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Insights Daily Current Events, 04 November 2015

Insights Daily Current Events, 04 November 2015

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Paper 3 Topic: Security challenges and their management in border areas.

Impose AFSPA in Garo Hills, says High Court

The Meghalaya High Court has asked the Centre to consider enforcing AFSPA in the militancy-hit Garo Hills region in Manipur.

Why?

  • To control the situation in the aid of civil and police authorities, till life becomes normal and the incidents of rampant kidnapping and killing stopped.

The court has also made it clear that deployment of armed forces would be only for the purpose of enabling the civil authorities in the state to deal with the situation effectively so that there is a regime of rule of law.

Was it necessary?

There is a rise in number of militancy incidents in the state, especially in the garo hills region, including abduction of government officials and threats to judges. Even the police and civil authorities have not been able to control the incidents of kidnapping for ransom and killings. The native population is totally exposed to militancy. Hence, AFSPA appears necessary.

Armed Forces (Special Powers) Act:

It is an Act empowering armed forces to deal effectively in ‘Disturbed Areas’. Any area which is declared ‘Disturbed’ under the disturbed areas act enables armed forces to resort to the provisions of AFSPA.

Who declares an area as disturbed?

The choice of declaring any area as ‘disturbed’ vests both with state and central government.

The government can declare AFSPA in the following conditions:

  • When the local administration fails to deal with local issues and the police proves inefficient to cope with them.
  • When the scale of unrest or instability in the state is too large for the police to handle.

Legal provisions of AFSPA:

In an area declared, “disturbed” an army officer is legally free to carry out following operations:

  • Fire upon or otherwise use force, even to the causing of death, against any person who is acting in contravention of any law” against “assembly of five or more persons” or possession of deadly weapons.
  • Destroy any shelter (private or govt.) from which armed attacks are made or likely to be made or attempted to be made.
  • Arrest any person without warrant who has committed a cognizable offence or against whom a reasonable suspicion exists that he has committed or is about to commit a cognizable offence.
  • Enter and search, without warrant, any premises for purpose of arrest or to recover any person, arms, explosives.
  • Search and seize any vehicle suspected to be carrying an offender or any person against whom any reasonable suspicion exists that he has or is about to commit an offence.

sources: the hindu, pib.

 

Paper 3 Topic: Resource mobilization

FinMin to ease transfer pricing rules

The finance ministry is streamlining safe harbour rules and advance agreements, two mechanisms to determine the price of services rendered by a multinational to its subsidiary in India.

What are safe harbour rules?

  • They are directives on margins the tax authorities should accept for the transfer price declared by an assessee. India announced the safe harbour rules in 2013.
  • These rules have drawn a tepid response since they were introduced.
  • The high margins of up to 25% on total operational profits have made it unattractive for companies to use them.

There is also a huge backlog in advance pricing agreements (APAs) in India. India has the highest incidence of transfer pricing litigation worldwide. The number of cases scrutinised has quadrupled from 1,061 in 2005-06 to 4,290 in 2014-15.

To address the above issues, the centre is bringing in reforms. The steps will involve lowering the margins in safe harbour rules and definitions will be reworked to remove ambiguities. The move would also simplify the tax regime, reduce litigation and help improve the business environment, a finance ministry official said.

Implications:

  • The lowering of safe harbour rates will ease the advance pricing agreement backlog. The government introduced the advance pricing scheme in 2012 and there are over 500 applications pending.

Advance Pricing:

An APA is essentially a contract between a taxpayer and the tax authorities that sets out beforehand the method for determining transfer pricing pertaining to transactions between a subsidiary and its foreign parent.

  • Under the APA companies could enter into an agreement with tax authorities for the next five years.

sources: bs, wiki.

 

Paper 3 Topic: Indian economy.

Global Financial Secrecy Index: Hong Kong, Singapore’s ranks rise

The 2015 Global Financial Secrecy index was recently released. It was compiled by the Tax Justice Network (TJN).

Details:

  • China has secured second position, behind only Switzerland.
  • Hong Kong and Singapore have increased their ranking. Hong Kong is placed third and Singapore’s ranking moved to fourth from the fifth place.
  • The US is ranked third for its refusal to take part in a global system for exchanging bank data created by the Organisation for Economic Cooperation and Development.
  • India has made significant progress in the past two years in financial transparency. India is ranked 45. In 2013 it was placed at 32.

Why India’s rank has improved?

  • Indian government has taken several steps to crack down on black money and illicit wealth including stringent laws to blunt illegal wealth stashed overseas.
  • It has also signed agreements with several foreign countries for exchange of information and is also bringing a legislation to tackle domestic black money.

The ranking takes into account the processes put in place to bring transparency and reduce the secrecy around financial dealings.

sources: bs, et.

 

Paper 1 Topic: Art and architecture.

Classic erotica at Mattancherry palace closed to public

Some of the most erotic 18th century mural sketches at Mattancherry Palace have been closed for public for over six years now.

  • While the Archaeological Survey of India (ASI) threw open the upper level to visitors after an enduring spell of restoration, the lower chambers featuring more scintillating and lascivious drawings have remained shut ever since.

About the Palace:Mattancherry palace

  • The Palace was built and gifted by the Portuguese as a present to the Raja of Cochin around 1555. The Dutch carried out some extensions and renovations in the palace in 1663, and thereafter it was popularly called Dutch Palace.
  • It features Kerala murals depicting Hindu temple art, portraits and exhibits of the Rajas of Kochi.
  • The palace is a quadrangular structure built in Nalukettu style, the traditional Kerala style of architecture, with a courtyard in the middle.
  • In the courtyard there stands a small temple dedicated to ‘Pazhayannur Bhagavati’, the protective goddess of the Kochi royal family.
  • Certain elements of architecture are indicative of European influence in basic Nāluketttu style.
  • The palace also contains rare examples of traditional Kerala flooring, which looks like polished black marble but is actually a mixture of burned coconut shells, charcoal, lime, plant juices and egg whites.

Murals:Mattancherry palace 1

  • There are number of murals, executed in the best traditions of Hindu temple art, which are religious, decorative and stylized. The murals have been painted in rich warm colours in tempera technique.
  • These murals depict scenes from Ramayana, Krishna leela, marriage of Parvati with Shiva and Siva Leela.

sources: the hindu, wiki.