Comprehensive News Analysis - 16 June 2016

A. GS1 Related

Nothing here today folks! J

B. GS2 Related

1. Govt. clears civil aviation policy, makes flying cheaper

Topic: Civil Aviation

Category: Governance

Location: The Hindu

Key points:

• The country’s first National Civil Aviation Policy has been approved by the government
• New airlines, such as Vistara and AirAsia, will no longer have to wait for five years before starting operations on international routes. Start-up airlines can now fly abroad after operating at least 20 planes or 20 per cent of their total flying capacity, whichever is higher, on domestic routes(According to a 2004 norm, which is also known as the ‘5/20 rule’, a domestic airline is allowed to go international only after flying for five years to domestic destinations and operating at least 20 aircraft)
• India will have an open-sky policy for countries beyond the 5,000-km radius from Delhi on a reciprocal basis. This means that airlines from European or SAARC countries will have unlimited access, in terms of number of flights and seats, to Indian airports, leading to increased flight frequencies with these countries (While India has full open-sky with U.S., it has a near open-sky agreement with the U.K. with a restriction on the frequency of flights to and from Mumbai and Delhi)
• As a part of its regional connectivity scheme, passengers will be charged Rs. 2,500 for an hour’s flight on regional routes by the airlines. The ceiling on airfares will be proportionate to the flying hour. For instance, airlines will charge passengers around Rs. 1,200 for a 30-minute flight and around Rs. 1,800 for a 45-minute journey.
• Domestic airlines will be required to provide more flights to the north-eastern region, Jammu and Kashmir, Andaman and Nicobar Islands and Lakshadweep as the route dispersal guidelines have been amended to add six more sectors to the metro routes. As per the guidelines, on such north-eastern and other routes, airlines are mandated to fly 10 per cent of their total capacity they deploy on metro routes. The government will provide financial support to fund airlines’ losses on flying to un-served routes.This will be done through “a small levy per departure” on all domestic routes except in remote and north-eastern States
• The government doesn’t plan to auction the international air traffic rights as was proposed earlier.A committee, headed by the Cabinet Secretary, will however recommend a method to allocate additional capacity entitlements to other countries wherever the Indian carriers have not utilised 80 per cent of their bilateral air traffic rights

Category: Governance

Key points:

• The Ministry of Human Resource Development is set to launch an app that anyone can use to register for volunteer work at government schools
• The scheme, called Vidyanjali, will be available in 21 States that are already on board this initiative
• Volunteers, however, cannot supplement the work of teachers by aiding them in the classroom as the Right to Education Act does not permit this sort of teaching, an official said.They will only be allowed to help with non-scholastic activities such as reading and theatre

Category: International Relations

Key points:

• A day after Prime Minister Narendra Modi’s recent address to a joint session of Congress, top Republican senator John McCain moved an amendment to the National Defence Authorisation Act (NDAA-17) which if passed would have recognised India as a global strategic and defence partner
• The U.S. had recognised India as a “major defence partner” in a joint statement issued after Mr. Modi held talks with President Barack Obama which supported defence-related trade and technology transfer to the country which would now be treated on par with America’s closest allies
• The NDAA was passed by the Senate with an overwhelming bipartisan vote of 85-13. But the amendment could not be passed by the Senate

Category: International Relations

Key points:

• Multiple incidents during the ongoing Malabar naval exercises between India, Japan and the U.S. off the Okinawa coast in Japan highlighted the increasing friction between China and the other nations in the region over developments in the South China Sea, unwittingly dragging India into the tensions
• Chinese observation ships had tailed a U.S. aircraft carrier and Indian naval ships participating in the exercise. The Chinese ship entered Japanese territorial waters while tailing the US aircraft carrier
• Over 20 ships and 90 aircraft from India, Japan and the U.S. are taking part in the 20th edition of Malabar exercises close to several islands claimed by China in the South and East China Sea. The sea phase of exercise began in the Philippine Sea on June 14 after conclusion of the harbour phase at Sasebo port(Nagasaki)
• India which has land dispute with China has strongly supported the right over flight and open seas and in the recent times is seen as increasingly aligning with the US. The U.S. and other nations have called for freedom of navigation and adherence to the principles of United Nations Convention of the Law of Seas (UNCLOS)
• Indian officials said that it was not surprising that China is monitoring the exercises as it is happening in their backyard. But they observed that the war games were taking place in international waters and anyone has the right to do so

