Brief of newspaper articles for the day bearing
relevance to Civil Services preparation
- GS PAPER 2
- India seeks help of friends for NSG entry {Foreign Policy}
- After Chabahar, India eyes port in Bangladesh {Foreign Policy}
- Citizens have right to safe water, say draft legislation {Bills and Laws}
- India, Singapore hold defence dialogue {Foreign Policy}
- Panel backs autonomous units for hill-country Tamils, Muslims {Foreign Policy}
- GS PAPER 3
- Drawing Kabul into a closer embrace {Foreign Policy}
- Taking the ordnance route {Security}
- Deal on Iran gas field may be sealed by Oct.{Economy}
- WTO welcomes TFA proposal: Sitharaman {Economy}
- Tea prices may decline over next decade: FAO {Economy}
- Holiday ends for Mauritius {Economy}
GS PAPER 2
[1] India seeks help of friends for NSG entry
Issue
- India’s membership into the Nuclear Suppliers Group.
- For comprehensive coverage of NSG, click here.
Key points:-
- PM Modi will visit Mexico and Switzerland to seek their support. Both these countries are known as “non-proliferation hardliners” who constitute a strong group in the NSG.
- China has announced that it sought membership of NPT as a precondition for any new membership of the NSG.
- India has traditionally opposed the NPT as a discriminatory instrument and did not sign it.
South Korea holds the chair of NSG meetings this year and it has extended its support for India’s membership in the group.
[2] After Chabahar, India eyes port in Bangladesh
News
- After bagging the strategically important Chabahar Port in Iran, Indian government is looking eastwards and is in discussions with Bangladesh to develop a similar facility in Paira.
Background
- Earlier in the year, China had showed interest in building the Paira port.
- But to strengthen Indo-Bangladeshi ties, Dhaka had cancelled the deal and is considering to award it to New Delhi.
- The move to build maritime infrastructure in Bangladesh seems to be part of ‘Act East’ policy of India.
[3] Citizens have right to safe water, say draft legislation
Issue
- Bills under consideration to ensure groundwater is used judiciously and granting citizens right to water.
Bills
- The National Water Framework Bill and the Model Bill for the Conservation, Protection, Regulation and Management of Groundwater.
- It aims to decentralise water management and give more power to panchayats and gram sabhas to decide how water can be better used.
Key provisions of the bills
- The government has for the first time said that citizens had a right to safe water and laid out stringent rules on how corporations and large entities can extract groundwater in these drafts.
- The bills also propose fines ranging from Rs.5,000 to Rs. 5,00,000 depending on the level of infraction and who the perpetrators were.
- Groundwater wouldn’t also be a free resource and those who could pay for it ought to be doing so while ensuring that it was equitably available to all.
- The Bill doesn’t detail a mechanism but lays down broad principles.
- According to the provisions of the proposed Bill, corporations and industries extracting groundwater now had to submit plans to ensure that water was used responsibly and that any possible contamination was remedied.
- The Bills also say that the top priority in the use of groundwater ought to be in meeting drinking, sanitation, food security, sustenance agriculture, the needs of women and only after that for industry.
[4] India, Singapore hold defence dialogue
News
- Defence Minister visit to Singapore to attend the Shangri-La dialogue.
Key points:-
- India and Singapore held the inaugural Singapore-India Defence Ministers’ Dialogue (DMD.
- Last month, the two countries convened the first meeting of their Defence Industry Working Group in which both sides agreed to set up industry level working mechanisms to foster cooperation in aerospace, electronics and other areas of mutual interest.
- Both countries significantly scaled up their military to military engagement with bilateral visits and joint exercises.
- India and Singapore signed a Defence Cooperation Agreement (DCA) in 2003 which was revised in 2015.
- Defence cooperation had been identified as a key sector under the India-Singapore Joint Declaration on Strategic Partnership signed during the visit of Prime Minister Narendra Modi to Singapore in November 2015.
[5] Panel backs autonomous units for hill-country Tamils, Muslims
Issue
- Sri Lankan Parliament has unanimously approved a resolution for setting up a Constitutional Assembly to formulate a new Constitution for the country in March 2016.
- An official committee on constitutional reforms has supported the idea of forming “internal autonomous units” for Muslims in the East and hill-country Tamils in the Central Province.
Recommendation
- The panel, which gave an account of the plight of the hill-country (Malayaha) Tamils, felt the proposed unit needed to be empowered to address economic, social, cultural and religious issues concerning the community and it should enjoy legislative and executive powers over defined matters, having an impact on the lives of the community.
- The formation of Pradesiya Sabhas, the lowest unit of administration in the country, was not done on uniform criteria and the lack of Tamil-speaking officials at local government authorities became an impediment for the community to get the benefit of efficient service delivery.
