Daily Current Affairs

Prelims Prominence - October 10, 2017

Economy

GST Council to rank companies on tax payment tack record

Why -

  • This ranking will enable businesses to judge how likely a material or service supplier will default on its tax payment obligations which could result in blockage of tax rebates if these items are sourced from them.

Why this ranking system?

  • The ranking system is being worked out as a solution to complaints from companies that the tax rebates due to them are getting blocked for no fault of theirs because their suppliers who charged tax-inclusive prices have not remitted taxes to the government.
  • In the previous tax regime, there had also been many instances of fraud where fake invoices from vendors have been used to claim refund.

Flip side of the ranking system

  • While it will facilitate a company to know the compliance level of its vendors, it is possible that businesses that have not paid certain taxes due to genuine alternative interpretation of law may get a poor score.
  • It is unfair to place the responsibility of good behaviour of the supplier on the buyer, who unlike the government, has no enforcement powers other than approaching a court of law.
  • It is been suggested that the ranking system should only capture defaults in payment of taxes that is collected from customers.
  • The GST compliance rating system, for which an enabling provision has been made in section 149 of the Central GST Act was not implemented at the time of launching the new tax system from 1 July as the cycle of tax return filing is yet to get stabilized.

GST council constitutes GoM to review GST Composition Scheme

Committee’s role

  • It will examine steps to make it more attractive as only 15.50 lakh businesses out of total 98 lakh have registered under GST regime opting for composition scheme
  • . Businesses with turnover of up to Rs. 1 crore can opt for composition scheme and pay taxes in range of 1-5% and file returns quarterly.
  • It will look into whether turnover of exempted goods can be excluded from total turnover threshold for levying tax under scheme.
  • It will examine whether scheme can be extended to taxpayers dealing in inter-state supplies of goods and whether the manufacturers opting for it can be given the benefit of input tax credit.

Composition scheme

  • It is an alternative method of levy of tax designed for small taxpayers whose turnover is up to Rs 75 lakh (Rs 50 lakh in case of 8 north-eastern states and hilly state of Himachal Pradesh).
  • Its objective is to bring simplicity and reduce compliance cost for small taxpayers.
  • It is optional under which manufacturers other than those of pan masala, tobacco and ice cream products have to pay 2% tax on their annual turnover.
  • The tax rate is 5% for restaurant services and 1% for traders.
  • As per Central GST Act, businesses are eligible to opt for composition scheme if person is not engaged in any inter-state outward supplies of goods and not into making any supply of goods through e-commerce operator who is required to collect tax at source.
  • While regular taxpayer has to pay taxes on monthly basis, composition supplier is required to file only one return and pay taxes on a quarterly basis.
  • Composition taxpayer is not required to keep detailed records that normal taxpayer is supposed to maintain.

Government Schemes

Government launches Intensified Mission Indradhanush

  • The Union Ministry of Health and Family Welfare has launched Intensified Mission Indradhanush (IMI) to accelerate full immunization coverage to more than 90% by December 2018.
  • Through this programme, Government aims to reach each and every child under two years of age and all those pregnant women who have been left uncovered under the routine immunisation programme.

Intensified Mission Indradhanush

  • IMI programme aims at reducing maternal and child mortality by reaching out to each and every child under two years of age and all pregnant women who have been left uncovered under routine immunisation programme.
  • Its focus is on improving immunization coverage in select districts and cities to ensure full immunization to more than 90% by December 2018.
  • IMI will provide greater focus on urban areas and other pockets of low immunization coverage. ‎IMI drive will be spread over 7 working days starting from 7th of every month.
  • Special strategies have been devised for effective implementation of IMI which includes inter-ministerial and inter-departmental coordination, action based review mechanism and rigorous monitoring of the programme.
  • It devises convergence mechanism of ground level workers of various departments like ANMs, Anganwadi workers, ASHAs, Zila preraks under National Urban Livelihood Mission (NULM), self-help groups for better coordination and effective implementation of the programme.
  • Moreover, it also has appreciation and awards mechanism to recognize districts reaching more than 90% coverage.
  • The criteria under it, include best practices and media management during crisis.
  • Certificate of Appreciation will be given to acknowledge contribution of partners/Civil Society Organization (CSOs) and others.
  • Implementation of ‎IMI will be closely monitored at the district, state and central level at regular intervals.
  • ‎It would be reviewed by Cabinet Secretary at National level and will be monitored at highest level under a special initiative Proactive Governance and Timely Implementation (PRAGATI).

