General Affairs
Kailash Mansarovar Pilgrims Cross Over To China From Nathu-La
-
The first batch of the Kailash Mansarovar pilgrims comprising 31 pilgrims and two liaison officers successfully crossed over to China from the Nathu-La border route in Sikkim today, officials said.
This is also the first batch of pilgrims though the Nathu-La route after the pilgrimage was stopped following the Dokalam standoff last year. India and China had agreed in April to resume the Kailash Mansarovar Yatra through the route.
Minister of State for External Affairs V K Singh had in a written reply to a question in the Lok Sabha had said the yatra for 2018 though Nathu-La would take place between June and September.
The special secretary to tourism and civil aviation department, Namrata Thapa and some other officials were present at Nathu-La during the crossing over of the yatris to China, an information and public relations department release said.
Earlier, the yatris had spent two days at 15th mile at Sherathang in Sikkim for acclimatization.
They will return here on July 1 after paying obeisance to Lord Shiva at Mount Kailash. They will disperse for their respective destinations from the next day, the release added.
The route via Nathu-La is in addition to the older route via Lipulekh Pass in Uttarakhand, the only route earlier that was badly damaged in the 2013 floods. Both the routes are operational but the new route via Nathu-La is shorter, safer and more comfortable.
This is also the first batch of pilgrims though the Nathu-La route after the pilgrimage was stopped following the Dokalam standoff last year. India and China had agreed in April to resume the Kailash Mansarovar Yatra through the route.
Minister of State for External Affairs V K Singh had in a written reply to a question in the Lok Sabha had said the yatra for 2018 though Nathu-La would take place between June and September.
The special secretary to tourism and civil aviation department, Namrata Thapa and some other officials were present at Nathu-La during the crossing over of the yatris to China, an information and public relations department release said.
Earlier, the yatris had spent two days at 15th mile at Sherathang in Sikkim for acclimatization.
They will return here on July 1 after paying obeisance to Lord Shiva at Mount Kailash. They will disperse for their respective destinations from the next day, the release added.
The route via Nathu-La is in addition to the older route via Lipulekh Pass in Uttarakhand, the only route earlier that was badly damaged in the 2013 floods. Both the routes are operational but the new route via Nathu-La is shorter, safer and more comfortable.
South Korea Seeks India's "Full Support" For Lasting Peace In Peninsula
-
South Korea today said India can play an "important role" in working towards lasting peace in the Korean Peninsula as it urged New Delhi to persuade Pyongyang to recalculate its strategy to change its course to denuclearisation.
Deputy Minister of Foreign Affairs of the Republic of Korea, Enna Park, also said that South Korean President Moon Jae-in is slated to visit India early next month, and during his summit with Prime Minister Narendra Modi, the two leaders will link their own initiates -- President Moon's New Southern Policy and PM Modi's Act East Policy.
Her remarks assume significance as during the historic meeting between US President Donald Trump and North Korean leader Kim Jong-un last week in Singapore, the latter had pledged to work towards "complete denuclearisation" in return for security guarantees from the US.
"It was a historic meeting, the US-North Korea leader-level talks, and they started to build trust for each other, started negotiations and set the tone. We should not lose this historic momentum and work together to make the peace initiative a success," she told reporters on the sidelines of an event here.
Asked what role did Seoul see for India in this bid for lasting peace in the Korean Peninsula, she said, India's role is important, because "we seek full support" from whole international community, including India.
"India, as the largest democracy, plays quite an influential role in forming international opinion. And, if international opinion supports peace initiative of South Korea, it will back up our initiative very effectively.
"And, so we want India to continue to persuade North Korea to recalculate its strategy to make a decision to change its course to denuclearisation," Ms Park said.
India had welcomed the United States-Democratic People's Republic of Korea (North Korea) Summit as a "positive development", saying it has "always supported all efforts to bring about peace and stability in the Korean Peninsula through dialogue and diplomacy".
Asked about India's engagement with North Korea, especially in the context of it having its embassy in Pyongyang and visit of Minister of State for External Affairs General VK Singh to that country, Ms Park said, "Such engagement from the Indian side is very much positive."
In the first high-level visit to North Korea from India in two decades, Singh visited Pyongyang last month where he held talks with several leaders including Foreign Minister Ri Yong Ho on key issues and raised New Delhi's concerns over nuclear proliferation.
Earlier in her keynote address at a seminar on 'Development of Peace and Prosperity for the Korea India Strategic Partnership' at Observer Research Foundation here, Park, also the Ambassador for Public Diplomacy, said, "Our government has started a bold journey towards peace process in Korean Peninsula. We ask for your (India's) wisdom and full support again."
"But the journey we have taken is a long one and it is not an easy one. It is rocky and there are challenges but we are very determined in pursuing peace in the Korean peninsula. People should live on the peninsula which is free from any threat of nuclear war. And, we are confident that we can achieve it with full support and concerted efforts from the international community," she said.
Asked if South Korea could think of joining the 'Quad' (a multilateral platform comprising India, the US, Japan and Australia), she said, "Maybe in the future, but right now our military assets are focusing on our security in the peninsula, because our security in the peninsula is still very vulnerable."
On ease of doing business in India, Ms Park said, "We have about 700 (South Korean) companies in India and they have found opportunities to do business. Indian economy is complimentary to our economy."
"Foreign companies need fair access to the market and they want to see less regulation, so that is what the Indian government is doing to make the business environment more favourable, friendly to foreign companies. There are problems... the speed is slow, but it is on the right track," she said.
Deputy Minister of Foreign Affairs of the Republic of Korea, Enna Park, also said that South Korean President Moon Jae-in is slated to visit India early next month, and during his summit with Prime Minister Narendra Modi, the two leaders will link their own initiates -- President Moon's New Southern Policy and PM Modi's Act East Policy.
Her remarks assume significance as during the historic meeting between US President Donald Trump and North Korean leader Kim Jong-un last week in Singapore, the latter had pledged to work towards "complete denuclearisation" in return for security guarantees from the US.
"It was a historic meeting, the US-North Korea leader-level talks, and they started to build trust for each other, started negotiations and set the tone. We should not lose this historic momentum and work together to make the peace initiative a success," she told reporters on the sidelines of an event here.
Asked what role did Seoul see for India in this bid for lasting peace in the Korean Peninsula, she said, India's role is important, because "we seek full support" from whole international community, including India.
"India, as the largest democracy, plays quite an influential role in forming international opinion. And, if international opinion supports peace initiative of South Korea, it will back up our initiative very effectively.
"And, so we want India to continue to persuade North Korea to recalculate its strategy to make a decision to change its course to denuclearisation," Ms Park said.
India had welcomed the United States-Democratic People's Republic of Korea (North Korea) Summit as a "positive development", saying it has "always supported all efforts to bring about peace and stability in the Korean Peninsula through dialogue and diplomacy".
Asked about India's engagement with North Korea, especially in the context of it having its embassy in Pyongyang and visit of Minister of State for External Affairs General VK Singh to that country, Ms Park said, "Such engagement from the Indian side is very much positive."
In the first high-level visit to North Korea from India in two decades, Singh visited Pyongyang last month where he held talks with several leaders including Foreign Minister Ri Yong Ho on key issues and raised New Delhi's concerns over nuclear proliferation.
Earlier in her keynote address at a seminar on 'Development of Peace and Prosperity for the Korea India Strategic Partnership' at Observer Research Foundation here, Park, also the Ambassador for Public Diplomacy, said, "Our government has started a bold journey towards peace process in Korean Peninsula. We ask for your (India's) wisdom and full support again."
"But the journey we have taken is a long one and it is not an easy one. It is rocky and there are challenges but we are very determined in pursuing peace in the Korean peninsula. People should live on the peninsula which is free from any threat of nuclear war. And, we are confident that we can achieve it with full support and concerted efforts from the international community," she said.
