Current Affairs - 27 April 2018

General Affairs 

Govt returns SC collegium proposal on Justice Joseph, says his elevation not 'appropriate'

• 

  In a fresh confrontation with the judiciary, the government on Thursday told the Supreme Court collegium to reconsider its proposal to appoint Uttarakhand high court chief justice KM Joseph to the top court, saying the elevation may not be "appropriate".
  
  The government received immediate support from the collegium head, Chief Justice Dipak Misra, who said the executive was well within its rights + to reject Justice Joseph's name while accepting the second name even though both were recommended for elevation together by the collegium. The names of Malhotra and Justice Joseph were recommended by the collegium in January.
  
  In a letter to Justice Misra, union law minister Ravi Shankar Prasad said the government's rejection of Justice Joseph's name has approval of the President and the Prime Minister and also flagged that the SCs/STs have no representation in the Supreme Court since long.
  
  "The proposed appointment of ... Joseph as a Judge of the Supreme Court at this stage does not appear to be appropriate," Prasad said in the letter. "It would also not be fair and justified to other more senior, suitable and deserving Chief Justices and senior judges of various High Courts."
  In theory, the collegium can still reject the government's proposal and re-send Justice Joseph's name to the law ministry, which can then decide the future action.
  
  The government's opposition to Justice Joseph's elevation is likely to deepen the rift between the executive and the judiciary.
  
  In a ruling in 2016, Justice Joseph had cancelled President's rule in Uttarakhand and brought back to power the then Congress government of Harish Rawat in the state. The judgement was seen at that time as a major setback to the BJP-ruled government at the Centre.
  
  The government's decision against Justice Joseph's elevation evoked sharp reactions with the Supreme Court Bar Association President terming it as "disturbing" and the main opposition party, Congress, asserting that the independence of the judiciary "is in danger" and asking if it would now speak in one voice that "enough is enough".
  
  Meanwhile, the apex court rejected a plea of senior advocate Indira Jaisingh to stay the warrant of apointment of Malhotra.
  
  Notification announcing the appointment of Malhotra was issued this morning by the department of justice in the law ministry.
  
  "... the government has been constrained to segregate the recommendation of the Supreme Court ... such segregation of proposals has been done in many cases earlier, which include appointment of judges to various HCs and even the SC in the interest of expeditious action on appointments," Prasad told Justice Misra.
  
  In June 2014, the then Chief Justice of India R M Lodha had written to the government making it clear that the executive cannot segregate recommendations without prior approval of the collegium. This had happened when the government had had decided against elevating senior lawyer and former solicitor general Gopal Subramanium to the Supreme Court, while accepting other recommendations of the collegium, a group of senior most judges of the Supreme Court that decides on appointment of the apex court judges.
  
  But in the meantime, Subramanium withdrew his consent to be recommended for the judgeship.
  
  In his six-page letter this morning, Union minister Prasad said in the all-India high court judges seniority list, Justice Joseph is placed at serial number 42.
  
  "There are presently 11 chief justices of various high courts who are senior to him in the all-India high court judges seniority list," he said.
  
  Out of a sanctioned strength of 1079 judges, the 24 HCs have 669 judges.
  Noting that the parent high court of Justice Joseph, the Kerala high court, has adequate representation in the Supreme Court and other high courts, Prasad said the high courts of Calcutta, Chhattisgarh, Gujarat, Rajasthan, Jharkhand, Jammu and Kashmir, Uttarakhand, Sikkim, Maniur and Meghalaya have no representation in the top court.
  
  "It may be relevant to mention here that there is no representation of SCs/STs in the Supreme Court since long," the letter read. 

'Toilet data' sparks Twitter war between BJP and Congress

• 

  A war of words ensued between the BJP and the Congress after the former tweeted a comparative data showing the number of toilets built in Karnataka during the rule of NDA and UPA governments.
  
  "In four years of UPA, only 20 lakh household toilets were built with Rs 350 crore, whereas in four years of NDA 34 lakh toilets were built with Rs 2,100 crore.
  
  Referring to the Nirav Modi-PNB fraud, the Congress was quick to point out that the cost incurred in the construction of per toilet during the UPA era was way lower than the cost incurred by the NDA government.
  
  The saffron party countered the Congress's claim by saying that the Rs 2,100 crore, used to built toilets during the four years of NDA government, was given to the Congress-led government in Karnataka by the BJP-led NDA government at Centre. Hence, implying that it was the Congress-led government in Karnataka, and not the NDA government, which was responsible for spending Rs 6177 for the construction of one toilet.
  
