Print Friendly, PDF & Email

Insights Daily Current Events, 06 May 2015

Insights Daily Current Events, 06 May 2015

ARCHIVES

Opposition stalls GST Bill, insists on relook by panel

Several Opposition parties have raised serious concerns on a number of clauses in the Goods and Services Tax (GST) Bill. With this chances of the Constitution (122nd Amendment) Bill for introduction of Goods and Services Tax (GST) clearing Parliament in the current session have dimmed.

  • Even if the Government manages to push the Bill through the Lower House, it may encounter stiff resistance in the Upper House. The government does not have a majority in the Upper House.
  • The Opposition’s strategy in the Rajya Sabha will be to force the government to accept the referring of the Bill to a Select Committee on the ground that there are substantial changes which have not been scrutinised.
  • However, the government is not willing to refere the bill to the committee. It says that if the GST Bill is sent back to the Standing Committee on Finance, it would delay the benefits to the States by another financial year as yet another deadline of April 1, 2016 would be missed.

GST:

The goods and services tax (GST) is a comprehensive value-added tax (VAT) on goods and services. It is an indirect tax levy on manufacture, sale and consumption of goods as well as services at a national level.

  • Through a tax credit mechanism, this tax is collected on value-added goods and services at each stage of sale or purchase in the supply chain.
  • The system allows the set-off of GST paid on the procurement of goods and services against the GST which is payable on the supply of goods or services. However, the end consumer bears this tax as he is the last person in the supply chain.
  • Experts say that GST is likely to improve tax collections and boost India’s economic development by breaking tax barriers between States and integrating India through a uniform tax rate.

What are the benefits of GST?

  • Under GST, the taxation burden will be divided equitably between manufacturing and services, through a lower tax rate by increasing the tax base and minimizing exemptions.
  • It is expected to help build a transparent and corruption-free tax administration. GST will be is levied only at the destination point, and not at various points (from manufacturing to retail outlets).
  • Currently, a manufacturer needs to pay tax when a finished product moves out from a factory, and it is again taxed at the retail outlet when sold.

How will it benefit the Centre and the States?

It is estimated that India will gain $15 billion a year by implementing the Goods and Services Tax as it would promote exports, raise employment and boost growth. It will divide the tax burden equitably between manufacturing and services.

What are the benefits of GST for individuals and companies?

In the GST system, both Central and State taxes will be collected at the point of sale. Both components (the Central and State GST) will be charged on the manufacturing cost. This will benefit individuals as prices are likely to come down. Lower prices will lead to more consumption, thereby helping companies.

Why are some States against GST; will they lose money?

  • The governments of Madhya Pradesh, Chhattisgarh and Tamil Nadu say that the information technology systems and the administrative infrastructure will not be ready by April 2016 to implement GST. States have sought assurances that their existing revenues will be protected.
  • Some States fear that if the uniform tax rate is lower than their existing rates, it will hit their tax kitty. The government believes that dual GST will lead to better revenue collection for States.
  • However, backward and less-developed States could see a fall in tax collections. GST could see better revenue collection for some States as the consumption of goods and services will rise.

The central government has offered to compensate States in case of a loss in revenues.

The GST Bill’s passage will require a constitutional amendment, which means a two-thirds majority is required in Parliament. The Assemblies too will have to approve the Bill ahead of the April 2016 deadline.

Sources: The Hindu, gstindia.com.

 

Assam included in Bill for land swap with Bangladesh

Faced with opposition from the Assam Chief Minister and the Congress in Parliament as well as unhappiness from the Hasina government in Dhaka, the Centre has reversed its decision on excluding Assam from the purview of its Bill on exchanging land with Bangladesh.

  • The Constitution (119th Amendment) Bill, 2013, which will allow the operationalisation of the 1974 India-Bangladesh Land Boundary Agreement, was cleared by the Cabinet recently. However, the cabinet had de-linked Assam from the agreement.
  • The envisaged exchange of land includes enclaves and adverse possessions from West Bengal, Meghalaya, Tripura and Assam.

About the land swap deal:

The swap will involve handing over 17,000 acres of land to Bangladesh in return for 7,000 acres in 111 enclaves in West Bengal, Assam, Tripura and Meghalaya, and was first decided under the 1974 Land Boundary Agreement (LBA) between India and Bangladesh, but never ratified by Parliament.