Asked if South Korea could think of joining the 'Quad' (a multilateral platform comprising India, the US, Japan and Australia), she said, "Maybe in the future, but right now our military assets are focusing on our security in the peninsula, because our security in the peninsula is still very vulnerable."
On ease of doing business in India, Ms Park said, "We have about 700 (South Korean) companies in India and they have found opportunities to do business. Indian economy is complimentary to our economy."
"Foreign companies need fair access to the market and they want to see less regulation, so that is what the Indian government is doing to make the business environment more favourable, friendly to foreign companies. There are problems... the speed is slow, but it is on the right track," she said.
PM Modi To Lead About 55,000 Yoga Enthusiasts In Dehradun
-
The country is all geared up to roll out yoga mats tomorrow to mark the fourth International Day of Yoga (IDY), with Prime Minister Narendra Modi scheduled to lead about 55,000 enthusiasts in performing asanas in Dehradun.
"About 5,000 events will be held across the country to mark International Day for Yoga (IDY)," a senior AYUSH ministry official said.
Ahead of the Yoga day, the prime minister posted a video on his Twitter handle giving a message that yoga is a "passport" to health assurance and not just a set of exercises that keeps the body fit.
"Yoga is the journey from 'me' to 'we'. It promises balance, calm, helps boost concentration and gives immense strength. As we approach the #4thYogaDay, I urge people around the world to make Yoga a part of their lives (sic)," PM Modi had tweeted.
Besides celebration is various districts and states which are being organised by state government in coordination with NGOs, the union ministers will go to different venues, inside the national capital and outside to lead yoga events.
In New Delhi, eight events have been planned with the main event being held in Rajpath.
The New Delhi Municipal Council (NDMC) will be organising events at Lodhi Garden, Nehru Park, Talkatora Garden and Rajpath.
Besides, around 50,000 yoga enthusiasts including women personnel from various Central Armed Police Forces such as BSF, CRPF, CISF will participate in a yoga event at Red Fort organised by Brahma Kumaris.
Yoga functions will also take place in Patanjali Yoga Samiti in Dwarka and Art of Living in Rohini.
Several ministries, like the Ministry of AYUSH has launched mobile app 'Yoga Locator' giving details of yoga activities in a particular surrounding area, while the Ministry of Women and Child Development has launched "#YogaFor9to5", a contest to generate awareness on the benefits of yoga at workplace for women.
Besides, celebrations will take place in more than 150 countries, with Indian missions coordinating activities in landmark places, the ministry official said.
On Sunday, PM Modi had shared through his Twitter handle photographs to various countries on practise sessions in the run-up to Yoga Day.
In India, the biggest gathering will be at Dehraudun's Forest Research Institure where the Prime Minister and about 55,000 others will stretch and bend in various yogic postures.
Elaborate security arrangements have been put in place with commandos and paramilitary forces deployed to ensure no untoward incidents take place.
In Delhi, eight events have been planned in the national capital with the main event being held in Connaught Place.
The centrepiece of the first IDY celebration on June 21, 2015 was New Delhi's Rajpath, with the event making it to the Guinness World Records with 35,985 participants performing asanas at one venue and 84 nationalities being part of it.
Last year, the main function was at Lucknow.
The United Nations General Assembly in December 2014 had declared that June 21 would be observed as International Day of Yoga every year, a move for which India had lobbied hard.
"About 5,000 events will be held across the country to mark International Day for Yoga (IDY)," a senior AYUSH ministry official said.
Ahead of the Yoga day, the prime minister posted a video on his Twitter handle giving a message that yoga is a "passport" to health assurance and not just a set of exercises that keeps the body fit.
"Yoga is the journey from 'me' to 'we'. It promises balance, calm, helps boost concentration and gives immense strength. As we approach the #4thYogaDay, I urge people around the world to make Yoga a part of their lives (sic)," PM Modi had tweeted.
Besides celebration is various districts and states which are being organised by state government in coordination with NGOs, the union ministers will go to different venues, inside the national capital and outside to lead yoga events.
In New Delhi, eight events have been planned with the main event being held in Rajpath.
The New Delhi Municipal Council (NDMC) will be organising events at Lodhi Garden, Nehru Park, Talkatora Garden and Rajpath.
Besides, around 50,000 yoga enthusiasts including women personnel from various Central Armed Police Forces such as BSF, CRPF, CISF will participate in a yoga event at Red Fort organised by Brahma Kumaris.
Yoga functions will also take place in Patanjali Yoga Samiti in Dwarka and Art of Living in Rohini.
Several ministries, like the Ministry of AYUSH has launched mobile app 'Yoga Locator' giving details of yoga activities in a particular surrounding area, while the Ministry of Women and Child Development has launched "#YogaFor9to5", a contest to generate awareness on the benefits of yoga at workplace for women.
Besides, celebrations will take place in more than 150 countries, with Indian missions coordinating activities in landmark places, the ministry official said.
On Sunday, PM Modi had shared through his Twitter handle photographs to various countries on practise sessions in the run-up to Yoga Day.
In India, the biggest gathering will be at Dehraudun's Forest Research Institure where the Prime Minister and about 55,000 others will stretch and bend in various yogic postures.
Elaborate security arrangements have been put in place with commandos and paramilitary forces deployed to ensure no untoward incidents take place.
In Delhi, eight events have been planned in the national capital with the main event being held in Connaught Place.
The centrepiece of the first IDY celebration on June 21, 2015 was New Delhi's Rajpath, with the event making it to the Guinness World Records with 35,985 participants performing asanas at one venue and 84 nationalities being part of it.
Last year, the main function was at Lucknow.
The United Nations General Assembly in December 2014 had declared that June 21 would be observed as International Day of Yoga every year, a move for which India had lobbied hard.
Ramzan Ceasefire Suspended Because Of Terrorists: Army Chief Bipin Rawat
-
Terrorists in Jammu and Kashmir had continued with their activities during Ramzan, necessitating suspension of the ceasefire by the Centre, Army chief Gen Bipin Rawat said today.
Governor's rule in the state is unlikely to have any impact on ongoing military operations, the Army chief said.
Operations in the Valley would continue as earlier, Mr Rawat told reporters on the sidelines of an event.
"Operations were being carried out earlier as well. Then we saw a phase of suspension of operations because we wanted people to get a chance to offer their prayers during Ramzan without any kind of problem. Despite that, terrorists continued with their activity, which is why the suspension of operations was cancelled," he said.
Action that was being taken earlier would continue, Mr Rawat asserted.
Referring to the imposition of Governor's rule in the state after the BJP pulled out of its alliance with the PDP, he said, "We don't think there will be any impact. We don't have an kind of political interference."
There has, he said, never been any kind of restriction on the force on how it should conduct its work.
The security forces have very strict rules of engagement and "take action" in accordance with them, Mr Rawat said.
The ceasefire announced by the Centre for the month of Ramzan was revoked on Sunday. Aurangzeb, an Army jawan, was killed by terrorists and journalist Shujaat Bukhari was shot dead two days ahead of Eid.
Today, Jammu and Kashmir was placed under Governor's rule for the fourth time in the last one decade after the BJP withdrew support to its alliance partner, prompting Mehbooba Mufti to resign as chief minister.
Governor's rule in the state is unlikely to have any impact on ongoing military operations, the Army chief said.
Operations in the Valley would continue as earlier, Mr Rawat told reporters on the sidelines of an event.
"Operations were being carried out earlier as well. Then we saw a phase of suspension of operations because we wanted people to get a chance to offer their prayers during Ramzan without any kind of problem. Despite that, terrorists continued with their activity, which is why the suspension of operations was cancelled," he said.
Action that was being taken earlier would continue, Mr Rawat asserted.
Referring to the imposition of Governor's rule in the state after the BJP pulled out of its alliance with the PDP, he said, "We don't think there will be any impact. We don't have an kind of political interference."
There has, he said, never been any kind of restriction on the force on how it should conduct its work.
The security forces have very strict rules of engagement and "take action" in accordance with them, Mr Rawat said.
