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Current Affairs - 18 January 2018

General Affairs 

Poll Dates For Meghalaya, Tripura And Nagaland To Be Announced Today
  • Poll dates for the northeastern states of Meghalaya, Tripura and Nagaland will be announced by the Election Commission this afternoon.

    A team of the top poll body visited the three states recently.

    Reports suggest polling is likely to be in one phase and the votes will also be counted on a single day.

    Tripura, ruled by Chief Minister Manik Sarkar's Left Front, has to elect a new assembly by March 6. The terms of the Meghalaya and Nagaland assemblies end on March 13 and 14.

    Mukul Sangma's Congress government rules Meghalaya and in Nagaland, the Naga People's Front-led Democratic Alliance, backed by the BJP, is in power with TR Zeliang as Chief Minister. The Nagaland government had asked for the election to be put off until there is a solution to the insurgency in the state.

    Polls to five more states are due this year - Rajasthan, Madhya Pradesh, Karnataka, Chhattisgarh and Mizoram.

    These elections are seen as critical ahead of the national polls next year.

Supreme Court To Examine Whether Speaker's Decision Can Be Scrutinised
  • The Supreme Court on Wednesday said it would examine whether the courts can scrutinise the decision of the Lok Sabha Speaker to specify a Bill as a Money Bill, as was done in the passage of the 2016 Aadhaar Act. 

    A five-judge constitution bench headed by Chief Justice Dipak Misra, hearing a clutch of pleas challenging the validity of Aadhaar scheme and its enabling law, however, said there was a Supreme Court judgement which said the Speaker's decision on terming a Bill as a money bill cannot be questioned in a court of law.

     "Once the Speaker says that a Bill is a money Bill, then the courts should not question," the bench, also comprising Justices AK Sikri, AM Khanwilkar, DY Chandrachud and Ashok Bhushan, said while referring to the 2014 judgement.

    Senior advocate P Chidambaram, appearing for his party colleague Jairam Ramesh, said though objections were raised on the Aadhaar bill in the Rajya Sabha, nothing could be done as it was held as money bill by the Lok Sabha Speaker.

    The senior lawyer was responding to a query raised by the bench in the hearing of main Aadhaar case as to whether a parliamentary panel was formed to examine the Aadhaar Bill.

    He said that members cannot question the decision of the speaker outside the house, but the courts are empowered to examine the validity of the decision.

    The top court, on December 15 last year, had sought a response from the centre on the plea of Jairam Ramesh challenging the government's decision to treat Aadhaar bill as a money bill and pass it in the budget session last year after rejecting amendments to it by the Rajya Sabha.

    After issuing notice to the centre, the top court had tagged the plea with the clutch of petitions against the Aadhaar scheme itself for hearing today by the constitution bench.

    Prior to this, it had said that it was "tentatively not convinced" about the grounds cited by the Congress leader to challenge Lok Sabha Speaker's decision to certify a bill to amend Aadhaar law as a money bill.

    The observation had come after the government had contended that it fulfilled the criteria for certification as money bill as funds for welfare schemes for which the biometric identification number (Aadhaar) was necessary has to be drawn from the Consolidated Fund of India. 

    The centre took the stand that the decision of the Speaker cannot be brought under judicial scrutiny.

    The Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Bill, 2016 was passed by the Lok Sabha on March 11 last year. It was then taken up in Rajya Sabha on March 16, where several amendments were made to it. The bill was then returned the same evening to Lok Sabha which rejected all the amendments proposed by the Upper House and passed it.

    A money bill contains provisions for various taxes and appropriation of funds and can be introduced only in the Lok Sabha. The Rajya Sabha cannot make amendments to such bills after passage by the Lok Sabha. The Rajya Sabha can suggest amendments but it depends on the Lok Sabha to accept or reject them.

    The NDA government chose to categorise the bill as a money bill as it lacked a majority in the Rajya Sabha.

Spike Missile Deal Back On Track After Talks With PM Modi, Says Netanyahu
  • Prime Minister Narendra Modi has revived the deal to buy Spike anti-tank missiles from Israel just weeks after New Delhi had exited the $ 500 million deal, Israeli Prime Minister Benjamin Netanyahu announced on Wednesday after wrapping up his trip to PM Modi's home state Gujarat.

    "Following talks I have held with my friend, Indian Prime Minister Narendra Modi, the Indian government has informed us that it is putting the Spike deal back on track. This is very important and there will be many more deals," Mr Netanyahu announced in a 35-second video statement late on Wednesday evening.

