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Insights Daily Current Events, 24 December 2015
Paper 2 Topic: Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests.
‘Seychelles committed to Indian naval base’
Seychelles government has provided India a plot of land in its Assumption Island to build its first naval base in the Indian Ocean region. This is a joint project between India and Seychelles.
- India’s evaluation team will shortly visit the spot.
- The project has acquired significance following China acquiring its first African naval base in Djibouti in November.
Significance of this Naval Base:
- Once ready, the naval base to be built by the defence forces of India, and Seychelles will help India exercise greater control over the Indian Ocean’s western region all the way to the piracy-prone eastern African coastline.
- The base will be one of the major staging posts for a large maritime security network that India is setting up with the help of the various Indian Ocean region partner countries.
- Apart from the naval base, India is set to acquire a fully operational coastal radar system (CRS) based in Seychelles from March 2016. The CRS will provide India with the ability to gather intelligence and assist in surveillance operations of the vital energy lanes near Seychelles.
- Security operation in the Indian Ocean region will also be helped by the leadership role that Seychelles has secured for itself in the Contact Group for Piracy off the Coast of Somalia (CGPCS), which will hold its first meeting in Mumbai in January, 2016.
India has been steadily increasing its maritime and security cooperation with Seychelles and a new patrol vessel from India will be handed over to Seychelles in mid-January 2016.
sources: the hindu.
Paper 3 Topic: Achievements of Indians in science & technology.
Indian American professor wins top honour for research on tumours
Indian American professor Rakesh K Jain has been selected for the National Medal of Science 2015 of United States (US). He holds a B.Tech degree in Chemical Engineering from the Indian Institute of Technology- Kanpur.
- Rakesh Jain is a professor at Harvard Medical School and Director of the Tumour Biology Laboratory at Massachusetts General Hospital.
- He is regarded as a pioneer in the area of tumour micro-environment and widely recognized for his seminal discoveries in tumour biology, drug delivery, in vivo imaging and bioengineering.
- He will receive the honour along with 16 other winners of the National Medal of Science and National Medal of Technology and Innovation at a White House ceremony in 2016.
About National Medal of Science:
- The National Medal of Science was created by statute in 1959 and is administered for the White House by the National Science Foundation.
- It recognizes individuals who have made outstanding contributions to science and engineering.
- It is awarded annually. It is considered as the United States’ highest honour for achievement and leadership in advancing the fields of science and technology.
sources: the hindu wiki.
Paper 3 Topic: e-technology in the aid of farmers.
Agriculture Ministry launches two mobile apps for farmers
In a bid to let farmers harvest the best of mobile technology, the Agriculture Ministry has launched two mobile apps.
- Crop Insurance: This app would help the farmers not only to find out complete details about insurance cover available in their area but also to calculate the insurance premium for notified crops, coverage amount and loan amount in case of a loaned farmer. It can also be used to get details of normal sum insured, extended sum insured, premium details and subsidy information of any notified crop in any notified area.
- AgriMarket: This app could be used by the farmers to get the prices of crops in the market (mandi) within 50 km radius of the device and other mandis in the country. This app automatically captures the location of the farmers using mobile GPS and fetches the market prices of crops in markets which fall within the range of 50 km.
Both these apps have been developed in house by IT Division of the Department of Agriculture, Cooperation & Farmers Welfare and can be downloaded from Google Store or mKisan portal.
sources: the hindu.
Paper 2 Topic: Government policies and interventions for development in various sectors and issues arising out of their design and implementation.
CBDT tells field officers to finish MAT assessments for FIIs
To end uncertainty over applicability of Minimum Alternate Tax (MAT) on foreign institutional investors (FIIs) and foreign companies, the Central Board of Direct Taxes (CBDT) has asked its field officers to complete the pending assessments in light of the directions issued regarding inapplicability of the tax liability on such entities.
- The government had earlier decided that Section 115JB of Income Tax with regard to levy of MAT will not apply to foreign companies, FIIs and foreign portfolio investors (FPIs) and a requisite amendment would be made in the Finance Bill 2016.
- It was decided that MAT will not apply to companies prior to April 1, 2015. The government had already in last Budget clarified that MAT would not be levied on foreign companies, FIIs and FPIs from April 1, 2015.
- The tax department, earlier this year, faced a huge controversy over applicability of MAT on capital gains made by foreign portfolio investors/foreign institutional investors in period prior to April 1. The issues spooked markets with FIIs threatening to pull out. The government managed to salvage the situation through a committee under Law Commission chairman A P Shah which recommended non applicability of MAT for previous years.
- The government had earlier said that the I-T Act will be amended with retrospective effect to exempt overseas companies, which do not have a permanent establishment in India, from paying MAT.
What is MAT?
The concept of Minimum Alternate Tax (MAT) was introduced in the direct tax system to make sure that companies having large profits and declaring substantial dividends to shareholders but who were not contributing to the government by way of corporate tax, by taking advantage of the various incentives and exemptions provided in the Income-tax Act, pay a fixed percentage of book profit as minimum alternate tax.
- The objective of introduction of MAT is to bring into the tax net “zero tax companies” which in spite of having earned substantial book profits and having paid handsome dividends, do not pay any tax due to various tax concessions and incentives provided under the Income-tax Law.
sources: bs, wiki.
Paper 3 Topic: financial inclusion.
World Bank might support India Post’s payments bank
The World Bank has shown interest to financially support the proposed India Post Payment Bank, having approached the department of posts (DoP). However, there has not been any official announcement yet.
- The Reserve Bank of India (RBI) had in October approved the proposals of 11 applicants, including the DoP, to start a payments bank.
All about Payment Banks:
Payment Bank is a step towards financial inclusion.
- Capital requirement: The minimum paid-up equity capital for payments banks is Rs. 100 crore.
- The payments bank should have a leverage ratio of not less than 3%, i.e., its outside liabilities should not exceed 33.33 times its net worth (paid-up capital and reserves).
- Promoter’s contribution: The promoter’s minimum initial contribution to the paid-up equity capital of such payments bank shall at least be 40% for the first five years from the commencement of its business.
- Foreign shareholding: The foreign shareholding in the payments bank would be as per the Foreign Direct Investment (FDI) policy for private sector banks as amended from time to time.
- Apart from amounts maintained as Cash Reserve Ratio (CRR) with the Reserve Bank on its outside demand and time liabilities, it will be required to invest minimum 75% of its “demand deposit balances” in Statutory Liquidity Ratio(SLR) eligible Government securities/treasury bills with maturity up to one year and hold maximum 25% in current and time/fixed deposits with other scheduled commercial banks for operational purposes and liquidity management.
What are the scopes of activities of Payment Banks?
- Payments banks will mainly deal in remittance services and accept deposits of up to Rs 1 lakh.
- They will not lend to customers and will have to deploy their funds in government papers and bank deposits.
- The promoter’s minimum initial contribution to equity capital will have to be at least 40% for the first five years.
- They can accept demand deposits.
- Payments bank will initially be restricted to holding a maximum balance of Rs. 100,000 per individual customer.
- Can issue ATM/debit cards but not credit cards.
- Can carry out payments and remittance services through various channels.
sources: bs, rbi.