an industry-wide and well-known fact that GIIP translates into resources upon appraisal of the explored area and then further into reserves upon commencement of development of the appraised area. These industry-wide well-known facts have not been considered and GSPC has been accused of making tall claims ithout letting the public know of the caveats attached to such estimates

Difficulties faced by GSPC

  • Geographical and geophysical conditions in the KG block have made it a technical challenge to explore and develop.
  • Factors such as low porosity, low permeability, high pressure (in excess of 12,000 psi), high temperature (about 400º Celsius) and a tight reservoir at a depth of more than 4,000 metres make for geological complexities of the kind which has rarely been tackled earlier by any exploration and production (E&P) company in India

 GSPC has put in efforts

GSPC has invested (and not wasted) a significant amount of money, time and effort in order to come up with the apt technology for the development of the block.

  • No mean feat: To overcome low permeability, the GSPC has, in well no. 4, successfully carried out hydro-fracking operations at a depth of more than 5,000 m — a feat achieved for the first time in India and almost unmatched in petroleum engineering in the world

Acquisition will help India

The objective being to achieve business synergy between the resources of ONGC and GSPC for achieving more domestic production of natural resources by carrying out further development of GSPC’s KG Block.

  • ONGC also operates an adjoining block in the KG basin which is due for development where the technological breakthrough achieved by GSPC in its KG Block can be of immense help for expediting the development
  • Given the proximity of the location of the two blocks, it is also possible that the state-of-art production facilities which GSPC has successfully commissioned can also come handy in achieving early production from ONGC’s block in the KG basin

Conclusion

The acquisition of stake by ONGC in GSPC’s KG block is meant for achieving synergy of securing energy security for India

 

ECONOMY

[1]. India-S. Korea DTAA notified

The Hindu

Context

The government on 26 october 2015 notified a new Double Taxation Avoidance Agreement (DTAA) between India and South Korea, which was signed by Prime Minister Narendra Modi during his visit to Seoul in May 2015.

  • India and South Korea on 26 October 2016 signed a revised Double Taxation Avoidance Agreement (DTAA) for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income.

Backdrop

The earlier Double Taxation Avoidance Convention between India and Korea was signed on 19 July 1985 and was notified on 26 September 1986. The existing Double Taxation Avoidance Convention, which has been in vogue for three decades, provides for residence-based taxation of capital gains on shares, which means taxes were to be paid where the investor was a resident.

 

Salient features of revised DTAA
• It provides for source based taxation of capital gains arising from alienation of shares comprising more than 5 percent of share capital.
• In order to promote cross border flow of investments and technology, the revised DTAA provides for reduction in withholding tax rates from 15 percent to 10 percent on fees for technical services and from 15 percent to 10 percent on interest income.
• It expands the scope of dependent agent Permanent Establishment provisions in line with India’s policy of source based taxation.
• It provides for exclusive residence based taxation of shipping income from international traffic under Article 8 of revised DTAA.
• It provides recourse to the taxpayers of both countries to apply for Mutual Agreement Procedure (MAP) in transfer pricing disputes as well as apply for bilateral Advance Pricing Agreements (APA).
• The Article on Exchange of Information is updated to the latest international standard to provide for exchange of information to the widest possible extent. As per revised Article, the country from which information is requested cannot deny the information on the ground of domestic tax interest.
• It inserts new Article for assistance in collection of taxes between tax authorities.
• It inserts new Limitation of Benefits Article i.e. anti-abuse provisions to ensure that the benefits of the Agreement are availed only by the genuine residents of both the countries.
• It aims to avoid the burden of double taxation for taxpayers of two countries in order to promote and thereby stimulate flow of investment, technology and services between India and Korea.

What is DTAA?

Tax treaties such as Double Taxation Avoidance Agreement serve the purpose of providing protection to tax payers against double taxation and thus preventing the discouragement which taxation may provide in the free flow of international trade, international investment and international transfer of technology.

  • DTAA treaty is devised to ensure that the same income is not taxed twice.

 

[2]. Distributors caution on haste in LPG roll-out:

The Hindu

 Context

LPG distributors have raised serious concerns regarding the government’s haste in implementing the targets set under the Pradhan Mantri Ujjwala Yojana (PMUY).

Backdrop

Oil marketing companies had sent letters to distributors exhorting them to meet the PMUY target of 3,000 registrations by September 30, 2016 “without fail” or face the consequences, pressure that the distributors say only adds to the safety hazard

  • The scheme aims at providing poor households with LPG connections. According to the distributors, rushed implementation could compromise the safety of the recipients.
  • The onus of providing the connections to the right households is on the distributors, who are provided with a list of eligible households from the Socio-Economic and Caste Census 2011 – SECC.

 

FLDI (The Federation of LPG Distributors of India)’s views

The implementation of PMUY is being done in an unsafe manner, with poor households receiving LPG cylinders without knowing or implementing the safety procedures associated with them.

 MoPNG’s view

The Ministry of Petroleum and Natural Gas (MoPNG) issued a statement highlighting the steps it had been taking to ensure the safety of the LPG cylinder recipients, saying that it has been providing safety handouts, safety briefings at the time of installation and has been organising safety melas and clinics to increase awareness.

 What is Pradhan Mantri UjjwalaYojana(PMUY)

The Union Government launched Pradhan Mantri Ujjwala Yojana (PMUY) for providing free of cost LPG (cooking gas) connections to women from BPL Households.

  • The tagline for the scheme is Swachh Indhan, Behtar Jeevan
  • Under PMUY, each of the beneficiaries will receive monetary support of about 1,600 rupees to get a connection of cooking gas.
  •  It includes administrative cost, pressure regulator booklet and safety hose
  • The scheme seeks to empower women and protect their health by shifting them from traditional cooking based on unclean cooking fuels or on fossil fuels to clean cooking gas.
  • It is being implemented by Union Ministry of Petroleum and Natural Gas. It is for the first time this ministry is implementing a welfare scheme.
  • The identification of eligible BPL families will be made in consultation with the State Governments and the Union Territories.
  • It will be implemented over three years’ time frame namely in the FY 2016-17, 2017-18 and 2018-19.

 

[3]. India to have 1 billion mobile subscribers by 2020

The Hindu

Context

Driven by falling prices of devices and network coverage improvements, India is expected to have one billion unique mobile subscribers by 2020, according to a new study by GSMA.

According to the reportThe Mobile Economy: India 2016’, released by Global System for Mobile communications Association- GSMA, India is expected to have 1 billion unique mobile subscribers by 2020 due to

  • falling prices of devices
  • Network coverage improvement.

According to the report, at the end of June 2016. , 616 million unique users had subscribed to mobile services in India, making it the second-largest mobile market globally

Almost half the country’s population now subscribe to a mobile service. Improving affordability, falling device prices and better network coverage aided by operator investment will help deliver over 330 million new unique subscribers by 2020, taking the penetration rate to 68 per cent – up from 47 per cent in 2015.

 The GSMA counts as unique mobile subscriber an individual, who may be using multiple mobile connections (SIMs)

 

 

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