ENLIGHTEN about Mission Indradhanush

  • Mission Indradhanush was launched in December 2014.
  • It aimed to fully immunize more than 90% of children under age of 2 years, as well as all pregnant women, against seven vaccine preventable diseases.
  • These diseases are diphtheria, whooping cough, poliomyelitis, tetanus, tuberculosis, measles and Hepatitis B.
  • In addition vaccines for Japanese Encephalitis and Haemophilus influenzae type B are also being provided Rubella, Injectable Polio Vaccine Bivalent and Rotavirus are also provided in selected states.

VAJRA Scheme: Government receives 260 applicants for visiting researcher programme

  • The Union Ministry of Science and Technology’s Visiting Advanced Joint Research (VAJRA) Faculty Scheme has received 260 applications from foreign scientists of whom 70 will be shortlisted.

Enlighten about it

  • The Visiting Advanced Joint Research (Vajra) faculty scheme is a dedicated programme for foreign scientists and academicians, with emphasis on non-resident Indians, persons of Indian origin and overseas citizens of India to work as adjunct faculty in the government-funded academic and research institutions.
  • Under this scheme, scientists or senior researchers abroad – of Indian origin or otherwise – can collaborate with faculties here.
  • Under the scheme, foreign researchers would receive endowments at par with those in their own country

Government launches sovereign gold bond scheme 2017-18 – Series-III

  • The bonds will be sold through banks, Stock Holding Corporation of India Limited, designated post offices and recognised stock exchanges namely the NSE and BSE.

Sovereign Gold Bonds

  • These bonds were launched under umbrella sovereign gold bond scheme in November 2015 with an objective to reduce demand for physical gold and shift part of domestic savings, used for purchase of gold, into financial savings.
  • It also aims to ease pressure on the country’s trade balance as India’s imports are dominated by crude oil and gold by converting gold into a productive asset.

Features of Sovereign Gold Bonds

Denomination

  • The bonds are denominated in units of one gram of gold and multiples thereof. Minimum investment in bonds is one gram. These bonds will be available both in demat and paper form.

Maximum limit

  • It will be of 4 kg for individual and HUF (Hindu Undivided Family) and 20 kg for trusts and similar entities per fiscal notified by government from time to time.

Issue price

  • It will be fixed in Rupees on basis of simple average of closing price of gold of 999 purity published by the India Bullion and Jewellers Association Limited for the last 3 business days of week preceding the subscription period
  • Issue price of the gold bonds will be 50 rupees per gram less for those who subscribe online and pay through digital mode.

Tenure

  • It is of 8 years period with exit option from 5th year can exercised on the interest payment dates.

Collateral

  • The bonds can be used as collateral for loans. The loan-to-value (LTV) ratio will be set equal to ordinary gold loan mandated by RBI

Tax treatment

  • The interest on Gold Bonds shall be taxable as per provision of Income Tax Act, 1961 (43 of 1961). The capital gains tax on it has been exempted.

Government launches Pradhan Mantri Gramin Digital Saksharta Abhiyan in Gujarat

  • Prime Minister Narendra Modi launched Pradhan Mantri Gramin Digital Saksharta Abhiyan (PMGDISHA) at Gandhinagar in Gujarat.
  • PMGDISHA is expected to make 6 crore rural households digitally literate by March 2019, making it one of the largest digital literacy programmes in the world.

Pradhan Mantri Gramin Digital Saksharta Abhiyan

  • PMGDISHA aims at imparting digital literacy to citizens in rural areas free of cost.
  • It aims to provide access to information, knowledge, education, and healthcare.
  • It will create avenues for livelihood generation and financial inclusion through digital payments and help bridge the digital divide.
  • It is expected to reach around 40% rural households in country by March 2019.
  • Under it, people in rural area will be trained to operate a computer, tablet, smartphones, etc and how to access the Internet, government services, undertake digital payment, compose e-mails, etc.
  • The marginalised sections of society like SCs/STs, Minorities, BPL familiers, differently-abled (divyangs) all will be a part of this scheme.

Environment & Ecology

Mapping the not so normal monsoon

Monsoon normal in 2017

  • IMD deems the season ‘normal’ if the all-India quantum of rain falls within a 10% range of its long-period average of 887.5 mm
  • The 2017 monsoon fell short of the number only by 5%
  • But there can be many shades of grey to an officially ‘normal’ monsoon

Another bumper year?

