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9 PM Daily NEWS Brief

9 PM Daily Current Affairs Brief – 11 January 2017



  • Front Page / NATIONAL [The Hindu]
  1. SC orders audit of 30 lakh NGOs
  2. NGT panel to inspect major waste generators
  3. Make solar rooftops mandatory
  4. Cash for land is just not done: SC
  5. Effects of Endosulfan devastating: SC
  • Editorial/OPINION [The Hindu]
  1. Taking ‘Cold Start’ out of the freezer?
  2. Mind the gender gap
  3. Reaching out to Africa
  • ECONOMY [The Hindu]
  1. India opposed to inclusion of ‘new issues’ in WTO
  2. Benefits of demonetisation uncertain in long run
  3. H1B visa reform to increase IT firms’ margin pressure
  • Indian Express
  1. Central To The Market
  2. An autonomy policy
  • Live Mint
  1. Time to revamp the tax administration
  2. Demonetisation and budgets

Click here to Download 9 PM Daily Brief PDF (11th Jan. 2017)


Front Page / NATIONAL [The Hindu]


[1] SC orders audit of 30 lakh NGOs


The Hindu

Context

SC issues directions to the government regarding funding of NGOs

What has happened?

SC has issued directions to the government to audit nearly 30 lakh NGOs which received public funds but consistently failed to explain how they spent the money.

Only few NGOs file returns

Though public funds to the tune of thousands of crores are spent on NGOs and voluntary organisations annually, the CBI submitted that only about three lakh of about 32 lakh NGOs file their balance sheets with the government.

 SC’s observations

  • Mere blacklisting: SC said that the only action so far against those who have failed to file their balance sheets is blacklisting. It is necessary to start criminal and civil action by the Central government and CAPART (Council for Advancement of People’s Action and Rural Technology)
  • Unaware of General financial rules: At one point, the court was taken aback when it found that despite the large amounts drawn from State coffers and given to NGOs, the government seemed to be unaware that General Financial Rules, 2005 mandate a regulatory mechanism for them. “This is your [government] money and you have no record of how they [NGOs] use it?” Chief Justice Khehar asked the government

SC ordered that

  • Prosecution: It ordered that any NGO found to have cooked its books or indulged in misappropriation should be subject to immediate criminal prosecution. Besides, the government should initiate civil recovery proceedings against such rogue organisations
  • Frame guidelines: By next hearing, the government should have framed guidelines for their accreditation, the manner in which these organisations should maintain their accounts and the procedure for recovery in case they fail to submit their balance sheets.

 Compliance report

The Supreme Court demanded that the government file a compliance report by March 31, 2017.


[2] NGT panel to inspect major waste generators


The Hindu

Context

The NGT expressed concern that public authorities lacked infrastructure and appropriate technical capacity to handle such huge quantity of waste

What has happened?

The National Green Tribunal (NGT) has constituted a committee to inspect major waste generators in the Capital, including five-star hotels, malls, hospitals, educational institutions with hostels and housing societies.

Members of the committee

The panel will include

  • Representatives of the ministries of Environment and Urban Development, Director General of Health Services, MCI, the DDA, the civic bodies, the Delhi government, the CPCB, the Railways and the DPCC
  • The committee also comprises four independent experts

NGT’s concern

The NGT expressed concern that public authorities lacked infrastructure and appropriate technical capacity to handle such huge quantity of waste

NGT Bench observed that

  • Mass generators of waste cannot be equated to households generating trash: Generators of mass municipal solid waste and sewage must ensure strict enforcement of the municipal solid wastes (Management and Handling) Rules, 2000.

[3] Make solar rooftops mandatory


The Hindu

Context

CSE: Solar panels on rooftops should be made mandatory for new residential societies.

 What has happened?

Solar panels on rooftops should be made mandatory for new residential societies, recommended the Centre for Science and Environment (CSE) in a policy brief

CSE’s findings

  • After studying the electricity consumption of five residential societies in Delhi, Jaipur and Ghaziabad, the CSE found that by switching from diesel generator (DG) sets to solar power for backup, the facilities would be saving lakhs of rupees every year
  • Discoms were aiding rooftop solar systems to meet the obligations for renewable energy,but most of these were being installed on institutional and commercial buildings
  • Need for awareness& giving financial incentives: RWAs did not appear to be interested in investing in the solar infrastructure despite potential savings. There was a need for greater awareness of solar power options among Resident Welfare Associations (RWAs). Fiscal incentives, including rebate on building tax, could be considered in order to encourage the switch to solar power

CSE recommended

  • Make solar rooftops a norm: Solar rooftops should become a part of the applications for construction approvals, with the builders keeping a certain portion of the plinth area “shadow-free” to aid solar panels
  • Complete ban on DG sets: A total ban on DG sets in new multi-storied houses should be considered. This would not apply to the essential common areas
  • Financial support to Discoms: Solar rooftop can cut discoms revenue since their most profitable customers may partly or fully migrate to solar. Therefore, it is vital that discoms be financially supported to encourage them to push solar rooftop
  • Incentivizing the shift from DG sets: Though there is a capital subsidy of 30 per cent for solar rooftop systems that are connected to the grid, there is a need to give incentives for switching from DG sets to solar systems with battery backup.

[4] Cash for land is just not done: SC


The Hindu

Context

SC agrees to hear the plight of the landless victims of the SardarSarovar Project

 What has happened?

