Comprehensive News Analysis – 07 January 2017

Table of Contents:

A. GS1 Related:
B. GS2 Related:

1. Aadhaar now mandatory for EPF pension scheme

2. Bengaluru is set to host PravasiBharatiya Divas

3. May’s visit to the U.S. to put “special relationship” to the test

C. GS3 Related:

1. GDP growth expected to be slower at 7.1% this year

2. Centre clears 26% strategic sale in BEML

D. GS4 Related
E. Important Editorials : A Quick Glance

The Hindu

1. Clamping down on ordinance raj

Economic Times

1. Pension regulator gets it right on NPS

Business Line

1. Failure of leadership

PIB

1. Japan to assist in making Chennai, Ahmedabad and Varanasi Smart Cities

2. India and Kazakhstan sign Protocol to amend the Double Taxation Avoidance Convention (DTAC)

F. Concepts-in-News: Related Concepts to Revise/Learn:
G. BILLS/ACTS/SCHEMES/ORGS IN NEWS
H. Fun with Practice Questions 🙂
I. Archives

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Useful News Articles

A. GS1 Related


B. GS2 Related
1. Aadhaar now mandatory for EPF pension scheme

Category: Polity and Governance  

Topic: Government Initiatives  

Key Points:

  • In a recent development, the Centre has made obtaining an Aadhaar number mandatory for 2.5 crore members of the Employees’ Pension Scheme of 1995.
  • The Labour Ministry said in a notification that those without an Aadhaar number will have to make an application to get enrolled by January 31, 2017.
  • In a notification issued by the Union Labour and Employment Ministry on January 4, “Members and pensioners of the Employees’ Pension Scheme desirous of continuing to avail pension and membership to the Employees’ Pension Scheme by availing the Central Government’s contribution and subsidy under the said scheme, are hereby required to furnish proof of the possession of the Aadhaar number or undergo Aadhaar authentication,”.

 

  1. Bengaluru is set to host Pravasi Bharatiya Divas

Category: Polity and Governance 

Topic: Government Initiatives 

Key Points:

  • The 14th edition of Pravasi Bharatiya divas will kickstart on Saturday with participation of more than 6,000 delegates from 30 countries.
  • The 14th edition of the Pravasi Bharatiya divas is being held in Bengaluru.
  • In fact, many delegates, who have descended on the city, are seeing the event as a platform to meet people from different regions or to air their grievances even as efforts are being made to showcase investment opportunities in various states before potential investors.
  • This event will be a three-day event where, technological advancements and social innovations will be showcased to Persons of Indian Origin (PIO) looking for business opportunities in the country.
  • The start up environment in Bengaluru will be a highlight during the Youth Pravasi Divas on Saturday.

 

3. May’s visit to the U.S. to put “special relationship” to the test

Category: International Relations

Topic: Effect of policies and politics of developed and developing countries on India’s interests

Key Points:

  • It is reported that British Prime Minister Theresa May is set to call on United States President-elect Donald Trump shortly after his inauguration this spring.

Background of events:

  • It is important to note that the enduring partnership between the two countries, which was famously described many decades ago by Winston Churchill as the “special relationship”, has gone through ups and downs.
  • The Obama administration in the U.S. had prioritised relations with other European nations such as Germany. In fact, Obama had described Chancellor Angela Merkel last year as his “closest international partner” over the past eight years.
  • Further, attempts to forge a Transatlantic Trade and Investment Partnership (TTIP) also reflected the U.S.’ eagerness to broaden its relations with Europe beyond Britain.
  • However, with the future of TTIP looking decidedly dim, even before the U.S. election, and the election of Mr. Trump, 2017 will throw up new opportunities — and challenges — for the relationship.

 

C. GS3 Related
1. GDP growth expected to be slower at 7.1% this year

Category: Indian Economy

Topic: Government Policy

Key Points:

  • Chief Statistician TCA Anant said on 6th January, 2017 that India’s gross domestic output is expected to grow at a slower pace of 7.1 per cent in 2016-17 compared to the 7.6 per cent clocked in the previous year.

