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UPSC 2017 IAS Exam: PIB Summary and Analysis - May 18

Bilateral Exercise Between Indian & Republic Of Singapore Navy (RSN) 
  • It is SIMBEX-17
  • This year’s edition is held in South China Sea
  • SIMBEX is an acronym for “Singapore-India Maritime Bilateral Exercises”
  • Bilateral cooperation between Singapore and India was first formalised when RSN ships began training with the Indian Navy in 1994


Joint Hadr Exercise Commences At Naval Station Karwar 
  • It is the Humanitarian Assistance and Disaster Relief (HADR)
  • The Annual Joint HADR Exercise involves multiple agencies
  • This year it is being conducted by Indian Navy’s Western Naval Command commenced at Naval Station Karwar
  • This year’s exercise has been named as “KARAVALI KARUNYA”
  • The exercise, which involves both professional exchange and actual disaster response mechanisms is set on a Tsunami disaster scenario and will continue till 20 May 2017


Cabinet approves signing of the Multilateral Convention to Implement Tax Treaty 
  • The treaty is related Measures to Prevent Base Erosion and Profit Shifting
  • The Convention is an outcome of the OECD / G20 BEPS Project to tackle base erosion and profit shifting (BEPS is done through through tax planning strategies that exploit gaps and mismatches in tax rules to artificially shift profits to low or no-tax locations where there is little or no economic activity, resulting in little or no overall corporate tax being paid)
  • The Final BEPS Project identified 15 actions to address BEPS in a comprehensive manner
  • Implementation of the Final BEPS Package requires changes to more than 3000 bilateral tax treaties which will be burdensome and time consuming. In view of the same, the Convention was conceived as a Multilateral instrument which would swiftly modify all covered bilateral tax treaties (Covered Tax Agreements / CTA) to implement BEPS measures
  • For this purpose, formation of an Ad-hoc Group for the development of such multilateral instrument was endorsed by the G20 Finance Ministers and Central Bank Governors in February 2015
  • About the convention and the Ad Hoc group

▪ India is part of the Ad Hoc Group of more than 100 countries

▪ The Convention implements two minimum standards relating to prevention of treaty abuse and dispute resolution through Mutual Agreement Procedure

▪ The Convention will not function in the same way as an Amending Protocol to a single existing treaty (which would directly amend the text of the Covered Tax Agreements). Instead, it will be applied alongside existing tax treaties, modifying their application in order to implement the BEPS measures

▪ The Convention ensures consistency and certainty in the implementation of the BEPS Project in a multilateral context

▪ The Convention also provides flexibility to exclude a specific tax treaty and to opt out of provisions or parts of provisions through making of reservations

▪ The Convention has been opened for signature as on 31st December 2016 and a first joint signing ceremony is scheduled to be held in Paris on 7th June, 2017

▪ Signing of the Multilateral Convention will enable the application of BEPS outcomes through modification of existing tax treaties of India in a swift manner. It is also in India’s interest to ensure that all its treaty partners adopt the BEPS anti-abuse outcomes. Signing of the Convention will enable curbing of revenue loss through treaty abuse and base erosion and profit shifting strategies by ensuring that profits are taxed where substantive economic activities generating the profits are carried out and where value is created


Coal linkage policy – SHAKTI 
  • Scheme for Harnessing and Allocating Koyla Transparently in India
  • The salient features are

▪ TPPs (Thermal Power Plants) having LoA (Letter of Assurance) shall be eligible to sign FSA (Fuel Supply Agreement) after ensuring that the plants are commissioned, respective milestones met, all specified conditions of the LoA fulfilled within specified timeframe and where nothing adverse is detected against the LoA holders and the TPPs are commissioned before 31.03.22

▪ TPPs, part of 78000 MW, that could not be commissioned by 31.03.15 shall now be eligible for coal drawal if the plants are commissioned before 31.03.22

▪ Actual coal supplies to all TPPs shall be to the extent of long term PPAs or medium term PPAs to be concluded in future

▪ Future coal linkages shall be granted as per the following provisions

• To Central and State Gencos (Generation Companies), on recommendations of Ministry of Power (MoP)

• Coal linkages shall be granted on auction basis for Independent Power producers (IPPs) with PPA based on domestic coal. The IPPs participating in auction will bid for discount on the existing tariff. The discount on tariff would be adjusted from the gross amount of bill at the time of billing

• The future coal linkages for supply of coal to IPPs without PPA shall be on the basis of auction where bidding for linkage shall be done over the Notified Price of Coal Company. The LoA shall be issued to the successful bidders and FSA signed after meeting the terms of LoA

• Linkages shall be earmarked to the States where any linkage quantity unutilized for two years shall lapse. States may indicate the earmarked linkages to the DISCOMs/SDAs


Cabinet approves construction of 10 units of India’s indigenous Pressurized 
Heavy Water Reactors (PHWR)
  • India has a current installed nuclear power capacity of 6780 MW. To this another 6700 MW of power is to be added by 2021-22
  • There are 22 operational plants
  • It is a first of its kind project for India’s nuclear power sector as the new units will come up in fleet mode as a fully home grown initiative o It would be one of the flagship “Make in India” projects in this sector
  • With likely manufacturing orders of close to 70,000 crores to the domestic industry, the project will help transform Indian nuclear industry by linking our goal of a strong nuclear power sector with our indigenous industrial capacities in high-end technologies
  • This Project will bring about substantial economies of scale and maximise cost and time efficiencies by adopting fleet mode for execution
  • It is expected to generate more than 33,400 jobs in direct and indirect employment


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