Current Affairs 1 March 2015

Key points of General Budget 2015-16

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  Finance Minister Arun Jaitley on Saturday announced a budget aimed at high growth, saying the pace of cutting the fiscal deficit would slow as he seeks to boost investment and ensure that ordinary people benefit.
  Here are the key highlights of Jaitley’s budget for the fiscal year that begins on April 1.
  1. TAXATION
  * To abolish wealth tax
  * Replaces wealth tax with additional 2 pct surcharge on super rich
  * Proposes to cut to 25 percent corporate tax over next four years
  * Corporate tax of 30 percent is uncompetitive
  Video: Union Budget 2015: Insight by Financial Express Managing Editor Sunil Jain
  
  * Net gain from tax proposals seen at 150.68 billion rupees
  * Jaitley proposes modification of permanent establishment norms so that the mere presence of a fund manager in India would not constitute a permanent establishment of the offshore fund, resulting in adverse tax consequences.
  * Proposes to rationalise capital gains tax regime for real estate investment trusts
  * Expects to implement goods and services tax by April 2016
  * To reduce custom duty on 22 items
  * Basic custom duty on commercial vehicle doubled to 20 percent
  * Proposes to increase service tax rate and education cess to 14 percent from 12.36 percent
  * Plans to introduce direct tax regime that is internationally competitive on rates without exemptions
  * Exemptions for individual tax payers to continue
  * To enact tough penalties for tax evasion in new bill
  * Tax dept to clarify indirect transfer of assets and dividend paid by foreign firms
  2. FISCAL DEFICIT
  * Fiscal deficit seen at 3.9 percent of GDP in 2015/16
  * Will meet the challenging fiscal target of 4.1 percent of GDP
  * Remain committed to meeting medium term fiscal deficit target of 3 percent of GDP
  * Current account deficit below 1.3 percent of GDP
  * Jaitley says have to keep fiscal discipline in mind despite need for higher investment
  3. GROWTH
  * GDP growth seen at between 8 percent and 8.5 percent y/y
  * Aiming double digit growth rate, achievable soon
  4. INFLATION
  * Expects consumer inflation to remain close to 5 percent by March, opening room for more monetary policy easing
  * Monetary policy framework agreement with the RBI clearly states objective of keeping inflation below 6 percent
  * “One of the achievements of my government has been to conquer inflation. This decline in my view represents a structural shift.”
  5. REVENUES
  * Revenue deficit seen at 2.8 percent of GDP
  * Non tax revenue seen at 2.21 trillion rupees
  * Agricultural incomes are under stress
  6. DISINVESTMENT
  * Government targets 410 billion rupees from stake sales in companies
  * Total stake sale in 2015/16 seen at 695 billion rupees
  7. MARKET REFORMS
  * Propose to merge commodities regulator with SEBI
  * To bring a new bankruptcy code
  * Jaitley says will move to amend the RBI act this year, and provide for a monetary policy committee
  * To set up public debt management agency
  * Proposes to introduce a public contract resolution of disputes bill
  * To establish an autonomous bank board bureau to improve management of public sector banks
  8. POLICY REFORMS
  * To enact a comprehensive new law on black money
  * Propose to create a universal social security system for all Indians
  * To launch a national skills mission soon to enhance employability of rural youth
  * To raise visa-on-arrival facility to 150 countries from 43
  * Allocates 346.99 billion rupees for rural employment guarantee scheme
  9. BORROWING
  * Gross market borrowing seen at 6 trillion rupees
  * Net market borrowing seen at 4.56 trillion rupees
  10. GENERAL ANTI-AVOIDANCE RULES (GAAR)
  * Government defers rollout of anti-tax avoidance rules GAAR by two years
  * GAAR to apply prospectively from April 1, 2017
  * Retrospective tax provisions will be avoided
  11. INFRASTRUCTURE
  * Investment in infrastructure will go up by 700 bln rupees in 2015/16 over last year
  * Plans to set up national investment infrastructure fund
  * Proposes tax-free infrastructure bonds for projects in roads, rail and irrigation projects
  * Proposes 5 “ultra mega” power projects for 4,000 MW each
  * Second unit of Kudankulam nuclear power station to be commissioned
  * Will need to build additional 100,000 km of road
  * Ports in public sector will be encouraged to corporatise under Companies Act
  12. EXPENDITURE
  * Plan expenditure estimated at about 4.65 trillion rupees
  * Non-plan expenditure seen at about 13.12 trillion rupees
  * Allocates 2.46 trillion rupees for defence spending
  * Allocates 331.5 billion rupees for health sector
  * If revenue improves, hope to raise budgeted allocations for rural job scheme by 50 billion rupees
  13. INVESTMENT
  * Propose to do away with different types of foreign investment caps and replace them with composite caps
  * To allow foreign investment in alternative investment funds
  * Public investment needed to catalyse investment
  14. GOLD
  * To develop a sovereign gold bond
  * To introduce gold monetisation scheme to allow depositors to earn interest
  * To introduce Indian-made gold coin to reduce demand for foreign gold coins
  15. SUBSIDIES
  * Food subsidy seen at 1.24 trillion rupees
  * Fertiliser subsidy seen at 729.69 billion rupees
  * Fuel subsidy seen at 300 billion rupees
  * We are committed to subsidy rationalisation based on cutting leakages
  FINANCE MINISTER’S COMMENTS
  * “We inherited a sentiment of doom and gloom. The investment community had almost written us off. We have come a long way since then.”
  * “We have turned around the economy, dramatically restoring macroeconomic stability and creating the conditions for sustainable poverty elimination, job creation, durable double digit economic growth.”
  * “While being mindful of the challenges … this gives us reason to feel optimistic.”
  * “Domestic and international investors are seeing us with renewed interest and hope.”