C. GS3 Related

1. Fed leaves rates unchanged; no hint on timing of next hike 

Topic: Global economy

Category: Economy

Key points

• The Federal Reserve is keeping interest rates unchanged in light of an uncertain job market, while offering no specifics about when its next rate hike might occur
• The central bank indicated that it needs a clearer picture of economic developments before raising rates again. It noted that the consequences of a slowdown in exports have lessened

Category: Economy

Key points

• The Finance Minister held an inter-ministerial meeting to discuss the spiralling prices of food and carve out a strategy to cool inflations ahead
• The government is making efforts to fill the demand-supply gap through imports and local purchase. Also, it is in talks with Myanmar and other countries for government-to-government import of pulses to meet shortage

Category: S & T

Key points

• India will sign a contract with the International Seabed Authority (ISA), a United Nations organisation, later this year that will give the country exclusive rights to mine for precious metals trapped in magma on the seabed of the Indian Ocean

(The ISA, under the United Nations Convention on Law of the Sea (UNCLOS), governs non-living resources of the seabed of international waters )

• Deep seabed polymetallic sulphides (PMS) contain iron, copper, zinc, silver, gold and platinum in variable constitutions and are precipitates of hot fluids from upwelling hot magma from the deep interior of the oceanic crust
• A slew of Indian organisations such as the National Institute of Ocean Technology and the National Centre for Antarctic and Ocean Research are involved with these surveys and developing specialised shipping vehicles
• A key technical challenge is being able to develop the specialised drills and extraction-technology required to fish out the metals

Category: Economy/Culture

Location: The Hindu

Key points

• After Tirupatiladdu , the PalaniArulmiguDhandayuthapaniSwamy temple panchamirtham might become the second temple prasadam to get a ‘geographical tag’
• Joint Commissioner of Hindu Religious and Charitable Endowments (HR&CE) on Wednesday filed the application with the office of Controller General of Patents, Designs and Trade Marks seeking Geographical Indication (GI) tag status for the temple’s famous prasadam – the panchamirtham . The application was accepted after scrutiny
• In the case status filed along with the application, it has been stated that panchamirtham came into being in 9^thCentury AD when Chera king CheramanPeruman established the temple. One can find references to it in ancient literature such as Nakkeerar’sThirumurugattrupadai , Arunagirinathar’sThiruppugazh , MampalaKaichingarayar’sPalaniVenbaAnthathi , and BalasubramaniaKavirayar’sPalani Temple Thalavaralaru; songs written by PambanSwamigal also refer to the prasadam
• The application states that people worshipping Lord Muruga always lived in/around a geographical region called kurinji, which basically referred to a mountainous area and landscape surrounding/adjacent to it. These people, as a gesture of their fondness and gratitude to Lord Muruga, offered natural products such as banana, honey, milk, milk-based products and cardamom to Lord Muruga. And, the ingredients always numbered five ( pancha). Hence, the name panchamirtham

Note:Palani is a town and a municipality in Dindigul district, Tamil Nadu, located about 100 km north-west of Madurai and 100 km South-east of Coimbatore and 60 km west of Dindigul.

5. Don’t misuse debt recast norms: Rajan

Topic: Banking

Category: Economy

Location: The Hindu

Key points

• Reserve Bank of India (RBI) Governor RaghuramRajan has asked bankers to judiciously apply the latest loan restructuring norms and not use them as a tool to delay identification of bad loans in a meeting of the BBB(Banks Board Bureau)
• RBI announced a revised scheme for debt recast, namely, Scheme for Sustainable Structuring of Stressed Assets (S4A). The new norms are only applicable for projects that have commenced operations and where bank loans amount to more than Rs.500 crore. According to the norms, at least 50 per cent of the debt should be serviced over the same period as that of the existing loans and the remaining debt could be converted into equity or quasi-equity instruments
• The meeting was convened following lenders’ complaints of over activism by investigative agencies probing bad debts. Banks are wary to offer one-time settlement of loans to borrowers, which would need them to take substantial haircut in many cases, as they fear being hounded by investigative agencies in case of such deals. The RBI Governor had also cautioned about the increasing interference from investigative agencies by saying it could ‘chill’ lending