    PM Netanyahu's statement, who is on his first visit to India, did not elaborate on the details of the understanding that has been reached with New Delhi.
    PM Netanyahu: "Following the talks I had with my friend Prime Minister @NarendraModi, the Indian government has informed us that it is putting the Spike deal back on track. This is very important and there will be many more deals."

    - PM of Israel (@IsraeliPM) January 17, 2018

    It is being speculated that the fresh deal that New Delhi signs could be much less than the $ 500 million negotiated earlier. News agency Reuters said Israel's Channel 1 television was reporting that the original deal worth $ 500 million would be cut in half.

    India had opted out of buying the anti-tank guided missiles in December after the Defence Ministry decided to back the state-owned Defence Research and Development Organisation (DRDO) which promised to deliver a world-class missile within four years.

    But the Army had been against being made to wait for DRDO-developed missiles, pointing that it would leave the Indian soldiers badly out-gunned till at least 2022.

    "So how do we bridge the gap between now and 2022? It's through the Spike. Rather than going whole hog we are in the discussion with the government" to fill in the gap, Army Chief General Bipin Rawat said last week.

    Spike is a man-portable "fire and forget' missile that can hit moving targets such as a tank, allowing the soldier who fires the missile to quickly move for cover.

    Cancelling the deal would, according to experts, give Pakistan's foot-soldiers an edge over Indian infantry soldiers because they have portable anti-tank missiles that can strike Indian tanks and bunkers at a distance of 3-4 km; India's equivalent missiles have a range of just 2 km.

    India had opted for Spike, manufactured by Israel's state-owned defence contractor Rafael Advanced Defence Systems, over the Javelin missiles offered by Washington in 2014.

    New Delhi had earlier declined to confirm if the Israeli side had raised the Spike deal at the bilateral meetings on Monday.

    "I am not at liberty to go into the details of the discussions but it is suffice to say that where individual defence procurement is concerned the relevant matters are discussed by officials," Vijay Gokhale, secretary (economic relations) had said.

RJD, Liquor Mafia Behind The Attack On Nitish Kumar, Alleges Sushil Modi
  • Bihar Deputy Chief Minister Sushil Kumar Modi on Wednesday charged the Rashtriya Janata Dal, the main opposition party in the state, with having masterminded the attack on Chief Minister Nitish Kumar's cavalcade last week in collusion with liquor mafia.

    The senior BJP leader's attack on Lalu Prasad's party was made in the context of attack on CM's cavalcade in a village in Buxar district on January 12 last.

    BJP is a coalition partner of Nitish Kumar government in Bihar.

    "Police had seized a huge quantity of liquor from Nandan village of Buxar district. The attack on the Chief Minister was a planned one, aimed at seeking vengeance for the operation", Sushil Modi tweeted.

    Kumar's cavalcade was attacked when he was touring the village on Friday last as part of his state-wide "Vikas Samiksha Yatra".

    The Chief Minister had banned sale and consumption of alcohol in the state nearly two years ago.

    In the tweet, Sushil Modi also said "those who had once stood joining hands in favour of prohibition, have today sided with the liquor mafia".

    The remark was an obvious reference to RJD supremo Lalu Prasad, currently in jail in connection with a fodder scam case, who had stood beside the Chief Minister on January 21 last when a state-wide human chain was formed in support of the prohibition drive.

    The RJD was sharing power with Kumar's JD(U) at that time. The Chief Minister walked out of the Grand Alliance after corruption charges surfaced against Prasad's younger son Tejashwi Yadav - who was then the Dy CM.

    The BJP, which was in the opposition, immediately came up with the offer of support to Kumar following which a new government was installed in the state.

    Sushil Modi also lambasted the opposition party for "weaving false tales of dissatisfaction with development works" and said "both wards under the village enjoy facilities like electricity and tap water".

    The RJD has been claiming that the stone-pelters were Dalits living in nearby localities who wanted to draw the CM's attention towards alleged lack of amenities in their area.

    The party has also criticized the ensuing police action, describing as "harassment of Dalits" the arrests made in connection with the attack on the Chief Minister's carcade, which had left many security personnel and other staff injured.

States To Discuss Steps To Empower Minorities Today: Mukhtar Abbas Naqvi
  • Minority affairs ministers and ministers of social justice from several states will discuss measures to empower minorities "without appeasement" at a meet in Lucknow today, Union minister Mukhtar Abbas Naqvi said on Wednesday.