  • More than the quantum of rainfall that is dumped on the sub-continent during the four critical months, it is the spatial and temporal distribution of rains that make or break crop prospects
  • On this score, the 2017 monsoon has been quite whimsical

Patchy distribution

  • For the purposes of measuring the spatial spread of rainfall, the IMD categorises India into 36 meteorological sub-divisions
  • West Bengal, Uttar Pradesh and Punjab account for a lion’s share of kharif rice production. But this year’s monsoon has been 29% below normal in Uttar Pradesh and 22% short of normal in Punjab
  • Madhya Pradesh, which is a critical growing region for the rabi wheat crop, has seen a deficiency of 20%. This will also impact pulses output.

Weak ending

  • Rainfall in the last two months of the south-west monsoon dictate reservoir storage and soil moisture
  • This sets the tone for the planting of the winter crops - India’s wheat and gram harvest,coarse cereals f urad and moong
  • Oilseeds such as rapeseed and mustard, sunflower and safflower are also predominantly winter crops

Health Care Sector

Tuberculosis – New drug approved by Health ministry

  • The technical group on tuberculosis in the ministry of health has given approval to ‘Delamanid’
  • Health Ministry will initially conduct a trial with this drug on over 400 patients in a controlled manner
  • New Drug will be included in the Revised National TB Control Program (RNTCP) from this month in parallel to Bedaquiline, another therapy

Reason behind this approval

  • Due to the increasing number of multi-drug resistant (MDR) and extensive drug resistant
  • Government’s expectations from the ‘Delamanid’
  • Delamanid has proved effective in many clinical trials in South Africa and Japan
  • Taking a cue from this, government are expecting that over 70-80% patients will respond to tuberculosis treatment

Bedaquiline

  • Bedaquiline, sold under the brand name Sirturo, is a medication used to treat active tuberculosis
  • It is specifically used to treat multidrug-resistant tuberculosis (MDR-TB)
  • It should be used along with at least three other medications for tuberculosis
  • It is used by mouth

State Specific

Odisha hikes compensation for deaths caused by wild animals

  • The State government has decided to increase the ex-gratia compensation for human deaths caused by wild animals to Rs. 4 lakh from the existing Rs. 3 lakh
  • ‘Ex gratia’ means ‘done from a sense of moral obligation rather than because of any legal requirement’
  • Why: Because the man-animal conflict is on rise in Odisha

The reasons behind Man-Animal conflicts

  • According to the State Forest and Environment Department, increasing bioticand anthropogenic pressure on forests are affecting the biodiversity and the habitat as a whole
  • As a result animals stray out of the forest towards human habitation in search of food, water or use these areas as routes to access other wilderness area to meet their ends

Election Reforms

Simultaneous polls feasible –SC Elections Commission on simultaneous elections

  • Election Commission is favouring simultaneous elections
  • But it said, all political parties need to be brought on board before such an exercise was carried out

Why is EC favouring this?

  • Simultaneous elections will give enough time to the incumbent government to formulate policies and implement programmes continuously for a longer time
  • It will also decrease the interruptions caused by the imposition of the model code of conduct

How can it be possible?

  • The step would be possible only when necessary changes were carried out in the Constitution and the Representation of the People Act
  • Existing legal and constitutional provisions mandate that elections are to be held within six months ahead of the end of the term of an Assembly or the Lok Sabha

Noble Prize -2017- Economy

Richard H. Thaler wins 2017 Nobel Prize in Economic Sciences

  • American economist Richard H. Thaler has won 2017 Nobel Prize in Economic Sciences for his contributions to behavioural economics. He will receive 9-million-kronor ($1.1-million) prize.
  • Thaler is Professor of Behavioral Science and Economics at University of Chicago Booth School of Business. He is co-author (with Cass R. Sunstein) of global best seller Nudge (2008) in which concepts of behavioral economics are used to tackle many of society’s major problems.