  • It will require an amendment to the Constitution (the 119th amendment) ratified by both Houses of Parliament with a two-thirds majority.
  • The deal relates to demarcation of boundary under the Land Boundary Agreement between the two countries. India and Bangladesh have been negotiating the land swap for years to resolve a long-running border conflict.

How will it affect the existing citizens:

  • The number of people to be involved in the whole swap is approximately 52,000, of which about 15,000 are on the Indian side of the border.
  • Under this intended agreement, the enclave residents could continue to reside at their present location or move to the country of their choice.
  • A number of Indian nationals living in Indian enclaves in Bangladesh territory are going to be adversely affected as they would lose their claim to Indian citizenship.
  • Now, it becomes the responsibilities of the governments of India and Bangladesh to ensure that there is no “discrimination” against them.

Opposition:

Some people have been opposing the deal on the ground that Assam will stand to lose more territory as compared to Bangladesh in the exchange of enclaves.

Sources: The Hindu, PIB, BS.

 

Akash inducted

The Army recently inducted the supersonic surface-to-air missile Akash, capable of targeting aerial threats up to a range of 25 km.

Akash Missile:

  • It is a medium range Surface to Air missile. It is India’s first indigenously designed, developed and produced air defence system missile.
  • The missile system can target aircraft up to 25 km away, at altitudes up to 18,000 m.
  • A nuclear warhead could potentially give the missile the capability to destroy both aircraft and warheads from ballistic missiles.
  • It can be used by both Army and Air Force.
  • The Akash system is fully mobile and capable of protecting a moving convoy of vehicles.
  • The system provides air defence missile coverage for an area of 2,000 km².
  • Akash flies at supersonic speed, reaching around Mach 2.5.
  • A self-destruct device is also integrated. It is propelled by an Integrated Ramjet Rocket Engine. The use of a ramjet propulsion system enables sustained speeds without deceleration throughout its flight.
  • The Missile has command guidance in its entire flight.
  • Akash missiles are designed to be launched from static or mobile platforms, including battle tanks and wheeled trucks, providing flexible deployment.
  • It can handle multiple targets and destroy manoeuvring targets, such as unmanned aerial vehicles, fighter aircraft, cruise missiles and missiles launched from helicopters.

It is developed by the Defence Research and Development Organisation (DRDO).

Sources: The Hindu, PIB, ET.

 

 

Govt. softens stand on real estate Bill

In the light of the demand from large sections of the Opposition, which is in a majority in the Upper House, the government has decided to refer the Real Estate (Regulation and Development) Bill 2013 to a Select Committee.

  • The Opposition, which had submitted a notice for referring the Bill to a Select Committee, is of the view that the draft legislation favours builders at the cost of home buyers.

Real Estate (Regulation and Development) Bill:

The Real Estate (Regulation & Development) Bill seeks to protect the interests of consumers and establish regulatory bodies at the Centre and States for ethical and transparent business practices in the real estate sector.

Aim of the Bill: The bill aims at regulating contracts and transfer of property, both of which are under concurrent list. The bill will override the provisions of state real estate laws if found inconsistent.

Features of the bill:

  • The Bill regulates transactions between buyers and promoters of residential real estate projects. It establishes state level regulatory authorities called Real Estate Regulatory Authorities (RERAs).
  • Residential real estate projects, with some exceptions, need to be registered with RERAs. Promoters cannot book or offer these projects for sale without registering them. Real estate agents dealing in these projects also need to register with RERAs.
  • 50% of the amount collected from buyers for a project must be maintained in a separate bank account and must only be used for construction of that project. In the original Bill, 70% of the amount had to be kept for this construction.
  • The Bill establishes state level tribunals called Real Estate Appellate Tribunals. Decisions of RERAs can be appealed in these tribunals.
  • The Bill provides for mandatory registration of all projects and real estate agents who intend to sell any plot, apartment or building with the Real Estate Regulatory Authority.
  • It makes mandatory the disclosure of all information for registered projects like details of promoters, layout plan, land status, schedule of execution and status of various approvals.
  • The Bill also includes a condition that prohibits a developer from changing the plan in a project unless 2/3rd of the allottees have agreed for such a change.

Benefits:

  • The Bill is expected ensure greater accountability towards consumers, and to significantly reduce frauds and delays.
  • It is expected to promote regulated and orderly growth of the real estate sector through efficiency, professionalism and standardization.
  • These measures are also expected to boost domestic and foreign investment in the sector and help achieve the objective of the Government of India to provide ‘Housing for All by 2022’, through enhanced private participation.