    The meeting would be inaugurated by Uttar Pradesh Chief Minister Yogi Adityanath and Naqvi will be the chief guest. The states and union territories participating in the programme are Uttar Pradesh, Bihar, Haryana, Delhi, Punjab, Uttarakhand, Jammu and Kashmir, and Chandigarh.

    "The main agenda of the programme is development with dignity and empowerment without appeasement. Various developmental measures initiated by different state governments for education and socio-economic development are likely to come up for a threadbare discussion," the minority affairs minister told PTI.

    "It is an important event, as ministers, secretaries and other officials from nine states/UTs will be participating in the event organised by the Union Ministry of Minority Affairs," he said.

    UP Minority Welfare Minister Laxmi Narayan Chaudhary in a video message tweeted that several welfare schemes being run for the minorities will be reviewed at today's meeting.

    The meeting will happen two days after Mr Naqvi announced the scrapping of subsidy for Haj from this year, four years ahead of a deadline suggested by the apex court in a 2012 order.

Business Affairs

GST Council meet today: Govt may bring down tax rate on 70 goods
  • The GST Council is scheduled to meet today for the 25th time. Ahead of the meet, it has been reported that the Council may bring down taxes on as many as 70 goods. According to a report in the Business Standard, the GST Council is likely to rationalise the tax rates of about 70 items, of which at least 40 are services. "Around 40 to 50 services will be taken up for a rate revision in the Council meeting. These are services that were earlier exempt but were taxed under the GST regime," the business daily quoted an official as saying.

    Apart from this, the Council is also expected to rationalise taxes of agriculture implements and unconventional fuel buses. The report suggests that the agriculture implements that are currently taxed up to 18 per cent may come under 12 or 5 per cent bracket.

    This will be the second biggest tax rationalisation after GST roll out. In November, the Council had brought down taxes on over 200 goods. As many as 178 items of daily use were shifted from the top tax bracket of 28 per cent to 18 per cent. The move, however, cost the exchequer dearly as following months GST collections declined.       

    Last year in August, the Council had slashed the tax on some tractor parts from 28 per cent to 18 per cent. In tomorrow's meeting, the Council may take up compliance issue and could come up with a single stage return filing to smoothen the procedures for small and medium enterprises. After the introduction of single form filing, the traders/firms will have to file just  12, down from 37. Currently, there are three return forms:  GSTR1, GSTR2 and GSTR3.

    The Council could also discuss the inclusion of real estate under GST. According to reports, the Council could put real estate sector under 12 per cent bracket and it may also subsume stamp duty and registration charges. "Discussion of real estate inclusion in GST is the key agenda of the GST Council which is scheduled to meet on January 18th," news agency ANI quoted an official as saying.

    The Confederation of Indian Industry or CII in a statement issued on Tuesday urged the government to bring oil and natural gas under the GST. As of now, crude oil, natural gas, diesel, petrol and aviation turbine fuel have not been included in the new taxation system.

    Last month, Finance Minister Arun Jaitley told Rajya Sabha that the Centre was ready to bring petroleum products under GST but it would want a consensus with the states before taking such a step. Days after Jaitley's statement, industry body Assocham said that the consensus with states on inclusion of petroleum would never emerge as they and the Centre were over-dependent on the sector for revenue collection.

    "Realistically speaking both the Centre and States have been over-depending on petroleum sector for their revenue collection. Collectively, they impose over 100-130 per cent taxes on petrol and diesel," Assocham said in a statement.

Hindustan Unilever net profit grows over 27 per cent at Rs 1,326 crore during December quarter
  • Hindustan Unilever Ltd (HUL) registered net profits amounting to Rs 1,326 crore during the third quarter of 2017-18 that ended on December 31, 2017. This amounts to 27.74 per cent year-on-year increase in net profit for the FMCG major during the December quarter. The company recorded net profit to the tune of Rs 1,038 crore in the corresponding period last fiscal, it said a stock exchange filing.

    In its Q3 2017-18 financial results, HUL mentioned a 24 per cent y-o-y increase in EBITDA at Rs 1,680 crore, as opposed to Rs 1,355 crore last fiscal. Total income during the quarter under review stood at Rs 8,742 crore as against Rs 8,400 crore in the year-ago period, up 4 per cent, it added. Total expenses during the December quarter 2017-18 stood at Rs 7,036 crore in comparison to Rs 7,067 crore in the same period last fiscal.