D. GS4 Related

E. Important Editorials: A Quick Glance

The Hindu

1. Politics of positions

Topic: law on office of profit

Category: polity

Key points

• Legal issues are not to be politicised. The issue of the President withholding assent to a Delhi government Bill seeking to protect its 21 parliamentary secretaries from incurring disqualification on the grounds of holding an office of profit, is a flagrant example
• There is a prevailing practice of appointing parliamentary secretaries in several other States
• Further, laws in these States expressly protect them from disqualification — a protection that Delhi is being denied by the Centre
• The matter is essentially a mix of two legal questions: whether the post of parliamentary secretary, paid or unpaid, is an office of profit; and whether MLAs are given the positions only to get around the constitutional limit on the number of ministers a State can have
• These questions can be settled through the Election Commission and the courts of law, and attempts to politicise them are unnecessary
• The parliamentary secretaries are under notice from the EC to show cause why they should not be disqualified for holding an ‘office of profit’. The Centre appears reluctant to clear the Bill as it may amount to granting retrospective protection and pre-empting the EC’s opinion
• The Delhi government contends that his parliamentary secretaries do not draw any salaries or perquisites. It ought to canvass this point before the Election Commission
• The EC will have to go by the set of tests evolved by the Supreme Court on whether a particular post is an ‘office of profit’: whether the government makes the appointment, remunerates the appointee, has the right to remove the appointee and controls the appointee’s functions
• Further, some High Courts have ruled that parliamentary secretaries are essentially ministers and their appointment would be struck down if it resulted in the ministry’s strength breaching the constitutional limit
• Under Article 164 (1A) of the Constitution, introduced in 2003, the Council of Ministers should not comprise more than 15 per cent of the strength of a Legislative Assembly. In the case of the 70-member Delhi Assembly, the limit is 10 per cent, or seven ministers
• Such questions arise because the term ‘office of profit’ and the post of parliamentary secretary do not yet have a clear legal definition. A legislative solution applicable across the country is needed. That should ensure that there are no double standards in applying the law on office of profit

Category: Governance

Key points:

• The Bombay High Court has said that certification and not censorship, is the real job of the CBFC. And that the power to order changes and cuts must be exercised only in line with provisions of the Constitution and Supreme Court orders. Its mandate is not to interfere with the film-maker’s creative process and freedom of expression
• Hardly a day after the court’s ruling, the CBFC has made 100 cuts in the Gujarati film SalagtoSawal: Anamat (Reservation: A Burning Question), a documentary on the Patidar agitation for reservations in Gujarat
• The new wisdom that has been filtering through the past several months has been that if you critique the government, you are anti-national; if you critique the Army, you are unpatriotic; if you question judicial verdicts (as in the case of the hanging of Afzal Guru), you are seditious. If you root for West Indian cricketers you are an enemy of ‘our’ people
• But here is a piquant situation. Here is the CBFC, submissive to the government, which has been cautioned by a judiciary which refuses to be submissive. Does this make the Bombay High Court anti-national or unpatriotic or seditious?
• We are likely to witness such phenomena again and again over the coming years, as democratic institutions of the state array themselves against puppet institutions of the government. The results are likely to be spectacular
• This should draw our attention to the current epidemic of an increasingly large number of institutions under various ministries, particularly those of Culture and of Information and Broadcasting (I&B), which have been made to do the government’s bidding
• Over the last two years, we have seen the three Akademis, the National Museum, the Film and Television Institute of India (FTII), the Indira Gandhi National Centre for the Arts (IGNCA), the Indian Council of Historical Research (ICHR), and the Nehru Memorial Museum and Library all go this way. And each one of them has turned into becoming non-performing ‘asset’ of the government
• From being a centre for serious discourse and practice of cinema, the FTII is now poised to being run down to a mediocre C-grade affiliate of the Ministry of I&B. Its originalvision of a cinema of dissent being the soul of the citizens of a struggling nation is destined to become a fast-fading nostalgic memory.
• So too, the ICHR. The National Museum, which was just about returning to normalcy after over a decade-long history of anguish, was swiftly returned to redundancy. The new chairman of the IGNCA, strayed way beyond his brief last week when he claimed apropos of nothing that Jawaharlal Nehru was dead against having B.R. Ambedkar in the Constitution-drafting committee. It is clear what role this gentleman and his hand-picked cohorts would be up to in the IGNCA, neutralising the years of research and documentation of diverse aspects of Indian arts and quite possibly substituting it with myth and fable all over again
• However, there has not been a sufficient survey of the goings-on in the SangeetNatak, Lalit Kala and SahityaAkademis and the conversion of these spaces into anti-democratic fiefdoms that, in fact, perform the function of eroding democracy
• One would like to highlight the case of the SahityaAkademi. Late last year a large number of writers, subsequent to the daylight killing of Akademi-member MalleshappaKalburgi, returned their awards, in what came to be known as “award wapsi”. What the writers were really calling into question was the nature of an institution like the SahityaAkademi itself. Why is the institution unable to reflect the angst or spirit of defiance of its constituents?
• The governmenthas issued an unprecedented circular — fashioned as a ‘Memorandum of Understanding’ — to all these institutions, converting them into ‘subordinate offices of the ministry’. Saddled now with soft puppets at their helm, it is likely we might see some more confrontations like that between the CBFC and the judiciary

