A NITI Aayog panel on Innovation headed by Prof. Tarun Khanna submitted its report recommending that the private sector should help fund research and development, including in research labs at universities and startups
It was constituted following the 2015 budget speech of Finance Minister Arun Jaitley, where he allocated 150 crore rupees for Atal Innovation Mission (AIM)
The committee was asked to suggest ways to promote innovation and build an entrepreneur-friendly ecosystem to drive job growth
Recommendations:
It recommended improved tax benefits for investments equivalent to a percentage of corporate profits in research labs in universities and startups
It recommended that all contracts with foreign defence companies above 5 billion dollars should include a clause for five percent of contract value to be directed to establish research-centric universities with strong emphasis on its core product areas
It suggested a Make in universities program which would involve setting up 500 tinkering labs, where aspiring entrepreneurs can experiment to create products that address local problems, with one 3D printer per institute
For these labs, the panel recommends utilisation of half of the 1000 crore rupees fund that Finance Minister Arun Jaitley had set aside for the Self Employed and Talent Utilization (SETU) scheme
It also recommends Grand Prizes approach to find ultra-low-cost solutions to India’s most intractable problems, on the lines of what is followed in some developed countries
It recommends that the AIM budget of 150 crore rupees be used entirely to award up to 12 grand prizes annually. Each challenge should carry a prize of between 10 crore and 30 crore rupees
The panel also pitched for an increase in investment in business incubators with up to 200 crore rupees public spending per year and roping in the private sector for the purpose
Establishing a fund-of-funds (FOF) by the Union Government to seed other early stage venture funds with a corpus of 5000 crore rupees
The Reserve Bank of India (RBI) has released the Report on Medium-term Path on Financial Inclusion submitted by 14-member committee headed by RBI Executive Director Deepak Mohanty
RBI had constituted the committee in July 2015 to examine the existing policy regarding financial inclusion and a five-year (medium term) action plan
It was tasked to suggest plan on several components with regard to payments, deposits, credit, social security transfers, pension and insurance
Key recommendations:
Augment the government social cash transfer in order to increase the personal disposable income of the poor- It would put the economy on a medium-term sustainable inclusion path
Sukanya Shiksha Scheme: Banks should make special efforts to step up account opening for females belonging to lower income group under this scheme for social cash transfer as a welfare measure
Aadhaar linked credit account: Aadhaar should be linked to each individual credit account as a unique biometric identifier which can be shared with Credit information bureau to enhance the stability of the credit system and improve access
Mobile Technology: Bank’s traditional business model should be changed with greater reliance on mobile technology to improve ‘last mile’ service delivery
Digitisation of land records: It should be implemented in order to increase formal credit supply to all agrarian segments through Aadhaar-linked mechanism for Credit Eligibility Certificates (CEC)
Nurturing self-help groups (SHGs): Corporates should be encouraged to nurture SHGs as part of Corporate Social Responsibility (CSR) initiative
Subsidies: Government should replace current agricultural input subsidies on fertilizers, irrigation and power by a direct income transfer scheme as a part of second generation reforms
Agricultural interest subvention Scheme: It should be phased out
Crop Insurance: Government should introduce universal crop insurance scheme covering all crops starting with small and marginal farmers with monetary ceiling of Rs. 2 lakhs
Multiple Guarantee Agencies: Should be encouraged to provide credit guarantees in niche areas for micro and small enterprises (MSEs). It would also explore possibilities for counter guarantee and re-insurance
Unique identification of MSME: It should be introduced for all MSME borrowers and information from it should be shared with credit bureaus
The Chief Economic Advisor Arvind Subramanian led panel submitted its report on Possible Tax rates under Goods and Services Tax (GST) to Finance Minister Arun Jaitley
Union government had set up the committee under chairmanship of CEA Dr. Subramanian in June 2015 to arrive at GST rates by factoring in the economic growth rate, taxpayer base and tax compliance levels
Recommendations:
Standard GST rate of 17-18%- It is the rate at which most products would likely be taxed
Not to specify GST rate in Constitutional Amendment Bill
Revenue-neutral rate of 15-15.5%- It is a single rate at which there will be no revenue loss to the centre and states in the GST regime
Eliminate all taxes on inter-state trade including one per cent inter-state tax on transfer of goods