  "Dear Congress, do not stoop lower than your President’s (Rahul Gandhi) IQ. Central government gave Karnataka government Rs. 2100 crores for toilet construction. If you say not enough toilets were built, ask Mr SiddhaRupaiya!"

13 children killed in bus-train collision in Kushinagar, Uttar Pradesh

• 

  At least 13 school children died on the spot and eight suffered injuries when the school van in which they were travelling was hit by a train at a railway crossing in Kushinagar on Thursday morning.
  
  Taking serious note of the incident, Uttar Pradesh chief minister Adityanath ordered immediate assistance to the victims and their families and directed Commissioner Gorakhpur to conduct a probe into the mishap. The CM also visited the injured as well as the accident site.
  
  Prime Minister Narendra Modi and Union Home Minister Rajnath Singh also tweeted expressing their condolences over the deaths.
  
  The incident took place at around 7.30 am at Bahpurva railway crossing under Vishnupura police station of Kushinagar district. The van driver also died on the spot. There were unconfirmed reports that van driver was listening to music using earphones when the incident took place. The train involved in the incident was on its way to Gorakhpur from Sivan. The van was carrying over 20 school children.
  
  “ A Tata Magic school van carrying school children collided with passenger train (55075) coming from Sivan to Gorakhpur at unmanned railway crossing number 45, around 7.30 am. The gate mitra tried to stop the van driver but he didn’t stop and his van somehow stopped at the track. The railway crossing comes under Banaras division where the accident took occurred in which 10-12 children died on the spot.” CPRO, NE Railway, Sanjay Yadav said.
  
  The commissioner of police Anil Kumar, SSP Kushinagar and DM Kushinagar have reached the accident site in and CM Adityanath is likely to visit by 11 am. As per locals, the van was speeding and suddenly stopped near the railway line when the accident occurred. The school bus was carrying children of Divine public School at Dudhi Bazar.
  Read this story in Marathi.
  
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Lockheed to sweeten India's fighter jet bid with F-35 technology

• 

  Lockheed Martin Corp. will provide latest combat jet technologies including a target tracking device aboard the F-16 aircraft that it plans to offer to India in its bid for the world’s largest order from the Indian Air Force.
  
  The global defence giant will offer jets equipped with the advanced radar which is fitted on its fifth-generation combat jet, the F-35, as well as a helmet-mounted tracking system and a new radio data link system, Vivek Lall, vice president for strategy and business development at Lockheed Martin said Wednesday.
  
  The bid also comes with an offer to shift its lone production line for F-16s from Fort Worth, Texas in the US to India as it takes on competitors Saab AB and Boeing Co. The variant being pitched is the F-16 Block 70.
  
  “There are a lot of technologies that come into the F-16 from F-35 and F-22, including the latest radar on these platforms,” Lall said in an interview. “It is a contemporary, state-of-the-art platform.”
  
  Getting state-of-the-art fighters is crucial for Prime Minister Narendra Modi as the South Asian nation faces increased risks from neighboring Pakistan and China at a time when the Russian MiG jet -- India’s mainstay -- is being phased out. As part of that plan, India sought proposals from global manufacturers for 110 combat planes, a deal worth at least $15 billion.

Bhaichung Bhutia launches own political party 'Hamro Sikkim'

• 

  Former footballer Bhaichung Bhutia today launched his political party "Hamro Sikkim" at the Press Club of India here.
  
  "Hamro Sikkim is dedicated to people of Sikkim. There are lot of policies that young generation like us feel isn't going right. We want to make sure everybody is included into decision making," Bhutia told ANI.
  
   Hamro Sikkim is dedicated to people of Sikkim. There are lot of policies that young generation like us feel isn't going right. We want to make sure everybody is included into decision making : Bhaichung Bhutia on launching his new party 'Hamro Sikkim' in #Delhi
  
  I will be live on #Facebook from Press Club of India tomorrow to announce our plans for Sikkim. It’s an outreach to national media to tell them that the beautiful state of #Sikkim is ready for change. So join me at 3 pm on 26th April as we engage the Nations Capital New Delhi.
  
  In a January 30 report, TOI had indicated Bhutia would quit TMC eyeing a larger political role in Sikkim. Bhutia had even expressed this to his party leadership then, saying he wasn’t keen to join any political party but wanted to be part of a larger political platform espousing Sikkim’s cause in New Delhi. 

Business Affairs

Air India on hiring spree; to induct 270 co-pilots

• 

  Ongoing privatisation and mounting losses have not deterred the flag carrier Air India from adding to the already-bloated workforce, as it's in the process of hiring around 270 co-pilots in the reserved category.
  
