Author: Dr V
All news available date-wise and month-wise. Click on the date to revise news.
- Context: Pakistani media reports which claimed that the JIT had drawn a blank in India
- News: Pak foreign ministry statement that The visit of the JIT to India took place in the context of the cooperative approach being pursued by the Pakistan government as part of its commitment to effectively fight terrorism in all its forms
- Doublespeak: statement that the JIT was denied access to security officers who were eyewitnesses to the Pathankot airbase attack
- Importance: ininvestigation is now being seen as a key indicator of whether a more restrained and cooperative approach to handling terror will yield results not seen before
- Context: Prime Minister Ranil Wickremesinghe’s planned visit to China
- News: Sri Lankan government is inching towards an agreement to revive the Colombo Port City Project
- Why: adverse impact would be caused to marine ecology, environment and fishermen’s livelihood due to the project
- Govt response: revival of the project is linked to compliance with all the norms and regulations
- Context: India’s move to add Maulana Masood Azhar to international list of terrorist faced Chinese opposition at the UN
- Beijing’s response: they had not dismissed India’s move to bring a ban on Azhar. but as the information provided by India to the UN was inadequate, placed a ‘technical hold’— a temporary measure
- India’s accusation: China discriminating among different kinds of terrorists (think of Pak angle)
- Who is Azhar?: head of Pakistan-based militant group Jaish-e-Mohammed mastermind of Pathankot terror attacks
- Azhar was also chief organiser of the Pakistani jihadist group Harkat-ul-Mujahideen in early 90s
- What: TRAI recoomended prices will be taken as provisional prices wherever administratively (not auctioned) allocated spectrum is available
- Balance: after actual auction, the balance will be taken
- Why: because market determined price is not available at that moment
- Benefits: it would yield the exchequer Rs.1,300 crore and would also lead to better utilisation of spectrum
- What: Lending to sectors which may not get timely and adequate credit in the absence of this special dispensation
- Examples: Agriculture, SMEs, Education, Housing, Export credit, micro credit etc
- Target: 40% of total lending for domestic banks
- Criticism: one component of financial repression
- Why: contracting export month after month for more than 12 months
- What: plan to offer incentives to small exporters, SEZs, labour intensive sectors, organic food processors
- Other steps: categorization of the entire export credit given by all lenders separately under priority sector lending without riders
- Better coordination with Indian missions overseas, relaxing norms for the Export Import Bank of India (Exim Bank) and Export Credit Guarantee Corporation of India (ECGC)
- Data: exports have declined from $314 billion in FY’14 to $310 billion in FY’15 and are expected to shrink further to nearly $260 billion this year
- Importance: Double digit growth impossible without exports doing well
New estimates demand a more nuanced understanding of economic activity.
- New estimates pegged the GDP significantly higher than previous estimates.
- But this jump was not in line with other parameters of economic activity such as corporate profit growth, credit off take etc.
- The new estimation methodology is in line with global norms.
- Where increased value addition, as against an actual increase in quantity of production, leads to a higher GDP.
- This approach can work seamlessly in an economy where all value addition is tracked formally and recorded in well-codified data.
- But for a country like India, where 93 per cent of labour works in the informal sector, this method requires a more nuanced appreciation.
Setting up of an asset reconstruction company by govt is a good idea. But test will lie in giving its managers a free hand.
- It will prepare them to lend to the corporate sector as and when economic activity picks up speed.
- Non-performing assets (NPAs) and restructured loans of scheduled commercial banks have only increased over the last two years.
- They stood at over 11 per cent of total advances in September 2015.
- The idea of dipping into taxpayer money for the ARC’s equity is opposed by some on the grounds of it creating a “moral hazard”.
- But if banks and corporates are forced to pay for the mess, a state-backed ARC would bring credibility to the asset recovery programme.
- It determines a country’s subscription to the IMF, access to fund and voting rights.
- The current quota formula is a weighted average of GDP (weight of 50 percent), openness (30 percent), economic variability (15 percent), and international reserves (5 percent).
