Insights Daily Current Affairs, 28 January 2017

Insights Daily Current Affairs, 28 January 2017

Paper 2 Topic: Government policies and interventions for development in various sectors and issues arising out of their design and implementation.

CWC Signs MoU with IIT Madras and IIS Bengaluru

Central Water Commission (CWC) under the Ministry of Water Resources River Development and Ganga Rejuvenation has signed two separate MoUs with IIT Madras and IIS Bengaluru. This will help them for the procurement of specified equipment and software for enhancing their capability to support dam rehabilitation efforts of CWC.

Background:

The Ministry of Water Resources, River Development and Ganga Rejuvenation has taken on board selected premier academic and research institutes, for capacity building in the areas of dam safety through World Bank assisted Dam Rehabilitation and Improvement Project (DRIP). The scope includes strengthening the testing laboratories, enhancing analytical capabilities, exposure visits to best global institutions and on ground exposure to dam safety concerns to the faculty of these institutions.

About DRIP:

The Ministry of Water Resources (MoWR), Government of India, with assistance from the World Bank, is implementing the DAM REHABILITATION AND IMPROVEMENT PROJECT (DRIP), which would be a six-year project.

• The project originally envisaged the rehabilitation and improvement of about 223 dams within four states namely, Kerala, Madhya Pradesh, Odisha, and Tamil Nadu and later Karnataka, Uttarakhand (UNVNL) and Jharkhand (DVC) joined DRIP and total number of dams covered under DRIP increased to 250.
• The project will also promote new technologies and improve Institutional capacities for dam safety evaluation and implementation at the Central and State levels and in some identified premier academic and research institutes of the country.
• The Central Dam Safety Organisation of Central Water Commission, assisted by a Consulting firm, is coordinating and supervising the Project implementation.
• The project development objectives of DRIP are: (i) to improve the safety and performance of selected existing dams and associated appurtenances in a sustainable manner, and (ii) to strengthen the dam safety institutional setup in participating states as well as at central level.

Sources: pib.

Paper 3 Topic: Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment. 

Centre says GAAR effective April 1, industry demurs

The Centre has reiterated that the General Anti Avoidance Rules – aimed at curbing tax avoidance – will come into force on April 1, ignoring industry’s suggestion to defer the rules on account of uncertainty over their applicability and to provide adequate time to prepare for the new regime.

Background:
Stakeholders and industry associations had requested for clarifications on implementation of GAAR provisions and a Working Group was constituted by Central Board of Direct Taxes (CBDT) to examine the issues raised.

Clarifications made by the government:

• GAAR will not be invoked in cases where investments are routed through tax treaties that have a sufficient limitation of benefit (LOB) clause to address tax avoidance. An LOB clause in tax treaties generally requires investors to meet certain spending and employment criteria to avail the benefits of the treaty, to ensure that only genuine resident companies benefit from the pact.
• All transactions or arrangements that have been approved by courts and quasi-judicial authorities like the authority for advance ruling and that specifically address the issue of tax avoidance will not be subject to the GAAR test.
• GAAR will not be applicable on compulsorily convertible instruments, bonus issuances or split/consolidation of holdings in respect of investments made prior to 1 April 2017 in the hands of the same investor.
• Also, if the jurisdiction of a foreign portfolio investor is finalized based on non-tax commercial considerations and the main purpose of the arrangement is not to obtain tax benefits, GAAR will not apply.

About GAAR:

The General Anti-Avoidance Rule was introduced by Finance Minister Pranab Mukherjee in his Budget with the objective to “counter aggressive tax avoidance schemes.”

• It empowers officials to deny the tax benefits on transactions or arrangements which do not have any commercial substance or consideration other than achieving tax benefit.
• It contains a provision allowing the government to retroactively tax overseas deals involving local assets. It could also be used by the government to target participatory notes (P-Notes).

Sources: the hindu.

Paper 3 Topic: Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment.

Loss making Indian Railways to rent out hill trains to private players

The Indian Railways is planning to start leasing out its standalone passenger corridors and branch lines to private companies for operations and maintenance, marking the beginning of corporate participation in the running of the world’s fourth largest railroad network.

Why this is necessary?

The Indian Railways, with a 1.54-million workforce and about 6,800 stations, runs about 7,000 trains everyday to ferry passengers, an activity that is generally unprofitable. In the financial year ending March 31, 2017, the losses from the passenger segment of the railroad operations are set to be about Rs 33,000 crore, about 10% higher than the losses for the previous financial year.

This move helps minimise operating losses for the government. With this, the Indian Railways may also promote tourism and attract private companies, particularly those from the hospitality and infrastructure industries.