Two options for states: Single rate of 1% or a range of 17-18%
Allocation to states will depend on revenues raised by Centre and states
Three-tier GST rate structure:
Essential goods will be taxed at a lower rate of 12%
Demerit goods such as luxury cars, aerated beverages, pan masala and tobacco products will be taxed at 40%
Remaining all goods will be taxed at a standard rate of 17-18%
Excluded real estate, electricity and alcohol and petroleum products while calculating tax rates but suggests bringing them under the ambit of GST soon
The Union Government has constituted two new committees:
Tax Policy Research Unit (TPRU)
Tax Policy Council (TPC)
Aim: To streamline the taxation policy and administration
These committees have been constituted based on the recommendation of the Tax Administration Reform Commission (TARC)
Tax Policy Research Unit
The TPRU will be headed by Revenue Secretary
It will carry out studies on various topics of fiscal and tax policies
It will assist the TPC in taking appropriate policy decisions and shall prepare tax proposal and analysis of legislative intent
It will also take decisions on expected increase or decrease in tax collection and economic impact
It will comprise of officers from CBEC, CBDT as well as economists, researchers, statisticians and legal experts
Tax Policy Council
The TPC will help the government in identifying key policy decisions for taxation
It shall aim to have a consistent and coherent approach to the issue of tax policy
It will look at all the research findings coming from TPRU and suggest broad policy measures for taxation
The council will be headed by Union Finance Minister
It shall have 9 members – Minister of State for Finance, Commerce Minister, NITI Aayog Vice-Chairman, Chief Economic Advisor and Finance Secretary
It would also have secretaries from the department of Revenue, DEA, DIPP and Ministry of Commerce
Background:
Presently, taxation policy and administration is handled in the CBDT and the CBEC
But there are also two independent boards Tax Research Unit (TRU) and Tax Policy and Legislation (TPL) wings which are also sending proposals to the Union Finance Minister
TARC in its First Report had identified handling of tax policy and related legislation as one of the areas in need of structural modifications
In order to bring consistency, multidisciplinary inputs and coherence in taxation policy making, it had recommended establishment of Tax Council supported by a common Tax Policy and Analysis (TPA) unit to cater to needs of both direct and indirect taxes
Account can be opened in a post office or a public sector bank
Who is eligible?
Girl child only
Child should be Indian citizen
Age limit: On the date of opening the account, the child’s age should 10 years or younger
Who can Invest?
Parent, or Legal Guardian of the eligible Girl child
Investment limit:
In 1 year, minimum Rs 1000/- needs to be invested., thereafter in multiples Of 100/-
Maximum of Rs 1,50,000/- can be invested
Deposits can be made in lump-sum or spread out manner
No limit on number of deposits either in a month or in a financial year
Operation of the account:
The account will be opened and operated by the guardian of a girl child till the girl child, in whose name the account has been opened, attains the age of 10 years
On attaining age of 10 years, the girl child may herself Operate the account
Tenure:
Deposit needs to made until 14 years from opening of account
Deposit under scheme will mature 21 year after opening of the account
Withdrawal:
No Premature Withdrawal is permitted
However, maximum up to 50% of deposit amount can be withdrawn for marriage or higher education of girl child, once she reaches 18 years of
age
Termination:
Scheme Tenure is 21 years from date of opening, or when the marriage of the girl child happens; whichever happens earlier
Account will compulsorily have to be closed after marriage of the girl child
In case after maturity of the account (21 years) the girl child does not marry, and if account is not closed after maturity, balance will continue to earn interest as specified for the scheme from time to time
Aim: To generate awareness and improve efficiency of delivery of welfare services meant for women
Launched on 22 January 2015 with an initial corpus of Rs. 100 crore
Joint initiative of Ministries of Women & Child Development, Health & Human Resource Development
Districts Identified
The three criteria for selection of districts:
Districts below the national average (87 districts/23 states);
Districts above national average but shown declining trend (8 districts/8 states)
Districts above national average and shown increasing trend (5 districts/5 states- selected so that these CSR levels can be maintained and other districts can emulate and learn from their experiences)
First Phase:
100 districts have been identified on the basis of low Child Sex Ratio as per Census 2011 covering all States/UTs as a pilot With at least one district in each state
Second Phase
The scheme has further been expanded to 61 additional districts selected from 11 States/UT having CSR below 918