Indian Navy Concludes Its Annual Exercise

• The Indian Navy concluded its annual Theatre Level Readiness and Operational Exercise (TROPEX) today. This month long war drill encompassed all dimensions of maritime warfare, and witnessed participation of around 50 ships and submarines, along with over 70 aircraft from the three Naval Commands. The exercise also saw participation of units from the India Air Force and the Indian Coast Guard. The area of operations spanned the Arabian Sea and Northern Indian Ocean and was aimed at validating the Indian Navy’s Concept of Operations. During TROPEX-2015, the Navy had deployed two Carrier Task Forces simultaneously at sea, with both Viraat and Vikramaditya operating with their integral flights in an operational scenario. This assumes significance as it makes the Indian Navy, besides the US Navy, capable of deploying more than one Carrier Task Force at sea, at present. 
  
  TROPEX also saw extensive deployment of the nuclear submarine Chakra, the recently inducted P8I Long Range Maritime Reconnaissance aircraft, the recently commissioned guided missile destroyer Kolkata and Anti Submarine Warfare corvette Kamorta. The exercise provided the right opportunity for the Navy to integrate these acquisitions into its war-fighting concepts. TROPEX-15 also served to reinforce the Indian Navy’s offensive capabilities across all dimensions, including Network Centric Operations, wherein, the indigenous satellite Rukmani was extensively utilised. The Navy also underscored its Op Logistics capability to effectively sustain Fleet Operations for extended periods at large distances. 
  
  The exercise reinforced the Navy’s ability to serve in different roles with relative ease, when it exercised a Humanitarian Assistance and Disaster Relief (HADR) mission, as part of the build up to the main phase of the exercise. This exercise was conducted against the backdrop of the Lakshadweep and Minicoy Islands having been struck by a super cyclone. The Indian Navy has the inherent capacity and capability to reach outlying islands and coastal areas, with relief and rehabilitation material, and remains continuously prepared for this task. 
  
  Overall, the exercise reiterated the Navy’s preparedness and capability to meet various roles mandated for it, in support of national objectives.

National Science Day 2015 celebrated

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  “Science for Nation Building” will be theme for the National Science Day to be celebrated tomorrow –the 28th February. This year’s theme has been chosen for the purpose of raising public appreciation on scientific issues for the development of nation. 
  
  The former Director of the Indian Institute of Science Dr. P. Balaram will deliver the National Science Day lecture on the subject of - Science for Nation Building. 
  
  National Science Day (NSD) is celebrated every year on 28th February to mark the discovery of the ‘Raman Effect’, for which a Nobel Prize winning research paper submitted by Sir C.V. Raman was accepted on that day. 
  
  National awards for the year 2014 for Science & Technology popularization will also be bestowed by the Minister of Science & Technology and Earth Sciences Dr. Harsh Vardhan at a function on Monday. Shri Y.S. Chowdary, Hon'ble Minister of State, for Science & Technology and Ministry of Earth Sciences, will preside over the function. 
  
  Awards, for outstanding contributions in popularising science and technology among the children, students and general public are presented every year. 
  