The ceasefire announced by the Centre for the month of Ramzan was revoked on Sunday. Aurangzeb, an Army jawan, was killed by terrorists and journalist Shujaat Bukhari was shot dead two days ahead of Eid.
Today, Jammu and Kashmir was placed under Governor's rule for the fourth time in the last one decade after the BJP withdrew support to its alliance partner, prompting Mehbooba Mufti to resign as chief minister.
NASA To Monitor Plants' Water Usage Through New Instrument
-
NASA plans to install on the International Space Station (ISS) an instrument that will measure the temperature of plants from space, enabling researchers to determine plant water use and to study how drought conditions affect plant health.
The instrument, called ECOSTRESS, or ECOsystem Spaceborne Thermal Radiometre Experiment on Space Station, will hitch a ride to the space station on a SpaceX cargo resupply mission scheduled to launch from Cape Canaveral Air Force Station in Florida on June 29, NASA said on Tuesday.
Plants draw in water from the soil, and as they are heated by the Sun, the water is released through pores on the plants' leaves through a process called transpiration.
This cools the plant down, much as sweating does in humans. However, if there is not enough water available to the plants, they close their pores to conserve water, causing their temperatures to rise.
Plants use those same pores to take up carbon dioxide from the atmosphere for photosynthesis -- the process they use to turn carbon dioxide and water into the sugar they use as food.
If they continue to experience insufficient water availability, or "water stress," they eventually starve or overheat, and die.
The data from ECOSTRESS will show these changes in plants' temperatures, providing insight into their health and water use while there is still time for water managers to correct agricultural water imbalances.
"When a plant is so stressed that it turns brown, its often too late for it to recover," said Simon Hook, ECOSTRESS principal investigator at NASA's Jet Propulsion Laboratory in Pasadena, California.
"But measuring the temperature of the plant lets you see that a plant is stressed before it reaches that point," Mr Hook said.
These temperature measurements are also considered an early indicator of potential droughts.
When plants in a given area start showing signs of water stress through elevated temperature, an agricultural drought is likely underway.
Having these data in advance gives the agricultural community a chance to prepare and/or respond accordingly, NASA said.
"ECOSTRESS will allow us to monitor rapid changes in crop stress at the field level, enabling earlier and more accurate estimates of how yields will be impacted," said Martha Anderson, an ECOSTRESS science team member with the US Department of Agriculture in Beltsville, Maryland.
The instrument, called ECOSTRESS, or ECOsystem Spaceborne Thermal Radiometre Experiment on Space Station, will hitch a ride to the space station on a SpaceX cargo resupply mission scheduled to launch from Cape Canaveral Air Force Station in Florida on June 29, NASA said on Tuesday.
Plants draw in water from the soil, and as they are heated by the Sun, the water is released through pores on the plants' leaves through a process called transpiration.
This cools the plant down, much as sweating does in humans. However, if there is not enough water available to the plants, they close their pores to conserve water, causing their temperatures to rise.
Plants use those same pores to take up carbon dioxide from the atmosphere for photosynthesis -- the process they use to turn carbon dioxide and water into the sugar they use as food.
If they continue to experience insufficient water availability, or "water stress," they eventually starve or overheat, and die.
The data from ECOSTRESS will show these changes in plants' temperatures, providing insight into their health and water use while there is still time for water managers to correct agricultural water imbalances.
"When a plant is so stressed that it turns brown, its often too late for it to recover," said Simon Hook, ECOSTRESS principal investigator at NASA's Jet Propulsion Laboratory in Pasadena, California.
"But measuring the temperature of the plant lets you see that a plant is stressed before it reaches that point," Mr Hook said.
These temperature measurements are also considered an early indicator of potential droughts.
When plants in a given area start showing signs of water stress through elevated temperature, an agricultural drought is likely underway.
Having these data in advance gives the agricultural community a chance to prepare and/or respond accordingly, NASA said.
"ECOSTRESS will allow us to monitor rapid changes in crop stress at the field level, enabling earlier and more accurate estimates of how yields will be impacted," said Martha Anderson, an ECOSTRESS science team member with the US Department of Agriculture in Beltsville, Maryland.
Business Affairs
Even if petrol comes under GST, it may not exclude VAT
-
The clamour for bringing petrol and diesel under GST has been growing in recent times, be it from the Opposition or from India's top industry bodies Assocham and Ficci. After all, even under the highest tax bracket of 28 per cent, one litre of petrol would cost only Rs 50.87, compared to the current price ranging from Rs 76 to Rs 84 per litre in the metros.
However, if the government does indeed decide to take the bull by the horns and bring the automobile fuels under the GST regime, that's not how the math will work out. Because, according to a top government official, the tax structure for the two fuels is likely to be a peak tax rate of 28 per cent plus states levying some amount of local sales tax or value added tax (VAT).
Unfortunately, this structure of peak GST rate plus VAT would work out to be as expensive on the common man's wallet as the present tax incidence. Currently, the central government levies an excise duty on the fuels, which stands at Rs 19.48 per litre for petrol and Rs 15.33 per litre on diesel. In addition to this, the states impose VAT at different rates to boost their revenues. In Andaman and Nicobar Islands, a mere 6 per cent sales tax is charged on both the fuels, but Mumbai has the highest VAT of 39.12 per cent on petrol while Telangana levies highest VAT of 26 per cent on diesel. The total tax incidence on petrol comes to 45-50 per cent, while on diesel it is 35-40 per cent.
"There is no pure GST on petrol and diesel anywhere in the world and so in India too it will have to be a combination of GST and VAT," said the official, who is closely involved with the GST implementation. According to him, the timing of including petro products in GST will be a political call which centre and states have to take collectively. But before that, the Centre has to decide if it is willing to forego the input tax credit of about Rs 20,000 crore that it currently pockets by keeping petrol, diesel, natural gas, jet fuel and crude oil out of the GST regime that came into force from July 1, 2017.
The source explained that under GST the total incidence of taxation on a particular good or a service has been kept at the same level as the sum total of central and state levies existing before the new regime rolled out. This was done by fitting them into one of the four GST tax slabs, namely 5 per cent, 12 per cent, 18 per cent and 28 per cent.
In the case of petrol and diesel, the total incidence of present taxation is already beyond the peak rate. So even the highest GST tax rate would result in a significant revenue loss, by the centre and the states alike. "The Centre doesn't have the money to compensate states for loss of revenue and so the solution is to have a peak rate of tax plus allowing states to levy some amount of VAT keeping in mind that the overall incidence should not exceed the present levels," he said.
The bottomline is that GST may not be the panacea for high fuel prices that everyone expects, at least not in the format in the works. More importantly, GST being an ad valorem levy - charged as a percentage on ex-factory price - would have a cascading impact on retail prices whenever refinery gate prices jump up following a rise benchmark international oil prices. The inverse would also be true.
In a blog post on Monday, Union Minister Arun Jaitley had alluded to states earning more through ad valorem VAT when oil prices rise. "The States charge ad valorem taxes on oil. If oil prices go up, States earn more," he said. The central excise is a fixed levy and does not change with changes in prices. The Modi government had raised excise duty on petrol by Rs 11.77 a litre and that on diesel by 13.47 a litre in nine instalments between November 2014 and January 2016 to shore up finances as global oil prices fell. On the other hand, it cut the tax just once - by Rs 2 a litre last October.
In the bargain, the government's excise collections from petro goods more than doubled in last four years, from Rs 99,184 crore in 2014-15 to Rs 229,019 crore in the last fiscal. States, likewise, saw their VAT revenue from petro goods rise from Rs 137,157 crore in 2014-15 to Rs 184,091 crore in 2017-18.
However, if the government does indeed decide to take the bull by the horns and bring the automobile fuels under the GST regime, that's not how the math will work out. Because, according to a top government official, the tax structure for the two fuels is likely to be a peak tax rate of 28 per cent plus states levying some amount of local sales tax or value added tax (VAT).
