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Daily News Analysis 01-03-2016

S.NO.

NEWS ITEM

SYLLUBUS

ESSENCE OF THE ARTICLE

1.         

 

Wigneswaran seeks Indias help on new Constitution (P16)

a)     I.R

a)     Chief Minister of Sri Lankas Northern Province C.V. Wigneswaran called upon India to ensure that the spirit behind the 13th Constitutional Amendment be retained in the new Constitution.

2.

In Iran, Rouhani-backed moderates secure victory (Page 16)

a)     International

a)     Irans President Hassan Rouhani secured a more moderate Parliament after elections saw hardliners soundly trumped by reformists while conservatives lost seats and voters implicitly backed the government.

3.

A pro-poor push in hard times (Page 1)

a)     National

b)     Economy

a)     Finance Minister Arun Jaitley dedicated his third budget to farmers, the poor and vulnerable sections of society while raising taxes on incomes of super-rich and introducing new cesses on services and cars to fund farmer welfare projects and infrastructure, respectively.

4.

A googly that could stump the salaried class (Page 10)

a)     National

b)     Economy

a)     Finance Minister Arun Jaitley raised the tax surcharge on the super-rich, but used a googly to sneak in an unkind cut for the salaried class, whose retirement savings are parked in the Employees Provident Fund.

5.

Cuts for flagship urban schemes (Page 11)

a)     National

a)     The Union Budgets primary focus on addressing rural distress has hit the NDA governments flagship urban policies, such as Smart City Mission and Atal Mission for Rejuvenation and Urban Transformation.

6.

Aadhaar to get legal backing (Page 11)

a)     National

b)     Social issue

a)     In his third Union Budget, Finance Minister Arun Jaitley announced cooking gas subsidy for women members of 5 crore poor households, giving a legal backing to Aadhaar numbers and launching direct benefit transfer for fertilizers to help farmers.

7.

Amnesty scheme for tax defaulters (Page 11)

a)     National

b)     Economy

a)     Finance Minister Arun Jaitley clarified in a post-budget select press briefing that the compliance window proposed in the Union Budget 2016 was not an amnesty scheme and remedies the flaws in the Voluntary Disclosure of Income Scheme that former Finance Minister Chidambaram had provided in 1997.

8.

Defence allocation marginally up (Page 11)

a)     National

b)     Economy

a)     The government allocated Rs. 2,49,099 crore for the defence sector for the year 2016-17, which is 11 percent more than the revised estimates of last year.

9.

Government tweaks Securities Transaction Tax (Page 11)

a)     National

b)     Economy

a)     From a capital market perspective, the Union Budget 2016-17 touched upon the issue of securities transaction tax, dividend distribution tax and the holding limit for foreign exchanges in Indian bourses.

10.

BJP elated at rural emphasis (Page 13)

a)     National

b)     Social issue

a)     The tilt towards rural India in the Union Budget was considered a given, after Prime Minister Narendra Modi unrolled the Pradhan Mantri Fasal Bima Yojana and started his rallies of farmers nationwide.

11.

Make In India initiative gets a leg up (Page 14)

a)     National

b)     Economy

a)     Finance Minister Arun Jaitley announced several proposals in the Union Budget 2016-17 to boost the governments Make in India initiative.

12.

Big bang reforms in FDI guidelines (Page 15)

a)     National

b)     Economy

a)     To facilitate ease of doing business for foreign investors and their domestic recipients, the Union Budget 2016-17 has proposed liberalisation of foreign direct investment norms in a host of sectors.

13.

Demand-side growth (Page 15)

a)     National

b)     Economy

a)    This years Union Budget is bound to have a very favourable impact on the economy.

14.

Dialysis programme (Page 13)

a)     National

b)     Health

a)    In a surprising move, the government has launched a new National Dialysis Services Programme.

15.

Exploring a Mars-like place on Earth (Page 20)

a)     S&T

b)     Geography

a)    A Mars-like laboratory in the driest place on Earth is helping NASA scientists study the limits of life and test drilling and life-detection technologies that might be sent to Red Planet in the future.

 

S.NO.

NEWS ITEM

SYLLUBUS

BACKGROUND

IMPORTANT POINTS

1.         