Sources: The Hindu, prsindia.org.

 

 

Rs. 2,800 crore unspent under Rashtriya Krishi Vikas Yojana: CAG

The report by the Comptroller and Auditor General of India (CAG) on the performance of the Rashtriya Krishi Vikas Yojana (RKVY) since its launch in 2007 to 2013 has detected shortfalls in achieving targeted outputs in 62 projects costing Rs. 1,405 crore in 19 States. The report was tabled in the Parliament recently.

  • The CAG report highlights numerous instances of the expected benefits of the RKVY not reaching the farmers.
  • The report also revealed that RKVY funds to the tune of Rs. 91.24 crore were diverted for other purposes in nine projects.

Rashtriya Krishi Vikas Yojana (RKVY):

Rashtriya Krishi Vikas Yojana is Special Additional Central Assistance Scheme launched in 2007 as a part of the 11th Five Year Plan by the Government of India.

  • It was launched under the aegis of the National Development Council.
  • It seeks to achieve 4% annual growth in agriculture through development of Agriculture and its allied sectors.
  • The Scheme was essentially launched to incentivize the states that increase their investment in Agriculture and allied sectors.

Eligibility:

A State is eligible for funding under the RKVY if it maintains or increases the percentage of its expenditure on Agriculture and its Allied Sectors with respect to the total State Plan Expenditure, where the Base Line for this expenditure is the average of the percentage of expenditure incurred by a State Government for the previous three years on Agriculture and its Allied Sectors minus any funds related to Agriculture and its allied sectors that it may already have received in that time under its State Plan.

Important features of the Scheme:

  • It is a State Plan scheme
  • The eligibility of a state for the RKVY is contingent upon the state maintaining or increasing the State Plan expenditure for Agriculture. & Allied Sectors
  • The base line expenditure is determined based on the average expenditure incurred by the State Government during the three years prior to the previous year.
  • The preparation of the district and State Agriculture Plans is mandatory.

 

Preparation of Agriculture Plans:

  • The Scheme requires the States to prepare District and State Agriculture Plans for creation of such infrastructure, which are essential to catalyse the existing production scenario for achieving higher production. Additional Central Assistance (ACA) is made available to the States as 100% grants.
  • The District Agriculture Plans would reflect the financial requirement and the sources of financing the agriculture development plans in a comprehensive way. The DAP will include animal husbandry and fishery, minor irrigation projects, rural development works, agricultural marketing schemes and schemes for water harvesting and conservation, keeping in view the natural resources and technological possibilities in each district.
  • Each State is further required to prepare a comprehensive State Agricultural Plan (SAP) by integrating the DAPs. The State will have to indicate resources that can flow from the State to the district.
  • The States have been provided flexibility and autonomy in the process of selection, planning, approval and execution of schemes to make investments in interventions as per their priorities and agro-climatic requirements so that the outcomes are as envisaged in the RKVY objectives.
  • The projects of the State Governments are approved by the State Level Sanctioning Committees (SLSCs) under the Chairmanship of Chief Secretary of the respective States.   The funds are routed through the State Agriculture Department, which is the nodal Department for the scheme.

The sub-schemes under RKSY are:-

  • Bringing Green Revolution to Eastern Region.
  • Initiative on Vegetable Clusters.
  • National Mission for Protein Supplements.
  • Saffron Mission.
  • Vidharbha Intensive Irrigation Development Programme.
  • Promotion of Oil Palm.
  • Nutri Cereals.
  • Accelerated fodder development programme.
  • Rainfed area development programme.

Sources: The Hindu, PIB, Wiki.

Insights Secure Prelims 2015

Welcome to Insights Secure Prelims – 2015 initiative. The following questions are based on current events that appear in PIB (Public Information Bureau) and from some important newspapers. For more challenging question papers (Full Length), please join our Preliminary Exam – 2015 Test Series (Please Click Here for Reviews)

To view Solutions, follow these instructions:

  1. Click on – ‘Start Quiz’ button

  2. Solve Questions

  3. Click on ‘Quiz Summary’ button

  4. Click on ‘Finish Quiz’ button

  5. Now click on ‘View Questions’ button – here you will see solutions and links.