Unfortunately, this structure of peak GST rate plus VAT would work out to be as expensive on the common man's wallet as the present tax incidence. Currently, the central government levies an excise duty on the fuels, which stands at Rs 19.48 per litre for petrol and Rs 15.33 per litre on diesel. In addition to this, the states impose VAT at different rates to boost their revenues. In Andaman and Nicobar Islands, a mere 6 per cent sales tax is charged on both the fuels, but Mumbai has the highest VAT of 39.12 per cent on petrol while Telangana levies highest VAT of 26 per cent on diesel. The total tax incidence on petrol comes to 45-50 per cent, while on diesel it is 35-40 per cent.
"There is no pure GST on petrol and diesel anywhere in the world and so in India too it will have to be a combination of GST and VAT," said the official, who is closely involved with the GST implementation. According to him, the timing of including petro products in GST will be a political call which centre and states have to take collectively. But before that, the Centre has to decide if it is willing to forego the input tax credit of about Rs 20,000 crore that it currently pockets by keeping petrol, diesel, natural gas, jet fuel and crude oil out of the GST regime that came into force from July 1, 2017.
The source explained that under GST the total incidence of taxation on a particular good or a service has been kept at the same level as the sum total of central and state levies existing before the new regime rolled out. This was done by fitting them into one of the four GST tax slabs, namely 5 per cent, 12 per cent, 18 per cent and 28 per cent.
In the case of petrol and diesel, the total incidence of present taxation is already beyond the peak rate. So even the highest GST tax rate would result in a significant revenue loss, by the centre and the states alike. "The Centre doesn't have the money to compensate states for loss of revenue and so the solution is to have a peak rate of tax plus allowing states to levy some amount of VAT keeping in mind that the overall incidence should not exceed the present levels," he said.
The bottomline is that GST may not be the panacea for high fuel prices that everyone expects, at least not in the format in the works. More importantly, GST being an ad valorem levy - charged as a percentage on ex-factory price - would have a cascading impact on retail prices whenever refinery gate prices jump up following a rise benchmark international oil prices. The inverse would also be true.
In a blog post on Monday, Union Minister Arun Jaitley had alluded to states earning more through ad valorem VAT when oil prices rise. "The States charge ad valorem taxes on oil. If oil prices go up, States earn more," he said. The central excise is a fixed levy and does not change with changes in prices. The Modi government had raised excise duty on petrol by Rs 11.77 a litre and that on diesel by 13.47 a litre in nine instalments between November 2014 and January 2016 to shore up finances as global oil prices fell. On the other hand, it cut the tax just once - by Rs 2 a litre last October.
In the bargain, the government's excise collections from petro goods more than doubled in last four years, from Rs 99,184 crore in 2014-15 to Rs 229,019 crore in the last fiscal. States, likewise, saw their VAT revenue from petro goods rise from Rs 137,157 crore in 2014-15 to Rs 184,091 crore in 2017-18.
4 reasons why trade war with US could weaken rupee further
-
After the decision of the United States to hike duties on steel and aluminum imports, India has decided to retaliate by raising import duties on about 30 products from US. This is not a good news for the Indian currency. The rupee has been depreciating for quite some time now because of trade deficit and higher current account deficit. The support from the foreign inflows is also waning because of higher stock market valuations, hardening of interest rates in US and also money tightening news from the European Union. Here are four reasons why an escalating trade war with US will further weaken the currency value against the US dollar.
United States is one of the largest trading partner
China is India's largest trading partner and in 2017-18 the total trade between the countries amounted to $89 billion. US comes second in the order, with total trade value of $74 billion. This shows that the US is a very big trading partner of India with both nations having exports and import relations for decades.
India runs trade surplus with the US
Though China is the largest trading partner of India, the country has a negative trade balance with China. Which means that India's exports to China are lower than what China imports from India. So this trade is very favourable for China. But in case of the US, India runs a trade surplus. India exports more to US than what it imports from US. The trade with US is very favourable for India, which means we export more than we import from them. This brings much needed dollar inflows into the country. If the trade war with US escalates, this will widen our trade deficit and also current account deficit.
Domestic industry will be hit
An escalating trade war with the US has potential to impact the domestic industry especially pharmaceuticals, apparel and textiles, iron and steel, mineral fuels and also fisheries. All these industries are manpower intensive. At a time when unemployment is a big issue in India and economy is also slowly coming back to normal, a trade war with US will impact the economy's growth momentum. In fact, investors and mutual funds in the market are betting big on pharmaceuticals as this sector hasn't participated in the rally in the last 2-3 years. If any duties are introduced, this sector will see some bloodbath in the stock market, which will push the stock valuations lower.
India's import items from the US are critical
India's highest imports from US are very critical in nature like nuclear reactors, boilers, mineral fuels, aircrafts, space crafts, medical equipments etc. Any higher duty on these products will impact India's key sectors. While the US or its companies could absorb the impact, India and Indian companies don't have the kind of strength, which a developed country has to absorb the higher costs.
United States is one of the largest trading partner
China is India's largest trading partner and in 2017-18 the total trade between the countries amounted to $89 billion. US comes second in the order, with total trade value of $74 billion. This shows that the US is a very big trading partner of India with both nations having exports and import relations for decades.
India runs trade surplus with the US
Though China is the largest trading partner of India, the country has a negative trade balance with China. Which means that India's exports to China are lower than what China imports from India. So this trade is very favourable for China. But in case of the US, India runs a trade surplus. India exports more to US than what it imports from US. The trade with US is very favourable for India, which means we export more than we import from them. This brings much needed dollar inflows into the country. If the trade war with US escalates, this will widen our trade deficit and also current account deficit.
Domestic industry will be hit
An escalating trade war with the US has potential to impact the domestic industry especially pharmaceuticals, apparel and textiles, iron and steel, mineral fuels and also fisheries. All these industries are manpower intensive. At a time when unemployment is a big issue in India and economy is also slowly coming back to normal, a trade war with US will impact the economy's growth momentum. In fact, investors and mutual funds in the market are betting big on pharmaceuticals as this sector hasn't participated in the rally in the last 2-3 years. If any duties are introduced, this sector will see some bloodbath in the stock market, which will push the stock valuations lower.
India's import items from the US are critical
India's highest imports from US are very critical in nature like nuclear reactors, boilers, mineral fuels, aircrafts, space crafts, medical equipments etc. Any higher duty on these products will impact India's key sectors. While the US or its companies could absorb the impact, India and Indian companies don't have the kind of strength, which a developed country has to absorb the higher costs.
PNB's internal probe reveals systemic lapses far beyond a few rogue employees: Report
-
What Punjab National Bank's CEO Sunil Mehta had called a "small turmoil" two months ago has blown into a nightmare of epic proportions for the bank. The $2 billion fraud perpetuated by diamantaire Nirav Modi led to PNB posting the biggest quarterly loss in India's banking history last month. Making matters worse, the bank's own internal probe has reportedly revealed that the lapses that caused the drawn-out fraud go far beyond a few rogue employees.
According to Reuters, a 162-page internal report, produced by four senior PNB officials tasked with probing the fraud, lays out how failings by 54 PNB officials allowed the fraud to be perpetrated. These officials range from clerks to foreign exchange managers, and auditors to heads of regional offices, and eight among them have already been charged by the Central Bureau of Investigation (CBI) for the roles they played.
Significantly, the report revealed that one of the reasons the fraud escaped detection for around seven years was because of lapses within some of the bank's critical areas at its New Delhi headquarters, such as its credit review and international banking units. "There was enough evidence to suggest failures," said the report, adding, "It was observed that blatant system violations/unethical practices/dereliction of responsibilities led bank to such a catastrophe."