 

Wigneswaran seeks Indias help on new Constitution (Page 16)

a)     I.R

a)     India – Sri Lanka relations

b)     Sri Lankas new Constitution

c)     13th Constitutional Amendment

d)     India-Sri Lanka accord 1987

a)    CM of Sri Lankas Northern Province C.V. Wigneswaran called upon India to ensure that the spirit behind the 13th Constitutional Amendment be retained in new Constitution.

b)     He said the 13th Amendment (an outcome of the 1987 India-Sri Lanka accord) is the only document through which India could function as the guarantor of interests and rights of Tamils in Sri Lanka.

c)     But with the enactment of the Provincial Councils Act of 1987, what was granted (to Provincial Councils) under the Amendment has been taken away. This is why the demand is being made for the repeal of the Provincial Councils Act and adherence to the original character of the Amendment.

d)     Asked whether New Delhi could make any suggestion to Colombo on Amendment issue under the given circumstances, he recalled how Constitutional experts from India got involved in the process of drafting the 13th Amendment.

e)     To another question whether it was realistic to expect the new Constitution to be federal, he said there had been a perception among sections of Sinhalese that federalism meant separation.

2.

In Iran, Rouhani-backed moderates secure victory (Page 16)

a)     International

a)     Irans elections

b)     Iran – P5+1 nuclear deal

c)     Irans nuclear programme

a)     Irans President Hassan Rouhani secured a more moderate Parliament on Feb 29 after elections saw hardliners soundly trumped by reformists while conservatives lost seats and voters implicitly backed the government.

b)     Final results showed seats being shared three ways between Rouhanis reformist and moderate allies, conservatives and independents.

c)     No single group had a decisive share of Parliaments 290 seats from the voting, but tallies suggested the President would be able to muster support from key backers and create a working majority.

d)     The returns were shaping up as a strong signal of public support for last years nuclear deal between Iran and world powers, an agreement steered by Rouhani which saw lifting of crippling sanctions in January.

3.

A pro-poor push in hard times (Page 1)

a)     National

b)     Economy

a)     Union Budget 2016-17

b)     Seventh Pay Commission

c)     One Rank One Pension scheme

d)     Ease of doing business

e)     GDP growth

f)     Fiscal deficit

g)     Fiscal consolidation

h)     Pradhan Mantri Krishi Yojana

 

a)     Finance Minister Arun Jaitley dedicated his third budget to farmers, the poor and vulnerable sections of society while raising taxes on incomes of super-rich and introducing new cesses on services and cars to fund farmer welfare projects and infrastructure, respectively.

b)     Jaitleys budget for 2016-17 attempted to address the distress in the rural economy that has hit demand creation and new investments, with enhanced outlays of nearly Rs. 2.75 lakh crore for programmes in the social sector, farmer welfare and the rural sector, giving them more play-time in his speech than measures to improve the ease of doing business.

c)     Despite higher expenditure owing to the 7th Central Pay Commission and the one rank one pension norm for defence forces, Jaitley chose to stick to the fiscal consolidation road map he outlined last year and set a 3.5 percent of GDP target for 2016-17.

d)     He said the Budget has remained on committed path of fiscal rectitude and includes a number of deep, though unglamorous structural reforms, addresses not only the structural reforms constituency but also the harsh realities of economic growth through allocations for the social (Rs. 1.51 lakh crore), agriculture (Rs. 35,984 crore), rural (Rs. 87,765 crore) and infrastructure sectors (Rs. 2.21 lakh crore).

e)     PM Modi said the pro-village, pro-poor and pro-farmer budget would make a qualitative change to the lives of those in rural areas. Several steps have been taken for the farmers. The most important is Pradhan Mantri Krishi Yojana.

f)     Noting that electricity and roads are crucial for villages, he said by 2019, all villages of the country will be connected by roads, while all of them will be electrified by 2018.

4.

