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Current Affairs 3 April 2017

 

NEWS

3 April 2017

Sr. No.

Topic

News

1.

GS III : SECURITY

Counterfeiting of new notes worries agencies

2.

GS III : ECONOMY- INFRASTRUCTURE

Swap terrorism for tourism, Modi tells Kashmiri youth

3.

GS II: POLITY - ELECTIONS

‘Parties' views sought on electoral bonds'

4.

GS II : POLITY - BILL/ ACT

Centre may remove cap on parent maintenance

5.

GS II : POLITY-ELECTIONS

Poll panel to buy new EVMs for 2019 elections

6.

GS II: INTERNATIONAL - MYANMAR

 

Judgment day soon for China-backed Myanmar project

7.

GS II: BILATERAL INDIA-USA

‘Foreign ownership norms a barrier'

8.

GS III: ECONOMY  POLICIES

GAAR raises issue of taxman's powers

9.

GS III: ECONOMY  BANKING

More money will not solve NPAs: Jaitley

10.

GS III: S&T - ENERGY

‘Grassoline' may power future flights

11.

GS III: S&T - ENVIRONMENT

Fungus that eats plastic may help clean environment

 


GS III : SECURITY

Counterfeiting of new notes worries agencies

  • That the new Rs. 2,000 and Rs. 500 notes have the same security features as the old Rs. 500 and Rs. 1,000 ones has the security agencies worried.
  • The "covert security features" had not been changed since 2005.
  • Water marks, security thread, fibre and latent image comprise the security features and these require several representations, evaluation and a Cabinet nod.
  • An official had said then that since the decision to introduce the new notes was taken only around May 2016, there was no time to alter the security features as the entire exercise takes between five and six years.
  • Officials have suggested now that to check counterfeiting, the security features of higher denomination notes, such as Rs. 2,000 and Rs. 500, should be changed every 3-4 years in accordance with global standards.
  • In the four months since the government announced its decision to scrap the old Rs. 500 and Rs. 1,000 notes on November 8, 2016, fake Rs. 2,000 notes with a face value of over Rs. 66 lakh have been detected by the Reserve Bank of India and the State police forces across the country.
  • The government informed the Lok Sabha that investigations were on to determine whether the security features of the new notes had been compromised.
  • The NIA had sent three fake notes for forensic analysis and the report said they were of low quality and were mostly scanned and colour copies of the original notes.
  • The report also said the notes were being printed in Bangladesh. According to the NIA, they were printed on the "security document of Bangladesh's currency paper, which said Praja Tantri Bangladesh."

 

 

 

GS III : ECONOMY- INFRASTRUCTURE

Swap terrorism for tourism, Modi tells Kashmiri youth

  • Inaugurating the country's longest tunnel of 9.28 km in Jammu, Prime Minister Narendra Modi asked Kashmiri youth to make a choice between tourism and terrorism.
  • The Chenani-Nashri tunnel, connecting the mountainous districts of Udhampur with Ramban, is an all-weather tunnel that will reduce the travel time between Srinagar and Jammu by two hours and bypass several treacherous and landslide-prone areas.
  • It has been built at a cost of Rs. 3,720 crores.
  • The Prime Minister said every Indian dreams of visiting Kashmir. "More the tourists, the better it will be for the economy. The entire country is with Jammu and Kashmir if tourism is the focus," he stressed.


 

GS II: POLITY  ELECTIONS

‘Parties' views sought on electoral bonds'

