Comprehensive News Analysis - 07 March 2016

A. GS1 Related

— Nothing here today, folks! —

B. GS2 Related

1. Civil Aviation Minister deflects CAG queries on revenue loss

Topic: Polity

Category: Governance

Location: The Hindu

Key Points:

• The CAG says there were several instances of possible revenue loss to the government in the joint ventures running the airports in Mumbai and Delhi
• The allegation is based on a limited audit of the books of the Airports Authority of India (AAI), which holds a 26 per cent stake in both the JV
• The AAI is supposed to have suffered huge losses because of various anomalies in the implementation of JVs
• DIAL (Delhi International Airport Ltd.) and MIAL (Mumbai International Airport Ltd.) are the JVs with the AAI
• GMR runs the Delhi airport, and GVK runs the Mumbai airport.

2. US to deploy nuclear-capable B-52 bombers against Islamic State

Topic: Polity

Category: Governance

Location: The Hindu, Page 17
Key Points:

• The U.S. is set to deploy its nuclear-capable B—52 warplanes for the first time to bomb ISIS as part of efforts to ramp up campaign against terrorists in Syria and Iraq
• These airplanes provide more range and payload capacity
• The aircraft had been used to drop unguided bombs in previous wars, including Afghanistan, can now be used to provide backup with the accuracy of precision-guided munitions

3. Efforts on to bring nun to Djibouti

Topic: International Relations

Category: bilateral issues

Location: The Hindu

• 15 people, including 4 nuns, one of them Indian, were killed in the terror attack(rebels) on the old age home in Yemen
• Efforts are on to bring Sr. Sali, the nun belonging to the Missionaries of Charity who escaped the attack to Djibouti
• Fr. Tom Uzhunnalil, a Salasian priest was attacked and abducted
• Efforts are on to know about the whereabouts of the priest

4. Proceed with caution on trade pact with India: Rajapaksa

Topic: International Relations

Category: Effect of policies of countries on India’s interests.

Location: The IndianExpress

Key Points:

• Former President Mahinda Rajapaksa on Sunday urged the Sri Lanka government to proceed “cautiously” on the proposed Economic and Technology Cooperation Agreement (ETCA) with India
• Mr. Rajapaksa wanted the government to take a “phased approach” on the issue
• Initially, “impediments to the implementation of the existing FTA [Free Trade Agreement] with India should be ironed out”
• “The problem of Indian fishermen poaching in Sri Lankan waters which has now reached crisis proportions should also be sorted out at this stage to create an atmosphere of trust between the people of the two countries,” he said
• “Issues such as ports of entry, product certification, mutual recognition of standards, Indian state laws governing trade and the caps imposed on certain export items from Sri Lanka all became issues that prevented Sri Lanka from achieving its full export potential to the Indian market,” he said
• He stressed that the country’s focus should be to get India to open up “without restrictions” on Sri Lanka’s main commodities of exports such as apparel and tea

5. 2013 Muzaffarnagar riots: Failure of intelligence, top officials led to riots in Muzaffarnagar, says probe panel

Topic: Polity

Category: Governance

Location: The IndianExpress

Key Points:

• THE JUSTICE Vishnu Sahai inquiry commission set up to probe the 2013 Muzaffarnagar riots has submitted its report
• It blamed intelligence failure and laxity on the part of some top officials for the violence in western Uttar Pradesh that claimed over 60 lives

6. NJAC case: Factor in merit, integrity in choosing judges, Government tells Supreme Court

Topic: Polity

Category: Governance

Location:

Key Points:

• The Memorandum of Procedure (MoP), finalised by a Group of Ministers (GoM) headed by External Affairs Minister seeks to introduce performance appraisal as a standard for appointing chief justices of HCs
  and SC judges
• After it quashed the proposed National Judicial Appointments Commission (NJAC), the SC’s Constitution Bench had, in December 2015, left it to the Centre to consult the CJI for drafting the new memorandum for appointments of judges to the higher judiciary

7. Xi tells Taiwan to stop dreaming of independence

Topic: International Relations

Category: India’s Neighborhood

Location: The Hindu

Key Points:

• The new government in Taipei has brought an exercise of sovereignty on the agenda
• ‘’We will resolutely contain ‘Taiwan independence’ secessionist activities in any form,” President Xi was quoted as saying
• Taiwan split from mainland China in 1945
• the communist revolution in 1949, drove away Chiang Kai-shek’s defeated Nationalists who formed their government on the island in that year
• the 1992 Consensus had called for political cooperation and integration between the 2 nations

C. GS3 Related

1. NSG deployed in Somnath, Delhi is put on high alert

Topic: Security

Category: Internal Security

Location: The Hindu

Key Points:

