Showing posts with label current affair. Show all posts
Showing posts with label current affair. Show all posts

Wednesday, 7 June 2017

GSAT 19


Why in news?

June 6 launch of GSAT-19, is perhaps ISRO’s most important mission in the last three decades.
This is bigger in technological significance than even the hugely popular Chandrayaan or Mangalyaan space missions.

What is the background of the issue?

Behind the success of the launch is nearly three decades of hard work in taming cryogenic technology and an interesting history of this technology was denied to ISRO by the United States in the early 1990s, forcing it develop it on its own.
ISRO had planned the development of a cryogenic engine way back in the mid-1980s when just a handful of countries the United States, the erstwhile USSR, France and Japan had this technology.
In 1991, ISRO and the Russian space agency, Glavkosmos, had signed an agreement for supply of two of these engines along with transfer of technology.
However, the United States, which had lost out on the engine contract, objected to the Russian sale, citing provisions of Missile Technology Control Regime (MTCR) that neither India nor Russia was a member of.
In an alternative arrangement, Russia was allowed to sell seven, instead of original two, cryogenic engines but could not transfer the technology to India.
But ever since the cancellation of the original Russian deal, ISRO got down to develop the cryogenic technology on its own at the Liquid Propulsion Systems Centre at Thiruvananthapuram.

It took more than a decade to build the engines and success did not come easily.

What is a Cryogenic engine?

Cryogenics is the science that addresses the production and effects of very low temperatures.

A cryogenic rocket engine is a rocket engine that uses a cryogenic fuel or oxidizer.

That is, its fuel or oxidizer (or both) are gases liquefied and stored at very low temperatures.

Notably, these engines were one of the main factors of NASA's success in reaching the Moon.

Amongst all rocket fuels, hydrogen is known to provide the maximum thrust.
But hydrogen, in its natural gaseous form, is difficult to handle, and, therefore, not used in normal engines in rockets like PSLV. However, hydrogen can be used in liquid form.

The problem is hydrogen liquefies at very low temperature, nearly 250 degrees Celsius below zero.

To burn this fuel, oxygen also needs to be in liquid form, and that happens at about 90 degrees Celsius below zero.

Creating such a low-temperature atmosphere in the rocket is a difficult proposition, because it creates problems for other material used in the rocket.
That’s why cryogenic upper stage engines are used.

What are the specifications of the project?

The launch is a giant leap for ISRO because of the rocket it is using.
The mission happens to be the first “developmental” flight of the next generation Geosynchronous Satellite Launch Vehicle, called GSLV-MkIII with an entirely indigenous cryogenic upper stage.

This cryogenic stage, that involves handling fuel at very low temperatures, is crucial to providing the extra thrust required by the rocket to carry heavier satellites deeper into space.

GSLV-MkIII is meant to carry payloads up to four to five tons and that was not possible with conventional propellants used by ISRO’s main launch vehicle, called PSLV.

PSLV can take satellites only up to 2 tons to orbits and that too until orbits of 600-km altitude from the earth’s surface.
It will not just help ISRO probe deeper into space but will also bring it extra revenue, enabling it to make commercial launches of heavier satellites.

By it successive successful launches ISRO once again proved India’s Space Exploration capability to the world.

Source: Indian Express

Thursday, 1 June 2017

Tax On Agricultural Income

Tax On Agricultural Income

Why in news?

Niti Aayog member Bibek Debroy suggested of bringing agricultural income into the income tax structure.

What is the legal position of tax on agriculture?

In the Seventh Schedule, Entry 82 in the Union List mentions taxes other than agricultural income, while Entry 46 in the State List mentions taxes on agricultural income.
Therefore, it is in the State List.
Section 2 (1A) of the Income Tax Act defines agricultural income as rent/revenue from land, income derived from this land through agriculture and income derived from buildings on that land.
Section 10 (1) of the Income Tax Act excludes agricultural income from a computation of total income.

What are his justifications?

The intention was to increase the government’s revenue.
There are also other following reasons.
Chartered accountants and lawyers have been misusing Section 2 (1A) and Section 10 (1).
Agricultural income was taxed till 1886.
We still have the Assam Agricultural Income Tax Act (1939), the Bihar Agricultural Income Tax (1939), the Kerala Agricultural Income Tax Act (1991), the Tamil Nadu Agricultural Income Tax Act (1955), the Orissa Agricultural Income Tax Act (1947), the Maharashtra Agricultural Income Tax (1962) and the Bengal Agricultural Income Tax Act (1944).
So it isn’t true that states don’t tax agricultural income.
It encourages laundering of non-agricultural income as agricultural income.
e.g In 2014-15, a company made profits of Rs 215 crores, but claiming the agricultural income exemption, it paid no tax.
Hence there must be a unified system of taxation across states.
Agricultural income taxation must be integrated with non-agricultural income taxation.
Why it is wrong?