  • The government will soon launch the electoral bonds scheme to fund political parties as proposed in this year's Budget, Union Finance, Defence and Corporate Affairs Minister Arun Jaitley said on 2 April 2017.
  • The Minister said the government had sought suggestions from all parties on the contours of the scheme, including whether such bonds should be issued only during elections.
  • He stressed that the reforms to electoral funding, initiated by the government through the electoral bond scheme, and the amendments to the Companies Act introduced in the Finance Bill were aimed at giving ‘some protection to identities (of donors), expanding the constituency of donors and encouraging clean money' coming into politics.
  • Stressing that a system where large parties would get thousands and millions of supporters giving donations online would be the cleanest way, the Finance Minister said, "I have suggested it to my party to start an online campaign and get at least a million people to donate - that will be a large corpus with small donations. That's the system that President Obama followed in his first election. There are no quid pro quos and no obligations of anyone."
  • "Essentially, money will come from where money is available. As it is, corporates are giving (money to political parties) and they are giving unclean money. They are siphoning it out of their businesses in order to donate. This will at least prevent that abuse," Mr. Jaitley said about the amendments introduced in the Finance Bill that abolish the funding cap of 7.5% of previous three years' net profits under the Companies law.
  • These changes, Mr. Jaitley said, need to be seen in conjunction with the amendments to the Foreign Contribution (Regulation Act) made last year to change rules that labelled an Indian company as a foreign source of funds if it had some NRI or foreign shareholders.
  • "Now when sectoral caps have been lifted in almost every sector to 74% and 100%, you won't find ten donors in India who won't get covered by that definition. So, for instance, a telecom or tobacco company doing business in India - Indian company doing 100% business in India, but within the meaning of FCRA would be debarred," he pointed out to explain the need to widen the definition and increase the constituency of donors.
  • "Similarly, in the Companies Act, a new company can't give, a company with so much profit can't give, so each of these changes were narrowing the constituency of donors and pragmatically, if you narrow the constituency of donors, you won't have five donors left. This doesn't mean that donations won't come, it only means that donations will come in cash," the Minister said.


Electoral bonds

 

  • Electoral bonds will be issued by a notified bank for specified denominations.
  • If you are keen to donate to a political party, you can buy these bonds by making payments digitally or through cheque.
  • You are then free to gift the bond to a registered political party.
  • The bonds will likely be bearer bonds and the identity of the donor will not be known to the receiver.
  • The party can convert these bonds back into money via their bank accounts. The bank account used must be the one notified to the Election Commission and the bonds may have to be redeemed within a prescribed time period
  • While the identity of the donor is captured, it is not revealed to the party or public. So transparency is not enhanced for the voter.



GS II : SOCIAL -VULNERABLE GROUPS

Centre may remove cap on parent maintenance

  • The government is mulling bringing legislative changes to remove the monthly ceiling of Rs. 10,000 on the maintenance paid by children to parents and introduce a rating mechanism for organisations providing home care services to the elderly.
  • If the proposed amendments to the Maintenance and Welfare of Parents and Senior Citizens (MWPSC) Act, 2007 come through, the maintenance amount to be decided by senior citizen tribunals for the neglected parents will depend on their need and the economic condition of their children.
  • At present, the maintenance for a parent or senior citizen that can be ordered by the tribunal as payable by the children or relative cannot be more than Rs. 10,000 a month.
  • The MWPSC Act makes it a legal obligation for children and heirs to provide maintenance to senior citizens and parents.


GS II : POLITY-ELECTIONS

Poll panel to buy new EVMs for 2019 elections

  • The Election Commission is set to buy next-generation EVMs that will become "inoperable" the moment attempts are made to tamper with it.
  • This move comes amid claims by some parties that the machines were tampered with during the recent Assembly polls.
  • The M3-type EVMs are also equipped with a self-diagnostic system for authentication of their genuineness.
  • These will come with a public key interface- based mutual authentication system.
  • Only a "genuine" EVM - manufactured either by Electronics Corporation Of India Ltd. or Bharat Electronics Ltd. - "communicates" with other EVMs in the field.
  • The EC has decided to replace 9,30,430 EVMs purchased before 2006 as the older machines are nearing their 15-year life cycle, he said.
  • The Cabinet had also authorised the EC to vary the quantity to be ordered on BEL and ECIL based on their production capacity and performance.




