02nd Nov, 2018-IAS Current Affairs
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‘Exercise Dharma guardian 2018’ (GS2: Bilateral relations)
Issue: Exercise DHARMA GUARDIAN – 2018, a joint military exercise between Indian & Japanese Armies, commenced at Counter Insurgency and Jungle Warfare School, Vairengete, Mizoram
About the exercise
Being first of its kind, the 14 days long joint exercise is being conducted from 01 Nov 2018 to 14 Nov 2018. The exercise will consist of a balance of indoor classes and outdoor training activities. The objective of this exercise is to build and promote army to army relations in addition to exchanging skills and experiences between both the armies. Due emphasis will be laid on enhancing tactical skills to fight against global terrorism and on increasing interoperability between forces of both countries which is crucial for the success of any joint operation.
‘Shanghai Cooperation Organization (SCO) Joint Exercise on Urban Earthquake Search & Rescue- 2019’ (GS2: Multilateral agencies)
Issue: The two-day long preparatory meeting of the “Shanghai Cooperation Organization Joint Exercise on Urban Earthquake Search & Rescue- 2019 began in India
This marks the first phase of the main exercise scheduled for 21-24 February, 2019 in Delhi by India. The National Disaster Response Force (NDRF) has been entrusted with the responsibility of organizing the exercise by Government of India.
India faced some of its most severe natural calamities like Orissa Super Cyclone (1999), Gujarat Earthquake (2001) and Indian Ocean Tsunami (2004). This succession of events and the International environment brought to fore, the need of comprehensive disaster management plan. This led to the enactment of the Disaster Management Act on December 26th , 2005. The National Disaster Management Authority (NDMA) was constituted to lay down the policies, plans and guidelines for disaster management.
The Disaster Management Act has statutory provisions for constitution of National Disaster Response Force (NDRF) for the purpose of specialized response to natural and man-made disasters. Accordingly, in 2006 NDRF was constituted with 8 Battalions. At present, NDRF has a strength of 12 Battalions with each Battalion consisting of 1149 personnel. In the beginning, the personnel of NDRF were deployed for routine law and order duties also.
The practice of “proactive availability” of this Force to the States and that of “pre-positioning”, in a threatening disaster situations have immensely helped minimise damage, caused due to natural calamities in the country.
It is a Eurasian political, economic, and security alliance, the creation of which was announced on 15 June 2001 in Shanghai, China by the leaders of China, Kazakhstan, Kyrgyzstan, Russia, Tajikistan, and Uzbekistan; the Shanghai Cooperation Organisation Charter, formally establishing the organisation, was signed in June 2002 and entered into force on 19 September 2003. The original five nations, with the exclusion of Uzbekistan, were previously members of the Shanghai Five group, founded on 26 April 1996. Since then, the organisation has expanded its membership to eight countries when India and Pakistan joined SCO as full members on 9 June 2017 at a summit in Astana, Kazakhstan. The Heads of State Council (HSC) is the supreme decision-making body in the SCO, it meets once a year and adopts decisions and guidelines on all important matters of the organisation. Military exercises are also regularly conducted among members to promote cooperation and coordination against terrorism and other external threats, and to maintain regional peace and stability
The SCO is widely regarded as the “alliance of East”, due to its growing centrality in Asia-Pacific, and has been the primary security pillar of the region
With the growing power and enlargement of the organisation, its scope of unity and cooperation has expanded to many other areas, including education, science, technology, health care, environmental protection, tourism, media, sports, humanitarian and culture, while extending its principle to include global governance and fostering of international relationships
‘World Cities day 2018’ (Facts that can be asked in Prelims)
Issue: The National Mission for Clean Ganga partnered with UN Habitat to organize a policy dialogue- ‘Urban Cafe: River for Habitat’ in New Delhi on the occasion of World Cities Day 2018
About World Cities Day 2018
World Cities Day aims to promote the international community’s interest in global urbanization, enhance cooperation among countries and cities in meeting opportunities and addressing challenges of urbanization, and contribute to sustainable urban development. The overall World Cities Day theme is Better City, Better Life and this year’s particular theme is Building Sustainable and Resilient Cities.
Need for sustainable cities
Over the last decade, natural disasters have affected more than 220 million people and caused economic damage of USD $100billion per year. By 2030, without significant investment to make cities more resilient, natural disasters may cost cities worldwide three times that amount a year and climate change may push up millions of urban residents into poverty. Hundreds of cities and communities are struggling with the impact of crisis – including conflicts, natural disasters, failures in governance and economic stress.