A googly that could stump the salaried class (Page 10)

a)     National

b)     Economy

a)     Union Budget 2016-17

b)     Employees Provident Fund (EPF)

c)     National Pension Scheme

d)     National Pension System

e)     Sovereign Gold Bond Scheme

f)     Gold Monetisation Scheme

a)     Finance Minister Arun Jaitley raised the tax surcharge on the super-rich, but used a googly to sneak in an unkind cut for the salaried class, whose retirement savings are parked in the Employees Provident Fund.

b)     In case of superannuation funds and recognised provident funds (including EPF), the same norm of 40 percent of corpus to be tax free will apply in respect of corpus created out of contributions made after April 1 2016.

c)    Accumulated savings under the National Pension Scheme that were fully taxable at the time of retirement would now be taxable only for 60 percent of the retirement corpus. The same logic has been extended to the EPF making 60 percent of savings taxable at the time of withdrawal. EPF contributions, income as well as the final corpus at retirement were tax-free till now.

d)     Along with this, the Finance Minister proposed a one-time exemption from any tax liability on those looking to switch their retirement savings from a recognised provident fund or superannuation fund to the National Pension System.

e)     He also proposed tax incentives for the Sovereign Gold Bond Scheme and the Gold Monetisation Scheme.

f)  It is proposed to provide that redemption by an individual of Sovereign Gold Bond issued by RBI under Sovereign Gold Bond Scheme 2015 shall not be charged to capital gains tax. It is also proposed to provide that long term capital gains arising to any person on transfer of Sovereign Gold Bond shall be eligible for indexation benefits.

g)     Along with this, he proposed that the interest and capital gains earned on the deposits under the Gold Monetisation Scheme also be made exempt from tax.

5.

Cuts for flagship urban schemes (Page 11)

a)     National

a)     Union Budget 2016-17

b)     Smart City Mission

c)     Atal Mission for Rejuvenation and Urban Transformation (AMRUT)

a)   The Union Budgets primary focus on addressing rural distress has hit the NDA govts flagship urban policies, such as Smart City Mission and Atal Mission for Rejuvenation and Urban Transformation.

b)     In the previous budget, the Finance Ministry made an annual allocation of Rs. 7,060 crore to the Smart City Mission. But this time, the Ministry has only set aside Rs. 3,205 crore.

c)  Similarly, AMRUT (a policy that aims to transfer powers of designing and building cities to municipalities) has faced a massive budget cut.

6.

Aadhaar to get legal backing (Page 11)

a)     National

b)     Social issue

a)     Union Budget 2016-17

b)     Aadhaar

c)     LPG scheme

d)     Poverty

e)     Below Poverty Line (BPL)

a)     In his third Union Budget, Finance Minister Arun Jaitley announced cooking gas subsidy for women members of 5 crore poor households, giving a legal backing to Aadhaar numbers and launching direct benefit transfer for fertilizers to help farmers.

b)     The govt will provide LPG connections to women members of a BPL household. It has earmarked Rs. 2000 crore to help meet the initial cost of providing cooking gas connections to 1.50 crore poor households in 2016-17.

c)     The govt said the move will help empower women, protect their health and create employment for rural youth in the supply chain of cooking gas. The scheme (which will be continued at least for two more years) will cover five crore below poverty line households.

d)     In a bid to ensure that the benefits of various government subsidies reach the people who deserve it, the govt plans to give statutory backing to the Aadhar platform. It will soon introduce a Bill in Parliament linking various financial inclusion schemes with Aadhaar numbers.

e)     The move will help streamline delivery of govt subsidies to the poor and the govt plans to bring all the benefits and subsidies funded from the Consolidated Fund of India on the Aadhaar platform.

7.

Amnesty scheme for tax defaulters (Page 11)

a)     National

b)     Economy

a)     Union Budget 2016-17

b)     Voluntary Disclosure of Income Scheme (VDIS) 1997

c)     Direct Tax Dispute Resolution Scheme

d)     Bilateral Investment Protection Agreement (BIPA)

a)     Finance Minister Jaitley clarified that the compliance window proposed in the Union Budget 2016 was not an amnesty scheme and remedies the flaws in the Voluntary Disclosure of Income Scheme that former Finance Minister Chidambaram had provided in 1997.

b)   Under the scheme, domestic tax payers will be able to declare undisclosed income or assets by paying tax at 30 per cent and surcharge at 7.5 per cent as well as a penalty of a similar amount.

c)     The 1997 VDIS is among the most successful such schemes as it garnered over Rs. 9000 crore in taxes. Jaitley also said that unlike the VDIS, the tax, penalty and surcharge will be payable on current value of asset income being declared.

d)     Jaitley also said the govt was hopeful that companies would take full advantage of the dispute resolution scheme which the budget proposed to resolve cases emanating from retrospective amendment of tax laws made in 2012.

e)     He said the one-time Direct Tax Dispute Resolution Scheme is aimed at resolving cases pending in any Court or Tribunal, Arbitration or mediation under the BIPA. It will provide a stable and predictable taxation regime.