• Intelligence inputs say a group of 8 to 10 terrorists have sneaked into India from Pakistan
• Gujarat and Delhi were on high alert with several teams of National Security Guard commandos on standby
• NSG teams have been deployed in Ahmedabad and Somnath temple
• all public functions to celebrate Shivratri at the historical Somnath temple have been cancelled

2. Proposals of the Companies Law Committee – A case of good spring-cleaning

Topic: Economic Development

Category: State of Indian Economy

Location: The Hindu

Key Points:

• The Committee appointed by the Government of India to suggest changes in the Companies Act, 2013 and Rules has submitted its report
• The Committee’s suggestions and potential impact
• Section 4 (1)(c) of the Companies Act, 2013 should be amended to allow companies to have a generic object( not specifically disclosed) clause to engage in any lawful activity or business as per the law for the time being in force
• a fundamental change in the business of a company without shareholders’ consent may not be in the interests of the investing public
• the present prohibition against more than two layers of subsidiaries for investments should be done away with
• When India is yet to tackle the huge problem of black money, this does not seem to a right measure
• The Committee has suggested the introduction of ‘test of materiality ‘for the purpose of determining whether pecuniary(shares) relationship could impact the independence of an individual to be an independent director
• any amendment to the existing law, which has the potential to reduce independence of directors, does not seem right
• National Financial Reporting Authority (NFRA) to be established at par with global standards
• the National Company Law Tribunal and the National Co. Law Appellate Tribunal should be amended to conform to the Supreme Court of India’s order of May, 2015

3. Economy will ‘absolutely not’ experience hard landing: China

Key Points:
Topic: Economy

Category: World Economy

Location: The Hindu

• Beijing kicked off its 12-day annual national parliament
• It underscored the challenges facing China as its economy transitions from an investment and export focused economy to one based more on services and consumption
• China’s economy grew 6.9 per cent in 2015, the slowest pace in a quarter of a century, but still comfortably the fastest among major economies
• It has set a growth target of 6.5 per cent to 7 per cent for this year
• fiscal deficit target is 3 per cent of GDP, up from the previous year’s target of 2.3 per cent
• China has massive foreign exchange reserves of more than $3 trillion to tap if needed, but a sharp decline in reserves in the past 18 months as Beijing sought to support its yuan has scared some investors
• Head of the National Development and Reform Commission (NDRC) said “predictions of a hard landing are destined to come to nothing.”

4. Those under watch ineligible for income declaration scheme

Topic: Economy

Category: Indian economy

Location: The Hindu

• Tax payers, whose returns were picked for random scrutiny by the authorities in recent years, would not be eligible to turn concealed income into ‘white’ under the Income Declaration Scheme (IDS), announced in the Union Budget to bring black money into the tax net
• Experts believe this may prove a dampener for the scheme
• the scheme provides immunity from wealth tax, scrutiny and prosecution and from the Benami Transaction Act

5. ‘Leak’ forces brief shutdown at snag-hit Kudankulam-I

Topic: Security

Category: Internal Security

Location:

• the country’s first nuclear reactor unit built with Russian assistance, is learnt to have been briefly shut down to attend to a leak noticed in the conventional system of the station recently
• To a specific query on the leak, a government official involved in the exercise said the Russian VVER-1000 reactor unit was restarted after “necessary rectification”
• The incident, officials said, had “no radiological safety implications” and therefore did not call for any safety and security audit

6. Tax concessions to help start-ups mobilise capital around the corner

Topic: Indian Economy

Category: Changes in industrial policy and their effects on industrial growth.

Location: The Hindu, Page 19

Key Points:

• To help start-ups mobilise capital at affordable rates during the initial stages, the Department of Industrial Policy and Promotion (DIPP) will soon take up with the Finance Ministry a proposal to grant Capital Gains Tax (CGT) exemption for those investing their capital gains in regulated/notified Venture Capital (VC) and angel funds.
• The budget had proposed CGT exemption for persons investing their capital gains only in regulated / notified Fund-of-Funds (FOF).
• FOFs, as per the DIPP’s Start-up Action Plan, are professionally managed funds that will not invest directly in start-ups, but contribute to the capital of VCs registered with capital markets regulator SEBI.
• These VCs, in turn, provide the needed early stage funding for start-ups. CGT is the tax-on-profit made by a person through sale of a capital asset (such as an investment or real-estate).
• According to sources, the Finance Ministry did not want VCs and angel funds to also be notified (as funds in which persons can reinvest their capital gains to avail CGT exemption), saying this could lead to misuse through ‘Related Party Transactions’ (RPT).
• RPTs are transactions such as sale / lease of property between the company and its related parties, including directors, key managerial personnel or their relatives.

