Comprehensive News Analysis – 16 January 2016

Table of Contents:

A. GS1 Related:
B. GS2 Related:
C. GS3 Related:

1. Odd-Even Over

2. A Tax on Samosas!

3. Rupee falls amid fears of global slowdown

D. Important Editorials: A Quick Glance

The Hindu:

Indian Express:

1. Start Up India: Criticisms

Others:

1. Financial Express: Taxing E-Commerce

2. Financial Express: Unlock Land Titles

E. Concepts-in-News: Related Concepts to Revise/Learn
F. Practice Questions
G. Archives

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Useful News Articles

A. GS1 Related:

— Nothing here today, folks! —

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B. GS2 Related:

— Nothing here today, folks! —

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C. GS3 Related:

1. Odd-Even Over: To return in New Form later

Topic: Environment, Urban Planning

Category: Pollution, Urban Infrastructure

Location: Hindu, IE – Headline news

Key points:

– Mixed results as far as pollution and congestion are concerned

– Great success as far as awareness and engagement are concerned! 🙂

– Assessing the impact: new data to be collected

2. A Tax on Samosas!

Topic: Economy

Category: Taxation

Location: IE, Page 12

Key points:

– Bihar govt’s bid to raise revenues by imposing taxes on packaged samosas and kachoris raises eyebrows (13.5 VAT)

 

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3. Rupee falls amid fears of global slowdown

Topic: Economy

Category: Foreign Exchange

Location: IE, Page 17

Key points:

– Investors acting bearish…

– Sustained capital flows are pulling the rupee down. FIIs have pulled out Rs 3,484 crore in the last two weeks. The fall in the rupee will offset some of the gains from the crude oil price fall

– Yuan’s fall has triggered fears of a currency war. Indonesia and Thailand’s currencies have fallen 9 per cent and 10 per cent, respectively, over the past year. Vietnam and Taiwan’s too have declined 4 per cent and 6 per cent.

– By devaluing its currency, China gains an advantage in global trade. Its exports become cheaper, and more attractive, to foreign buyers. To stay competitive against China, its trade partners — mostly in Asia — devalue as well to maintain a cheaper currency.

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D. Important Editorials: A Quick Glance

The Hindu:

Indian Express:

Topic: Economy, Paper III

Category: Investment (Essay Potential)

Key points:

– A “start-up policy” today in the form of a Start-up and Entrepreneurship Bill, which, among other things, will use taxpayer funds to spur investments in start-ups.

– Venture Capital funds are high risk operations – right use for tax money?

– When there is no apparent dearth of private money for such “aspirational India” initiatives, why should a government that still has to feed, clothe, educate and skill a vast majority of its citizens fritter away scant tax resources on such risky investments?

– Quotable Quote: “Venture-capital financing for Indian start-ups has grown at a compounded rate of 30 per cent over the last 15 years. India already has the third largest start-up ecosystem in the world, boasting of more than 12,000 active start-ups. That there is a thriving and growing private venture-capital industry for providing risk capital to start-ups in India is quite evident. It is then inexplicable that the government should seek to squander away scarce tax rupees in the garb of providing a funding impetus to the start-up ecosystem — when, clearly, there are worthier claimants such as issues of rural distress, bad loans in the banking sector, and distraught power sector finances.

The need for state intervention in any economic activity is either to kick start it, or to step in when private markets have failed. Neither is the case with venture-capital funding for Indian start-ups…”

Related Articles:

Stopping as vital as starting: Need for Exit Policy

More on Insolvency Bill

Assignment: Go to prs.org and summarize proposed Bankruptcy bill

 

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Others:

1. Financial Express: Taxing E-Commerce

Topic: Economy, paper III

Category: Taxation, FDI, E-commerce

Key Points:

– FDI is not allowed in online retail – so e-commerce companies in India follow the marketplace model – where these companies do not own the goods. They facilitate transactions between the buyers and sellers for a fee.

– While e-commerce has taken root with people across India buying goods online, it has ended up irking state finance ministers no end. While people were getting goods cheaper, it meant a loss of tax revenue to states.

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Topic: Economy, Paper III

Category: Investment, Land Reforms, Rural Development (essay potential)

Key Points:

– The lack of clear land title and land records has inhibited the development of a functioning land market

– Poverty is not because people are poor, but primarily because of their inability to capitalise, legally and easily, on the few assets they do possess…

– bottom-up, community-driven mapping and documentation of land should be facilitated, with the aid of GPS instruments and satellite images

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

i. Pollution measurement

ii. VAT

iii. Bear market

iv. Venture Capital

v. Bankruptcy

vi. FDI in Retail

vii. Land Reforms + Land Titles + Technology in Land Reforms

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F. Fun with Practice Questions 🙂
Question 1: Regarding pollution control and measurement:

1. National Air Quality Index (AQI) is for for monitoring the quality of air in major urban centres across the country on a real-time basis

2. AQI is meant to enhance public awareness for taking mitigative action.

3. The index considers eight pollutants — PM10, PM2.5, NO2, SO2, CO, O3, NH3 and Pb

Which among the above statements is/are wrong?

a) 1, 2 & 3

b) 2 & 3

c) 2 only

d) None

Question 2: Which of the following is not an indirect tax?

a) VAT

b) GST

c) Sales Tax

d) Wealth Tax

Question 3: Consider the statements below about Land Reforms in India:

1. Imposing land ceilings was a kind of land reform

2. Green revolution was a kind of land reform

3. Arbitrary land acquisition has been a major sore point over the years.

Answer choices:

a) Only 1 is true

b) Only 1 and 2 are true

c) Only 2 and 3 are true

d) All of the above are true

Question 4: Which of the following is false about Bear markets?

a) It accompanies an economic downturn

b) It promotes added fear and insecurity in markets

c) It causes the various market indices to go up sharply

d) None of the above

Question 5: With regard to FDI in retail:

1. Single brand outlets such as Adidas are allowed to have 100% FDI

2. Single brand outlets (entering india) can sell online only if they have license for physical outlets

3. Foreign Investment Promotion Board is in charge of all FDI approvals.

Answer choices: a) Only 1 is true b) Only 1 and 2 are true c) Only 2 and 3 are true d) All of the above are true

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Check Your Answers

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