- As for the Muslims, the panel pointed out that the community’s representatives felt that the Muslims would get marginalised in the event of the merger of the Northern and Eastern provinces and if the merger was allowed, they should get a separate region, including non-contiguous areas of the East where the community was in majority.
Some novel suggestion
- The committee even described as a “novel suggestion” the idea of the merged North-East province having two Chief Ministers, one being a Tamil and the other Muslim.
- Also, it recommended that members of the two communities be included in the proposed National Land Commission.
GS PAPER 3
[1] Drawing Kabul into a closer embrace
Context
- PM Modi’s visit to Afghanistan
Issue
- India should not keep its relationship limited to infrastructure and should look for expanding the scope of its relationship with Afghanistan.
India’s contribution to Afghanistan
- India has invested in economic reconstruction in post-Taliban Afghanistan.
- India has built Salma dam in Herat province, which will boost the agricultural and industrial sectors of Herat.
- Iran’s Chabahar port, which has been built with Indian aid will be linked to Afghan road networks.
- India is one of the closest regional powers that has invested in institution and infrastructure building in Afghanistan.
- Besides the infrastructure work India has initiated and completed, it has also signed the TAPI pipeline project that aims to bring natural gas from Turkmenistan through Afghanistan and Pakistan to India.
Should we expand our relationship?
- Afghanistan is currently going through a particularly turbulent transition
- It has realised that complete military victory over Taliban is improbable.
- It is openly targeting Pakistan for supporting the Taliban.
- Both India and Afghanistan understands that a stable regime in Kabul is geopolitical insurance against Pakistan’s deep state.
- This raises the question that whether the time has come to expand our relationship.
- India has signalled a small shift in its policy by delivering M-25 attack helicopters to Kabul.
- But it remains cautious about making larger overtures on security and is wary of being sucked into a never-ending war.
- Such caution is required.
- But it should not deter India from playing a bigger role in a country whose stability is vital for its regional ambitions.For India, Afghanistan has immense strategic potential.
[2] Taking the ordnance route
Issue
- Gaps in the modernisation process of the Army’s ammunition depots.
Context
- Fire tragedy at Central Ammunition Depot (CAD) in Pulgaon town of Wardha district, Maharashtra.
About Central Ammunition Depot
- CAD Camp or Central Ammunition Depot Camp of Pulgaon is a military area and the second largest ammunition depot in Asia.
- It is the central repository of India’s stockpile of munitions, from standard-issue bullets to artillery shells, mines, tank shells and even BrahMos missiles.
- It comes under direct aegis of the Army headquarters.
- Virtually all types of ammunition purchased by the Army or manufactured at state-owned ordnance factories are stored at the depot, which are then used to replenish the stocks of ammunition depots and field ammunition depots strewn across the country and onwards to field formations.
- The CAD also undertakes the task of disposing of ammunition which has completed its life cycle, or is defective.
Army Ordnance Corps (AOC)
- It is responsible for providing logistics support to the Indian Army and thus constitutes the backbone that sustains the nation’s war-fighting capabilities.
- One of the functions of the AOC involves the mechanics of provisioning and procuring all items required to raise and maintain an efficient and effective fighting Army.
- It manages an inventory range covering every requirement of a soldier from “clothing to weapons, from a needle to a tank and also all munitions except fuel, fodder and medicines”.
- Under this also falls the task of ammunition management.
What is ammunition management?
- It basically covers the entire arc from repair and servicing of all munitions and missiles to disposal and demolition of unserviceable/dangerous ammunitions and explosives.
- Ammunition is stored in specifically designed sheds and segregated based on their explosive nature.
Gaps in the modernisation process of the Army’s ammunition depots
- There is shortage of critical ammunition and unusually high quantities of defective ammunition in stockpiles which threaten to severely undermine fighting capabilities in the event of a prolonged war.
- A CAG audit flagged serious concerns regarding fire safety, transportation and storage, pointing out that the Army continued to ferry explosives in ordinary vehicles, that the storage facilities weren’t satisfactory, and that expired explosives weren’t always disposed of in a timely manner.
Any plan to upgrade security and firefighting infrastructure
- The Army has currently rolled out a modernisation programme on a trial basis at three ammunition depots to upgrade security and firefighting infrastructure.
- It entails a three-tier security and fire system.
- The first tier is perimeter security, with measures such as powerful lights, night vision devices and electrical fences.
- The second tier consists of an inner wall mounted with additional camera-lined fencing and access-controlled gates.
- The third tier is for high-security areas such as missile shelters with provisions such as sensors and Quick Reaction Teams on standby.
- The plan is to eventually extend this to all 13 Central Ordnance Depots.
[3] Deal on Iran gas field may be sealed by Oct.
Issue
- The Farzad B gas field is an Iranian natural gas field that was discovered in 2012.
- India and Iran would seal ‘development, financial and commercial’ terms to develop the prolific gas project – Farzad B in the Persian Gulf by a consortia of New Delhi-based explorers led by ONGC Videsh, the overseas arm of state-run Oil and Natural Gas Corporation.