Mission Ganga

NMCG approves Eight Projects under Namami Gange Programme

Approved projects include the following

  • Pollution abatement works
  • Sewage management- The project has been approved in Ganga River at Bally in West Bengal for construction of 40 MLD STP under Hybrid Annuity based PPP model among other works.
  • Treatment of drains using bio-remediation technology
  • Pollution inventorization, assessment and surveillance Project

National Mission for Clean Ganga (NMCG)

  • NMCG is implementation wing of National Council for Rejuvenation, Protection and Management of River Ganga (also referred as National Ganga Council).
  • It was established in 2011 as a registered society under Societies Registration Act, 1860.
  • It has a two tier management structure and comprises of Governing Council and Executive Committee.
  • Both of them are headed by Director General (DG), NMCG. Executive Committee is authorized to approve projects under mission up to Rs.1000 crore.
  • Similar to structure at national level, State Programme Management Groups (SPMGs) acts as implementing arm of State Ganga Committees.
  • This structure attempts to bring all stakeholders on one platform to take a holistic approach towards the task of Ganga cleaning and rejuvenation.

Economy/Banking

Why do we need external benchmarks while pricing loans?

  • An internal Study Group constituted by the Reserve Bank of India (RBI) has recommended that banks should set interest rates based on an external benchmark and not as per internal benchmarks as is the practice now.

What is the need for external benchmarks?

  • The present loan pricing regime, that is, the marginal cost of fund based lending rate (MCLR) or the base rate under the previous regime were both calculated based on banks’ internal factors such as cost of funds.
  • They are insensitive to changes in the policy interest rate or repo rate. Also, banks deviated in an ad hoc manner from the specified methodologies for calculating the base rate and the MCLR to either inflate the base rate or prevent the base rate from falling in line with the cost of funds.

What external benchmarks are available?

  • The study group has cited 13 possible candidates as external benchmarks including the weighted average call rate (WACR), collateralised borrowing and lending obligation (CBLO) rate, market repo rate.
  • However, the report also said that no instrument in India met all the requirements of an ideal benchmark.
  • The group has shortlisted 3 candidates from these 13 — one of which could be selected by RBI as external benchmarks after receiving feedback from all stakeholders.
  • The Study Group is of the view that the T-Bill rate, the CD rate and the RBI’s policy repo rate are better suited than other interest rates to serve the role of an external benchmark.

Energy Sector

CERA WEEK

  • Minister of Petroleum and Natural Gas Shri Dharmendra Pradhan, spoke at the welcome reception and dinner session of India Energy Forum by CERAWEEK scheduled from 8-10 October 2017 in New Delhi.
  • Following the speech he interacted with the speakers and participants of the three day International conference being organized by CERAWEEK for the first time outside Houston in a regional format.
  • The event is being hosted in collaboration with the Ministry of Petroleum and Natural Gas. Minister of Shipping and Road Transport and Highways Shri Nitin Gadhkari, and also Minster of Railways and Coal Shri Piyush Goyal, are scheduled to participate

Focus

Women Of Science

India requires a policy push, change in mindsets, for there to be more women scientists

  • Only 16 women scientists have won the Shanti Swarup Bhatnagar Award (administered by CSIR) since its inception in 1958.
  • The award is the highest research award given to a scientist, under 45 years of age, for research carried out in India.
  • For women, the childbearing age coincides with the age that requires the greatest dedication to the lab to establish oneself.
  • Women also have to deal with the “two body problem”, whereby institutions do not give faculty jobs to both partners.
  • This is slowly changing. Even then, many women in their 30s drop out of the STEM
  • The base of the pyramid never becomes wide enough to support a peak — a phenomenon called “the leaky pipeline
  • This is a global phenomenon. A 2013-14 survey of 69 science academies worldwide showed only 12 per cent of their members to be women.
  • There is also a dearth of women in leadership positions, yet another consequence of the “leaky pipeline”.
  • However, a close examination of numbers reveals a different picture. Fifty-one per cent of our early career fellows, scientists who have recently finished their PhD, are women.
  • But for the intermediate and senior fellowships awarded to scientists, there is a drastic drop — only 22 per cent of the awardees are women.

Real change requires a smaller effort

  • A change in the mindset of the people.
  • The male child who believes that girls are not good at maths (or science) will grow up to become the stalwart questioning the professional commitment of child-bearing women.
  • Girls should not be told that being an engineer or a scientist will make them less appealing
  • Real change also requires policy to push it forward.
  • Two things critical for a researcher today are a position with stability and funds for research
  • This calls for increasing the time given to women researchers who have a child early in their career to apply for tenure
  • Similarly, a full cost one-year extension should be given on research grants to women scientists who take maternity leave during the term of the grant