Cities need support to become resilient and develop their capacity to absorb the impact of hazards, protect and preserve human life and limit damage to and destruction of public and private assets while continuing to provide infrastructure and services after a crisis.
‘Generalized System of Preferences’ (GS3: Indian Economy)
Issue: The US government withdrew GSP (Generalized System of Preferences) benefits to India worth $70 million on as many as 50 items effective immediately.
Trade relationships between India and the US have soured under the current US administration, with Trump unilaterally raising tariffs on steel and aluminium imports from India and challenging its export subsidy regime at the World Trade Organization (WTO). India has also dragged the US to the WTO on higher steel and aluminium tariffs and has threatened to impose retaliatory tariffs worth $240 million on US imports.
Generalized System of Preferences (GSP) is a preferential tariff system extended by developed countries (also known as preference giving countries or donor countries) to developing countries (also known as preference receiving countries or beneficiary countries). It involves reduced MFN Tariffs or duty-free entry of eligible products exported by beneficiary countries to the markets of donor countries.
|BENEFITS OF GSP|
|· Indian exporters benefit indirectly – through the benefit that accrues to the importer by way of reduced tariff or duty free entry of eligible Indian products|
|· Reduction or removal of import duty on an Indian product makes it more competitive to the importer – other things (e.g. quality) being equal.|
|· This tariff preference helps new exporters to penetrate a market and established exporters to increase their market share and to improve upon the profit margins, in the donor country.|
‘International Solar Alliance’ (GS2: Multilateral agencies)
Issue: The Union Cabinet chaired by Prime Minister Shri Narendra Modi has given ex-post facto approval for moving a Resolution in the first Assembly of the International Solar Alliance (ISA) for amending the Framework Agreement of the ISA for opening up the ISA membership to all countries that are members of the United Nations.
Benefits of this decision
Opening the membership of the ISA will put solar energy in global agenda with the universal appeal for developing and deploying solar energy. It will make ISA inclusive, whereby all member countries that are members of the United Nations could become member. Expanding membership will lead to ISA initiative benefitting the world at large.
The International Solar Alliance (ISA) is an alliance of more than 121 countries initiated by India, most of them being sunshine countries, which lie either completely or partly between the Tropic of Cancer and the Tropic of Capricorn. The primary objective of the alliance is to work for efficient exploitation of solar energy to reduce dependence on fossil fuels
The initiative was launched by Prime Minister Narendra Modi at the India Africa Summit, and a meeting of member countries ahead of the 2015 United Nations Climate Change Conference in Paris in November 2015. The framework agreement of the International Solar Alliance opened for signatures in Marrakech, Morocco in November 2016. It is headquartered in India
The focus is on solar power utilization. The launching of such an alliance in Paris also sends a strong signal to the global communities about the sincerity of the developing nations towards their concern about climate change and to switch to a low-carbon growth path. India has pledged a target of installing 100GW by 2022 and reduction in emission intensity by 33–35% by 2030 to let solar energy reach to the most unconnected villages and communities and also towards creating a clean planet.
‘HIV’ (GS2: Issues related to Health)
Issue: Despite the ‘test and treat’ policy introduced by the National AIDS Control Organisation (NACO) last April, at least 44% of People Living with HIV/AIDS (PLHIV) in India are yet to get the life-saving Anti-Retroviral Therapy (ART).
The ‘test and treat’ policy aimed to entitle every person who tests positive for HIV to free treatment. The move is part of the country’s National Strategic Plan for HIV for the next seven years. However, according to NACO’s data, only 11.41 lakh of the 21.4 lakh PLHIV had been initiated on ART till March 2018. This shows that India still has a long way to go to meet the 90-90-90 targets by 2020, which are not just milestones set by the UNAIDS but also enshrined in India’s National Health Policy (NHP 2017)
What is 90-90-90 target?
The 90-90-90 targets mean 90% of all PLHIV will know their HIV status, 90% of PLHIV will receive ART, and 90% of people receiving ART will have suppressed viral load to minimize transmission.
Human immunodeficiency virus infection and acquired immune deficiency syndrome (HIV/AIDS) is a spectrum of conditions caused by infection with the human immunodeficiency virus (HIV).
HIV is spread primarily by unprotected sex (including anal and oral sex), contaminated blood transfusions, hypodermic needles, and from mother to child during pregnancy, delivery, or breastfeeding.
