IASbaba’s Daily Current Affairs – 26th September, 2015

ECONOMICS

Green Highways: An Initiative towards Sustainable Development

For Highway projects to be environmentally sustainable, it is necessary that the natural resources lost in the process of Highway construction are restored in one way or the other.
This requires that ecological needs are taken into consideration from the stage of project planning and designing to its execution.
The Highways developed as green corridors not only sustain biodiversity and regenerate natural habitat but also benefit all stakeholders, from road users to local communities and spur eco-friendly economic growth and development

Ministry of Road Transport & Highways has framed Green Highways (Plantation, Transplantation, Beautification & Maintenance) Policy-2015.

Plan:

The plan is to grow three layers of trees and bushes.
The first will be of bushes so that if a vehicle goes off the road, it does not collide with something life-threatening.
The second will be of medium-sized trees
The last will be of tall fruit trees.
Only species indigenous to the area would be planted

The vision is to develop eco-friendly National Highways with participation of the stakeholders:

Objectives:

Toreduce the impacts of air pollution and dust
Treesand shrubs along the Highways act as natural sink for air pollutants
To prevent soilerosion at the embankment slope
Plants along highway median strips and along the edges to reduce theglare of oncoming vehicles which sometimes become cause of accidents.
The community involvement in tree plantation directly benefits localpeople by generating employment.

Working arrangement:

New policy has recommended that the requirement of land for tree plantation should be included in the Land Acquisition Plans prepared by the DPR (Detailed Project Report) consultants.
This move will help in pre-planning of the plantation activities and the space required for the same, so that there is a systematic plan before the construction of National Highways.
One percent of the civil cost of the road projects will be for developing green corridors.

Role of Planting Agency:

Responsibility of the planting agency will be to ensure that the condition of the site is good enough for the successful establishment of grasses.
The planting agency is required to supervise all field operations like preparation of surface, sowing of seeds or saplings and quality of planting material used.

Role of monitoring agency:

The monitoring of the plantation status has been included as an integral part of the policy.The Monitoring Agency will monitor progress of planting and status of plantations on continuous basis
This agency shall carry out the site visit for field verification in respect of survival, growth and size of plantation and maintenance of the same.
The monitoring Agency will conduct performance audit of executing agencies for various projects on an Annual basis and award of new contracts to the agencies will be decided based on their past performance.

Conclusion:

The development can be sustainable when systematic and conscious decisions are taken.
The policy when implemented in letter and spirit will result into India being a “Nation with Natural Highways”.
It will address the issues that lie in the “road of development” and pave “a journey towards sustainable development”.
The Government can frame policies, provide standards, but success of projects depends on strong monitoring which is not possible without active community participation and community ownership.

Connecting the dots:

Comment on the New Green Highway policy 2015.
Who are the stakeholders involved in the New Green Highway policy? How the interest of different stakeholder’s ensured by the New Green Policy 2015?

Centre to exempt foreign firms covered by double taxation treaty

Income Tax Act will be amended with retrospective effect to exempt from minimum alternate tax (MAT) the overseas companies that covered under double taxation avoidance agreements (DTAAs)
Government had exempted foreign institutional and portfolio investors from payment of MAT on the capital gains made by them before April 1, 2015.
Through the amendment the government will clarify that MAT provisions will not be applicable to FIIs/FPIs not having a place of business/permanent establishment in India, for the period prior to April 1

New Provisions:

Foreign companies that do not have a permanent establishment in India will be exempt from paying MAT on profits from April 2001.
In case the companies belong to countries with which India does not have a DTAA, the MAT exemption will apply if they are exempted from registration under Section 592 of the Companies Act 1956, or Section 380 of the Companies Act 2013.

What is Minimum Alternative Tax?

MAT was first introduced in 1996 to make companies pay at least some tax. That is because some were paying little or no tax, as they were enjoying tax exemptions, but at the same time were reporting profits and even paying handsome dividends to the shareholders.

How is MAT calculated?

MAT is calculated at 18.5 per cent on the book profit (the profit shown in the profit and loss account) or at the usual corporate rates, and whichever is higher is payable as tax.
Payers of MAT are eligible for tax credit, which can be carried forward for 10 years and set off against tax payable under normal provisions.

Connecting the dots:

What do you understand by Minimum Alternate Tax and Double Taxation Avoidance Agreement?
‘Centre has exempted foreign firms covered by double taxation treaty to pay MAT.’ Do you think this would be a sufficient move to gain investor’s confidence? What other steps can government take to boost investor’s confidence?

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