Earlier this year, PNB discovered that some officials at its Brady House branch in Mumbai, including former deputy manager Gokulnath Shetty, repeatedly issued fraudulent Letters of Undertaking (LoU) worth Rs 6,498 crore to Modi's companies without following the processes and without securing collateral. A LoU is a guarantee by the issuing bank to the receiving bank and the companies that it would undertake to pay a certain amount of money on a specific date. Using those guarantees, companies controlled by Modi and his uncle Mehul Choksi received credit from banks overseas to fraudulently fund their businesses, PNB alleged.
The reason the scam escaped detection for so long is that Shetty issued the guarantees by using a messaging system called SWIFT, without recording the transactions in the bank's core banking software - something he was supposed to do since the two systems were not integrated. Between March 2011 and May 2017, when he retired, Shetty authorized more than 1200 fraudulent LoUs, the probe found.
It also revealed that the bank's international banking department and the IT division had delayed the integration work. They had also not complied with central bank advisories in 2016 calling for a comprehensive audit of SWIFT systems in use.
Indeed, a recent CBI chargesheet accused the bank's former MD and CEO Usha Ananthasubramanian and her top officials of failing to prevent the fraud despite having prior knowledge of how LoUs can be used to cheat banks. That's because Ananthasubramanian was heading PNB when Indian Overseas Bank (IOB), Chandigarh, reported a LoU fraud in 2016 with a similar modus operandi to the PNB fraud. The RBI had then issued various guidelines and circulars, including about integrating the systems, in order to prevent a repeat. However, PNB allegedly failed to implement them in entirety.
In addition, the PNB investigators said that the fraud could have been detected had the branch followed internal rules and conducted the basic daily SWIFT reconciliation that required logs of transactions on the global payments network to be manually checked against the bank's internal system. "Only one activity would have nailed the whole act at the incipient stage," said the probe report, adding that it was it is "incomprehensible" that the branch staff did not notice the fraud being committed.
The probe found several other problems at the branch. As a mid-level employee, Shetty should have been able to approve transactions of up to Rs 25 lakh, without sign-off from more senior officials. But he had been given unlimited approval powers, the PNB investigators said, without explaining how this happened.
Then, shortly before his retirement, Shetty used his personal Yahoo e-mail address to send 22 e-mails to reconcile large forex transactions involving the Modi group. The use of personal e-mail was "overlooked" by the bank's treasury department, the report said.
It added that under PNB policy, no officer should remain in the same office for more than three years, but Shetty retired after serving in Brady House for seven years. Three transfer orders were issued for him during his tenure, but he was never moved.
Signs that audit practices at Brady House were weak were, in fact, flagged by the branch itself, according to two internal PNB memos reviewed by Reuters. In March 2012, the branch had flagged off that nearly 50% of the observations posed in its annual inspection report - mainly auditor queries - remained "un-replied/unattended to by respective concerned officers", calling it a "critical situation". Then, four years later, the branch's assistant general manager issued an internal memo saying around 18 observations - including five described as zero-tolerance level issues - were pending. This memo was signed by 10 bank officers, including Shetty.
Damningly, such lapses were not limited to the Brady House branch. According to the agency, protocol dictates that the daily reconciliation reports should travel up the chain to PNB's headquarters in New Delhi. Along the way, they would be signed off by the Brady House branch head and sent each month to a Mumbai city regional office that would issue all-clear certificates for the branches it controls.
But the probe report revealed that despite receiving just two monthly reports from the Brady House branch last year instead of 12, the regional office signed off on a "false" compliance certificate, signalling a clean bill of health for the branch. Moreover, despite a massive missing paper trail, none of the senior inspection officers - who conducted 10 visits between 2010 and 2017 to the branch - reported anything "adverse".
Here's another red-flag missed by the Mumbai city regional office that the probe report highlighted. The Brady House branch's import and export transactions in the 12 months to March 2017 stood at $3.3 billion, 50% higher than recorded two years prior thanks to the dealings with Modi & Co. "The exceptional growth should have been noticed," the report said.
According to the agency, this probe report, along with dozens of pages of annexed bank records and internal e-mails, was presented by PNB officials to the bank's fraud risk management arm on April 5. It is also part of the evidence submitted by the CBI in court but the report's findings are being made public only now.
Ironically, the damning conclusions of the report stand in contrast to the lack of regulatory action taken by the authorities since the fraud was reported. No penalty has been imposed on PNB as a result of the fraud and there has been no senior management shake-up.
According to Reuters, a 162-page internal report, produced by four senior PNB officials tasked with probing the fraud, lays out how failings by 54 PNB officials allowed the fraud to be perpetrated. These officials range from clerks to foreign exchange managers, and auditors to heads of regional offices, and eight among them have already been charged by the Central Bureau of Investigation (CBI) for the roles they played.
Significantly, the report revealed that one of the reasons the fraud escaped detection for around seven years was because of lapses within some of the bank's critical areas at its New Delhi headquarters, such as its credit review and international banking units. "There was enough evidence to suggest failures," said the report, adding, "It was observed that blatant system violations/unethical practices/dereliction of responsibilities led bank to such a catastrophe."
Earlier this year, PNB discovered that some officials at its Brady House branch in Mumbai, including former deputy manager Gokulnath Shetty, repeatedly issued fraudulent Letters of Undertaking (LoU) worth Rs 6,498 crore to Modi's companies without following the processes and without securing collateral. A LoU is a guarantee by the issuing bank to the receiving bank and the companies that it would undertake to pay a certain amount of money on a specific date. Using those guarantees, companies controlled by Modi and his uncle Mehul Choksi received credit from banks overseas to fraudulently fund their businesses, PNB alleged.
The reason the scam escaped detection for so long is that Shetty issued the guarantees by using a messaging system called SWIFT, without recording the transactions in the bank's core banking software - something he was supposed to do since the two systems were not integrated. Between March 2011 and May 2017, when he retired, Shetty authorized more than 1200 fraudulent LoUs, the probe found.
It also revealed that the bank's international banking department and the IT division had delayed the integration work. They had also not complied with central bank advisories in 2016 calling for a comprehensive audit of SWIFT systems in use.
Indeed, a recent CBI chargesheet accused the bank's former MD and CEO Usha Ananthasubramanian and her top officials of failing to prevent the fraud despite having prior knowledge of how LoUs can be used to cheat banks. That's because Ananthasubramanian was heading PNB when Indian Overseas Bank (IOB), Chandigarh, reported a LoU fraud in 2016 with a similar modus operandi to the PNB fraud. The RBI had then issued various guidelines and circulars, including about integrating the systems, in order to prevent a repeat. However, PNB allegedly failed to implement them in entirety.
In addition, the PNB investigators said that the fraud could have been detected had the branch followed internal rules and conducted the basic daily SWIFT reconciliation that required logs of transactions on the global payments network to be manually checked against the bank's internal system. "Only one activity would have nailed the whole act at the incipient stage," said the probe report, adding that it was it is "incomprehensible" that the branch staff did not notice the fraud being committed.
The probe found several other problems at the branch. As a mid-level employee, Shetty should have been able to approve transactions of up to Rs 25 lakh, without sign-off from more senior officials. But he had been given unlimited approval powers, the PNB investigators said, without explaining how this happened.
Then, shortly before his retirement, Shetty used his personal Yahoo e-mail address to send 22 e-mails to reconcile large forex transactions involving the Modi group. The use of personal e-mail was "overlooked" by the bank's treasury department, the report said.
It added that under PNB policy, no officer should remain in the same office for more than three years, but Shetty retired after serving in Brady House for seven years. Three transfer orders were issued for him during his tenure, but he was never moved.
Signs that audit practices at Brady House were weak were, in fact, flagged by the branch itself, according to two internal PNB memos reviewed by Reuters. In March 2012, the branch had flagged off that nearly 50% of the observations posed in its annual inspection report - mainly auditor queries - remained "un-replied/unattended to by respective concerned officers", calling it a "critical situation". Then, four years later, the branch's assistant general manager issued an internal memo saying around 18 observations - including five described as zero-tolerance level issues - were pending. This memo was signed by 10 bank officers, including Shetty.