2. Centre clears 26% strategic sale in BEML

Category: Indian Economy   

Topic: Government Policy

Key Points:

  • It is reported that the Centre will sell 26 per cent stake in defence equipment manufacturer BEML.
  • This will make it the first major PSU to be sold through strategic disinvestment, which may fetch the exchequer over ₹1,000 crore.
  • It is important to note that in September, the Cabinet had cleared strategic sale of Bharat Pumps and Compressors Ltd., while in December it had approved sale of India’s first pharma company Bengal Chemicals and Pharmaceuticals Ltd as well as Hindustan Antibiotics Ltd.
  • These PSUs will be the first privatisation since the sale of Jessop and Co in 2003-04 under the NDA government headed by Prime Minister Atal Bihari Vajpayee.

 

D. GS4 Related
E. Important Editorials: A Quick Glance
The Hindu
1.  Clamping down on ordinance raj

Category: Polity and Governance

Topic: Judiciary

Key Points:

  • In Indian polity, it is important to note that the temptation to use the power vested in the President and the Governors under Articles 123 and 213 of the Constitution is generally a result of one of the following three reasons:
    a) reluctance to face the legislature on particular issues,
    b) fear of defeat in the Upper House where the government may lack the required numbers,
  1. c) and the need to overcome an impasse in the legislature caused by repeated and wilful disruption by a vociferous section of the Opposition.

The recent verdict of a seven-member Bench of the Supreme Court breaks new ground in highlighting the constitutional limitations on the cavalier resort to ordinances.

Past Precendents

  • In 1986, the Supreme Court had declared in the D.C. Wadhwa case that repeated re-promulgation of ordinances was unconstitutional.  
  • In Krishna Kumar Singh v. State of Bihar, the court went deeper and concluded that the failure to place an ordinance before the legislature constitutes abuse of power and a fraud on the Constitution.

In fact, the recent verdict of a seven-member Bench of the Supreme Court widens the scope of judicial review of ordinances. 

Ultimately, it is important to note that the courts can only define the boundaries between the use and abuse of power, but it is up to parties in the legislature to observe the limits of constitutional propriety and show that they have both the time and the will to enact laws.

 

Economic Times

1. Pension regulator gets it right on NPS

Category: Indian Economy

Topic: Government Policy 

Key Points:

  • Experts believe that the pension regulator is right to seek tax parity for members of the National Pension System (NPS) and the Employees Provident Fund (EPF).
  • It is important to note that NPS subscribers have to pay tax at maturity, unlike the EPFO members, who are exempt from tax at all three stages of contribution, accumulation and withdrawal.
  • It has been suggested that the government must ensure tax parity to popularise NPS, which has lower administrative costs besides superior returns.
  • The case is compelling, considering that the tax-exempt saving allowed now is low, and in combination with the Public Provident Fund, makes contributions to the NPS effectively out of taxed income for people with even moderate incomes.
  • It has been observed that a swift adoption of the goods and services tax (GST) will also help widen the income-tax base.
  • Further, a uniform exempt-exempt-tax (EET) would do away with the absurd restriction of annuities as the only asset class that qualifies for tax exemption when savings from NPS are redeployed.

 

Business Line

  1. Failure of leadership

Category: Polity and Governance

Topic: Social Justice, Government Initiatives    

Key Points:

  • In a recent survey by the Indian National Bar Association a shocking statistic was revealed: nearly 70 per cent of female victims of sexual harassment in the workplace refrain from lodging a complaint — mostly due to fear, embarrassment and a lack of confidence in the system’s ability and willingness to address the issue.
  • It is important to note that the sexual harassment of women at workplaces is commonplace, but regrettably, managements continue to be in a state of denial.
  • Unfortunately, most businesses do not consider sexual harassment a serious offence and tend to sweep complaints under the carpet.
  • In many instances, women are blamed for their male colleagues’ unacceptable behaviour.
  • It is also important that every employee of an organisation be given a clear understanding of what is acceptable and what is unacceptable behaviour.
  • Misuse of provisions of the law, often out of vindictiveness, must also be prevented.
  • Organisations stand to gain by creating a healthy work atmosphere where men and women can be equal-opportunity professional partners, and more women join the workforce.