  Sources in the know of the development also say the airline has created a new post of chief pilot as well despite it already having two somewhat similar positions--director of operations and executive director of operations--being manned by two senior pilots.
  
  Air India has, however, defended the hiring plan, citing operational and regulatory requirements.
  
  The massive pilot recruitment comes on the back of hiring of 500 cabin crew by the state-run carrier weeks before government floated a preliminary information memorandum inviting bidders to buy 76 per cent stake.
  Government will also exit the low-cost international subsidiary Air India Express and its 50 per cent stake in the ground handling joint venture AISATS. The rest of the stake is held by SATS or Singapore Airport Terminal Services.
  
  "Air India is in the process of adding 270 co-pilots when such crew is already in excess. And this hiring is being done in the reserved category and that too at a time when there is a big question mark on the issue of retention of the workforce post-privatistion," airline sources said.
  
  Air India has 11,214 permanent employees as of December 2017. These include 2,056 on deputation to other companies and agencies. It also has 2,913 on contract and 2,661 on deputation from other group companies as per the government memorandum on privatisation.
  
  Sources also alleged that the airline has recently created two ED-level posts in the IT and civil departments.
  
  "The creation of a new post for civil (department) is beyond comprehension as the airline is in the process of getting rid of its real estate and it can't be understood why there has to be a post of for such work," they said.
  
  Moreover, the airline is now creating the post of chief pilot though there are already two occupants who are in charge of flight operations, sources alleged.
  "Interestingly, one of the three contenders for the post is a pilot who had failed the pre-and post-flight alcohol tests when he was the flight operations inspector and was suspended by the DGCA," they alleged.
  
  Responding to the allegations, Air India in an e-mail told PTI that "the post of chief pilot is not a new and is named as 'fleet captain' as designated by the DGCA.

Markets off to flat start, Nifty close to 10,600-mark

• 

  Benchmark BSE Sensex was up in the range of 50 to 80 points in early trade on Thursday on sustained buying by domestic institutional investors amid mixed trend in other Asian bourses.
  
  Short-covering of bets today being the last session of April expiry in the derivatives segment supported the recovery. Asian markets were mixed as robust corporate earnings helped Wall Street calm concerns over the surge in US bond yields.
  
  Realty, metal, healthcare, infrastructure, auto,FMCG and power sectors led the recovery. The NSE Nifty was also trading in the green and was close to 10,600 at 10 am.
  
  Brokers said sustained buying by domestic institutional investors and a mixed trend at other Asian bourses, tracking overnight gains at Wall Street, mainly influenced sentiment here.
  
  Major gainers were M&M, TCS, Tata Steel, Sun Pharma, Yes Bank, RIL, HUL, Infosys, HDFC Bank, SBI, Asian Paints, Maruti Suzuki, IndusInd Bank, Bajaj Auto, Power Grids and Dr Reddy's, with gains of up to 0.98 per cent.
  
  However, Wipro, tumbled 3.62 per cent to Rs 276.80 after the company yesterday reported over 20 per cent decline in its consolidated profit to Rs 1,800.8 crore for the March quarter, 2017-18. 

India shows jobs growth as more than 30 lakh join EPF

• 

  More than three million workers joined the country's state-run social security fund, Employees Provident Fund (EPF), in six months through February, giving Prime Minister Narendra Modi some ammunition to defend his record on creating jobs ahead of a general election due next year.
  
  A new data series on payrolls released by the EPF for the first time on Wednesday, however, gives an incomplete picture of how many new jobs are being created in the non-farm sector.
  
  The provisional data showed 4,72,075 employees were added to the state-run social security fund in February, and 6,04,557 joined in January, bringing the six-month total to 31.1 lakh.
  
  “The data shows there was a good increase in jobs every month in the last six months, which will now help fill the missing link for policy-making,” said Soumya Kanti Ghosh, chief economist at the country’s largest lender, the State Bank of India.
  
  As nearly 15 million join the workforce every year, India still has a long way to go before the world’s fastest-growing major economy can cope with the country’s demographic bulge.
  
  “Unemployment is a serious issue in India, and we must be worried over the implications,” N.R. Bhanumurthy, an economist at the National Institute of Public Finance and Policy, a Delhi-based think-tank, said.
  
  Modi won the 2014 election promising to revitalise the economy and create strong jobs growth, but some critics have accused his government of making exaggerated claims over just how well the economy is doing.
  