Agreeing to hear the plight of the landless victims of the SardarSarovar Project in detail, the Supreme Court on Tuesday observed that giving cash instead of land to farmers who lost their fertile lands to the mega dam project is “tentatively” not acceptable

Petitioner’s contention: Land for land

Appearing for Narmada BachaoAndolan, advocate Sanjay Parikh said that the farmers are left with neither land nor livelihood despite there being binding orders from the Supreme Court upholding their right to land.

  • Mr. Parikh had submitted that as per the Narmada Tribunal Award and the Supreme Court verdicts, all adult sons were indisputably entitled to five acres of cultivable and irrigable land, and any discrimination would lead to the violation of the constitutional rights of the oustees.

Detailed hearing

CJI agreed for a detailed hearing on January 19thafter government sought authorities sought time for preparation

Backdrop

It should be noted that earlier the apex court had dismissed an application by the Madhya Pradesh government and the Narmada Valley Development Authority for a modification of the apex court judgments of 2000 and 2005 upholding land rights for adult sons of the SardarSarovar Project-affected farmers

  • SC Bench said that the State’s application suffered from gross delay, after having been filed several years since the Supreme Court gave its verdict on the issue.

[5] Effects of Endosulfan devastating: SC


 The Hindu

Context

Important decision on Endosulfan by SC

What has happened?

Describing the effects of Endosulfan as “devastating,” the Supreme Court has directed the Kerala government to release the entire compensation to over 5,000 victims, mostly newborns, and their families in 3 months

Bench’s directions

A three-judge Bench led by Chief Justice of India J.S. Khehar said

  • The State of Kerala can initiate legal proceedings to recover the compensation money from pesticide companies responsible for the production and sale of the highly controversial but cheap agrochemical
  • The State government can also approach the Central government

Previous SC directions

In 2011, the Supreme Court ordered the immediate ban of Endosulfan while disregarding pleas of over 150 private export companies.

  • It had said “any decision affecting human life, or which may put an individual’s life at risk, must call for the most anxious scrutiny

 What has Kerala government done so far?

Kerala has earmarked over ₹ 180 crore for the payment of compensation to victims, some of whom are terminally ill from the effects of the pesticide which was aerially sprayed on cashew plantations adjoining habitats where the victims are located

  • Compensation paid: The State has paid cash compensation ranging from ₹ 2 lakh to ₹ 5 lakh to the victims. It said the entire rehabilitation scheme, including a multi-speciality hospital, would cost over ₹ 500 crore
  • Kerala government has requested centre to spare Rs 486 crore

Read More: The Hindu article on devastation caused by Endosulfan


Editorial/OPINION [The Hindu]


[1] Taking ‘Cold Start’ out of the freezer?


The Hindu

Context

General BipinRawat’s reference to Cold Start raises vital questions about what he means by the phrase and whether he was authorized to speak on the matter by the government.

What has happened?

Gen Rawat, the new army chief, in an interview given to India Today, has acknowledged the existence of army’s Cold Start strategy or doctrine

 Military doctrine

A military doctrine helps standardize operations, facilitating readiness by establishing common ways of accomplishing military tasks. Its objective is to foster initiative and creative thinking and links theory, history, experimentation and practice.

 What is Cold Start doctrine?

Cold Start is a military doctrine developed by the Indian Armed Forces for use in a possible war with Pakistan.

  • The main objective of the Cold Start Doctrine is to launch a retaliatory conventional strike against Pakistan inflicting significant harm on the Pakistan Army before any international community could intercede, but not in way Pakistan would be provoked to make a nuclear attack
  • Cold Start Doctrine was developed as the limitations of the earlier doctrine – Sundarji Doctrine – was exposed after the attack on the Indian Parliament

Crux of cold start

  • Pakistan must not enjoy the luxury of time. Cold Start aims for eight “Battle Groups”, comprising independent armoured and mechanised brigades that would launch counterattacks within hours.
  • These Battle Groups will be fully integrated with the Indian Air Force and naval aviation, and launch multiple strikes round the clock into Pakistan.
  • Each Battle Group will be the size of a division (30,000-50,000 troops) and highly mobile unlike the strike corps.
  • Ominously for Pakistan, the Battle Groups will be well forward from existing garrisons. India’s elite strike forces will no longer sit idle waiting for the opportune moment, which never came in the last wars
  • Although its operational details remain classified, it appears that the goal would be to have three to five Battle Groups entering Pakistani territory within 72 to 96 hours from the time the order to mobilise is issued
  • Also, rather than seek to deliver a catastrophic blow to Pakistan (i.e., cutting the country in two), the goal of Indian military operations would be to make shallow territorial gains, 50-80 km deep, that could be used in post-conflict negotiations to extract concessions from Islamabad
  • Cold Start also works to undermine the much smaller Pakistani economy. According to the Pakistani media, the threat of the Indian Cold Start doctrine and increase in India’s defence budget has prompted the Pakistan government to sharply increase its defence budget, further increasing the strain on that country’s fragile economy.

Beauty of cold start

The beauty of Cold Start is it may never have to be used. It screws with the Pakistani military’s mind and forces the generals to spend time and scarce resources on finding ways to stop an Indian blitzkrieg

What if Pakistan uses tactical nuclear warheads on Indian armed columns progressing towards its cities under Cold Start?

If at all Pakistan uses tactical nuclear warheads on Indian armored columns thundering towards its cities, it would end up devastating its own Punjabi heartland. Most Pakistani cities are close to the border and would become uninhabitable while India would lose only a small part of its army

Gist of Cold start

In simple terms, Cold Start aims at finishing off with Pakistan before our political leadership loses its nerve and starts thinking of a truce or before international mediation stops war midway.