    The personal care segment generated Rs 4,090 crore in revenue during Q3 2017-18 as against Rs 3,980 crore in the year ago period. Home care division contributed Rs 2,741 crore during the quarter compared to 2,689 crore year ago. HUL saw double digit volume growth across categories under home care segment, a company statement said.

    HUL further added that growth in the household care segment was led by a strong performance in Vim. The purifiers business saw the launch of air purifiers under the Pureit brand. "Personal wash witnessed robust growth across key brands led by Dove and Pears. Growth in skin care was driven by the strong performance of Fair & Lovely," the company said.

    HUL stated that the GST rate cut benefits have been passed on end consumers immediately, expect those put into effect on November 15, 2017 due to lack of time. "Therefore, an estimated value of Rs 119 crore was proactively disclosed to the CBEC on this count and we offered to pay this amount suo motu to the Government. This amount is not recognised as revenue and is accounted as a liability as on 31st December 2017," company stated.

    "We have delivered another strong performance in the quarter, with broad based growth across categories and further improvement in margins," HUL Chairman Harish Manwani said.

    On the outlook, he said, "We remain positive about the mid-term outlook of the industry and will continue to invest strongly in our core brands and developing categories of the future".

    He, however, said there were early signs of commodity cost inflation and the company would further sharpen its focus on cost effectiveness programmes and manage business dynamically for competitiveness and sustained profitability.

Sensex crosses 35,000 for the first time: 'I will not buy Indian equities'
  • John Praveen, Managing Director & Chief Investment Strategist at Pramerica International Investments Advisors said elevated valuation of Indian companies will keep him away from India equities that saw the BSE Sensex crossing 35,000 for the first time. Pramerica International Investments Advisors globally manages close to $100 billion. Praveen who has downgraded India from an overweight to neutral, says "India is costliest across markets. With continuing upsurge in global crude oil prices I will not be buying Indian equities in the near term (three months)." "Rising oil prices is a big concern for India in the near term. It can spoil the party for India. High oil prices will lead to fiscal slippages thus can see an increase in rates by the central bank and impact both equity and bond market where yields could move upwards," says Praveen who would wait and watch for the union budget to take a future call on India and Indian equities.

    While he is cautious on India for the next three months, his investment theme for Indian equities for 2018 remain almost the same to 2017. This year he is betting on the stocks related to rural India that includes fertilizer and farm equipment companies ahead of the elections. He is also bullish on the infrastructure story especially on companies that are in road building. He continues to remain positive on sectors related to consumer discretionary, materials, including cement and metals. While negative on consumer staples due to valuation and avoid IT and healthcare stocks due to global policies. "Market has discounted a fiscal deficit of 3.5 per cent. Anything above that will be bad for the market," says Praveen.

    As on December 2017, India is trading at a price to earnings (PE) ratio of 24.4 compared to Brazil's 18.9, China's 16.5 and Russia's 7.2. Barring India all the other three countries are still trading lower than their long-term averages. For India the long-term average PE is around 17.8. Praveen says while India enjoys premium to its counter parts due to rising growth rates, it has been the only country apart from the Euro-zone where corporates haven't delivered on performance. "In the beginning of the year we had expected an EPS growth of 12 per cent for India (index) but the actual growth is around 4 per cent. This year corporate earnings are likely to throw some surprises due to the low base effect following demonetization and introduction of GST. For 2018, we see the EPS growth at 9 per cent."

    Concerns for Indian equities?
    1)    Expensive Valuation 
    2)    Rising oil prices that is around $65-70 per barrel
    3)    Fiscal slippages due to rising oil prices as well as ahead of election
    4)    Rising interest rates due to rise in inflation 
    5)    Earnings disappointment

Evasion of GST by dealers cause revenue dip: Sushil Kumar Modi
  • GST evasion by dealers by suppressing turnover has caused a revenue slump under the composition scheme in the last two months, Bihar deputy chief minister and GST network panel head Sushil Kumar Modi said in Bengaluru on Wednesday. "We are surprised to find out that the total revenue collected was just Rs 310 crore in the last two months, despite 7.5 lakh composition dealers having filed returns," he told reporters after a Group of Ministers (GoM) meeting here.

    This slump only means there is suppression of turnover by composition dealers who are evading taxes. The amount was not large enough, but it was not in good taste, Modi said. GST Network (GSTN) was analysing possible interventions to check this malady and it would be discussed at the GST Council meeting in New Delhi tomorrow, he said.