 

PIB

  1. Japan to assist in making Chennai, Ahmedabad and Varanasi Smart Cities

Category: International Relations

Topic: Bilateral Agreements

Key Points:

  • Japan has decided to be associated with the development of Chennai, Ahmedabad and Varanasi as smart cities. Japan is quite interested in urban development initiatives of the Government of India and decided to be a partner.
  • So far, leading countries have come forward to be associated with development of 15 smart cities. These include: United States Trade Development Agency (USTDA) –Visakhapatnam, Ajmer and Allahabad, UK-Pune, Amaravati(Andhra Pradesh) and Indore, France-Chandigarh, Puducherry and Nagpur and Germany –Bhubaneswar, Coimbattore and

 

  1. India and Kazakhstan sign Protocol to amend the Double Taxation Avoidance Convention (DTAC)

Category: International Relations  

Topic: Bilateral Agreements

Key Points:

India and Kazakhstan on 6th January, 2017 signed in the national capital a Protocol to amend the existing Double Taxation Avoidance Convention (DTAC) between the two countries which was earlier signed on 9th December, 1996 for the avoidance of double taxation and for the prevention of fiscal evasion with respect to taxes on income.

Salient features of the Protocol are as under:

(i) The Protocol provides internationally accepted standards for effective exchange of information on tax matters. Further, the information received from Kazakhstan for tax purposes can be shared with other law enforcement agencies with authorisation of the competent authority of Kazakhstan and vice versa.

(ii) The Protocol inserts a Limitation of Benefits Article, to provide a main purpose test to prevent misuse of the DTAC and to allow application of domestic law and measures against tax avoidance or evasion. 

(iii) The Protocol inserts specific provisions to facilitate relieving of economic double taxation in transfer pricing cases. This is a taxpayer friendly measure and is in line with India’s commitment under Base Erosion and Profit Shifting (BEPS) Action Plan to meet the minimum standard of providing Mutual Agreement Procedure (MAP) access in transfer pricing cases. 

(iv) The Protocol inserts service PE provisions with a threshold and also provides that the profits to be attributed to PE will be determined on the basis of apportionment of total profits of the enterprise. 

(v) The Protocol replaces existing Article on Assistance in Collection of Taxes with a new Article to align it with international standards.


F. Concepts-in-News: Related Concepts to Revise/Learn:
  • Base Erosion and Profit Shifting (BEPS)
  • Double Taxation Avoidance Convention (DTAC)


G. BILLS/ACTS/SCHEMES/ORGS IN NEWS

National Civil Aviation Policy, 2016 : Salient Features 


H. Fun with Practice Questions 🙂
Question 1: Consider the following statements, regarding the recently signed Protocol to amend the Double Taxation Avoidance Convention (DTAC) between India and Kazakhstan,
  1. The Protocol provides internationally accepted standards for effective exchange of information on tax matters.
  2. The information received from Kazakhstan for tax purposes can be shared with other law enforcement agencies with authorisation of the competent authority of Kazakhstan and vice versa.

Which of the following statements is/are incorrect?

A) 1 Only

B) 2 Only

C) Both 1 and 2

D) Neither 1 nor 2

Question 2: Consider the following statements regarding international assistance for developing smart cities in India,
  1. Japan has decided to be associated with the development of Bengaluru, Ahmedabad and Varanasi as smart cities.
  2. France is associated with the development of Chandigarh, Puducherry and Nagpur.

Which of the following statements is/are correct?
a) 1 only

b) 2 only

c) Both 1 and 2

d) Neither 1 nor 2

Question 3: Consider the following statements
  1. Article 123 of the Constitution of India gives the President legislative powers to promulgate ordinances.
  2. Article 213 of the Constitution of India gives the Governor the power to promulgate ordinances.

Which of the following statements is/are correct?
a) 1 only

b) 2 only

c) Both 1 and 2

d) Neither 1 nor 2

Question 4: Under the Indain Constitution, who are the ultimate Sovereign ?

a) The Indian People

b) Prime Minister of India

c) President of India

d) All elected leaders of India

Question 5: Consider the following statements,
  1. Article 123 of the Constitution grants the President certain law making powers to promulgate Ordinances when either of the two Houses of Parliament is not in session and hence it is not possible to enact laws in the Parliament.
  2. An Ordinance may relate to any subject that the Parliament has the power to legislate on.

Which of the following statements is/are correct?

a) 1 only

b) 2 only

c) Both 1 and 2

d) Neither 1 nor 2

Check Your Answers

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