  • In normal times the mobilization time of Indian army’s strike corps takes time as it is located in central India. Cold Start aims to reduce the time to few hours

 Genesis of Cold Start

The perceived failure to mobilise the army’s Strike Corps in a timely fashion after the December 2001 attacks on Parliament was the impetus for Cold Start

Stance of Indian government

Official stance on Cold start has been the subject of extensive debate and controversy since it was first discussed in 2004. The idea has never been formally accepted by the Indian government

How Cold Start prompts Pakistan to build upon its nuclear arsenal?

The “threat” posed by Cold Start has been repeatedly cited by Pakistani authorities as proof of India’s hostile intentions which in turn has provided a justification for Pakistan to build up its nuclear forces, both increasing the sheer size of its nuclear arsenal (which carries its own risks of theft and nuclear terrorism) and developing lower-yield nuclear warheads and short range missiles, so-called tactical nuclear weapons, which are aimed at deterring — or in the worst case, defeating — a limited Indian military incursion

Can Indian Army pull it off?

Author states that there is no public evidence that India remotely has the capability to adopt or execute such a doctrine.

  • The army simply lacks the materiel and organisation to implement the more aggressive versions of Cold Start
  • It is not at all clear, for example, that the Indian Army at present possesses sufficient superiority in numbers of troops and armored vehicles in the vicinity of the International Border to be able to overcome the Pakistan Army’s defensive and geographic advantages in a short conflict
  • Obsolete equipment and critical shortages of ammunition and air-defence assets raises serious questions about the army’s ability to implement a Cold Start-style operation at all
  • Sustaining offensive operations in Pakistan requires joint operations with the air force. Not only does the Indian Air Force lack the kind of close air support capability Cold Start would require, but army-air force cooperation is marred by inter-service dysfunction.

 Author’s contention

Author points out that,

  • Reviving cold start may markedly escalate tensions in bilateral relations with Pakistan without necessarily delivering a clear benefit, since there is still no evidence that India has the required capabilities to implement anything resembling Cold Start.

Conclusion

Author concludes by saying that it is time for both the army and the government to clarify what precisely its conventional doctrine is by identifying its operational and strategic objectives and how it fits into India’s larger strategy to deter major militant attacks on the homeland.


[2] Mind the gender gap


The Hindu

Context

Despite the successes, better implementation and planning are needed to ensure that these policies percolate right down to the last woman in the most remote parts of the country.

Issue: Addressing gender disparity via Gender Responsive Budgeting (GRB)

Gender equality

Justifying her stance that the world is slowly recognising the importance of gender issues, author directs our attention to the fact that Gender equality is one of the 17 goals amongst the Sustainable Development Goals, to “transform our world”.

  • Moreover, women safety and empowerment were two out of many core issues around which the 2014 LS elections in India were fought

Budgetary concerns

Author states that the lack of targeted resources is often stated to be the biggest reason behind the sluggish progress in furthering the gender agenda. Therefore, it is important that India’s budget priorities reflect its commitment to invest in women and girls.

Problems

Here are few of the recognised challenges

  • Women’s declining labour participation
  • Under-representation in Parliament
  • Skewed child sex ratio
  • Prevalent gender-based violence

Scale of the problem in India

  • A poor rank: The World Economic Forum’s annual Global Gender Gap Report ranked India 87 in terms of gender equality in economy, education, health, and political representation

Gender Responsive Budgeting (GRB)

Author points out that to solve the above problems, India adopted the GRB in 2005

  • Rationale: The rationale for gender budgeting arises from recognition of the fact that national budgets impact men and women differently through the pattern of resource allocation. Women, constitute 48% of India’s population, but they lag behind men on many social indicators like health, education, economic opportunities, etc. Hence, they warrant special attention due to their vulnerability and lack of access to resources. The way Government budgets allocate resources, has the potential to transform these gender inequalities.
  • Gender-responsive planning and budgeting ensures that fiscal resources are generated and allocated in a way that affects women and men equitably

Gender Budgeting

Every annual budget since 2005 has included a statement that lists out two parts. Sixteen states have also embraced this exercise. There is

  • Part A, which reflects ‘Women Specific Schemes’, namely, those which have 100 per cent allocation for women
  • Part B, which reflects ‘Pro Women Schemes’, namely, where at least 30 per cent of the allocation is for women

GRB & improvement in indicators

Studies substantiate the positive link between GRB and improved indicators for women.

  • IMF Study: For instance, a recent International Monetary Fund (IMF) study found that States that employ GRB also show better female to male school enrolment ratios. Further, it was observed that GRB also has a positive impact on infrastructure spending

Problems

  • Declining & Stagnant allocations: Author states that in recent years the allocations have either remained stagnant or have been declining

Budget 2016-17: Author cites the 2016-17 Budget to prove her above point.

  • While the Ministry of Women and Child Development and National Commission for Women saw nominal increases, the scheme meant for implementing the Domestic Violence Act did not receive any allocation
  • Decline in ministries and departments under GRB: There was a decline in the number of ministries and departments that fall under GRB
  • Decentralization of funding under GRB: The budget also initiated the decentralization of funding in GRB, thus shifting the onus for budgeting and implementation from the Central Ministry to State counterparts. While this did empower the States to come up with women-specific policies as per their respective challenges, the obvious downside was the risk that States could choose to not prioritise gender in their budgeting

What more needs to be done?