Strategies:
Implement a sustained Social Mobilization and Communication Campaign to create equal value for the girl child & promote her education
Focus on Gender Critical Districts and Cities low on CSR for intensive & integrated action
Mobilize & Train Panchayati Raj Institutions/ Urban local bodies/ Grassroot workers as catalysts for social change
Ensure service delivery structures/ schemes & programmes are sufficiently responsive to issues Of gender and children’s rights
Enable Inter-sectoral and inter-institutional convergence at District/ Block/ Grassroot levels
Implementation:
Centre: A National Task Force (NTF) headed by Secretary WCD
State: A State Task Force (STF)
District: District Task Force (DTF) headed by the District Collector/ Deputy Commissioner with representation of concerned departments
Block: A Block Level Committee headed by SDM/ SDO/ BDO
With the Nuclear Security Summit coming to an end in April 2016, the international community must garner requisite diplomacy to continue the legacy of the process.
source: nss2016.org
The 4 NSS held in this series were –
2010 – Washington
2012 – Seoul
2014 – The Hague
2016 – Washington
How did this all begun?
The nuclear security summit initiative began with an April 2009 call by U.S. President Barack Obama to hold a global summit on nuclear security in 2010 as part of an effort to “secure all vulnerable nuclear material around the world within four years.”
Broad goals –
Address the threat of nuclear terrorism by minimizing and securing weapons-usable nuclear materials,
Enhancing international cooperation to prevent the illicit acquisition of nuclear material by non-state actors
Taking steps to strengthen the global nuclear security system
The pledges secured under this summits are referred to as “gift baskets”.
It isn’t relevant to go back in time and revisit the 1st, 2nd and 3rd summit but let’s have a look at the 4th (and the final one) –
A primary goal of the 2016 summit is to approve 5 action plans for international organizations and initiatives that will continue the work of the summit process.
The five groups are the UN, the International Atomic Energy Agency, Interpol, the Global Partnership Against the Spread of Weapons of Mass Destruction, and the Global Initiative to Combat Nuclear Terrorism.
Since these organisations are at the forefront of the summit, it would be worthwhile to know about them for IAS Prelims. Hail google!
Question:
Write a critical note on the outcome of the recent Fourth Nuclear Security Summit held in Washington.
While you answer this question – keep some points in mind – Russia gave it a miss, Iran was not invited.
Pakistan had ratified the Convention on the Physical Protection of Nuclear Material 2005 Amendment, but it still has not adhered to the International Convention for the Suppression of Acts of Nuclear Terrorism.
India may need to explore possibilities to negotiate with China and Pakistan to create a Regional Nuclear Security Summit process to prevent proliferation of weapons usable nuclear materials.
Expert Committee to simplify income tax laws headed by Justice (retired) R.V. Easwar has submitted its report to Union Finance Ministry
The 10 member committee has recommended simplifying provisions related to tax deduction at source (TDS), tax refunds and claims of expenditure for deduction from taxable income
It also has suggested several taxpayer-friendly measures to improve the ease of doing business in the country, accelerate process of tax dispute resolutions and reduce litigation
source: Live Mint
Recommendations:
Deferring the contentious Income Computation and Disclosure Standards (ICDS) provisions and making the process of tax refunds faster
Deletion of a clause in IT Act, 1961 that allows the IT department to delay tax refund due beyond six months in case of delay in refunds levying higher interest
IT department should stop the practice of adjusting tax demand of a taxpayer against legitimate refunds due whose tax return is under assessment
Treat stock trading gains of up to Rs. 5 lakh as capital gains and not business income
Tax Deducted at Source (TDS) rates for individuals must be reduced to 5 per cent from current 10 per cent. Dividend income should be treated as part of total income
Exempting non-residents not having a Permanent Account Number (PAN), but seeking to provide their Tax Identification Number (TIN) for the applicability of TDS at a higher rate
Most of the working processes of the IT departments should be conducted electronically in order to minimize direct human interface
Eligibility criteria under the presumptive tax scheme to be increased to Rs. 2 crore from Rs. 1 crore rupees to make it easy for small businesses
Such scheme should be also for professionals
Background:
Union Government had constituted this committee in October 2015 by following up on a promise to provide a fair and predictable tax regime
The committee was tasked to suggest recommendations to overhaul the IT Act, 1961 to remove ambiguities that cause unnecessary litigation and update the laws based on various judgements
What is ICDS?