GS II: INTERNATIONAL - MYANMAR

Judgment day soon for China-backed Myanmar project

  • A government-appointed commission is to soon make a recommendation on the fate of the $3.6 billion, China-financed Myitsone Dam in Myanmar.
  • The decision is a daunting test for Aung San Suu Kyi, who risks angering China, the region's economic powerhouse, if she cancels the project, or the public if she lets it go forward.
  • If her government cancels the project outright, it could have to repay some $800 million that the state-owned Chinese developer says it has already spent on the project.
  • If Myanmar offers China other dam projects in return, a compromise her government has floated, they are likely to impinge on disputed ethnic areas where they could threaten the peace talks she has championed since her political party came to power last year.
  • The Myitsone Dam is among the largest of many Chinese-financed energy and mining projects approved by the military junta that ruled Myanmar until 2011.
  • It is especially contentious because it would be the first dam to cross the Irrawaddy River, the mythic cradle of civilisation for Myanmar's ethnic Burman majority.
  • While officials said the dam would provide Myanmar much-needed cash and electricity, critics said it would cause irreparable harm to the river, destroy fish stocks downstream and displace thousands of villagers. But perhaps the most incendiary objection was that under the deal struck by the ruling generals, 90% of the dam's electricity could go to China.
  • As protests spread to Myanmar's cities, Ms. Suu Kyi had spoken out against the dam.
  • In 2011, the military-backed transitional government yielded to public pressure and suspended the project, the decision coming as a shock to Chinese officials and businessmen.
  • The Myitsone was meant to be the first and largest of seven dams planned by the Chinese developer. It would generate more power than the entire country produces now, according to some estimates, but would still not cure the country's chronic energy shortages.
  • The dam's developer, State Power Investment Corp., has already spent $800 million on feasibility and technical studies, bridges, electrical grid updates and other supporting infrastructure, a person familiar with the dam contract said. The money was borrowed from commercial banks, he said, so the cost keeps growing as the loans accrue interest.
  • Officials close to Ms. Suu Kyi have said that negotiations were under way for Myanmar to pay China, or apply the money to other projects, if the dam is not built.



GS II: BILATERAL INDIA-USA

‘Foreign ownership norms a barrier'

  • Indian regulations on foreign ownership in e-commerce, banks, insurance and other online-related services were major barriers for overseas investors, according to a report by the U.S. President Donald Trump's administration.
  • The findings were part of the report on foreign trade barriers from the Office of the United States Trade Representative (USTR). The annual report points to a list of trade irritants in 63 nations.


E-commerce:

  • "India allows for 100% foreign direct investment in business-to-business (B2B) electronic commerce, but largely prohibits foreign investment in business-to-consumer (B2C) electronic commerce transactions," according to the report.
  • Foreign direct investment is allowed in a market-based electronic retailing model, but not in the inventory-based model, it added.
  • According to the report, the only exception that was granted was to single-brand retailers. Single-brand retailers who meet certain conditions including the operation of physical stores in India may undertake to trade through electronic commerce. "This narrow exception limits the ability of the majority of potential B2C electronic commerce foreign investors to access the Indian market."


Equalisation levy

  • The trade barriers report also pointed out India's tax (6% equalisation levy) on foreign online advertising platforms was not par with the international norms and warned the levy in its current form may impede foreign trade and increase the risk of retaliation from other countries where Indian companies are doing business.
  • "India recently began assessing an ‘equalisation levy', which is an additional 6% withholding tax on foreign online advertising platforms, with the ostensible goal of "equalising the playing field" between resident service providers and non-resident service providers.
  • However, its provisions do not provide credit for tax paid in other countries for the service provided in India," according to the report.
  • The report also pointed out that the levy would result in taxes on business income even when a foreign resident does not have a permanent establishment in India or when underlying activities are not carried out in India.
  • "The current structure of the equalisation levy represents a shift from internationally accepted principles, which provide that digital taxation mechanisms should be developed on a multilateral basis in order to prevent double taxation."

 

Data storage

  • According to the USTR, the Indian requirements of storage of data within India reduce productivity, dampen domestic investment and undermine the ability of information and communications technology companies to offer cutting-edge services.
  • The 2012 National Data Sharing and Accessibility Policy, issued by the Ministry of Science & Technology, which requires that all data collected using public funds - including weather data - be stored within the borders of India, it added.
  • It also pointed out the Department of Electronics and Information Technology (DEITY) guidelines requiring cloud computing service providers to store data within India to qualify for bidding for government procurements.


Insurance sector:

  • Even though the FDI limit in insurance has been increased to 49%, the regulatory requirement for the appointment of directors and other operational requirements are a concern, it said.
  • The report also highlighted Insurance Regulatory and Development Authority's (IRDA) discussion paper that called for the compulsory public listing of life insurers that have been in operation in India for seven years or more.
  • "Such a requirement to publicly list is rare, and companies generally decide whether to undertake an initial public offering based on an analysis of company-specific facts. If implemented, this requirement would be another measure that would have a discouraging effect on foreign investors," it noted.