Agriculture’s share in India’s GDP is around 14-16% while it has 49% of the total manpower and 64% of rural manpower.
The main reason for a large part of the population being dependent on agriculture is small land holdings and less productive farming techniques.
Moreover, agricultural output fluctuates far more than the industrial and services sectors.
Given the level of informal occupation prevalent in agriculture, implementing an agricultural tax will not be easy.
Any agricultural tax system would have to evolve crop-specific norms of return to the land, while accommodating external shocks like droughts, floods or pests.
Imposing tax on value of goods produced, the mechanism would fail to take individual farm economics into account, thereby taxing a farmer even if he makes a loss on sale.
Lack of clarity on land titles and cropping patterns based on lease/share-cropping shall further introduce randomness to the system.
It shall disincentivise farmers to sell through organised formal channels, thereby increasing risk to farmer’s income.
Many farmers save seeds from one harvest for the next and the practice remains critical to running Indian agriculture — proposals based on value of goods produced would end up taxing such sustainable practices as well.
Further complications arise if farmers suffer from multiple crop failures followed by one successful crop, for the income in that period may be subjected for tax payment.
In this bleak situation, the proposal to tax agricultural income is irrational.

Source: The Hindu, The Indian Express

Wednesday, 31 May 2017

Germany looks eastward as it welcomes Modi

Angela Merkel believes the U.S. and the U.K are no longer dependable and her nation hence has to shift its gaze and find new friends

•A day after warning that Europe can no longer “depend” on its Western partners, the U.S. and the U.K., German Chancellor Angela Merkel met Prime Minister Narendra Modi shortly after he landed in Berlin on Monday.

•Ms. Merkel’s comments are likely to set the atmosphere for her meetings this week with Mr. Modi, followed by Chinese Premier Li Keqiang, who will visit Germany on May 31, as she discusses closer cooperation with leaders from the “East” after her stated disappointment with those from the “West”.

•Mr. Modi and Ms. Merkel, who met informally for dinner at the Schloss Meseberg castle outside Berlin, will address a press conference on Tuesday after the announcement of expected agreements on investment, technology, counter-terror, clean energy and water partnerships as well a joint statement likely to focus on cooperation on global issues such as climate change and UN Security Council reform.

G-20 agenda

•Germany will host the next G-20 summit in Hamburg in July, and Mr. Modi is expected to discuss Chancellor Merkel’s agenda at the multilateral forum.

•Germany is expected to raise issues over trade with India after their bilateral treaty lapsed this year and push for the resumption of the India-EU Free Trade Agreement talks. Mr. Modi is likely to pitch his government’s recent reforms on foreign investment and the rollout of the GST to attract more German investment in India, and take trade beyond its current levels of €17.42 billion.

•“Both (the German and Indian) governments are firmly committed to strengthening economic relations,” Mr. Modi was quoted as saying in an interview with the Handelsblatt newspaper of Germany. “I am very optimistic about our future partnership.”

•After his meeting with Ms. Merkel, Mr. Modi will meet many top CEOs and business leaders to strengthen the push for bettering economic ties.

•While the economy was always expected to top the agenda for the Prime Minister’s Germany visit, it is now likely to be overshadowed by Ms. Merkel’s comments after the just-concluded G-7 summit in Italy as well as the NATO-U.S. summit. The Chancellor told a party convention in Munich on Sunday that the “days when Europe could completely count on others are over to a certain extent”.

•Ms. Merkel was responding to U.S. President Donald Trump’s refusal to commit to the U.N. climate change accord this far, his insistence on more contributions from other NATO partners, as well as Britain’s exit from the European Union.

Concern over OBOR

•In what is being described as her version of the U.S.’s “Pivot to Asia”, Ms. Merkel is expected to discuss closer cooperation with both India and China as part of Europe’s quest for alternative coalitions, raising speculation that the moves could make Germany an unusual new venue for India-China rivalry.

•“It would be wrong to see Germany-India and Germany-China as a zero sum game,” said the spokesperson of the Federal Foreign Office, when asked at a press briefing on Monday in Berlin, ahead of the high level visits. “Improving our relations with any country in the world will not come at the cost of any other.”

•Mr. Modi would also like to discuss shared concerns over China’s Belt and Road initiative that India has refused to join on sovereignty issues. Germany is part of the B&R connectivity initiative, but refused to sign a statement on trade — along with other EU countries — that they said would contravene World Trade Organisation (WTO) commitments.

•“We maintain concerns over China’s ambiguity on free trade commitments and human rights,” conceded a foreign ministry official who didn’t wish to be named. “But the fact is there is no way around China if you want to achieve anything on the global stage in today’s world,” he added, in a possible reference to a bilateral trade partnership of €169.9 billion which saw China surpass both U.S. and France in 2016.