8.

Defence allocation marginally up (Page 11)

a)     National

b)     Economy

a)     Union Budget 2016-17

b)     Defence sector allocation

c)     Seventh Pay Commission

d)     One Rank One Pension

e)     Inflation

 

a)     The government allocated Rs. 2,49,099 crore for the defence sector for the year 2016-17, which is 11 percent more than the revised estimates of last year. The allocation does not include defence pensions as well as certain civil expenses of the Defence Ministry.

b)     With inflation pegged at 4.8 percent, the real increase in budget over revised estimates of last year will be 6.2 percent.

c)     Most of the increase in the budget allocation is in the revenue stream to cater to the impending implementation of the 7th Pay Commission.

d) Defence pensions saw a huge jump of about Rs. 12,000 crore from last year to Rs. 82,332 crore due to the implementation of One Rank One Pension.

9.

Government tweaks Securities Transaction Tax (Page 11)

a)     National

b)     Economy

a)     Union Budget 2016-17

b)     Securities Transaction Tax (STT)

a)     From a capital market perspective, the Union Budget 2016-17 touched upon the issue of securities transaction tax, dividend distribution tax and the holding limit for foreign exchanges in Indian bourses.

b)     A review of the STT was on the market wish list and the Finance Minister did not disappoint though market players expected more. He announced an increase in the quantum of STT on options contracts from the current 0.017 percent to 0.05 percent.

c)  Essentially, he has increased the tax on speculative trading in the derivatives segment while leaving the STT on investments unchanged. In another move that spooked the markets to a large extent, the Budget laid down that dividend income in excess of Rs. 10 lakh would be taxed at 10 percent.

10.

BJP elated at rural emphasis (Page 13)

a)     National

b)     Social issue

a)     Union Budget 2016-17

b)     Pradhan Mantri Fasal Bima Yojana

a)     The tilt towards rural India in the Budget was considered a given, after PM Modi unrolled the Pradhan Mantri Fasal Bima Yojana and started his rallies of farmers nationwide.

b)   The only problem in budget and the push for infrastructure is that the States will have to meet 40 percent of the funding because they have received more funds from the Finance Commissions payout.

c)     There are reforms in the budget, but the emphasis on rural roads and irrigation and tax exemption to neo-middle class are important indicators.

d)     A scheme to be launched on B.R. Ambedkars birth anniversary to start a unified agricultural e-market and a Rs. 500-crore corpus to finance entrepreneurs of the Scheduled Castes and Scheduled Tribes is meant to handle the fall-out of the suicide of Rohith Vemula.

11.

Make In India initiative gets a leg up (Page 14)

a)     National

b)     Economy

a)     Union Budget 2016-17

b)     Make in India (MII) initiative

c)     Minimum Alternate Tax

d)     Investment Promotion and Amended Technology Upgradation Fund scheme

a)     Finance Minister Jaitley announced several proposals in the Union Budget 2016-17 to boost the governments Make in India initiative.

b)     To help start-ups innovate, generate employment and be key partners in MII programme, he proposed to back them through 100 percent deduction of profits for three out of five years for start-ups set up during April 2016 to March 2019. He said Minimum Alternate Tax will apply in such cases.

c)   To strengthen MII initiative, there was an allocation of Rs. 1804 crore towards the scheme for Investment Promotion and Amended Technology Upgradation Fund.

d)   Also proposed modification in Customs and Excise Duty structure to incentivise domestic value addition and push the MII campaign.

e)     Changes were proposed in Customs and Excise Duty rates on certain inputs, raw materials, intermediaries/components and other goods while several procedures were simplified.

12.