Key facts:

• Narrow and metre-gauge tracks linking the colonial era hill stations are set to be the first of the 108,000-kilometer rail network to be run privately.
• Largely unprofitable routes linking Kalka and Shimla, Siliguri and Darjeeling, the NilgiriBSE 0.00 % mountains with the plains, Neral and Matheran, and the Kangra Valley railways would be among the first the government will likely choose to bid out to private operators.
• Winning bidders will be offered long-term concession agreements, making the leases more viable. The ministry has worked on both upfront-payment and revenue sharing models for leasing standalone passenger corridors and branch lines.
• Companies will also have the flexibility to own and maintain the stations. The companies will also be free to set fares on these lines after the approval from the upcoming Rail Development Authority of India.

Way ahead:

If the experiment meets specified benchmarks for success, these leases could be the future templates for enhanced private participation.

Sources: et.

Paper 2 Topic: Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests.

Seven new countries join BEPS agreement

Seven jurisdictions – Lithuania, Gabon, Hungary, Indonesia, Malta, Mauritius and the Russian Federation – have signed a tax co-operation agreement, the Multilateral Competent Authority Agreement for Country-by-Country Reporting (CbC MCAA), to enable automatic sharing of country-by-country information. Now, the total number of signatories has increased to 57.

About CbC MCAA:

The CbC MCAA, which aims to boost transparency by multinational enterprises (MNEs), allows signatories to bilaterally and automatically exchange country-by-country reports, as part of Action 13 of the base erosion and profit shifting (BEPS) Action Plan.

The agreement helps ensure that tax administrations obtain a better understanding of how MNEs structure their operations, while also ensuring that the confidentiality and appropriate use of such information is safeguarded.

Sources: et.

Paper 2 Topic: Government policies and interventions for development in various sectors and issues arising out of their design and implementation.

99% of Indians over 18 now have Aadhaar cards

Over 99% of Indians aged 18 and above now have Aadhaar cards as more than 111 crore residents have enrolled themselves for the unique identification number.

• The increase in enrolments will come as a boost to the government’s drive to make India a less-cash society as it is encouraging the use of AadhaarPay, a merchant version of Aadhaar-enabled payment system (AEPS).

Way ahead:

Backed by the Aadhaar Act and 91.7% coverage of the total population, the government is set to accelerate the use of unique identification numbers in its social welfare schemes for disbursing entitlements and subsidies as it will help check duplication and pilferage.

About Aadhaar:

Aadhaar is a 12 digit individual identification number which will serve as a proof of identity and address, anywhere in India.

• The Unique Identification Authority of India (UIDAI) assigns Unique Identification Number “Aadhaar” to residents of India on voluntary basis.
• Aadhaar-platform is aimed at providing social security benefits / subsidies based on eligibility through direct benefit transfer. It also helps bring transparency and eliminate corruption, leakage and inefficiency.
• It was conceived as an initiative that would provide identification for each resident across the country and would be used primarily as the basis for efficient delivery of welfare services.
• It would also act as a tool for effective monitoring of various programs and schemes of the Government.

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.

GSLV’s cryogenic upper stage tested successfully

The Indian Space Research Organisation’s Propulsion Research Complex has successfully conducted the stage level test of GSLV MK III’s cryogenic upper stage C-25.

• The cryogenic upper stage of the GSLV is the large C-25, the most difficult component of the launch vehicle to be developed. It will be powered by the indigenously developed CE-20 engine.

Background:

Cryogenics is the study of substances at very low temperature – at minus 150 degrees Celsius and less, in which gases like oxygen, hydrogen and nitrogen turn liquid. Cryogenic engines are called so because they use liquid oxygen and liquid hydrogen as fuel. The extremely cold temperatures make these liquids tricky to operate.

Key facts:

• The GSLV-III or Geosynchronous Satellite Launch Vehicle Mark III, is a launch vehicle developed by the Indian Space Research Organization.
• GSLV Mk III is conceived and designed to make ISRO fully self reliant in launching heavier communication satellites of INSAT-4 class, which weigh 4500 to 5000 kg.
• It would also enhance the capability of the country to be a competitive player in the multimillion dollar commercial launch market. The vehicle envisages multi-mission launch capability for GTO, LEO, Polar and intermediate circular orbits.
• GSLV-Mk III is designed to be a three stage vehicle, with 42.4 m tall with a lift off weight of 630 tonnes. First stage comprises two identical S200 Large Solid Booster (LSB) with 200 tonne solid propellant, that are strapped on to the second stage, the L110 re-startable liquid stage. The third stage is the C25 LOX/LH2 cryo stage. The large payload fairing measures 5 m in diameter and can accommodate a payload volume of 100 cu m.

Sources: the hindu.

Facts for Prelims

TROPEX 17: 

• The Indian Navy’s Annual Theatre Readiness Operational Exercise (TROPEX) has begun off the Western Seaboard.
• The exercise will have ships and aircraft of both the Western and Eastern Naval Commands, as also assets from the Indian Air Force, Indian Army and the Indian Coast Guard exercising together.
• The exercise is aimed at testing combat readiness of the combined fleets of the Indian Navy, and the assets of the Indian Air Force, Indian Army and the Indian Coast Guard.
• It will also strengthen inter-operability and joint operations in a complex environment.