SourceThe hindu��

Tuesday, 30 May 2017

Regional comprehensive economic partnership

Regional Comprehensive Economic Partnership

What is the issue?

There’s a rush to finalise RCEP this year which is pushing India into covering most tariff lines that destroy its economy.

What is RCEP?

RCEP is being negotiated between India and 15 other countries including the 10-member Asean, Japan, South Korea, New Zealand, Australia and China.
India had very rightly maintained a cautious approach in its FTAs on goods, intellectual property rights, and many new issues such as investment, government procurement and competition policy.

Why RCEP is becoming a disaster for India?

There was clearly huge pressure on India to conclude negotiations this year and to make major concessions in goods, services and investment at the ministerial of the RCEP in Hanoi.
It has the potential to overthrow India’s policies of rural development and industrialisation especially ‘Make in India’, and the promise of the Prime Minister to provide accessible healthcare and medicines to all.
Most important, it threatens the policy flexibility and sovereignty to pursue independent economic, social and environmental policies.
In goods trade, India has already agreed to give up the three-tier tariff reduction proposal that offered different coverage for Asean, Japan and South Korea, and a much lower level of tariff reduction coverage for New Zealand, Australia and China.
In agriculture and allied products, the plantation sector is already reeling from the impact of the India-Asean FTA even with relatively high protection of agriculture and a tariff-coverage of 73-80%.
If tariff cuts cover 92-80% of products, the impact will be huge.
On the other hand, New Zealand’s export-oriented dairy products will decimate India’s growing dairy sector, which is still largely small-scale.
If India has to cut duties on 92% of goods in RCEP, India will face threats from both Asean and China.

What are the other possible threats to Indian economy?

E-commerce commitments, if any, will allow companies such as Alibaba from China to displace Indian manufacturing especially in the SME segment.
Further, India is being asked to eliminate export restrictions on minerals and raw material by Japan and South Korea, which may threaten domestic raw material availability.
India is openly pitching services as its offensive area of interest and may be willing to sacrifice goods tariffs for gains in services.
This can be the most dangerous of India’s current trade policy stance.

India has demands for both Mode 3 (investment) and Mode 4 (movement of people) with a proposal for a RCEP business visa for professionals.
India’s demand for Mode 4 is unlikely to be granted.

What India hopes to gain in Mode 3 for its outward FDI is not clear as it is not competitive in most services except for IT and ITES.

India is under heavy pressure to agree to the investor state dispute settlement provision in RCEP without the safeguards provided in the Model BIT.

The investment chapter in RCEP is also pitching for strong provisions on IPRs.
Agreeing to data exclusivity, extending patent terms and unduly strong enforcement measures will weaken the entire generic medicine sector and take away several health safeguards in India’s Patent Act, notably section 3(d).

This will make medicines inaccessible not only for Indian patients but for those in the entire developing world.

In addition, since India has rightly fought against ‘TRIPS plus’ provisions in its FTA negotiations with EU and European Free Trade Association, there is no rationale for it to change its stance in RCEP.

Source: Business Line

Thursday, 25 May 2017

Continental ties

The Hindu

www.facebook.com/Aovious1

Context

India begins the heavy-lifting needed to transform economic partnerships in Africa

What has happened?

The 52nd Annual Meetings of the Board of Governors (the Bank’s highest decision-making body) of the African Development Bank (AfDB) and the 43rd Meetings of the Board of Governors of the African Development Fund (ADF) officially opened in Ahmedabad, India, on Tuesday, May 23, 2017 with calls for greater cooperation between the Bank and India to help drive Africa’s transformation.

What is AfDB?

The African Development Bank (AfDB) Group is a regional multilateral development finance institution established to contribute to the economic development and social progress of African countries that are the institution’s Regional Member Countries (RMCs).

Established on:
The AfDB was founded following an agreement signed by member states on _August 14, 1963_, in Khartoum, Sudan, which became effective on September 10, 1964

HQ
The AfDB headquarters is officially in Abidjan, Côte d’Ivoire

The AfDB comprises three entities:

*The African Development Bank (ADB)
*The African Development Fund (ADF)
*The Nigeria Trust Fund (NTF)

Mission of AfDB

AfDB’s mission is to

Help reduce poverty, improve living conditions for Africans and mobilize resources for the continent’s economic and social development

Members

The Bank Group has 80 member countries, comprising 54 regional member countries (RMC) and 26 non-regional member countries (NRMC).