Author states that despite successes, better implementation and planning are needed to ensure that these policies reach right down to the last woman in the most remote parts of the country.

  • More than mere symbolism: GRB must be viewed as an essential tool to tackle societal inequality that hinders progress instead of a symbolic exercise for pleasing the emerging women constituency
  • A more expansive approach: Author states that currently GRB identifies schemes that are exclusively dedicated to women. This approach has restricted the benefits of GRB to a select few schemes. A much better approach would be to look at all the existing schemes via GRB perspective.

For example:Sectors such as energy, urban development, food security, water supply and sanitation continue to operate in isolation, despite having causal interrelationships with women’s empowerment.

Way ahead

Author states that gender budgeting alone is not sufficient to tackle deep-rooted gender disparities.However, policies can be more effective if budgeting takes a broader, gendered approach which includes planning targeted interventionsand monitoring and evaluation mechanisms to ensure implementation.

  • Flexible policies: Policies should also be flexible to change based on feedback from the intended recipients
  • Incentivizing states: It would also help if the Central government could, through an incentive mechanism, encourage State governments to take up GBR as a priority in their budget layouts.

[3] Reaching out to Africa


 The Hindu

Context

Conclusion of India-Africa Forum summit

Issue: India-Africa Forum Summit

Significance of the summit

That 41 heads of state and government from 54 countries in Africa were present at the India-Africa Forum Summit in New Delhi, itself demonstrates the importance both sides attach to mutual ties.

  • The summit, which concluded on Thursday, was the largest gathering of foreign dignitaries in New Delhi since the 1983 Non-Aligned Summit.

Africa: important trade partner

Africa is an important trade partner for India.

  • Indian energy companies have assets in African countries, and New Delhi exports consumer and capital goods and medicines to the continent
  • India-Africa trade was worth almost $70 billion in 2014-15, and Indian companies invested some $30-35 billion in the continent over the past decade
    • Higher trade: Chinese trade with Africa is much higher, to the tune of, $200 billion in 2014-15.
    • Huge Chinese investment: Besides, China has invested more than $180 billion in Sub-Saharan Africa alone in areas ranging from energy to infrastructure during the period 2005-2015.

Author suggests

  • Perfecting the policy: India may not have the resources to beat the level of Chinese investments, but it can certainly do a lot more with proper policy approaches, faster project execution and improved bilateral relations.
    • Recent announcement of the $10 billion concessional credit to Africa by India is a right step in this direction
  • UNSC reforms: Author states that there’s a convergence of interest for reforming the Security Council. India’s claim is that as the second most populated country and the largest democracy in the world, it deserves a permanent seat in a reformed Security Council. India has also noted that Africa, with more than a quarter of the members of the UN, is not represented in the powerful UN body. Against this background, it is imperative for both sides to speak in “one voice” for Security Council reforms
  • Cashing in on the goodwill: Stronger ties with Africa fit into India’s traditional foreign policy setting. The goodwill India enjoys in the continent is a result of the principled anti-colonial positions the country took in the post-Independence era. India should cash in on that goodwill to build a stronger economic and political partnership with Africa in the new century.

Read More: India-Africa Forum Summit


ECONOMY [The Hindu]


[1] India opposed to inclusion of ‘new issues’ in WTO


The Hindu

Context

Ahead of a special meeting of trade ministers on the sidelines of the forthcoming World Economic Forum at Davos, India opposed attempts by some developed nations to introduce ‘new issues’ into the formal agenda of the World Trade Organisation (WTO)-level negotiations

World Economic Forum

The World Economic Forum (WEF) is a Swiss nonprofit foundation, based in Geneva

  • Brief history: The forum was founded in 1971 by Klaus Schwab, a German-born business professor at the University of Geneva. First named the “European Management Forum”, it changed its name to the World Economic Forum in 1987 and sought to broaden its vision to include providing a platform for resolving international conflicts.
  • Mission: Recognized by the Swiss authorities as an international body,its mission is cited as “committed to improving the state of the world by engaging business, political, academic, and other leaders of society to shape global, regional, and industry agendas”
  • Annual meet at Davos: The Forum is best known for its annual meeting at the end of January in Davos, a mountain resort in the eastern Alps region of Switzerland. The meeting brings together some 2,500 top business leaders, international political leaders, selected intellectuals, and journalists for up to four days to discuss the most pressing issues facing the world

Note: WEF brings out the yearly Global Competitiveness report

What has happened?

Ahead of the annual meet at the Davos, that is scheduled to take place between January 17 and 20, India has opposed attempts by some developed nations to introduce ‘new issues’ including e-commerce and investment into the formal agenda of the World Trade Organisation (WTO)-level negotiations on liberalisation of global trade.

Backdrop

India had on earlier occasions too rejected the attempts of the developed world to make such ‘new issues’ part of the ongoing Doha Round talks saying it will ‘dilute’ the ‘development agenda’ of the negotiations.


[2] Benefits of demonetisation uncertain in long run


The Hindu

Context

Short-term pain of the government’s demonetisation exercise could outweigh long-term gains that it said were still ‘uncertain.

What has happened?

Fitch, a rating agency, in a report titled, “Benefits of demonetisation are highly uncertain”, has said that the short term pain of the demonetization might outweigh the uncertain long-term gains of the move

Observations made in the report

In its report, the rating agency has said that,

  • Since demonetisation was a one-off event, people in the informal sector would still be able to use the new high-denomination notes and other options, like gold, to store their wealth
  • There are no new incentives for people to avoid cash transactions. The informal sector could soon go back to business as usual
  • There were uncertainties over the impact on the banking sector as demonetisation could also affect the ability of some borrowers, especially SMEs, to service their loans, with negative effects on bank asset quality
  • The positive impact on funding conditions will depend on deposits remaining in banks beyond the next few months. There is nothing to prevent them being withdrawn again
  • The intentions behind demonetisation were positive and in keeping with broader reform efforts, but the short-term pain might outweigh the uncertain long-term gains.

