Insights Daily Current Affairs, 18 January 2017
Insights Daily Current Affairs, 18 January 2017
Paper 3 Topic: Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment.
Finance Ministry suspends Dec. 21 tax circular on indirect transfers
In a move that will provide a respite to foreign portfolio investors (FPIs), venture capital and private equity investors, the central board of direct taxes (CBDT) has decided to put on hold its recent circular on taxation of indirect transfers.
What’s the issue?
In December 2016, the tax department issued a clarification on the scope of indirect transfer provisions that sought to even apply these provisions to FPIs. This would have taxed any profits made by funds with underlying assets (including equities) in India.
- This would have subjected FPIs, especially those with India-focused funds, to greater scrutiny by the income-tax (I-T) department and led to double taxation in many cases.
- It was estimated that 181 publicly traded funds whose India exposure is more than half of total assets could be affected by this move. These funds managed $39 billion of assets.
- This had forced many foreign investors to make representations to the finance ministry asking the latter to reconsider the circular. They had pointed out that applying these provisions on offshore investors investing in these foreign funds or FPIs would lead to double taxation as they already pay securities transaction tax and tax on capital gains from selling of shares.
Indirect transfer provisions deal with taxation of transactions wherein even though the transfer of shares took place overseas, the underlying assets were in India.
- Indirect transfer provisions were introduced in the I-T act in 2012 with retrospective effect, as the government sought to bring Vodafone Group Plc.’s $11 billion acquisition of Hutchison Essar Ltd in 2007 (by acquiring a Cayman subsidiary owned by Hutchison International) and other such transactions under the tax net in India.
- To remove the sting from the retrospective amendment to the tax laws by the previous government, the government had subsequently clarified that only those indirect transfer transactions wherein more than 50% of the underlying assets are in India will be subject to a levy of capital gains tax in India. But the clarifications also extended the tax to funds, including those outside India.
Sources: the hindu.
Paper 3 Topic: Science and Technology- developments and their applications and effects in everyday life Achievements of Indians in science & technology; indigenization of technology and developing new technology.
LIGO India, Meant to Study Gravitational Waves, To Be Ready By ’24
The LIGO India project is likely to be commissioned in 2024. The LIGO India centre, which will study cosmic gravitational waves, will only be the third one in the world. However, this would require Indian universities to churn out young researchers trained in the science, according to the announcement made by LIGO Laboratory.
About LIGO India:
The LIGO (Laser Interferometer Gravitational-wave Observatory) is a massive observatory for detecting cosmic gravitational waves and for carrying out experiments. The objective is to use gravitational-wave observations in astronomical studies.
- The project operates three gravitational-wave (GW) detectors. Two are at Hanford in the state of Washington, north-western US, and one is at Livingston in Louisiana, south-eastern US. The proposed LIGO India project aims to move one advanced LIGO detector from Hanford to India.
- LIGO research is carried out by the international LIGO Scientific Collaboration (which includes the GEO Collaboration and the Australian Consortium for Interferometric Gravitational Astronomy) and the Virgo Collaboration in Europe.
- LIGO India will be set up as a joint scientific collaboration between LIGO laboratories of the California Institute of Technology (Caltech), Massachusetts Institute of Technology (MIT), the US, and three lead Indian institutions, namely, the Inter-University Centre for Astronomy and Astrophysics (IUCAA), Pune, Institute for Plasma Research (IPR), Gandhinagar, and Raja Ramanna Centre for Advanced Technology (RRCAT), Indore.
What are Gravitational Waves?
Gravitational waves are the ripples in the pond of spacetime. The gravity of large objects warps space and time, or “spacetime” as physicists call it, the way a bowling ball changes the shape of a trampoline as it rolls around on it. Smaller objects will move differently as a result – like marbles spiraling toward a bowling-ball-sized dent in a trampoline instead of sitting on a flat surface.
Why they are useful?
These waves will be particularly useful for studying black holes (the existence of which was first implied by Einstein’s theory) and other dark objects, because they’ll give scientists a bright beacon to search for even when objects don’t emit actual light.
- With this, mapping the abundance of black holes and frequency of their mergers could get a lot easier.
- Since they pass through matter without interacting with it, gravitational waves would come to Earth carrying undistorted information about their origin.
- They could also improve methods for estimating the distances to other galaxies.
Why it is difficult to detect these waves?
The reason that gravitational waves have been so difficult to detect is that their effects are tinier than tiny. In fact, the signals they produce are so small that scientists struggle to remove enough background noise to confirm them.
Paper 2 Topic: Important International institutions, agencies and fora, their structure, mandate.
India becomes Associate member of CERN
India has officially become an Associate member of CERN with the Indian government completing its internal approval procedures in respect of the agreement it had signed with CERN on November 21, 2016.