Developments till now
- Iran has given an in-principle approval for the deal.
- The price is yet to be settled. While Iran need a viable royalty amount, Indian companies also need a suitable economic incentive.
Government unveiled the unified guidelines for the awarding of LPG distributorship.
- Under the new system, there will be four broad types of distributorships with varying refill ceiling limits – Sheheri (Urban), Rurban (a combination of rural and urban), Gramin (rural) and Durgam Vitrak (for hilly and difficult to reach locations).
- The new guidelines also provide for a 33 per cent reservation of the licenses for women across all categories
[4] WTO welcomes TFA proposal: Sitharaman
What is TFA (Trade Facilitation Agreement)
- Traders from both developing and developed countries have long pointed to the vast amount of “red tape” that still exists in moving goods across borders, and which poses a particular burden on small and medium-sized enterprises. To address this, WTO Members concluded negotiations on a landmark Trade Facilitation Agreement (TFA) at their 2013 Bali Ministerial Conference and are now in the process of adopting measures needed to bring the Agreement into effect.
- The TFA contains provisions for expediting the movement, release and clearance of goods, including goods in transit. It also sets out measures for effective cooperation between customs and other appropriate authorities on trade facilitation and customs compliance issues. It further contains provisions for technical assistance and capacity building in this area. The Agreement will help improve transparency, increase possibilities to participate in global value chains, and reduce the scope for corruption.
Issue
- India is seeking “trade facilitation agreement for services
Recent developments
- World Trade Organisation (WTO) Director General Roberto Azevedo has welcomed India’s proposal for a Trade Facilitation Agreement (TFA) in Services.
- The proposed TFA in Services envisages, among other things, easier temporary movement of skilled workers, to boost global services trade.
[5] Tea prices may decline over next decade: FAO
Issue
- Tea prices may fall sharply over the next decade as supply may outstrip demand.
Analysis
- A mismatch between demand and consumption of tea in 2014 led to a surplus of 180,000 tonnes and tea prices dropped by 5.3 per cent.
- According to the Food and Agricultural Organisation’s Intergovernmental Group on Tea (IGG/Tea) prices may increase in nominal terms in 2024, in real terms prices may actually decline by an annual average of one per between 2014 and 2024.
What is FAO, IGG/Tea
- The FAO, IGG/Tea, represents a forum for intergovernmental consultation and exchange on trends in production, consumption, trade and prices including global appraisal of market situation and short-term outlook.
- It met recently at Kenya.
[6] Holiday ends for Mauritius
Issue
- India has Double Taxation Avoidance Agreement (DTAA) with Mauritius. Now the government will amend this treaty to plug the loopholes.
Read Editorial Today #34- Changes in the tax treaty with Mauritius.
Its main effect
- The biggest distortion of this treaty was the long shadow cast on India’s domestic tax reform agenda.
Analysis
- To understand the true magnitude of this achievement and its profound impact, it is important to look back and understand the structural damage that this treaty had inflicted on India’s economy and tax structure over three decades.
- In January 2016, a committee constituted by the Securities Board of India (SEBI) recommended exemption of long-term (more than a year) capital gains tax on investments made in shares of private (not listed on stock exchanges) companies. The rationale was the need for a “level-playing field” for such private equity investors on par with investors in shares of publicly listed companies because Investments in publicly listed shares were granted exemption from long-term capital gains tax in 2004.
- The rationale for that decision was to provide a “level-playing field” to domestic investors in relation to Mauritius’ investors.
- This treaty has led to a long tail of arbitrages across various asset classes (private vs public shares), types of investors (Mauritius vs non-Mauritius), types of income (capital gains vs dividends) etc. This treaty has hampered India’s ability to garner enough tax resources through progressive direct taxes.
- While it is true that this treaty provided an opportunity for illegal round tripping of domestic money, the most damaging impact has been the cascading effect on India’s tax structure.
Effect on Tax structure
- During 2012-13, long-term capital gains income earned was Rs 90,000 crore. If these were subject to tax (say 15 per cent), the government stood to garner nearly Rs 15,000 crore in that year, equivalent to the entire budget for providing drinking water to all Indians.
- To make up for the shortfall in tax revenues from such sources, all governments in the past have resorted to increasing indirect taxes, which are more insidious, economically inefficient and ultimately unfair.
- Indirect taxation makes India’s tax system among the most regressive in the world. India’s direct-to-indirect tax ratio including state and central taxes is 35:65. In most other similar economies, it is the exact opposite.
- According to Economist this skewed tax structure plays an important role in exacerbating India’s growing inequality, as increase in indirect tax affect the poor most.
Conclusion
- Thus government’s move to amend the Mauritius tax treaty is not meant to merely curb offshore black money or curtail round tripping of domestic money.
Leave a Reply