[3] H1B visa reform to increase IT firms’ margin pressure


 The Hindu

Context

IT firms’ margins will come under more pressure if the US government clears the H1B visa reform Bill — ‘Protect and Grow American Jobs Act’

Proposal

The key proposal in the Bill is to

  • Increase the salary of H1B visa holder to USD 100,000 (Rs 66 lakh) from USD 60,000 per annum The salary level that has been proposed is significantly higher than the average employee cost of Indian IT companies of under Rs 1 million (ranges between Rs 3 lakh to Rs 5 million)
  • The removal of an exemption of having a master’s degree: The removal of the exemption of possessing a master’s degree to qualify for a H1B visa if implemented will reduce the talent pool qualifying for such visas and in turn result in either increased employee cost for hiring employees with higher qualification or subcontract work, both of which would increase the cost of operations and result in lower profit margins

Backdrop

Indian IT companies generate around 55-60 per cent of the revenue from the US. The onsite proportion of revenue exceeds the offshore portion.


Indian Express


[1] Central To The Market


Indian Express

Context

Long-term investments in social sector are essential for growth, political stability.

Give it a go-through once.


[2] An autonomy policy


 Indian Express

Context

Demonetisation process raises troubling questions over the way government has treated RBI. Central bank needs to assert

A fairly simple article. It throws light on one of the many aspects of demonetization move by the government. One of those is the damage done to the autonomy of the RBI and the perceived impact on its credibility.

Why is credibility of the central bank critical?

It is critical because the stability of the economy is hinged on it and not just in the eyes of global investors and rating agencies, but also from the perspective of the entities the RBI regulates.

Conclusion

Author concludes by saying that RBI needs to reclaim the space vital to health of the institution.


Live Mint


[1] Time to revamp the tax administration


Live Mint

Context

The tax department will now have to mine a vast volume of data to zero in on accounts that have been used to deposit unaccounted cash.

Issue: Demonetization’s aftereffects

Costs & benefits

Author states that the cost and benefits of the demonetization are still being debated

  • Costs: In terms of costs, economic indicators such as auto sales and purchasing managers’ indices indicate that economic activity has been hit by the cash crunch. However, the data on tax collection suggests that the impact could be limited
  • Benefits:When it comes to benefits, assessing the real gains in terms of original intended purpose of the move i.e. to attack the black money stored in cash, would be a tricky process. And the burden of it will fall on a tax administration that is ill-equipped for it
    • Success of the move: Author states that the success of demonetization in terms of arresting black money would depend on the number of old notes not returned to the banking system because,
      • Such notes reflect the black money that couldn’t be laundered or couldn’t be deposited into banking system on account of it being illegal

Note: It should be noted here that above fact doesn’t mean that all the notes that have returned to banking system are not a part of black money

Difficulties before ta administration

Author states that it will now be the responsibility of the tax administration to sift through volumes of data to detect unaccounted deposits made in the bank accounts during the demonetization exercise. This will not be easy because,

  • Increase in workload and prospective litigation: It will substantially increase the workload and can lead to litigation
  • Pressure on tax infrastructure: The department will have to handle the entire exercise with care and avoid causing discomfort to honest taxpayers. This will put enormous pressure on the existing capability and infrastructure of the tax department

Existing situation

A recent Mint report noted that

  • Pending cases: About 390,000 direct tax cases are pending across various forums and an internal committee has suggested that the department should reduce scrutiny to give more attention to litigation management

Addressing tax evasion

Author state that without addressing the problem of tax evasion, any attempt to broaden the tax base will be futile. He suggests,

  • Enhancing tax administration’s capability: Government must work on a medium-term strategy to enhance the capability of the tax administration
  • Big Data analytics: Author suggests using big data analytics like using data generated by the consumption patterns of individuals to identify tax evasion
  • Boosting compliance: Simplifying the tax structure and lowering tax rates would help boost compliance.

Reducing generation of black money

  • Reforming laws: The government will simultaneously need to work on laws and regulations to reduce the generation of black money in the system. For instance, as has been noted by several experts, high stamp duty in real estate encourages under-reporting, which results in the creation of black money
  • Political finance: Bringing transparency to political funding and financing will also help in reducing the generation of black money.

Conclusion

Author states that government has taken the various steps to deal with black money but if it is to build on any of the benefits that have accrued so far, it must make the structural changes to the tax administration needed to minimize the generation of black money and make detection of tax evasion an ongoing process.


[2] Demonetisation and budgets


Live Mint

Context

All in the mind: ArunJaitley will soon be presenting the 2017-18 budget and his well-laid plans may have to incorporate demonetisation-induced changes.

Article speaks about the prospective announcements that could be made during the annual budget

Give it a go-through.