- GDP is measured through a blend of GDP—based on market exchange rates (weight of 60 percent)—and on PPP exchange rates (40 percent)
- Emerging economies want changes to the formula as part of overall reform, giving more weight to GDP at PPP and dynamic factors such as GDP growth.
- Any changes in quotas must be approved by an 85 percent majority of the total voting power.
- This gives country holding >15% quota de facto veto over quota reforms and USA holds such a veto with more than 16% quota share.
Launch of BRICS Bank and Asian Infrastructure Investment Bank, finally pushed US and developed nations to modernize their quota structure.
- International Monetary Fund has finally made country quota reforms agreed by the G20 in 2010 a reality.
- The U.S. Congress which had blocked the reforms finally dropped its veto to allow quota reform to go through.
- With this structural shift, more than 6 % of the quota, including both the Fund’s capital and voting rights, have been transferred from developed to emerging economies.
- India and China have respectively increased their voting shares by 0.292 and 2.265 percentage points.
- All the directors on IMF board will now be elected and developed countries will not be able to nominate.
- It is modeled on the Maharashtra Control of Organised Crime Act.
- The Maharashtra law itself has not achieved any remarkable success in curbing organised crime.
- Most controversial clauses of bill includes, first. evidence based on interception of communication admissible in courts.
- Second, making confession to a police officer of the rank of Superintendent of Police admissible in court,
- Third, allowing 180 days, instead of the usual 90, for the filing of a charge sheet.
Police need better resources and training to combat organised crime and terror, and not laws that abridge and modify conventional criminal procedure to the detriment of human rights.
- Gujarat Control of Terrorism and Organised Crime Bill has already been rejected by two presidents.
- Clause that permitted the State Home Secretary to authorise the interception of telephone calls on his own was dropped after center’s disapproval.
- India’s repeated experiments with anti-terrorism laws have been, by and large, unsuccessful.
- The Terrorist and Disruptive Activities (Prevention) Act, (TADA) 1985, and its latter-day version, the Prevention of Terrorism Act, 2003, were allowed to lapse after allegations of persistent misuse.
- Substantive amendments made to the Unlawful Activities (Prevention) Act in 2012, the country does have an effective law to curb modern-day terrorism.
Courts have routinely invoked contempt provisions to punish expression of dissent which have nothing to do with administration of justice.
- Power to punish acts which ostensibly scandalize or lower the authority of the court speaks not to the majesty of the institution, but to an ingrained sense of insecurity.
- In a democracy, it’s difficult to locate any justification for thwarting speech at the face of the judiciary.
- The guarantee of free speech in a democracy ought to serve as a value unto itself.
- After 2006 amendment of contempt of court act the truth in speech now constitutes a valid defense against proceedings of contempt.
- England altogether abolished as a form of contempt the offence of scandalizing the judiciary.
The challenge is to make tax regime simpler and taxpayer friendly and ensure certainty without an erosion in what is already a low tax base. In this regard Easwar committee recommeded-
- Raising the threshold for Tax Deducted at Source (TDS) and reduction of TDS rates from 10 per cent to 5 per cent
- Amending the capital gains tax laws to provide relief to retail investors who get caught in demands made by taxmen.
- Simplification of the distinction between capital gains and business income.
- Changes in law to avoid delay in the issue of tax refunds
- A presumptive income scheme for professionals as part of the move to ensure ease of business.
- Encouragement of electronic filing and measures to reduce the compliance burden.
The regulator’s recommendation holds risks for an industry that serves a crucial socio-economic objective.
- TRAI recommended very high reserve price for auction of spectrum in 700 MHZ band.
- This band has high performance efficiency and utility in improving and expanding high-speed wireless broadband services across rural areas.
- But high pricing of a public asset may end up having the exact opposite effect:.
- It could make a scarce resource so expensive that its meaningful utilisation is compromised, thus unable to serve the larger public good.
- Very high per unit price realisation, while possibly helping meet immediate fiscal needs, would only bleed the industry of resources.
- High price of spectrum would also affect private investment in network expansion and infrastructure.
- The financial viability of the industry is crucial both for private investment and for the government to earn recurring revenues.