Damningly, such lapses were not limited to the Brady House branch. According to the agency, protocol dictates that the daily reconciliation reports should travel up the chain to PNB's headquarters in New Delhi. Along the way, they would be signed off by the Brady House branch head and sent each month to a Mumbai city regional office that would issue all-clear certificates for the branches it controls.
But the probe report revealed that despite receiving just two monthly reports from the Brady House branch last year instead of 12, the regional office signed off on a "false" compliance certificate, signalling a clean bill of health for the branch. Moreover, despite a massive missing paper trail, none of the senior inspection officers - who conducted 10 visits between 2010 and 2017 to the branch - reported anything "adverse".
Here's another red-flag missed by the Mumbai city regional office that the probe report highlighted. The Brady House branch's import and export transactions in the 12 months to March 2017 stood at $3.3 billion, 50% higher than recorded two years prior thanks to the dealings with Modi & Co. "The exceptional growth should have been noticed," the report said.
According to the agency, this probe report, along with dozens of pages of annexed bank records and internal e-mails, was presented by PNB officials to the bank's fraud risk management arm on April 5. It is also part of the evidence submitted by the CBI in court but the report's findings are being made public only now.
Ironically, the damning conclusions of the report stand in contrast to the lack of regulatory action taken by the authorities since the fraud was reported. No penalty has been imposed on PNB as a result of the fraud and there has been no senior management shake-up.
Sensex rises 260 points, Nifty closes at 10,772; banking stocks gain
-
The Sensex and Nifty closed higher in line with global peers on cues that the global economy was on growth track amid escalation of tariff war between US and China. While the Sensex rose 260 points higher to 35,547, the Nifty rose 61 points to 10,772 level.
Top gainers on the Sensex were Reliance Industries (2.44%), IndusInd Bank (2.27%), and Vedanta Ltd (2.10%).
"Markets are largely driven by global factors due to lesser domestic triggers," said Anita Gandhi, whole-time director at Arihant Capital Markets. "The Reserve Bank of India's OMO (open market operation) purchase should help improve liquidity in the markets and boost sentiment."
Small cap and midcap indices on the BSE rose 0.27% and 0.23%, respectively.
The revival was led by banking stocks with the BSE Bankex rising 1.04% or 306 points to 29,709 level. Bank Nifty too rose 292 points to 26,557 level.
Metal and auto stocks too contributed to the recovery with BSE metal and auto indices rising 1.09% and 0.45%, respectively.
Brokers said investor sentiment got a boost after the Reserve Bank yesterday announced purchase of government securities of up to Rs 10,000 crore on June 21 to help in liquidity management.
Abhijeet Dey, senior fund manager-equities at BNP Paribas Mutual Fund said, "Stock markets shrugged recent weakness to trade on a positive note today. In line with global cues, benchmark indices in India opened the day in the green and traded with strength, through the day. Recovery in global stocks boosted sentiment on the domestic bourses while bargain hunting at lower levels provided some stability to markets. Both the benchmark Sensex and the Nifty finally closed the day with gains of 0.50%. On the sectoral front, barring the IT and FMCG indices, all other indices on the National Stock Exchange (NSE) traded with gains."
Meanwhile, the IndiGo stock was the top BSE loser after a media report said enforcement directorate had summoned top management of the airline in connection with an alleged case of FEMA violations. The stock closed 7.49% or 92 points lower at 1136.15 level on BSE.
Market breadth was marginally negative with 1,309 stocks closing higher against 1314 ending lower on the BSE.
On Tuesday, the Sensex and Nifty closed lower for the second straight day, tracking a sell-off across global markets after the US and China reignited their trade dispute. The BSE Sensex plunged around 262 points to end at a two-week low of 35,286.74, while the broader Nifty dropped 89 points to 10,710.45. This was the index's lowest closing since June 6, when it had ended at 35,178.
Global markets
European shares rose in early trading. Germany's DAX rose 0.4 percent to 12,727.61 and France's CAC 40 added 0.3 percent to 5,405.57. Britain's FTSE 100 gained 1.2 percent to 7,695.94. Wall Street was poised to open higher. Dow futures added 0.4 percent to 24,808.00 and broader S&P 500 futures were up 0.3 percent to 2,773.00.
Japan's benchmark Nikkei 225 index rebounded 1.2 percent to close at 22,555.43 and South Korea's Kospi gained 1.0 percent to 2,363.91. Hong Kong's Hang Seng rose 0.8 percent to 29,696.17 and the Shanghai Composite in mainland China increased 0.3 percent to 2,915.73. Australia's S&P/ASX 200 climbed 1.2 percent to 6,172.60. Taiwan's benchmark rose, but Southeast Asian indexes were mixed.
Positive global cues
German Chancellor Angela Merkel and French President Emmanuel Macron have agreed to create a Eurozone budget ahead of next week's European Union summit. The new budget aims to boost investment and provide a safety mechanism for the 19 nations using the euro currency. It also hopes to find a European solution for migration issues - the center of a dispute between Merkel and her Bavarian allies.
The solid US job market has helped to boost demand for new homes. The Commerce Department said housing starts rose to a seasonally adjusted annual rate of 1.35 million in May, the strongest pace since July 2007. All of May's construction gains came from a 62 percent jump in the Midwest, while building slumped in the Northeast, South and West.
Top gainers on the Sensex were Reliance Industries (2.44%), IndusInd Bank (2.27%), and Vedanta Ltd (2.10%).
"Markets are largely driven by global factors due to lesser domestic triggers," said Anita Gandhi, whole-time director at Arihant Capital Markets. "The Reserve Bank of India's OMO (open market operation) purchase should help improve liquidity in the markets and boost sentiment."
Small cap and midcap indices on the BSE rose 0.27% and 0.23%, respectively.
The revival was led by banking stocks with the BSE Bankex rising 1.04% or 306 points to 29,709 level. Bank Nifty too rose 292 points to 26,557 level.
Metal and auto stocks too contributed to the recovery with BSE metal and auto indices rising 1.09% and 0.45%, respectively.
Brokers said investor sentiment got a boost after the Reserve Bank yesterday announced purchase of government securities of up to Rs 10,000 crore on June 21 to help in liquidity management.
Abhijeet Dey, senior fund manager-equities at BNP Paribas Mutual Fund said, "Stock markets shrugged recent weakness to trade on a positive note today. In line with global cues, benchmark indices in India opened the day in the green and traded with strength, through the day. Recovery in global stocks boosted sentiment on the domestic bourses while bargain hunting at lower levels provided some stability to markets. Both the benchmark Sensex and the Nifty finally closed the day with gains of 0.50%. On the sectoral front, barring the IT and FMCG indices, all other indices on the National Stock Exchange (NSE) traded with gains."
Meanwhile, the IndiGo stock was the top BSE loser after a media report said enforcement directorate had summoned top management of the airline in connection with an alleged case of FEMA violations. The stock closed 7.49% or 92 points lower at 1136.15 level on BSE.
Market breadth was marginally negative with 1,309 stocks closing higher against 1314 ending lower on the BSE.
On Tuesday, the Sensex and Nifty closed lower for the second straight day, tracking a sell-off across global markets after the US and China reignited their trade dispute. The BSE Sensex plunged around 262 points to end at a two-week low of 35,286.74, while the broader Nifty dropped 89 points to 10,710.45. This was the index's lowest closing since June 6, when it had ended at 35,178.
Global markets
European shares rose in early trading. Germany's DAX rose 0.4 percent to 12,727.61 and France's CAC 40 added 0.3 percent to 5,405.57. Britain's FTSE 100 gained 1.2 percent to 7,695.94. Wall Street was poised to open higher. Dow futures added 0.4 percent to 24,808.00 and broader S&P 500 futures were up 0.3 percent to 2,773.00.