Note: Read about the cultural assets mentioned.

Category: Ethics

Key Points:

• Religion has become a bad word because of the violence and hatred it is seen as engendering in its wake. Interpretations of religion by devout followers to suit their political or personal goals, blind faith, and an overpowering commitment to a single religion over all others all result in a catastrophic vision of what religion ‘should’ be in contemporary society
• At the same time, it is essential to remember the role of religion in the development of a humanist approach, and a world view that is not restricted to any one religion but addresses the human condition in its tenet and practice. If this understanding of religion is glossed over, we are likely to lose sight of the definitive role that religion has played in Indian society. A profound variety of religious discourses emphasise interfaith harmony, of overcoming difference through the practice of compassion and service to others
• .Let us not forget the contributions of the Kashmiri Shaivite mystic Lal Ded, Guru Nanak, the saints and poets of the Bhakti tradition, and many, many others. A present-day exemplar are the teachings of the 14th Dalai Lama, Tenzin Gyatso
• The 14th Dalai Lama does not proclaim Buddhism as the only religion for the world but speaks of many religions. This ‘Guru’ has sought to promote interfaith harmony not only through his private meetings with religious leaders, seeking religious unity, but also organising discussions among them to develop mutual understanding, trust, and goodwill
• This unusual teacher exhorts the audience to not accept whatever he says out of faith, but to question and understand through reason whether or not the teachings have any value. “Scepticism is essential,” he says, as the Buddha taught. Doubt, question, analyse, discover, and practice is the message, so that blind faith, ardent devotion, and ritual have no place in this way of understanding oneself and one’s relationship to society. The idea of the fixed self has no place in this doctrine. The emphasis is on “oneness with humanity”, as the Dalai Lama puts it. There is an evident effort to emphasise the interconnectedness between people, religions and nationalities.
• The Dalai Lama said: “Buddhism is not a religion; it is a science of the mind”. It is about human psychology. The possibilities for training the mind through mindfulness and introspection lie within each one of us. It is up to us to take a call on how we wish to spend the rest of our lives: with conflict, despair, and suffering, or by using human intelligence to make an effort to rein in negative thoughts, and live a life of harmony with other individuals
• At the same time, the Dalai Lama is well aware of the conflicts surrounding religion, created by “mischievous elements”, and the distinctions of caste that create differences and exclusion. There is a need to recognise our connectedness with all people, he argues
• In recent decades, the Dalai Lama has began to engage with scientists with a view to establish a scientific temper among young monks. Science education is now an essential component of monastic education in the Dalai Lama’s monasteries
• In the field of education, he has been pushing for bringing in secular ethics into the curriculum. At his initiative, Emory University in Atlanta, Georgia, has developed a draft curriculum on secular ethics for implementation in schools that seek it out
• The outcry in India to restore religious-based or classical tradition-based ‘values’ in education has supporters, no doubt. This will definitely have disastrous consequences not only in its implementation but also in its outcome, where children would unwittingly become firmly entrenched in particular religious traditions and see others as ‘different’. Rather than building religious harmony, the emphasis on values emanating from religious discourse will only serve to reproduce conflict. The Emory University initiative stands out for its completely secular approach to the preparation of a curriculum that seeks to restore ‘ethics’ (without any religious connotations) as a core value in school curriculum
• It is in this sense that we may speak of religion with a humanist face. That religion must only be used to divide and destroy, to manufacture and indoctrinate, to motivate and engender violence is a very limited view of religion and its possibilities. As citizens who seek a future free from violence and fear, not only for ourselves but also for our children, we must ensure that petty political ambitions with a narrow world view do not overshadow the larger goals of humanity and its enduring potential