D. GS4 Related

E. Important Editorials : A Quick Glance

1. Don’t let down the children-The Hindu

• the fourth round of the National Family Health Survey (NFHS) for 15 States revealed worrying levels of stunting and lack of healthy weight among children
• Budget 2016-17 should have provided some remedies
• the Budget has dealt the ICDS a blow in the form of a 7 per cent cut over the revised estimate of expenditure for the previous year, of about Rs.15,500 crore
• practical evidence on the effectiveness of supplementary nutrition should prompt the Centre to enhance funding for the ICDS
• Data from an earlier round of the NFHS show that when nutrition is available every day to children under two, there is a marked positive effect on their height, particularly for girls
• Such early interventions have a life-long impact, in the form of higher productivity and earnings
• It is incumbent on the Central Ministry to monitor the implementation of the scheme so that the allocated money is not leaked out
• Raising the outlay, instituting a mechanism to heighten awareness among communities in less developed States and achieving full coverage are needed remedies

2. Oil slip – The Indian Express

Key Points:

• Does the government appreciate the severity of the crisis facing the petroleum industry? Is it serious about reviving domestic oil and gas exploration? And is its emphasis on clean energy substantive?
• Firstly there are many ambiguities
• The budget announced that the price of gas from newly discovered fields would be determined through the market and linked to the price of alternative fuels.
• It was not clear “newly discovered” meant discoveries yet to be made or those already made but not monetised.
• It was also not clear whether the price would be linked to low-priced coal, the higher-priced imported liquefied natural gas or to a fuel between these two price points
• The switch in the calculation of cess on oil production from a specific rate to ad valorem is a positive move
  (Earlier fixed per barrel now as a percentage of the value of a barrel)
• But the tax rate is as high as 20%
• Secondly,for increased production govt. must offer tax credits and exemptions for incremental production from marginal fields and enhanced oil recovery
• And third, if it wishes to give a boost to clean energy, it should put together a more robust package of subsidies and concessions
• Give incentives for electric vehicles and cement R&D partnerships between government entities, private corporations, universities and research laboratories
• India’s dependence on oil and gas imports will increase in the short to medium term
• the petroleum industry is in terrible shape. Every private oil company loses cash at $30 per barrel
• It’s time for the govt. to take action to help the ailing domestic industry

3. Missed opportunity – The businessline

Key Points:

• the SC declined to grant an interim stay on the Telecom Regulatory Authority of India’s order levying a penalty on call drops on mobile telephony providers
• This has put yet another strain has on telecom operators’ financials
• the penalty of ₹1 per dropped call — nearly thrice the average revenue per minute the sector earns from voice calls — is estimated by analysts to impact their bottomlines by around 7 to 8 per cent in the coming fiscal
• the Budget plans to collect a record ₹99,000 crore from telecom operators in 2016-17 in the form of spectrum charges and licence fees. This is almost double the revised estimates for the current financial year at ₹56,034 crore
• Further, the right to use the spectrum as well as subsequent spectrum trades are to be treated as a service and charged service tax
• All this creates additional pressure on telecom companies which are already reeling under a cumulative debt of over ₹2.5 lakh crore
• the Finance Ministry has taken a myopic view on spectrum sales to try and squeeze out as much as the market can bear
• The reality is that India is currently ranked 142nd in terms of Internet penetration, way below even countries like Bhutan and Sri Lanka
• If India has to catch up with the rest of the world, then the Centre must encourage investments in the creation of broadband infrastructure

4. Try competition, not price control; government should set aside recommendation by agriculture ministry panel-The Economic Times

Key Points:

• the government should set aside the recommendation by the agriculture ministry panel for 70% reduction in the royalty fee for Mosanto’s genetically modified Bt cotton
• Price is an issue: a 450-g packet of Mosanto seeds cost between Rs 830 and Rs 1,100
• Mosanto controls 90% of the market
• A better idea would be to take on Mosanto in the marketplace by fostering competition, from public and private sector seed companies that draw on research carried out at Indian agricultural institutions
• Some options are already in the testing stage: seeds developed by the Nagpur-based Central Institute of Cotton Research are to be available to farmers in 2017, at about 10% of the price
• the Indian Bt Bikaneri Nerma is being developed by the University of Agricultural Sciences
• This would result in competition, giving farmers the choice they lack at present. Politically, too, this would be more fruitful.

F. Concepts-in-News: Related Concepts to Revise/Learn:

i.   NSG

ii.  CAG

iii.  AAI

iv.  NFRA

v.  National Companies Law Tribunal

G. Fun with Practice Questions 🙂

To be Updated

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