Japan's benchmark Nikkei 225 index rebounded 1.2 percent to close at 22,555.43 and South Korea's Kospi gained 1.0 percent to 2,363.91. Hong Kong's Hang Seng rose 0.8 percent to 29,696.17 and the Shanghai Composite in mainland China increased 0.3 percent to 2,915.73. Australia's S&P/ASX 200 climbed 1.2 percent to 6,172.60. Taiwan's benchmark rose, but Southeast Asian indexes were mixed.
Positive global cues
German Chancellor Angela Merkel and French President Emmanuel Macron have agreed to create a Eurozone budget ahead of next week's European Union summit. The new budget aims to boost investment and provide a safety mechanism for the 19 nations using the euro currency. It also hopes to find a European solution for migration issues - the center of a dispute between Merkel and her Bavarian allies.
The solid US job market has helped to boost demand for new homes. The Commerce Department said housing starts rose to a seasonally adjusted annual rate of 1.35 million in May, the strongest pace since July 2007. All of May's construction gains came from a 62 percent jump in the Midwest, while building slumped in the Northeast, South and West.
CEA job was the best; leaving due to "very compelling reasons", says Arvind Subramanian
-
Chief Economic Adviser Arvind Subramanian has decided to quit the job, with close to a year of his tenure remaining, and return to the US for "very compelling reasons" -- the second high profile exit from government in less than a year.
He said he would leave the office within the next two months even though his contractual term was co-terminus with the government.
Subramanian was appointed as CEA, finance ministry, on October 16, 2014 for a 3-year term and was given an extension last year.
"My departure from this job is for entirely personal reasons. It is no secret that we are expecting our first grandchild in the early September. That's a very compelling reason that takes us back to old life of that used to lead of researching, writing, teaching and reflecting above all," he said.
Subramanian's official contract was till May 2019.
"The first person I mentioned this to was the Prime Minister after consulting Mr (Arun) Jaitley," he said, while expressing that this was the best job he ever had and probably ever will.
Earlier in the day Union Minister Arun Jaitley announced that Subramanian will be leaving the finance ministry after nearly 4 years because of "pressing family commitments" and return to the US.
Asked about his last date in the office, he said, "In terms of date, the hard deadline is early September, when the baby is going to arrive. We haven't exactly finalised. It would be over the next month or two. No firm date as yet has been fixed."
To a question on his future plans, he said, it will be revealed in the next few days.
"You will get to know what I am exactly, I will be going do, in the next few days. I can not reveal that right now for obvious reasons. Whatever has to be done has to done through formal channel but in few days you will get to know what I will doing in the next year at least," he said.
"I am profoundly grateful and humbled by these extraordinarily generous words by Minister Arun Jaitley announcing my decision to return - for personal reasons - to researching and writing. CEA job was the most rewarding, fulfilling, exciting I have ever had," he said
Subramanian is the second key economic policy adviser to quit the job mid-way to return to the US. Previously, the then NITI Aayog vice chairman Arvind Panagariya had quit in August 2017, nearly two years before his term was to end. Incidently, both were handpicked after BJP government came to power in May 2014 and cited personal reasons for quitting the job ahead of tenure.
When asked about his successor, he said the process would start soon and 'Competence, competence, competence,' that's what the government believes in and that's what the government should follow while choosing his successor.
On unfinished agenda, he said, he would like to see office of CEA in every state.
"One thing which I wish we could have done... there was a lot of demand for creating the office of CEA in a number of states, a number of chief ministers were keen to have something like this and I wish I had more bandwidth, time and energy to kind of do this in the states as well. I hope it will happen going forward," he said.
On the recent talks of India aiming to touch double digit growth rate, he said it should certainly aspire for this.
Subramanian said: "It helps on so many fronts. To achieve double digit growth, you need two things, you need favourable external environment, which is not the case and you need to do a lot of domestic policy hard work at home.
"I think government has begun to do the latter but I think economic environment has deteriorated. So may be the task has become that more challenging. I would never say double digit growth is beyond the reach of India. We can but you would need both need external environment and ongoing sustained policy reform at home."
On global trade wars and growing protectionism, the CEA said: "I do think we need to think about what measures we need to take to cushion any adverse fallout. I think trade war will not happen internationally, but if it does, we have to find appropriate responses in terms of domestic polices as well."
When asked if he would be willing to take up assignment in the future in India, he said, he is always committed to serving the country.
On the Goods and Services Tax, he said many of the exempted sectors should come under this, as broader the base of GST, the better it is.
It is for the GST Council to take a call, he added.
On his proposal of setting up a bad bank two-and-a-half years ago to deal with bad loans, he said: "I was very passionate about that but the NCLT process offers a legal framework for resolving this bad bank might not have been able to do. I am very happy in this instance that an alternative idea gained traction and resolution process is moving well."
With regard to the Universal Basic Income proposed by him in the Economic Survey of 2016-17, he said, it didn't happen but it became a part of the policy discussion.
"The idea has been around. We just brought it in the more prominence. All policies will have to navigate through challenging times," he said.
He said he would leave the office within the next two months even though his contractual term was co-terminus with the government.
Subramanian was appointed as CEA, finance ministry, on October 16, 2014 for a 3-year term and was given an extension last year.
"My departure from this job is for entirely personal reasons. It is no secret that we are expecting our first grandchild in the early September. That's a very compelling reason that takes us back to old life of that used to lead of researching, writing, teaching and reflecting above all," he said.
Subramanian's official contract was till May 2019.
"The first person I mentioned this to was the Prime Minister after consulting Mr (Arun) Jaitley," he said, while expressing that this was the best job he ever had and probably ever will.
Earlier in the day Union Minister Arun Jaitley announced that Subramanian will be leaving the finance ministry after nearly 4 years because of "pressing family commitments" and return to the US.
Asked about his last date in the office, he said, "In terms of date, the hard deadline is early September, when the baby is going to arrive. We haven't exactly finalised. It would be over the next month or two. No firm date as yet has been fixed."
To a question on his future plans, he said, it will be revealed in the next few days.
"You will get to know what I am exactly, I will be going do, in the next few days. I can not reveal that right now for obvious reasons. Whatever has to be done has to done through formal channel but in few days you will get to know what I will doing in the next year at least," he said.
"I am profoundly grateful and humbled by these extraordinarily generous words by Minister Arun Jaitley announcing my decision to return - for personal reasons - to researching and writing. CEA job was the most rewarding, fulfilling, exciting I have ever had," he said
Subramanian is the second key economic policy adviser to quit the job mid-way to return to the US. Previously, the then NITI Aayog vice chairman Arvind Panagariya had quit in August 2017, nearly two years before his term was to end. Incidently, both were handpicked after BJP government came to power in May 2014 and cited personal reasons for quitting the job ahead of tenure.
When asked about his successor, he said the process would start soon and 'Competence, competence, competence,' that's what the government believes in and that's what the government should follow while choosing his successor.
On unfinished agenda, he said, he would like to see office of CEA in every state.
"One thing which I wish we could have done... there was a lot of demand for creating the office of CEA in a number of states, a number of chief ministers were keen to have something like this and I wish I had more bandwidth, time and energy to kind of do this in the states as well. I hope it will happen going forward," he said.
On the recent talks of India aiming to touch double digit growth rate, he said it should certainly aspire for this.
Subramanian said: "It helps on so many fronts. To achieve double digit growth, you need two things, you need favourable external environment, which is not the case and you need to do a lot of domestic policy hard work at home.
"I think government has begun to do the latter but I think economic environment has deteriorated. So may be the task has become that more challenging. I would never say double digit growth is beyond the reach of India. We can but you would need both need external environment and ongoing sustained policy reform at home."
On global trade wars and growing protectionism, the CEA said: "I do think we need to think about what measures we need to take to cushion any adverse fallout. I think trade war will not happen internationally, but if it does, we have to find appropriate responses in terms of domestic polices as well."
When asked if he would be willing to take up assignment in the future in India, he said, he is always committed to serving the country.
On the Goods and Services Tax, he said many of the exempted sectors should come under this, as broader the base of GST, the better it is.
It is for the GST Council to take a call, he added.