1. Miscounting The Urban

Topic: Data on Urbanisation

Category: Economy

Key Points:

• Recognition of senior policymakers in the government that many so-called large villages are really urban areas but are not classified as towns on account of various reasons is a step in the right direction
• Demographers from the 1990s onwards have questioned the definition of rural and urban and underlined the fact that reclassification of large villages to towns leads to substantial advances in our understanding of the dynamics of movements in the Indian economy. This phenomenon was not recognised as urbanisation until the 2011 Census
• In the 2006 it was established that there were “large villages” that met the census criteria of towns but were not classified as urban areas by the government and, at that time, even in the census (now called census towns). This led to a pessimistic perception of urbanisation
• A part of this pessimistic perception arose from settlements which are “urban” by census definitions not being classified as “urban”. While the absolute differences on this account could be small, “small” absolute differences can affect the projections seriously. For instance, if a proper classification was made of the “villages” in Gujarat that were not rural according to the census definition but were not classified as towns, the rate of change in urbanisation in the state would be twice that which is currently planned for
• This anomaly was recognised in the 2011 Census. In Gujarat, the 2006 projections have turned out to be accurate for 2011. The pattern is similar in agriculturally advanced states like Punjab, in contrast to industrially advanced Gujarat, and a relatively backward state like Bihar. In all, we are talking about a million or more farmers having moved to census towns. Policymakers have been forced to recognise this phenomenon for 2011, but are still resisting its implications for future planning, which is a terrible mistake
• The 2011 Census shows that this trend was prevalent in the whole country and the increase in the population of census towns was roughly equivalent to the increase in the rate of urbanisation of the country. The census authority was saying that more than 4 crore Indians had moved from villages to urban areas, which were not officially classified as municipalities, notified towns or cantonments and, were not counted as urban. In the 11th plan (2007-2012), this problem was finally recognised. The base numbers were changed, but corrections were not factored in the projections of urban population
• This conundrum continues. What it really means is crores of farmers have moved from villages to towns following the laws of the market because the demand for their products was rising in markets in small towns. This was particularly true for milk and animal husbandry products like eggs, poultry and so on, and fruits and vegetables. But these were not officially taken into account and, therefore, the provision to build infrastructure in market towns — markets, storage facilities, processing of agriculture commodities, roads, communication infrastructure — was not provided to the extent needed
• The next round of population projection is not yet ready. The Technical Group on Population Projections is still working on it. This time the pressure to provide backup to the Five Year Plan (FYP) is not there since there is no FYP. The ministries may rely on earlier statistics and projections of rural and urban population. Now that the NITI Ayog has recognised this problem, the ministries, hopefully, will be pushed to factor in these changes in their workplan
• The Expert Group on Population Projection will, hopefully, submit its report soon and many infrastructure planning decisions which have to take into account population projections will get to work with the correct set of numbers on rural and urban population and migration from rural to urban areas

1. PIB

 The cooperation between the two sides involves exchange of visits, information, technology and training and also expansion of agricultural trade while reducing trade barriers

Under the MoU, a Joint Working Committee will be constituted to identify priority areas of mutual interest and follow up on the progress of implementation of the activities identified by both sides

d) Cabinet appraisal of MoU between ISRO and Canadian Space Agency (CSA) on cooperation in the field of outer space

The Union Cabinet has been apprised of the Memorandum of Understanding between Department of Space / Indian Space Research Organization (DOS/ISRO) and Canadian Space Agency (CSA) on cooperation in the field of outer space. The MoU was signed in Ottawa, Canada on 15th April 2015.

The MoU would lead to establishment of joint team, drawing members from ISRO and CSA, which will further work out the plan of action including examination and defining cooperative projects and the time-frame. This will also provide opportunities for diverse research in the field of peaceful uses of space technologies.