  India’s growth stuttered after the government’s decision to take high denomination bank notes out of circulation overnight in late 2016 in a bid to make the country less reliant on cash transactions and flush out money that was being kept out the taxman’s sight.
  
  The implementation of GST last year also knocked growth, and caused some companies to shed jobs.
  
  Since then an upturn in global and domestic demand, along with some deregulation, has helped the economy regather momentum, and it is expected to grow 7 percent in the fiscal year to March next year.
  
  OVERESTIMATES
  
  To bring more of the vast workforce into the organised sector, Modi this year announced the state would partially cover employers’ contributions to the EPF for three years. The government says it will cover an amount up to 12 per cent of employees’ salaries.
  
  As a result of those incentives, critics say the new data series overestimates job creation in the organised sector as many workers who were previously working on contract have been taken on as staff by the same employers and added to the fund.

ITAT rules in favour of Flipkart; I-T to refund Rs 55 cr tax collected with interest

• 

  The Income Tax Appellate Tribunal has set aside the revenue department's Rs 109.52 crore tax demand on Flipkart, ruling that discounts doled out by the e-commerce major should not be accounted for as capital expenditure.
  
  The income tax department will now have to refund the Rs 55 crore tax that was deposited by Flipkart and revoke the bank guarantee pursuant to the February 6 order of the ITAT.
  
  The tax department while raising the demand had treated the Rs 796 crore loss incurred by Flipkart for the assessment year 2015-16 as capital expenditure.
  
  The tax department had contended that the loss in the form of discounts offered to customers is intended to build up brand value/monopoly or primacy in the online market.
  
  "One cannot proceed on the basis of presumption that the profit foregone is expenditure incurred and further that expenditure so incurred was for acquiring intangible assets like brand, goodwill etc," said the Bangalore bench of the ITAT in its order dated April 25.
  
  The company had pleaded before the ITAT that since e-commerce was in its nascent stage, it was very difficult to create trust and awareness of sale through this mode. "The volume of sales was very low. One of the ways to increase volume of sales and attract buyers to e-commerce was to offer discounted prices," it said.
  
  However, the I-T department said it should be treated as 'capital expenditure' since it helped in creating 'brand value' and 'marketing intangibles' for Flipkart.
  
  The ITAT in its order said "we hold that the loss as declared by the Assessee in the return of income should be accepted by the AO (assessing officer)..."
  
  Disallowing expenses and arriving at a positive total income by assuming that there was an expenditure of a capital nature incurred by the assessee in arriving at a loss "is without any basis and not in accordance with law", the ITAT said.
  
  As per the February 6 interim order passed by the ITAT, Flipkart was asked to deposit 50 per cent of the tax demand and and furnish bank guarantee for balance demand for a period of 6 months by February 28, 2018.
  
  Nangia & Co Managing Partner Rakesh Nangia said, "In order to give effect to the ITAT's favourable ruling, the revenue authorities will have to refund the demand already paid by Flipkart. This refund shall come with interest at half a percent per month for each completed month.
  
  "The revenue authorities may choose to file appeal against the ITAT order before the High Court, but that shall not in anyway impact the refund of tax demand already paid".
  
  Flipkart was fighting its case with the income tax department regarding tax treatment of substantial expenditure incurred by it in the nature of product discounts, advertisement and marketing expenses.
  
  In its tax return, Flipkart had claimed that it needs to incur such expenses on year-on-year basis to sell its products and retain its market share, thus entire amount of such expenses is deductible as tax expense.
  
  On the other side, the income tax department treated such expenditure as 'capital expenditure', claiming that such expenses created 'brand value' and 'marketing intangibles' for Flipkart and thus entire amount of such expenses was 'not deductible' as tax expense and has to be capitalised.
  
  This ruling is very important from the perspective that product discounting, advertisement and marketing expenses constitute a major portion of expenses of e-commerce companies, which such e-commerce companies incur on day to day basis, Nangia said.
  
  "This is an essential feature of e-commerce business model, primarily dealing with consumer products and selling directly to end consumers. This, being the first favourable ruling from the tax tribunal on this litigative matter, would certainly give a relief to the e-commerce companies across the country incurring similar expenditure," he added.

Draft National Telecom Policy to be released on May 1: DoT

• 

  The government is likely to release the draft of new National Telecom Policy (NTP) on May 1 to seek public comments, Telecom Secretary Aruna Sundararajan said today.
  
  "The direction of the new policy, that we hope you will see as early as on May 1, will be reform-oriented. It will be investor friendly and bring down the cost of compliances," she said at the Annual General Meeting of US industry body Amcham.
  