    Under the composition scheme, tax payers with a turnover of upto Rs 1.5 crore have the option of paying a minimal rate of tax and filing a simplified tax return, he said. The average revenue shortfall of all states for August was 28.3 per cent and it slumped to 17.5 per per cent in October. Again it rose to 20.9 per cent and minutely dipped to 20.7 per cent in November and December, he said. If the average monthly compensation cess collection from August to December went below Rs 7,615 crore, the Centre would have to shell out money from its kitty, he said.

    Modi, however, said GoM was confident of plugging the loopholes and disruptions in terms of revenue slump. Going by past experience, the GSTN platform has been able to reduce the glitches because the technology was designed in such a manner that it would be difficult to evade taxes, he said. The number of returns filed till date was 5.25 crore and 154 crore invoices had been processed by GSTN.

    As of today, the due registration and migrated tax payers have reached a figure of one crore, he said. The GSTN-related glitches were coming down and the system was able to handle complaints pouring in. He said as much as 93 per cent of 47 assigned functionalities of GSTN have been operationalised and the remaining would be operationalised in the coming days.

Direct tax mop-up jumps 19% to Rs 6.89 lakh crore this fiscal
  • Direct tax collections during the first nine-and-a-half months of the current fiscal have risen by 18.7 per cent to Rs 6.89 lakh crore, the tax department said on Wednesday.

    The collections till January 15, 2018 represent over 70 per cent of the Rs 9.8 lakh crore revenue target from direct taxes, the Central Board of Direct Taxes (CBDT) said in a statement.

    "The provisional figures of direct tax collections up to January 15, 2018, show that net collections are at Rs 6.89 lakh crore which is 18.7 per cent higher than the net collections for the corresponding period last year," it said.

    Gross collections (before adjusting for refunds) have increased by 13.5 per cent to Rs 8.11 lakh crore during April, 2017 to January 15, 2018.

    Refunds amounting to Rs 1.22 lakh crore have been issued during this period.

    Stating that there has been "consistent and significant" improvement in the position of direct tax collections during the current fiscal, the CBDT said the growth rate of total gross collections has improved from 10 per cent in Q1, to 10.3 per cent in Q2, to 12.6 per cent in Q3 and to 13.5 per cent as on January 15, 2018.

    Similarly, the growth rate of total net direct tax collections has climbed up from 14.8 per cent in Q1, to 15.8 per cent in Q2, to 18.2 per cent in Q3 and to 18.7 per cent as on January 15, 2018.

    The growth in corporate tax collections has risen from 4.8 per cent in first quarter of current fiscal to 10.1 per cent in Q3 and 11.4 per cent as on January 15, 2018.

    Similarly, the growth rate of net corporate tax collections increased from 10.8 per cent in Q2 to 17.4 per cent in Q3 and to 18.2 per cent as on January 15, 2018.

General Awareness

tatutory, regulatory and various quasi-judicial bodies.
Defence Acquisition Council (DAC)

  • Context: The Defence Acquisition Council (DAC) has simplified ‘Make II’ procedure, which prescribes guidelines to be followed to develop and manufacture defence equipment through Indian Industry.

    Changes introduced:

    Since no government funding is involved in ‘Make II’ project, the DAC felt it necessary to simplify the procedure to make it industry friendly, with minimal government control. The salient aspects of the revised procedure will now allow Ministry of Defence to accept suo-motu proposals from the industry and also allows start-ups to develop equipment for Indian Armed Forces. The minimum qualification criteria to participate in ‘Make II’ projects has also been relaxed by removing conditions related to credit rating and reducing financial net worth criteria.

    As per the earlier ‘Make II’ procedure, only two vendors were shortlisted to develop prototype equipment. Now, all vendors meeting the relaxed eligibility criteria will be allowed to participate in the prototype development process. The vendor will not be required to submit Detailed Project Report. After accord of approval of the ‘Make II’ project by the council, all clearances will be accorded at Service HQ (SHQ) level.

    Defence Acquisition Council (DAC)

    What is it? To counter corruption and speed up decision- making in military procurement, the government of India in 2001 decided to set up an integrated DAC. It is headed by the Defence Minister.

    Objective: The objective of the DAC is to ensure expeditious procurement of the approved requirements of the Armed Forces, in terms of capabilities sought, and time frame prescribed, by optimally utilizing the allocated budgetary resources.

    Functions: The DAC is responsible to give policy guidelines to acquisitions, based on long-term procurement plans. It also clears all acquisitions, which includes both imported and those produced indigenously or under a foreign license.

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