Disease in a baby can often be prevented by giving both the mother and child antiretroviral medication
‘NRI deposits’ (GS3: Indian Economy)
Issue: Non-resident Indian (NRI) deposits jumped to $5.7 billion in the first five months of this fiscal compared to $0.5 billion in the same period last year.
Reasons for the increase
The rise is attributed to the sliding rupee, which makes deposits in the currency attractive for NRIs, and to higher oil prices which have prompted inflows from NRIs in the Middle-east to increase. According to data published by RBI, during the April-August period of 2018-19, NRI deposit inflow was $5.7 billion. Non-Resident (External) Rupee Account was the main contributor at $4.1 billion compared to $1.7 billion during the same period of the previous year.
Also, when currency depreciates, interest rates in the country develop an upside bias. So, prospective interest earnings also go up. This too incentivizes NRIs to send more money during the episodes of currency depreciation
The UAE is the top source of inward remittances into India, with Kerala receiving the maximum funds sent from abroad
‘Goods and Services Tax (GST)’ (GS3: Mobilization of Resources)
Issue: After a gap of six months, the goods and services tax (GST) collections crossed the Rs 1-lakh crore mark in October (for September) primarily driven by festive demand, anti-evasion measures and finalization of audit statements by businesses last month.
The GST collections in October stood at Rs 1,00,710 crore, the second time in the current financial year after April when the monthly GST collections topped the targeted Rs 1-lakh crore mark. The compliance rate inched higher, with 67.45 lakh businesses filing the summary GSTR-3B returns in October as against 67 lakh businesses filing GST returns in the previous month.
Goods and Services Tax (GST) refers to the single unified tax created by amalgamating a large number of Central and State taxes presently applicable in India. The 101st constitution Amendment Act of September 2016 made in this regard, inserted a definition of GST in Article 366 of the constitution by inserting a sub-clause 12A. As per that, GST means any tax on supply of goods, or services, or both, except taxes on supply of the alcoholic liquor for human consumption. And here, services are defined to mean anything other than goods.
GST is a single tax on the supply of goods and services, right from the manufacturer to the consumer. Credits of input taxes paid at each stage will be available in the subsequent stage of value addition, which makes GST essentially a tax only on value addition at each stage. The final consumer will thus bear only the GST charged by the last dealer in the supply chain, with set-off benefits at all the previous stages (set-off means making good the payments on account of prior-stage taxes for the transactions across the entire value chain). In other words, it follows a multi-stage collection mechanism. In this, tax is collected at every stage and the credit of tax paid at the previous stage is available as a set off at the next stage of transaction. This shifts the tax incidence near to the consumer and benefits the industry through better cash flows and better working capital management.
Implementation of GST is one of the major indirect tax reforms in India and was put in place on 1 July 2017 during a special midnight session of the Parliament.
The salient features of GST are as under:
- GST comes under the broad spectrum of what is known as Value Added Tax which provides for input credits and taxes only the value addition that happened in the process of production / provision of service.
- GST would be applicable on supply of goods or services as against the present concept of tax on the manufacture or on sale of goods or on provision of services.
- GST would be a destination based tax as against the present concept of origin based tax. i.e, tax is imposed at the point of consumption.
- It would be a dual GST with the Centre and the States simultaneously levying it on a common base. The GST, to be levied by the Centre would be called Central GST (CGST) and that to be levied by the States would be called State GST (SGST). This is to protect the fiscal federalism of this country as both the levels of government have the constitutional mandate to levy and collect specific taxes. SGST would be applicable only if both the buyer and seller are located within the state. CGST does not have any such restriction regarding location.
- The Centre would levy and collect the Integrated Goods and Services Tax (IGST) on all inter-State supply of goods and services. There will be seamless flow of input tax credit from one State to another. Proceeds of IGST will be apportioned among the States.
- CGST and SGST would be levied at rates to be mutually agreed upon by the Centre and the States.
- Credit of CGST paid on inputs may be used only for paying CGST on the output and the credit of SGST paid on inputs may be used only for paying SGST. In other words, the two streams of input tax credit cannot be mixed except in specified circumstances of inter-State sales.
- However, cross utilization of credit of CGST between goods and services would be allowed. Similarly, the facility of cross utilization of credit will be available in case of SGST. However, the cross utilization of CGST and SGST would not be allowed except in the case of inter-State supply of goods and services under the IGST model.