Background

The successful space cooperation is being pursued through two Implementing Arrangements in the field of Satellite Tracking Network Operations, and in the field of the Ultra Violet Imaging Telescope (UVIT) Detector Subsystem in support of the ASTROSAT astronomy mission

India would enable engaging internationally renowned experts with profound expertise in different aspects of scientific drilling in order to accomplish deep drilling and associated investigations in Koyna region

As a member of ICDP, scientists/engineers from India would have right to submit proposals, to participate in all ICDP co-funded workshops and drilling projects and have access to all data results from ICDP projects. This will shed new light on the genesis of seismicity and better understanding of earthquake processes

The project has shown remarkable success by aiding the construction of wetlands containing plant species such as Canna indica, lemon grass (Cymbopogon), napier (Pennisetumperpureum X Pennisetumamericarnum), para grass (Urochloamutica), typha (Typhalatifolia), water hyacinth (Eichhorniacrassipes), water lettuce (Pistia stratiotes) and a weed species AgaratumConyzoides. These plant species absorb harmful toxins as well as nutrients such as nitrogen, phosphorus, potash, inter alia, that contaminate the water due to overuse of chemical fertilizers in the agriculture sector

Category: Economy

Key Points

• While the country may not have a full-fledged goods and services (GST) tax in place even next year—petroleum, potable alcohol, real estate and electricity will remain out of its ambit—the good news is that it is almost certain there could be a working GST legislation by April
• Since the draft GST Act is silent about the 1% levy over the GST, this suggests manufacturing states like Tamil Nadu and Gujarat that were clamouring for the levy may be willing to forgo it, possibly because the Centre has promised 100% compensation for the first few years anyway
• As for the dual control issue, the deliberations suggest those with revenues of under Rs 1.5 crore a year may be taxed by the states—that’s a significant victory for the states. It is unfortunate that the draft Act 2016 does not mention the revenue-neutral-rate since, while the Congress demand to put an 18% cap in the legislation is untenable, a reasonable revenue-neutral-rate would have addressed its concerns as well—a panel headed by the chief economic advisor had, in any case, recommended a rate of 14.5-15.5%.
• Nevertheless, much ground has been covered. For example, although the Act doesn’t specify the rate for a composite levy, except to say it will not be less than 1%, experts believe the final rate will be closer to 3% for firms that have an aggregate turnover of less than Rs 50 lakh
• A composite levy is critical because it will spare small businessmen from harassment by tax officials
• The prescribed threshold for levying the GST of Rs 10 lakh appears low in comparison with the Rs 1.5 crore floor for central excise duties, but keep in mind the service tax threshold is a mere Rs 10 lakh and that for most state levies it is Rs 5 lakh. Understandably, states are not keen to raise the threshold apprehending this would lose them VAT revenues
• In earlier discussions, the floor being talked about was closer to Rs 25 lakh, so it is possible the threshold could go up. Deciding that GST will be levied on the transaction value is a good idea since it doesn’t tax any discounts offered by a seller—how the transaction value is to be determined, though, could be a bone of contention
• Industry would have been hoping for more ease of compliance in the sense of uniform rates and less exemptions—hopefully, the exemptions list will be kept to the minimum—some sections like e-commerce will be uncomfortable with the provision that they deduct tax at source from vendors that sell on their platforms
• It could be an onerous task given they deal with thousands of sellers and perhaps the empowered committee could look for a simpler way to collect the tax from the vendors. Once the system goes fully digital, however, it might not be that difficult
• After a few years, when revenue buoyancy is evident, it will be critical to bring sectors like oil and real estate into GST’s ambit since the deadweight loss of excise duties paid in these areas runs into thousands of crores each year

Category: Economy

Key points:

• After a brief interval, hopes of the goods and services tax (GST) being introduced in India have been revived with the Government saying all States except Tamil Nadu have boarded the GST bus. It remains to be seen whether a few changes in the law could induce Tamil Nadu also to get onboard