The Central Government had notified 10 Income Tax Computation & Disclosure Standards (ICDS) effective financial year 2015-16
Objective: To minimising tax related disputes by bringing greater consistency in the application of accounting principles governing the computation of Income
These standards were developed using the old Indian General Audit and Accounting Practices (GAAP)
Main Features:
In case of conflict between the provisions of the Income Tax Act, 1961 and ICDS, the provisions of the Income Tax Act would prevail
No need to maintain separate books of accounts for ICDS. Maintain book only for income computation
Revising the most important facets of reforms proposed by the Bibek Debroy committee & highlighting the pain points of Indian railways –
#1. The process of accounting in Indian Railways is “very complicated”. “It is impossible to figure out what the rate of return on a project is”
The financial statements of Indian Railways need to be re-drawn, consistent with principles and norms nationally and internationally accepted.
#2. Streamline recruitment & HR processes
Remove the multiplicity of channels of recruitment and consolidate the process. At present there are 8 organized Group ‘A’ services in Indian Railways. Deployment to these services is by direct recruitment from UPSC (Civil Service and the Engineering examinations) and also by promotion of Group ‘B’ officers of the department.
The eight services can be broadly categorized in two bigger groupings viz. technical and non-technical services.
#3. Indian Railways should focus on core activities to efficiently compete with the private sector
It should distance itself from non-core activities, such as running a police force, schools, hospitals and production and construction units.
#4. Deploy an independent regulator
Shift regulatory responsibility from the government to an independent regulator as the private sector will only come in if there is fair and open access to infrastructure.
The report recommends setting up a Railway Regulatory Authority of India (RRAI) statutorily, with an independent budget, so that it is truly independent of the Ministry of Railways.
#5. Merge Railway budget with Central government budget
“End gross budgetary support, end this system of paying dividends and therefore you effectively end the railway budget. You not only end the railway budget, you eventually also end the Ministry of Railways and integrate it into a Ministry of Transport.”
Government-constituted expert committee to examine the Possibility of Replacing Multiple Prior Permissions with Pre-Existing Regulatory Mechanism had submitted its recommendations
The 11 member committee was headed by Ajay Shankar, Former Secretary of Department of Industrial Policy and Promotion (DIPP)
The expert committee was constituted by DIPP in April 2015
It was tasked to:
Examine the possibility of replacing multiple prior permissions with a pre-existing regulatory mechanism
Recommend a framework of the proposed regulatory mechanism and draft proposed legislation
Identify safeguards for replacing the system of prior permission and integrating them in the proposed regulatory mechanism
Recommendations:
Introduction of credible third-party certification in most areas of regulation to cut down on multiple permissions needed by investors
Adopting global best practices for emission norms in order to promote ease of doing business in the country
Need for a standing institutional mechanism within the government for an independent regulatory impact assessment
For start-ups:
Steps like Greenfield development and earmarking of mixed land use redevelopment should be undertaken
Start-ups must be exempted from the requirement of seeking building plan approvals would give a boost to the ecosystem
Any inspection of a start-up in cases of actionable complaints should be done only with the permission of an officer at a sufficiently higher level
Environmental Issues:
Ministries of environmentally sensitive sectors should join with the Ministry of Environment and Forests to prepare a 20 year perspective geographical plan
This plan must indicate preferred locations in prioritised categories for their anticipated projects in order to minimise the negative impact of environment