Big bang reforms in FDI guidelines (Page 15)

a)     National

b)     Economy

a)     Union Budget 2016-17

b)     Foreign Direct Investment (FDI)

c)     FIPB route

d)     Ease of doing business

e)     Bilateral Investment Treaties (BIT)

f)     Centre-State Investment Agreement

a)     To facilitate ease of doing business for foreign investors and their domestic recipients, the Union Budget 2016-17 has proposed liberalisation of FDI norms in a host of sectors.

b)     These include insurance, pension, Asset Reconstruction Companies, stock exchanges, marketing of food products, listed Central Public Sector Enterprises except banks and areas governed by financial sector regulators, falling beyond the 18 specified NBFC activities.

c)     Significantly, in a move that is in line with the union govts policy of cooperative and competitive federalism as well as to ensure effective implementation of BIT signed by India with other countries, the govt proposed in the FY17 Budget to introduce a Centre-State Investment Agreement.

d)     Regarding insurance and the pension sectors, the FY17 Budget has proposed to allow foreign investment in the automatic route up to 49 per cent, subject to the extant guidelines on Indian management and control to be verified by sectoral regulators.

e)    Govt has also proposed to allow 100 percent FDI through FIPB route in marketing of food products produced and manufactured in India.

f)     The FY17 Budget has also proposed to hike the investment limit for foreign entities in Indian stock exchanges from 5 percent to 15 percent on par with domestic institutions. This move is aimed at enhancing global competitiveness of Indian stock exchanges and accelerating adoption of best-in-class technology and global market practices.

13.

Demand-side growth (Page 15)

a)     National

b)     Economy

a)     Union Budget 2016-17

b)     Economy Survey

c)     GDP growth

d)     MNREGA

e)     Make in India initiative

a)     According to the author, the budget should release robust development forces all round to push growth beyond the 7-7.75 percent anticipated by the Economic Survey. It has been carefully crafted initially to meet the aspirations of the weaker sections and indirectly to enable industry to return to growth and profitability.

b)     The Union Budget has given close attention to improvement in the quality of jobs by providing for education, skill development and health, to resolving actual problems of the farmers and to the needs of transportation which can ease and lower costs.

c)     Education and health are the software of development and most countries that have developed fast have prioritized these two sectors. With education and health people can go in for better quality jobs with higher incomes.

d)     Agriculture has received Jaitleys special attention. That is because in the past two years monsoon was deficient and production declined.

e)     Apart from the agricultural credit which is targeted at Rs. 9 lakh crore, investment will be made in irrigation which should cover 28.5 lakh hectares, and the provision for MNREGA, will double farmers income. Similarly, big investment has been planned for transportation.

f) It is undoubtedly encouraging that 100 percent electrification of villages will be achieved by 2018. This will improve productivity and incomes in the farming community.

g)     Surely, the investment will create demand for a variety of goods and services and the income in the hands of workers and farmers generate consumer demand for industry as well. This will help industry to utilize capacities better and induce private sector investment.

h)     Proposed investment in the public and private sectors was over Rs. 17 lakh crore five years back. It has crawled down to Rs. 4 lakh crore now.

i)     Jaitleys budget is designed to generate that demand from different sectors and enable industry to grow faster.

j)     He has reduced the rate of corporate taxation to 25 percent for new companies without any change in the taxation of existing companies. The facilities provided for Make in India will increase the share of Industry in GDP and generate 100 million jobs.

14.

Dialysis programme (Page 13)

a)     National

b)     Health

a)     National Dialysis Services Programme 

a)    In a surprising move, the government has launched a new National Dialysis Services Programme.

b)     End-stage renal disease affects about 2.2 lakh new patients every year.

15.

Exploring a Mars-like place on Earth (Page 20)

a)     S&T

b)     Geography

a)     Red Planet

b)     Atacama Desert

c)     Atacama Rover Astrobiology Drilling Studies (ARADS) project

d)     NASA

a)    A Mars-like laboratory in the driest place on Earth is helping NASA scientists study the limits of life and test drilling and life-detection technologies that might be sent to Red Planet in the future.

b)     In a harsh environment with very little water and intense ultraviolet radiation, most life in the extreme Atacama Desert in Chile exists as microbial colonies underground or inside rocks.

c)     The ARADS project has just completed its first deployment after one month of fieldwork in the hyperarid core of the Atacama Desert. 

d)     The extreme dryness the soil in this region is remarkably similar to that of Red Planet.

e)   The cold and dry conditions on Mars open the possibility that evidence for life may be found below the surface where negative effects of radiation are mitigated - in the form of organic molecules known as biomarkers.

f)   But until humans set foot on Red Planet, obtaining samples from below the surface of Mars will require ability to identify a location of high probability for current or ancient life, place a drill, and control the operation robotically.

NOTE: Read all articles about Union Budget 2016-17.

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