 

Categories
9 PM Daily NEWS Brief

9 PM Daily Current Affairs Brief -6th January 2017



  • Front Page / NATIONAL [The Hindu]

  1. NGT raps Environment Ministry
  2. Ban on import of exotic skins
  3. Be mindful of speedy justice: HC
  4. SC asked to resolve conflict over ‘rape’ definition in two laws
  5. How will EC decide on the party symbol row
  • Editorial/OPINION [The Hindu]

  1. Reading between the lines
  2. Keeping the streets safe
  • ECONOMY [The Hindu]

  1. Export infrastructure scheme on the anvil
  2. ‘Repayment of micro loans hit by note ban’
  3. New norms likely for top PSU bank posts
  • Indian Express

  1. We are all accountable
  2. Let the budget be
  • Live Mint

  1. How to go about chasing black money
  2. Charting our artificial intelligence future

Click here to Download 9 PM Daily Current Affairs Brief PDF (6th Jan. 2017)

Front Page / NATIONAL [The Hindu]


[1] NGT raps Environment Ministry


The Hindu

Context

A Bench headed by NGT chairperson Justice Swatanter Kumar said that the MoEF had not “applied its mind” while amending a notification published on December 9, 2016, exempting construction projects from the process of environment impact assessment (EIA) and prior environmental clearance.

What had MoEF done?

The MoEF, in a recent notification, had exempted real estate projects from obtaining prior environmental clearance.

  • It had even put in a “self-declaration” clause for smaller projects (less than 20,000 sqmetres). For bigger projects, the environmental clearance (EC) and building permission would be given by urban local bodies as part of an “integrated format”.

Backdrop

The tribunal was hearing a plea filed by the Society for Protection of Environment and Biodiversity, which sought directions for the notification to be quashed on the ground that it contravened provisions of the EIA notification, 2006, and the Environment Protection Act, 1986.

  • Allegation: The plea alleged that the notification tried to “circumvent” the EIA Notification, 2006, in the name of “ease of doing business”.

Earlier, the green panel had refused to stay the December 9 notification and issued notices to the Ministries of Environment and Forests and Urban Development, seeking a reply before January 4.

What is Environment Impact Assessment (EIA)?

It is the process by which the anticipated effects on the environment of a proposed development or project are measured. If the likely effects are unacceptable, design measures or other relevant mitigation measures can be taken to reduce or avoid those effects.


[2] Ban on import of exotic skins


The Hindu

Context

In a landmark decision that will spare the lives of tens of thousands of animals from the exotic leather industry, the Directorate General of Foreign Trade has banned the import of skins of reptiles and fur of minks, foxes and chinchillas.

Issue: Cruelty to animals

What are animal rights bodies saying about the decision?

Animal rights bodies have hailed the decision by the Centre to ban such imports, saying that the country is now emulating other nations across the world in adopting “cruelty-free” alternatives to exotic skins

Backdrop

The notification issued on January 3 comes in the wake of campaigning for a ban by People for Animals (PFA), Humane Society International/India (HSI/India) and People for the Ethical Treatment of Animals (PETA).

  • Union Cabinet Minister of Women and Child Development wrote to the Minister of State (Independent Charge) for Commerce and Industry on banning import of exotic skins
  • The Ministry of Environment and Forest and Climate Change, and the Animal Welfare Board of India had supported the ban proposal

[3] Be mindful of speedy justice: HC


The Hindu

Context

Delhi High Court observed that “courts, while endeavoring to deliver speedy justice, must not hand out hasty decisions without any concern for justice” and that docket explosion is a problem for the judicial system to contend with but does not concern the individual litigant who comes to court seeking justice.

A pretty straightforward article. It elaborates on the concern of Delhi HC that speedy justice doesn’t mean handing out hasty decisions which might lead to aggravation of justice.

Give it a go-through once


[4] SC asked to resolve conflict over ‘rape’ definition in two laws


The Hindu

Context

An exception to Section 375 (rape) in the IPC allows a man to go scot-free despite having sex with his 15-year-old ‘wife’.

Backdrop

In a petition before a Bench led by Chief Justice of India J.S. Khehar, the BachpanBachaoAndolan, an organisation run by Nobel Laureate Kailash Satyarthi, said an estimated 47 per cent of children in India were married off before they turned 18, according to the United Nations. It further said that,

  • IPC condones rape: The IPC condones the rape of a 15-year-old by her husband despite the fact that the more recent Protection of Children from Sexual Offences Act (POCSO) of 2012 qualifies those aged below 18 as ‘children’

 Penal provisions in POCSO

POCSO has specific penal provisions against ‘penetrative sexual assault’ and ‘aggressive penetrative sexual assault’ on children below 18.

  • Section 6 of the Act enunciates the punishment for aggravated penetrative sexual assault as rigorous imprisonment of not less than 10 years to life imprisonment. Mr. Satyarthi wants the apex court to clear the anomaly in law. The IPC terms children as those aged under 15 years while POCSO terms children as those aged under 18.

The Chink

Despite being a child by definition (under the age of 18), provisions of POCSO are not applied. Reason: The benefit of a Special Act (POCSO) is not afforded to children when they are in married relationship but over the age of 15. Therefore, a child’s status as a child till she attains the age of 18 is denied to her once she is forcefully or otherwise wed.

Simple explanation

  • Problem with POCSO: Under POCSO, children under age of 18 years are protected but if a child is wed or forcefully married then provisions of POCSO do not apply.
  • Problem with IPC: Under IPC, anyone of 15 years of age or above 15 years of age is not deemed to be a child.

Why this petition?

Penal provisions for child rape are stricter. Hence, the petitioner wants the provision under IPC to be amended and age be increased to 18 years of age.

Directions by the SC

The apex court directed the government to address the issue within four months. The Bench asked Mr. Satyarthi to approach the court on the same grounds for immediate resolution if he is not satisfied with the government’s response.