• Maybe to prove a point that the Government means GST, a Model GST law has also been put out
• The pillars on which a good GST law should stand are a tax only on value addition (which would mean across-the-board credit on inputs), a small negative list on which tax is not payable, and a comfortable rate of GST. The negative list and the rate of GST may be worked out in the coming months. Where the model GST law disappoints most is in granting a no-questions-asked input tax credit
• Section 16 of the Model GST law is titled ‘Manner of taking input tax credit’. Once the law is operational, it could well be altered to ‘Manner of not taking input tax credit’
• This is because out of the 16 sub-sections in this section, the first three use the sentence “subject to such conditions and restrictions as may be prescribed”. We know from experience that the moment such sentences find their way in a section, the lawmakers are always tempted to find a way to use it by imposing some condition or restriction or the other
• A new law such as GST should not find inspiration from the past for the purpose of imposing restrictions. Restrictions, if any, should be based on the structure of the new law. The fourth sub-section mandates that credit should be taken within one year from the date of issue of tax invoice relating to such supply. Sub-section 9 of Section 16 imposes further restrictions on credit
• No credit would be given to motor vehicles, except when certain conditions are met. The provision that credit would not be provided to goods and / or services provided in relation to food, outdoor catering, beauty treatment, health services, cosmetic surgery, club membership, health and fitness centre, life insurance, health insurance and travel benefits extended to employees on vacation when such goods and/or services are used primarily for personal use or consumption of any employee is a word-for-word reproduction from the existing Cenvat Credit Rules
• There are other restrictions imposed in the execution of a works contract and construction of immovable property. Sub-section 9 concludes with a flourish — credit would not be provided to goods and/or services used for private or personal use. It is unfortunate that in a critical area such as input tax credit, lawmakers have taken the convenient route of aping existing laws instead of thinking afresh
• . If Section 16 of the Model GST law is not amended, the interpretational issues and litigation would only increase

Category: Economy

Key points:

• Provisional figures for May suggest that the consumer price index (CPI), or retail inflation, has risen to 5.76% from 5.01% (over the like period last year). In April, the combined CPI — which tracks both rural and urban area prices — rose by 5.47%. The small changes in decimal points matter a lot because monetary policy and the consequent cost of funds are now anchored to the CPI
• Disaggregated May figures reveal that the inflation rate for protein foods like eggs, milk, meat and fish was 8-14%. Vegetables prices grew over 10% for the month, while those for pulses shot up by an eye-popping 31.57%. The total weights for the so-called superior foods in the CPI is about 20%, and the hardening of prices in this high-demand, supply-challenged segment is the main reason why the food price index has spurted by 7.55%
• In select items, the price rise is far higher — for tomatoes, for example. Hopefully, such price spike is a very temporary phenomenon that would surely ease after the rains arrive. However, it cannot be gainsaid that we need focused policy to boost investment in storage, logistics and cold chains to dampen price rise in superior foods. In parallel, we need proactive initiatives to step-up acreage in pulses
• It is clear that flaring prices in only a few items like tomatoes or onions can jack up the overall price index. Also glaring is the fact that consumer price inflation rate is higher and more pronounced in rural than in urban centres, by as much as two percentage points. It points at the pressing need for better, more complete markets in rural areas so as to gainfully arrest food price inflation. It would also be sensible to take into account the very concentrated nature of food inflation when deciding the overall monetary policy rate going forward

On under-5 stunting, India ranks 114th out of 132 countries, 170th out of 185 countries on anaemia prevalence, 120th out of 130 countries on under-5 wasting and 104th out of 190 countries on diabetes prevalence,” says the report

d) Westinghouse funding: MEA panel to finalize details 

The Indian government has set up an inter-agency committee that will work out the details of the financing structure for six Westinghouse AP-1000 nuclear reactors. The body, under the aegis of the Department of Atomic Energy (DAE) will be led by Secretary (economic relations),MEA. The export finance negotiating committee has been tasked with working out the details of the funding package with US’ Exim Bank, which has agreed to finance the project

The fresh complaints have been filed by Kaveri Seeds, Ankur Seeds and Ajeet Seeds. The competition watchdog has clubbed the new complaints with the ongoing investigation against the company that was initiated in February on the complaint of the agriculture ministry.

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

• Civil Aviation Policy
• Vidyanjali App
• S4A Scheme
• UNCLOS
• International Seabed Authority
• Geographic Indication
• Buddhism
• CCI
• Census towns
• ASTROSAT
• GST
• Koyna Region
• Atal Tinkering Labs

G. Fun with Practice Questions 🙂

Question 1: Which of the following statements is/are correct?

Question 2: Which of the following statements is/are correct?

Question 3: Which of the following statements is/are correct about the Competition Commission of India(CCI)?

Question 4: Which ofthe following products is/are GI(Geographical Indication) tagged?

Question 5: Which of the following criteria is/are to be satisfied for a place to be classified as census town?

H. Archives:

You can check out some more recent News Analysis sections to build even more context

13th June 2016: Daily News & Current Affairs Analysis

12th June 2016: Daily News & Current Affairs Analysis

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