An Agreement was signed in November 2016 to admit India to CERN as an Associate member. But India had to “notify CERN of its final approval for the Agreement to enter into force” and become an Associate member.
- As an Associate member India will have full access to all data generated at CERN. As there are many experiments in CERN, there will be plenty of information available.
- As an Associate member, India can participate in all experiments.
- Also, whenever any CERN facilities get upgraded and go through maintenance, it will provide opportunities for Indian industries to participate. Indian industry will be entitled to bid for CERN contracts, which will allow it to work in areas of advanced technology.
- Since Indian scientists will become eligible for staff appointments, it will also enhance the participation of young scientists and engineers in operation and maintenance of various CERN projects.
CERN is the world’s largest nuclear and particle physics laboratory, where scientists and engineers are probing the fundamental structure of the Universe by using the most sophisticated scientific instruments and advanced computing systems.
- CERN is based in Geneva on the French-Swiss border. The CERN convention was signed in 1953 by the 12 founding state.
India and CERN:
In 1991, India and CERN signed a Cooperation Agreement, setting priorities for scientific and technical cooperation. India and CERN have signed several other protocols since then. But India’s involvement in CERN began in the 1960s with researchers from the Tata Institute of Fundamental Research, Mumbai participating in experiments at CERN. In the 1990s scientists from Raja Ramanna Centre for Advanced Technology, Indore too got involved in CERN experiment. Researchers from TIFR, Raja Ramanna Centre for Advanced Technology and other institutes built components for an accelerator (LEP) and detectors (L3, WA93 and WA89). India was granted Observer status to the CERN Council in 2002.
Sources: the hindu.
Paper 2 Topic: Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests.
Industry seeks foreign partners for trade pact
India’s top industry bodies are attempting to build a coalition with counterparts in other nations with similar interests to give a fillip to the country’s proposal for a Trade Facilitation in Services (TFS) Agreement at the World Trade Organisation (WTO)-level.
The proposed TFS pact, among other things, aims to make it easier for professionals and skilled workers to move across borders for short-term work, as well as ensure portability of their social security contributions.
India is making the case for this pact in line with the Trade Facilitation Agreement (TFA) in goods, signed by WTO in 2014. It aims at expediting movement, release and clearance of goods as well as co-operation on customs compliance issues.
- Pitching for a trade facilitation agreement in services in WTO, India had floated a concept note in September 2016 saying the pact will reduce transaction costs by doing away with unnecessary regulatory and administrative burden on trade in services.
- India had proposed simplification of procedures and clarity in work permits and visas for smooth movement of professionals.
- It said the TFS Agreement will address the key issues that are pertinent to facilitating trade in services, such as transparency, streamlining procedures, and eliminating bottlenecks.
Sources: the hindu.
Paper 1 Topic: Important Geophysical phenomena such as earthquakes, Tsunami, Volcanic activity, cyclone etc., geographical features and their location- changes in critical geographical features (including water-bodies and ice-caps) and in flora and fauna and the effects of such changes.
Silicon identified as ‘missing element’ in Earth’s core
Earth’s core is made up of Iron and nickel, but there is a third element which has eluded identification till now. However, now scientists have been able to identify the third and elusive element as silicon. Researchers have identified silicon as the missing element deep in the core of the planet.
The core of the Earth is believed to be made of mainly Iron and Nickel. It was known for long that iron –nickel core under the core pressure is denser than the core. This made a possibility of the core having some lighter elements like Silicon Oxygen or Sulfur. The presence of this solid core which is entirely different from the liquid outer layer was first discovered by scientists after studying seismic waves which were being deflected by the solid core in the centre.
- Silicon made up a significant proportion of the inner core of the Earth besides Iron and Nickel. This was concluded by going back into the creation of Earth. For this, scientists recreated the pressure and temperatures found in the core of Earth. They concluded that 5% of the Earth’s core was composed of silicon which is dissolved in the iron-nickel alloys.
- The core is composed 85 % by weight of Iron while nickel accounted for 10% of the core. This still left some 5% of the core unaccounted for. There were was possibility of the 5% being composed of Silicon, Oxygen or Sulfur. The researchers finally found that the 5% consisted of Silicon dissolved in the Iron and nickel.
Facts for Prelims
- It is a mission launched by Indian Railways to save Rs 41,000 crore on the Indian Railways’ expenditure on energy consumption over the next 10 years.
- This target will be achieved by taking a slew of measures which include moving 90% of traffic to electric traction over diesel. Presently, this is at 50 %of the total rail traffic. The Railways ministry plans to achieve this target by doubling the current pace of electrification.
- The railways also aim to procure more and more electricity at cheaper rates through open market instead of sourcing it through DISCOMs and thereby hopes to save as much as 25% on its energy expenses.
- New technologies are also being explored to bring down electric consumption.