[5] How will EC decide on the party symbol row


 The Hindu

Context

The Election Symbols (Reservation and Allotment) Order, 1968 empowers the EC to recognise political parties and allot symbols. Under Paragraph 15 of the Order, it can decide disputes among rival groups or sections of a recognised political party staking claim to its name and symbol.

Article is a straightforward read presented in a simple question and answer format.

Give it a go-through once 


Editorial/OPINION [The Hindu]


[1] Reading between the lines


The Hindu

Context
The Supreme Court verdict on electoral malpractice ensures that future legal challenges to election victories based on identity politics will walk the fine line of text, context and subtext.

Article talks about the recent judgement of SC, specifically the Abhiram Singh v. C.D. Commachen, wherein it was held that an appeal for votes during elections on the basis of religion, caste, race, community or language, even that of the electorate, will amount to a ‘corrupt practice’ and call for disqualification of the candidate

Note: This issue has already been covered in proper detail in the 9pm Brief dated 4th January, 2017. Any new point, if present in the article, has been included here

Minority judgement
• Author states that the minority judgement pointed out that a broad or purposive interpretation might fall afoul of Article 19(1)(a) of the Constitution
• It further cited that departing from a literal or strict interpretation would mean unsettling the law accepted over several decades and that the Supreme Court had no such strong reason to do so

The rationale behind including the word “his” in RP Act
Author states that the rationale behind the addition of the word “his” in the section 123 (3) of RP Act was to prevent an electoral candidate to create enmity between two communities or vilification of another language.


[2] Keeping the streets safe


 The Hindu

Context

There is the other factor of inadequacies of police leadership that have become glaring over the years

Issue: Recent molestation incident in Bengaluru on New Year’s Eve & consequent apathy displayed by Bengaluru police in tackling the entire situation

What could have been done?

The local police stations could have possibly made an assessment late in the afternoon so that extra policemen could have been directed to localities where the crowds were pouring in. There was therefore an element of failure on the part of city police intelligence

What should be done?

  • Restructuring existing police arrangements: Author states that what is required now is to restructure existing police arrangements for special occasions such as New Year celebrations

 Why police didn’t use force against anti-social elements?

Author states that police were reluctant to use force against anti-social elements. Reasons could be,

  • A long chain of command: Unless specific orders are given from the commissioner itself, cops shy of using strong methods

Reason: The cause for above state of affairs is the host of judicial enquiries and complaints against police. Even if government uses force, the opposition makes an issue out of it, in spite of the fact that the ground situation warranted such an action

Leadership deficit

A weak leadership: Author states that the police looks up to Chief minister or Home minister of a state for even routine field decisions. Even if there is a CM who stays away from field affairs, a weak DGP or Police Commissioner takes no chances. Granting more autonomy to police is futile in the presence of such hesitant DGPs

Author suggests

  • Public pressure: it is only strong public opinion that can bring a sea change to the styles of policing. In the Bengaluru incidents, the citizenry has a significant role to play by bringing enough pressure on the government to identify the accused and bring them to book. If they do not rise to the occasion, not much will happen.
  • Sensitizing the police: Day-to-day interaction on the subject between the higher echelons and policemen at the grass-roots level will help. Senior police officers need to visit stations and talk to the constabulary who actually are at the ground level when unruly incidents happen. 

ECONOMY [The Hindu]


[1] Export infrastructure scheme on the anvil


The Hindu

Context

The Centre will tie up with the States to soon roll-out a new scheme called ‘TIES’ — or Trade Infrastructure for Export Scheme — to boost export infrastructure

Government’s rationale

Since most States wanted a Central scheme that supports export infrastructure, government is formulating a scheme to provide financial support and supplement the efforts of States to create export infrastructure.

Road quality

Upgrading Indian roads carry nearly 65 per cent cargo against the global trend where railway is the major contributor. Therefore the States should focus on improving the last mile connectivity of major exporting hubs to Inland Container Depot/Ports. Quality of roads including their load bearing capacity should be upgraded for smooth transit of export goods.

Why state should co-operate in setting up of common facilities like testing labs?

Pointing out that about 150 Sanitary &Phyto-Sanitary (SPS) measures (or norms on food safety and animal & plant health standards) and a similar number of Technical Barriers to Trade (TBT) notifications (including mandatory and voluntary standards) were being issued by World Trade Organisation-member countries each month. Around 50-60 per cent of these measures have the potential to impact India’s trade

Therefore, the States should cooperate with the Centre for setting up common facilities like testing labs and training institutes as well as to ensure packaging and storage support to the Indian industry.

Present situation

So far only 17 States (of the 29 States and seven Union Territories in the country) have prepared their export strategy

 Need to diversify

There is a need to diversify our services exports. Areas like medical tourism, nursing and healthcare, education, audio-visual media have an excellent potential that can be harnessed. For this, we need to develop the right competencies like language skills for the East and North East Asian markets

Logistics Performance Index

Meanwhile, the Centre has decided to soon bring out a Logistics Performance Index to rank states on steps taken to facilitate trade and improve logistics.

  • North-East Corridor: Measures in the pipeline include expediting the proposal for a north east corridor to improve connectivity with south East Asian countries and exports to that region

[2] ‘Repayment of micro loans hit by note ban’


The Hindu

Context

CRISIL study showed that 9 per cent of micro enterprises are facing trouble servicing debt and paying salaries and unorganised players are expected to suffer most due to lower growth expectations.