Future cooperation

Maritime cooperation: India is working on a maritime outreach to extend its Sagarmala programme to the southern coastal African countries with ‘blue economies’
Solar connection : India is also building its International Solar Alliance, which Djibouti, Comoros, Cote d’Ivoire, Somalia and Ghana signed on to on the sidelines of the AfDB project

Involving other powers

In its efforts, India has tapped other development partners of Africa, including Japan, which sent a major delegation to the AfDB meeting
It has also turned to the United States, with which it has developed dialogues in fields such as peacekeeping training and agricultural support, to work with African countries
It is significant that during the recent inter-governmental consultations between India and Germany, both countries brought in their Africa experts to discuss possible cooperation in developmental programs in that continent

Conclusion

At a time when China is showcasing its Belt and Road Initiative as the “project of the century” and also bolstering its position as Africa’s largest donor, a coalition of like-minded countries such as the one India is putting together could provide an effective way to ensure more equitable and transparent development aid to Africa.

(This is imp topic related to India Africa relation for IAS /KAS mains GS under IR)

Tuesday, 23 May 2017

What is the Real Estate Regulation Act (RERA)?

The Real Estate (Regulation & Development) Act, 2016, the landmark realty law to protect home buyers from unscrupulous developers,

What is Real Estate Act, 2016?

The Act which is envisaged to regulate both commercial and residential real estate projects, seeks to set up a state level regulatory authority called Real Estate Regulatory Authority (RERAs) for regulation and promotion of the real estate sector.
The Act makes it mandatory for uploading the details of a Real Estate project on the website of the RERAs. Real estate agents also need to register with the RERAs.
The Act also makes it mandatory for the builders to put 70% of the amount collected from buyers in a separate bank account. This must only be used for construction of the project. However, the state government can alter this amount to less than 70%.
The Act also seeks to establish fast track dispute resolution mechanisms for settlement of disputes through adjudicating officers and Appellate Tribunal.

Here’s all you need to know about the new realty law:

• It makes it mandatory for all builders - developing a project where the land exceeds 500 square metre - to register with RERA before launching or even advertising their project. Developers have been given time until July 31 to register.
• Not doing so will invite up to a maximum imprisonment of 3 years or fine of up to 10% of the total project cost.

• Developers will have to submit as well as upload project details, including approved layout plan, timeline, cost, and the sale agreement, that prospective buyers will have to sign to the proposed regulator.

•Only developers who fulfil this disclosure clause would be permitted to advertise their project to prospective buyers.

•Real Estate Appellate Tribunals to be set up in every state.
•As of now, the real estate sector was largely unregulated in India. If a consumer had a complaint against a developer they had to make rounds of consumer or civil courts. Now, in case of any grievance, the consumer can go to the real estate regulator for redressal.

• Developers will have to put 50% of the money collected from a buyer in a separate account to meet the construction cost of the project. This will put a check to the general practice by developers to divert buyer’s money to start a new project instead of finishing the one for which money was collected. This will ensure that construction is completed on time.

• The law is likely to stabilise housing prices. It will lead to enhanced activity in the sector, leading to more housing units supplied to the market.

• It will weed out fly-by-night operators from the sector and channelise investment into it.

• Builders will also benefit as the law has penal provisions for allottees who do not pay dues on time. The builder can also approach the regulator in case there is any issue with the buyer.

What are some of the key issues?

Major issue is Parliament’s jurisdiction to make laws related to real estate as “land” is in the State List of the Constitution. However, the primary aim of the act is to regulate contracts and transfer of property, both of which are in the Concurrent List.
Some states already have laws to regulate real estate projects. And the act differs from these state laws on several grounds.
The Bill mandates that 70% of the amount collected from buyers of a project be used only for construction. In certain cases, the cost of land more than 30%.
The real estate sector has some other issues such as a lengthy process for project approvals, lack of clear land titles, and prevalence of black money. Some of these also fall under the State List.

Why establishing RERA is important?

Only 4 States and 6 Union Territories so far notified the final Real Estate Rules. So, the Minister of Housing & Urban Poverty Alleviation has urged the Chief Ministers of states to implement the Act before April 30, 2017.
From May 1, 2017, under the provisions of the Act, both buyers and developers of real estate property can approach RERA seeking relief against violation of the contractual obligations and other provisions of the Act.
For this to happen, Real Estate Authorities and Appellate Tribunals were required to be in place and in a position
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How it works in other countries

United States

Real estate in the US is regulated at numerous levels. There is no single regulatory body, but a series of bodies that regulate different ownership and usage aspects. To safeguard the interest of the end-users, the US department of housing and urban development (HUD) has rules under the real estate settlement procedures act to protect consumer interests pertaining to residential properties.

If a buyer enters a contract with the developer, and the developer does not deliver on the terms agreed upon in the contract, the developer can be taken to court for breach of contract. In the US, there are state real estate licensing laws and a code of ethics in place.

United Kingdom

There is no regulator to monitor development. The financial services authority (FSA), which is now part of the Bank of England, regulates almost all investments in real estate. The Property Misdescriptions Act, 1991, prohibits making false or misleading statements on property matters in the course of estate agency business and the property development business.

(Source: Realty decoded: Investing across borders by Ernst & Young and Ficci)

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