  National Council for Science & Technology Communication (NCSTC) instituted national awards in 1987 to stimulate, encourage and recognize outstanding efforts in the area of science popularization and communication and promoting scientific temper. The awardees selected for 2014 are: Dr. P. S. Shankar, Gulbarga, Dr. Ramesh Chandra Goswami, Tezpur, Dr. S. Narendran, Thanjavur and M.M Publications Limited, Kottayam being the National Awardees for Outstanding Efforts in Science & Technology Communication through Print Media including Books and Magazines. Bharatiya Vidya Bhavan's Muktangan Exploratory Science Centre, Pune, Dr. Shripal Rathi, Muzaffarnagar, Shri Abhijit Sarma Barua, Guwahati, Shri Parveen Singh, Jammu and Shri Prem Singh, Sangrur have won the National Award for Outstanding Efforts in Science & Technology Popularization among Children. Shri Anil Kumar Sharma, Ludhiana has won National Award for Outstanding Efforts in Science & Technology Communication through Innovative and Traditional methods. 
  
  Shri Sarasvatichandra Acharya, Ahmedabad and Dr. A. Subbiah Pandi, Chennai are the National Awardees for Outstanding Efforts in Science & Technology Communication in the Electronic Medium. All these awards consist of an award amount of Rs.1,00,000/- (Rupees one lakh), a memento and a citation. 
  
  NCSTC acts as a nodal agency to support, catalyze and coordinate celebration of the National Science Day in scientific institutions and research laboratories throughout the country and also supports various programmes by the State Science &Technology Councils & Departments for organizing lectures, quizzes, open houses, etc.

Navy inducts four Immediate Support Vessels

• The Navy inducted four new Immediate Support Vessels (ISVs) on Friday, strengthening the coastal security. The vessels were commissioned by Maharashtra Chief Minister Devendra Fadnavis.
  
  “The ISVs are armed with Heavy Machine Guns (HMGs) and are fitted with state of the art radar and navigational equipment. These versatile ships are capable of conducting patrolling operations and high speed interceptions at sea using speeds in excess of 40 knots, and are deployed for security of Offshore Development Areas (ODA) and coastal maritime assets,” a press release by the agency read.
  
  “The induction and deployment of these ships will augment the ongoing efforts to bolster coastal security; and provide protection to our offshore assets from asymmetric threats,” it added.
  
  Of the 14 vessels inducted so far, 11 have been designed and constructed by M/s SHM Shipcare, Mumbai and 3by Abu Dhabi Ship Builder thus proving as an apt example of the “Make in India ‘ initiative proposed by the BJP government.
  
  “The commissioning of these Immediate Support Vessels will enhance the capacity of the Indian Navy to provide better security. This commissioning ceremony also showcases the ship building capabilities of the country following Prime Minister’s call of ‘Make in India’,” Mr. Fadnavis said.

India along with other G4 nations demand UNSC reform

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  United nations: India, along with other nations in the G4 bloc, have said it is “high time” the powerful UN Security Council is reformed to make it more representative and fit for the 21st century. The Directors General of UN Affairs of the G4 bloc of Brazil, Germany, India and Japan met in Berlin yesterday to exchange views on the current state of play and to develop concrete ideas on how to move the issue of Security Council reform decisively forward.
  
  The G4 shared the view that 70 years after the founding of the UN and 10 years after the 2005 World Summit, during which the Heads of States and Governments had unanimously called for an early reform, the process is yet to be initiated. “It is high time to finally making the Security Council more representative and fit for the 21st century,” said the G4 countries in a joint press statement.
  
  They welcomed the strong commitment shown by President of the General Assembly Sam Kutesa in making reform of the Security Council a top priority. The G4 agreed to continue their close cooperation with each other and with reform oriented partners to actively continue promoting a comprehensive reform of the Security Council. The Berlin meeting was chaired by Patricia Flor, Director General for United Nations and Global Issues at the German Federal Foreign Office.
  
  Meanwhile, addressing reporters at the end of China’s Presidency of the Security Council for February, Chinese Ambassador to the UN Liu Jieyi said while the  membership of the Council should be expanded to make it more representative of developing countries, there should not be any timelines imposed for achieving the reform of the powerful UN  body. “Our view is that the Council should be enlarged. For us the most important thing is to enhance the representativeness of the developing countries,” he said.
  
  When asked if there should be a timeline by when the long-pending reform should be achieved, Liu said the reform process is an issue for the 193 members of the UN. “I don’t think that any timeline imposed by any member should be the thing that guide the entirety of 193 members,” he said. He added that the reform process concerns the long term interest of the UN itself and must be approached “carefully and democratically” by all members of the General Assembly.
  
  “The objective is to try and achieve broad consensus on the issue relating to reform of the UNSC,” he added.