Give the article a go-through once


[3] New norms likely for top PSU bank posts


 

The Hindu

Context

The Banks’ Board Bureau is working to ensure that leadership roles in state-run banks would only be given to those with at least six years of service left, in order to ensure accountability of their actions.

What is Bank Board Bureau?

Banks Board Bureau is an autonomous body of Union Government of Indiatasked to improve the governance of Public Sector Banks, recommend selection of chiefs of government owned banks and financial institutions and to help banks in developing strategies and capital raising plans.

Article details the proposed steps to increase accountability in the public sector banking system.

Proposed measures

  • Ensuring accountability: An attempt will be made to introduce accountability in the system, to ensure that you appoint a whole time director or a CEO (chief executive officer) at an age where he has got a minimum of six years more to go in the institution so that he can be held accountable for the decision
  • Incentives: From the next financial year, introduction of bonuses, E-sops, and performance linked packages could happen. The idea is to provide monetary and non-monetary incentives to attract professionals. These incentives would apply to positions across all levels, not just to the middle and senior management.
  • Running the banks: People from diverse fields of expertise would be roped in to be the members of the Board Bureaus of Public Sector Banks (PSBs). It would be ensure that these Boards run the banks.

Read More: Major Overhaul of banking system, Bank Board Bureau 


Indian Express


[1] We are all accountable


Indian Express

Context

Blame the nation as a whole for the poor implementation of demonetisation.

Article is pretty straightforward and a light read. Author has stated that if demonetization has failed it is not the sole failure of the government but also our own.

Give it a go-through once


[2] Let the budget be


 Indian Express

Context

Opposition to advancing the Union budget on account of assembly elections is misplaced

What has happened?

A united Opposition has approached the Election Commission (EC) seeking postponement of the presentation of the Union Budget for 2017-18 till the completion of polls to the five state assemblies, for which the schedule has already been announced.

Doling out sops

The primary argument given by these parties is that the government would use the budget, which it wants to present on February 1, to dole out various sops to “allure” voters while these polls are held between February 4 and March 8.This, they say, would give an unfair advantage to the ruling party at the Centre.

No evidence

Author suggests that there is no empirical evidence of such fickle voter behavior so as to be swayed by populist schemes and announcements

 Right to make announcements

Author presents us with a question that,

Can a popularly elected government at the Centre be denied the right to make announcements, populist or otherwise, during its tenure just because of state-level elections?

Policy paralysis

It is known that when Model Code of Conduct is in place, government cannot make any new announcements and governance comes to a standstill. So, author presents us with a thought provoking question,

Should policy paralysis for these months be a prerequisite for the holding of free and fair elections? Surely, this is not what the drafters of our Constitution had in mind. 


Live Mint


[1] How to go about chasing black money


Live Mint

Context

The focus of any sustainable reform of the taxation structure must be on reducing flows of tax evasion, not going after existing caches of black money.

Issue: Tackling the menace of black money

Focus on the flow

In the first paragraph, author states that the flow of tax evasion every year is what should be the focus of any drive targeting black money, rather than the caches accumulated from past tax evasion meaning government should focus on curbing the ongoing tax evasion every year rather than paying attention towards the accumulated wealth from past tax evasion

Reason: Bcz those who had large amounts of unaccounted wealth moved to financial form of assets from physical assets like cash or gold or real estate. Loans were given to large construction companies which could not access the formal financial market.

Problem: Such companies faced problem in accessing formal credit because we have been unable to develop bond markets in the country as we should have. Even borrowers would prefer the bond market as lending rates are quite high through unofficial channels

What should be done?

Author states that Bond markets today call for a whole ecosystem, with credible rating agencies to give lenders the confidence to move into that disintermediated financial space, instead of just being risk averse and placing their savings with banks or other aggregators like the Life Insurance Corporation of India (LIC).

In between the article, author throw light at the problems being faced by mobile wallets. Article on Digital payment systems have been covered in detail in many briefs. You can refer those.

Tackling Black money

  • Utilizing existing databases: Author states that government needs to focus on big fish when tackling with the menace of black money. Utilizing already existing databases like Aadhaar and database of high-end luxury car owners, which is maintained by motor vehicle department of every state (PAN number is mandatory for such transactions) can help tax authorities to reign in the corrupt
  • Presumptive tax: Author states that presumptive tax methods can be employed as has been done by many other countries successfully.

For example: Israel:

  • For a big purchase like a yacht or a luxury car by a moneyed immigrant, there would be a presumptive taxable income estimated at some multiple of the value of the transaction
  • Restaurant owners would be taxed on a presumption of taxability based on capacity.
  • The formula was arrived at through discussions with restaurant associations on what seemed fair, and was not contestable
  • Those that did not meet the presumptive income had to pay the tax anyway, and eventually closed down
  • The presumptive tax worked as an efficiency incentive. Most of all, these methods are survey-based and formulaic, and thus prevent tax terrorism
  • Expenditure on high-end weddings: Author points out that the expenditure on high-end weddings can be tracked via purchase and lease of devices utilized in such weddings and the amount of electricity consumed from the grid.

Solution:A simple administrative requirement for PAN numbers attached to electricity dues or leasing of generators would have led to higher revenue for both the income-tax department and power distribution companies.

Conclusion

Author concludes by saying that unless our taxation system are reformed, there is nothing demonetization can do for tax revenue

Read More: Presumptive tax


[2] Charting our artificial intelligence future


Live Mint

Context

In the great software of the universe, we will remain a beautiful bug, and AI will increasingly become a normal feature.

Give it a go-through once