- All goods and services, except alcoholic liquor for human consumption, will be brought under the purview of GST (To include alcoholic liquor, which is a major source of revenue for the states, another constitution amendment would be required). Crude Petroleum and some petroleum products have also been Constitutionally brought under GST. However, it is provided that petroleum and petroleum products shall not be subject to the levy of GST till notified at a future date on the recommendation of the GST Council. The present taxes levied by the States and the Centre on petroleum and petroleum products, i.e., Sales Tax/VAT, CST and Excise duty only, will continue to be levied in the interim period.
- Tobacco and tobacco products would be subject to GST. In addition, the Centre could continue to levy Central Excise duty and the States can levy sales tax / VAT.
- Exports would be zero-rated. The exporter shall have an option to either pay tax for his output and claim its refund or export under bond without tax and claim refund of Input Tax Credit.
- Import of goods or services would be treated as inter-State supplies and therefore, would be subject to IGST in addition to the applicable customs duties. In other words, all imported goods will be charged integrated tax (IGST) which is equivalent to Central GST + State GST. This will bring equality with taxation on local products.
- The list of exempted goods and services is attempted to be kept to a minimum and it would be harmonized for the Centre and the States as far as possible.
- A common threshold exemption would apply to both CGST and SGST. Dealers with a turnover below it would be exempt from tax. A compounding option (i.e.to pay tax at a flat rate without credits) would be available to small dealers below a certain threshold. The threshold exemption and compounding provision would be optional. All taxpayers eligible for threshold exemption will have the option of paying tax with input tax credit (ITC) benefits. Taxpayers making inter-State supplies or paying tax on reverse charge basis shall not be eligible for threshold exemption. Similarly, small taxpayers with an aggregate turnover in a financial year up to Rest. 50 lakhs shall be eligible for composition levy. Under the scheme, a taxpayer shall pay tax as a percentage of his turnover during the year without the benefit of ITC.
- GST rates will be uniform across the country. However, to give some fiscal autonomy to the States and Centre, there will a provision of a narrow tax band over and above the floor rates of CGST and SGST.
- The laws, regulations and procedures for levy and collection of CGST and SGST would be harmonized to the extent possible.
- A Goods & Services Tax Council which will be a joint forum of the Centre and the States will be created. This Council would function under the Chairmanship of the Union Finance Minister and will have Ministers in charge of Finance/Revenue or Minister nominated by each of the States & UTs with Legislatures, as members. Members have differential voting powers with votes of the central government having 1/3rd weightage and rest 2/3rd with states. Decisions can be taken only if it has more than 3/4th majority (i.e. Votes in Favour = 1/3 *Votes in favour by Center + [(2/3 * 1/No. of states present and Voting)*Votes in favour by States]). Such decisions will be immune from the deficiencies in the constitution of the GST council or appointment of its members or any procedural irregularity. The Council will make recommendations to the Union and the States on important issues like
- taxes, cesses and surcharges levied by the Union, States and local bodies which may be subsumed in the GST
- the goods and services that may be subjected to or exempted from GST
- apportioning of the revenue between center and states in case of IGST
- Framing of model GST laws
- deciding the principles that govern the determination of place of supply, based on GST laws
- decision on threshold limits of turnover below which goods and services may be exempted from GST,
- creating special provisions for states like Jammu& Kashmir, North Eastern States including Assam, and hilly states like Himachal Pradesh and Uttarakhand,
- decision on the date on which GST will be levied on crude petroleum, high speed diesel, petrol, natural gas, and ATF.
- tax rates including the floor rates and bands, special rates /rates for a specified period to raise additional resources during a natural calamity or disaster
- framing dispute resolution modalities. Rajya Sabha made this provision mandatory while passing the Bill in 2016. The GST Council will have to establish a mechanism to adjudicate any dispute arising out of its recommendations. Disputes can be between: (a) the centre vs. one or more states; (b) the centre and states vs. one or more states; (c) state vs. state. This implies that there will be a standing mechanism to resolve disputes.
- GST levied and collected by Union Govt. except the tax apportioned with states in case of IGST shall also be distributable between Union and States as per the recommendations of the Finance Commission.
- Union Government cannot impose surcharges (which usually goes to the consolidated fund of India) on articles which are covered under GST laws.
- Centre will compensate States for loss of revenue arising on account of implementation of the GST for a period up to five years. (The compensation will be on a tapering basis, i.e., 100% for first three years, 75% in the fourth year and 50% in the fifth year).Rajya Sabha while passing the Bill made the amendments in such a way to make it mandatory that center must provide compensation; compensation cannot be provided for more than five years, but allows to decide a shorter time period.