Banking Sector:

  • "Foreign banks are required to submit their internal branch expansion plans on an annual basis, and their ability to expand is hindered by non-transparent limitations on branch office expansion. Foreign banks also face restrictions on direct investment in Indian private banks," according to the report.



GS III: ECONOMY

GAAR raises issue of taxman's powers

  • With the government implementing its anti-tax avoidance rules from April 1, industry is concerned about the greater subjective authority being given to the tax department and how this could render transactions unprofitable.
  • The General Anti-Avoidance Rules (GAAR) are designed to prevent the avoidance of tax by taking advantage of international tax laws.
  • The rules say that if the major outcome of a transaction is a tax benefit and there is no sound business basis for the transaction, then the government can invoke GAAR and reclassify the transaction or the profits arising from it.
  • "Such rules create subjectivity. Suppose a transaction makes sound business sense but also results in substantial tax savings, then does it make them a tax evader?"
  • Similarly, Mr Jhaveri explained, there could be cases where the tax benefit accrues upfront whereas the business advantages of a transaction could accrue only with a delay. In such a case, would the transaction be treated as one conducted purely to evade tax?
  • In any case, tax experts agree that the government has included several safeguards against bullying by tax authorities, such as several layers of permissions required before GAAR is invoked.
  • It has been clarified that if the limitation of benefits (LOB) clause sufficiently addresses tax avoidance, then GAAR will not apply.
  • The LOB clause in the India-Singapore and Mauritius treaties now is relevant only for availing the 50% tax rate for two years.
  • The official clarification also said that, if at the time of sanctioning an arrangement, the court had explicitly and adequately considered the tax implications, then GAAR would not apply to such an arrangement.
  • It has also been clarified that GAAR would not apply if an arrangement was permitted by the Authority for Advance Rulings.

 

GS III: ECONOMY

More money will not solve NPAs: Jaitley

  • Recapitalisation of public sector banks by diverting the exchequer's resources from other development projects just because some rich borrowers failed to pay up their dues isn't an acceptable solution for banks' bad loan woes, Finance Minister Arun Jaitley said.
  • Stressing that the Indian political system isn't ready for privatisation of PSU banks yet, he said that the government is doing some recapitalization of banks but it's easy to suggest it as the solution for non-performing assets on their books.
  • "This effectively means that money which we are spending on irrigation, MGNREGA and poverty alleviation schemes, we have to withdraw that money and give it to the banks as the rich guys haven't paid to the banks," Mr. Jaitley said.
  • The core NPA problem, he said, concerns just 20 to 30 accounts and banks must have the decision making ability to settle those accounts.
  • The minister said that the government is working on bringing down its equity in IDBI Bank below 50%.





GS III: S&T - ENERGY

‘Grassoline' may power future flights

  • In the quest of more sustainable energy sources, scientists from Belgium have developed ‘grassoline' - a biofuel derived from grass that could one day power aircraft.
  • Researchers investigated methods that can disintegrate and treat grass until it can be used as a fuel.
  • "Right now the amount of biofuel that can be made from grass is still limited to a few drops. The current process is very expensive, and engines should be adapted to this new kind of fuel," researchers said.
  • "If we can keep working on optimising this process in cooperation with the business world, we can come down on the price. And maybe in a few years we can all fly on grass!".

 

 

GS III: S&T - ENVIRONMENT

Fungus that eats plastic may help clean environment

  • Scientists from the Chinese Academy of Sciences have identified a soil fungus, which uses enzymes to rapidly break down plastic materials, an advance that could help deal with waste problem that threatens our environment.
  • Aspergillus tubingensisis a fungus, which ordinarily lives in the soil.
  • In laboratory trials, the researchers found that it also grows on the surface of plastics.
  • It secretes enzymes onto the surface of the plastic, and these break the chemical bonds between the plastic molecules, or polymers.
  • Using advanced microscopy and spectroscopy techniques, the team found that the fungus also uses the physical strength of its mycelia - the network of root-like filaments grown by fungi - to help break apart the polymers.
  • The team found the plastic-eating fungus living in a rubbish tip in Islamabad, Pakistan.
  • Plastic does not break down in the same way as other organic materials, and it can persist in the environment over long periods of time.
  • Attempts to deal with plastic waste through burying, recycling, incineration or other methods are variously unsustainable, costly and can result in toxic by-products, which are hazardous to human health.

 


 

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