  She mentioned that the proposed NTP 2018 will be placed for public comments for 15-20 days.
  
  "It (NTP) will hopefully trigger innovation, will focus on Make in India and provide opportunities for partnering with lot of companies,"Sundararjan said.
  
  After the public comments, the Department of Telecom (DoT) will start inter-ministerial consultation on the policy and thereafter approach the Cabinet for final approval, she said.
  
  The NTP 2018 is expected to present a growth road map of the Indian telecom sector, which is reeling under debt of around Rs 7.8 lakh crore, for a period of next five years.
  
  Telecom operators have demanded that the government lower spectrum usage charges, licence fees and other levies on the sector to make business viable.
  
  The Economic Survey 2017-18 had mentioned that the telecom sector is going through stress due to a huge debt pile, tariff war and irrational spectrum costs and called for policy measures to minimise over-bidding of assets during auctions.
  
  The survey said auctions in case of spectrum as also coal and renewables led to transparency and avoided rent-seeking, although they "may have led to a winners' curse, whereby firms overbid for assets, leading to adverse consequences in each of the sector".
  
  It suggested that the "policy design must minimise these costs wherever possible. More specifically, there should be greater reliance on using incentives and carrots than on sticks".
  
  Sundararajan had said earlier that the government will look at positioning the telecom sector primarily as an enabler to boost the economy rather than a revenue earner under the new NTP.
  
  DoT has held various round of discussions with stakeholders in all the field of sector for the policy.
  
  The Telecom Regulatory Authority of India (Trai) has recommended road map for NTP 2018 that should be able to address global requirements and attract investments of about USD 100 billion by 2022.
  
  It has suggested that the NTP 2018 should facilitate ease of doing business through simplification of licensing and regulatory frameworks, rationalisation of taxes, levies and related compliances, and facilitating availability of resources, including spectrum.
  
  Trai recommended that under the new policy framework, the telecom sector should be able to generate 20 lakh jobs, achieve 900 million broadband subscriptions with download speed of 2 Mbps and connect all gram panchayats with at least 1 gigabit per second with wireless broadband by 2022.
  
  Trai reiterated its long pending demand of putting in place an ombudsman based consumer grievance redressal mechanism "by end of 2018".

General Awareness

Statutory, regulatory and various quasi-judicial bodies.
Zonal Council

• Context: The 23rd meeting of the Western Zonal Council was recently held at Gandhinagar, Gujarat and the Union Home Minister Shri Rajnath Singh chaired the meeting.
  
  What are zonal councils?
  
  Zonal councils have been established by the Parliament to promote interstate cooperation and coordination. They are statutory bodies established under the States Reorganisation Act 1956 and not constitutional bodies. They are only deliberative and advisory bodies.
  
  There are 5 five Zonal councils namely:
  
  The Northern Zonal Council, comprising the States of Haryana, Himachal Pradesh, Jammu & Kashmir, Punjab, Rajasthan, National Capital Territory of Delhi and Union Territory of Chandigarh.
  The Central Zonal Council, comprising the States of Chhattisgarh, Uttarakhand, Uttar Pradesh and Madhya Pradesh.
  The Eastern Zonal Council, comprising the States of Bihar, Jharkhand, Orissa, and West Bengal.
  The Western Zonal Council, comprising the States of Goa, Gujarat, Maharashtra and the Union Territories of Daman & Diu and Dadra & Nagar Haveli.
  The Southern Zonal Council, comprising the States of Andhra Pradesh, Karnataka, Kerala, Tamil Nadu and the Union Territory of Puducherry.
  
  Composition:
  
  Chairman – The Union Home Minister is the Chairman of each of these Councils.
  Vice Chairman – The Chief Ministers of the States included in each zone act as Vice-Chairman of the Zonal Council for that zone by rotation, each holding office for a period of one year at a time.
  Members- Chief Minister and two other Ministers as nominated by the Governor from each of the States and two members from Union Territories included in the zone.
  Advisers- One person nominated by the Planning Commission (which has been replaced by NITI Ayog now) for each of the Zonal Councils, Chief Secretaries and another officer/Development Commissioner nominated by each of the States included in the Zone.
  Union Ministers are also invited to participate in the meetings of Zonal Councils depending upon necessity.
  
  The main objectives of setting up of Zonal Councils are:
  
  Bringing out national integration.
  Arresting the growth of acute State consciousness, regionalism, linguism and particularistic tendencies.
  Enabling the Centre and the States to co-operate and exchange ideas and experiences.
  Establishing a climate of co-operation amongst the States for successful and speedy execution of development projects.