On his proposal of setting up a bad bank two-and-a-half years ago to deal with bad loans, he said: "I was very passionate about that but the NCLT process offers a legal framework for resolving this bad bank might not have been able to do. I am very happy in this instance that an alternative idea gained traction and resolution process is moving well."
With regard to the Universal Basic Income proposed by him in the Economic Survey of 2016-17, he said, it didn't happen but it became a part of the policy discussion.
"The idea has been around. We just brought it in the more prominence. All policies will have to navigate through challenging times," he said.
General Awareness
Governor’s rule in J&K
-
Context: The state of Jammu and Kashmir is all set to see a governor’s rule following the sudden break in ties between BJP and PDP and subsequent resignation of chief minister Mehbooba Mufti.
What’s so special about this?
The imposition of governor’s rule in J&K is slightly different than that in other states. In other states, the president’s rule is imposed under the Article 356 of Constitution of India. In J&K, governor’s rule is mentioned under Article 370 section 92 – ‘ Provisions in case of failure of constitutional machinery in the State.’
Article 370 section 92: Provisions in case of failure of constitutional machinery in the State:
If at any time, the Governor is satisfied that a situation has arisen in which the Government of the State cannot be carried on in accordance with the provisions of this Constitution, the Governor may by Proclamation-
Assume to himself all or any of the functions of the Government of the State and all or any of the powers vested in or exercisable by anybody or authority in the State.
Make such incidental and consequential provisions as appear to the Governor to be necessary or desirable for giving effect to the objects of the Proclamation, including provisions for suspending in whole or in part the operation of any provision of this Constitution relating to anybody or authority in the State.
Any such Proclamation may be revoked or varied by a subsequent Proclamation.
Any such Proclamation whether varied under subsection (2) or not, shall except where it is a Proclamation revoking a previous Proclamation, cease to operate on the expiration of six months from the date on which it was first issued.
If the Government or by a Proclamation under his section assumes, to himself any, of the powers of the Legislature to make his laws, any law made by him in the exercise of that power shall, subject to, the terms there of continue to have effect until two years have elapsed from the date on which the proclamation ceases to have effect, unless sooner.
No Proclamation under this section shall, except where it is a Proclamation revoking a previous Proclamation, be laid before each House of the Legislature as soon as it is convened.
What is President’s Rule in the Indian context?
The imposition of Article 356 of the Constitution on a State following the failure of constitutional machinery is called President’s Rule in India. Once the President’s Rule has been imposed on a state, the elected state government will be temporarily dissolved, and the Governor, who is appointed by the government at the Centre, will replace the Chief Minister as the chief executive of the State.
The state will fall under the direct control of the Union government, and the Governor will continue to be head the proceedings, representing the President of India – who is the Head of the State.
The imposition of the President’s rule requires the sanction of both the houses of Parliament. If approved, it can go on for a period of six months. However, the imposition cannot be extended for more than three years, and needs to be brought before the two houses every six months for approval.
What’s important?
For Prelims and Mains: Difference between President’s Rule under Article 356 and Governor’s Rule in J&K, Special status for J&K under Article 370.
Context: The state of Jammu and Kashmir is all set to see a governor’s rule following the sudden break in ties between BJP and PDP and subsequent resignation of chief minister Mehbooba Mufti.
What’s so special about this?
The imposition of governor’s rule in J&K is slightly different than that in other states. In other states, the president’s rule is imposed under the Article 356 of Constitution of India. In J&K, governor’s rule is mentioned under Article 370 section 92 – ‘ Provisions in case of failure of constitutional machinery in the State.’
Article 370 section 92: Provisions in case of failure of constitutional machinery in the State:
If at any time, the Governor is satisfied that a situation has arisen in which the Government of the State cannot be carried on in accordance with the provisions of this Constitution, the Governor may by Proclamation-
Assume to himself all or any of the functions of the Government of the State and all or any of the powers vested in or exercisable by anybody or authority in the State.
Make such incidental and consequential provisions as appear to the Governor to be necessary or desirable for giving effect to the objects of the Proclamation, including provisions for suspending in whole or in part the operation of any provision of this Constitution relating to anybody or authority in the State.
Any such Proclamation may be revoked or varied by a subsequent Proclamation.
Any such Proclamation whether varied under subsection (2) or not, shall except where it is a Proclamation revoking a previous Proclamation, cease to operate on the expiration of six months from the date on which it was first issued.
If the Government or by a Proclamation under his section assumes, to himself any, of the powers of the Legislature to make his laws, any law made by him in the exercise of that power shall, subject to, the terms there of continue to have effect until two years have elapsed from the date on which the proclamation ceases to have effect, unless sooner.
No Proclamation under this section shall, except where it is a Proclamation revoking a previous Proclamation, be laid before each House of the Legislature as soon as it is convened.
What is President’s Rule in the Indian context?
The imposition of Article 356 of the Constitution on a State following the failure of constitutional machinery is called President’s Rule in India. Once the President’s Rule has been imposed on a state, the elected state government will be temporarily dissolved, and the Governor, who is appointed by the government at the Centre, will replace the Chief Minister as the chief executive of the State.
The state will fall under the direct control of the Union government, and the Governor will continue to be head the proceedings, representing the President of India – who is the Head of the State.
The imposition of the President’s rule requires the sanction of both the houses of Parliament. If approved, it can go on for a period of six months. However, the imposition cannot be extended for more than three years, and needs to be brought before the two houses every six months for approval.
What’s important?
For Prelims and Mains: Difference between President’s Rule under Article 356 and Governor’s Rule in J&K, Special status for J&K under Article 370.
What’s so special about this?
The imposition of governor’s rule in J&K is slightly different than that in other states. In other states, the president’s rule is imposed under the Article 356 of Constitution of India. In J&K, governor’s rule is mentioned under Article 370 section 92 – ‘ Provisions in case of failure of constitutional machinery in the State.’
Article 370 section 92: Provisions in case of failure of constitutional machinery in the State:
If at any time, the Governor is satisfied that a situation has arisen in which the Government of the State cannot be carried on in accordance with the provisions of this Constitution, the Governor may by Proclamation-
Assume to himself all or any of the functions of the Government of the State and all or any of the powers vested in or exercisable by anybody or authority in the State.
Make such incidental and consequential provisions as appear to the Governor to be necessary or desirable for giving effect to the objects of the Proclamation, including provisions for suspending in whole or in part the operation of any provision of this Constitution relating to anybody or authority in the State.
Any such Proclamation may be revoked or varied by a subsequent Proclamation.
Any such Proclamation whether varied under subsection (2) or not, shall except where it is a Proclamation revoking a previous Proclamation, cease to operate on the expiration of six months from the date on which it was first issued.
If the Government or by a Proclamation under his section assumes, to himself any, of the powers of the Legislature to make his laws, any law made by him in the exercise of that power shall, subject to, the terms there of continue to have effect until two years have elapsed from the date on which the proclamation ceases to have effect, unless sooner.
No Proclamation under this section shall, except where it is a Proclamation revoking a previous Proclamation, be laid before each House of the Legislature as soon as it is convened.
What is President’s Rule in the Indian context?
The imposition of Article 356 of the Constitution on a State following the failure of constitutional machinery is called President’s Rule in India. Once the President’s Rule has been imposed on a state, the elected state government will be temporarily dissolved, and the Governor, who is appointed by the government at the Centre, will replace the Chief Minister as the chief executive of the State.
The state will fall under the direct control of the Union government, and the Governor will continue to be head the proceedings, representing the President of India – who is the Head of the State.
The imposition of the President’s rule requires the sanction of both the houses of Parliament. If approved, it can go on for a period of six months. However, the imposition cannot be extended for more than three years, and needs to be brought before the two houses every six months for approval.
What’s important?
For Prelims and Mains: Difference between President’s Rule under Article 356 and Governor’s Rule in J&K, Special status for J&K under Article 370.
No comments:
Post a Comment