1. The revelations made by Panama Papers and likes in the past have established the fact that a huge chunk of black money has been stashed abroad. How this money gets generated and manages to get pass the authorities in India? Can you identify the modus operandi of such transactions?
At an estimated 56% of the GDP, black money has become a politically sensitive and economically alarming topic. With the Panama papers revelations, the issue has once again become a debatable issue, to track down the generation sources and modus operandi of black money transactions
Sources of generation:
The money which is stashed abroad in offshore entities can be generated through both legal and illegal means.
Legal means like legitimate business profits, entertainment industry etc. Though this money is not illegitimate, it becomes so when the individual resort to evading taxes using loopholes in the law.
Illegal means like betting, gambling, organized crime etc. As the source of this money is concealed from the tax authorities and no tax is paid, this can be categorized into black money.
Real estate is one of the major sources of generation of black money, where the transactions are done by cash.
Under hand dealings – selling of college seats for money, kickbacks and bribes accepted by officials for favors like project clearances.
Under-voicing and over-voicing of products like machinery and software.
How does it manage to get past the authorities:
Difficulty in Tracking: Black money generated via illegitimate activities is difficult to track and monitor as the transactions are done by cash.
Overlapping jurisdictions: Too much regulation and laws can create confusion. Indian administrative system has been grappled with too many institutions with overlapping jurisdictions, which often results in delayed actions and consequent flight of money. The same is true for various laws which are either inadequate , or the loopholes are exploited, as was seen in Vodafone case.
Nexus: Even some public officials are involved in this black money menace, which leads to delayed and ineffective implementation and enforcement of rules.
Understaffing of enforcement agencies: all the tax enforcement agencies in India including IT department, ED,state agencies are understaffed and under skilled to keep active vigil on such transactions.
Hawala route: Money is transferred through an international network of brokers, without real movement of funds.
Over invoicing exports: so that the extra amount shown is delivered to someone located in the import country.
Trusts: trustees are nationals of that foreign company but beneficiaries are Indian nationals who invest initial corpus.
Shell companies: firms with insignificant assets are created abroad to bring back money via tax havens like Mauritius.
GDRs: Raising of capital by Indian companies with no tangible business through Global depository receipts.
Participatory notes: issued by FIIs to overseas investors to invest in Indian stocks without registering with the regulator.
Write a suitable conclusion briefly.
Best answer: MDA
Money that is not fully legitimate in the hands of its owner is called black money and is a drain on Indian exchequer as it cannot be utilized for any gainful public service.
àBlack money generation: is either through illegal methods like smuggling, terrorism, corruption, etc. or by accumulating wealth through non-payment of tax dues in one or the other form (ex: by stashing away in tax havens with little tax and information liability). There are certain vulnerable economic sectors like real estate, bullion and jewelry, international transaction involving tax haven, film industry, etc.
àBlack money manages to pass across authorities:
# using our own legal loopholes, for ex: NRIs are not included in the Black Money bill act 2015. So, Indian counterparts can work out legal arrangements with NRIs to avoid tax.
#No particular mechanism in the legal framework to detect black income generation which complies their outflow without detection
# Tax avoidance is often facilitated through professionals(law firms like Mossack Fonseca, source of Panama Papers) , chartered accountants, etc
#Corruption in bureaucratic echelons that support black money passage
MODUS OPERANDI of Black money transactions: is that they move out of the country through channels like Hawala and re-enter as white through channels like tax havens like Mauritius To journey through: –>Hawala route: Money is transferred through an international network of brokers, without real movement of funds
–>Over invoicing exports: so that the extra amount shown is delivered to someone located in the import country
–>Trusts: trustees are nationals of that foreign company but beneficiaries are Indian nationals who invest initial corpus
Fro journey through:
#Shell companies: firms with insignificant assets are created abroad to bring back money via tax havens like Mauritius
#GDRs: Raising of capital by Indian companies with no tangible business through Global depository receipts
#Participatory notes: issued by FIIs to to overseas investors to invest in Indian stocks without registering with the regulator
The recent efforts of the GoI to curb black money by way of Black Money bill, 2015 is though a welcome move and propagates a tax-compliance culture, its success hinges on plugging the legal gaps and greater transparency in global information exchange
2. In the drought affected regions of the country, the lack of irrigation infrastructure is a major cause of worry. Identify these areas in India and suggest suitable irrigation techniques along with their advantages and limitations.
Indian agriculture mainly depends on rainfall and ground water irrigation but in case of erratic monsoon and consequent draught like situation water scarcity soon turns in water crisis. This year ten states are under draught and many more are facing similar challenges with some variants.
Drought affected regions of the country – (Draw small map and shade following regions)
North western part- some parts of Rajasthan, Gujrat, Punjab, Haryana and Uttarakhand where climate is arid or semi arid due to scanty rainfall.
Peninsular part- rain shadow areas of Maharashtra, TN, Andhra Pradesh and Karnataka.
Some regions of central India like Kalahandi(Odisha), Bundelkhand(MP) and Palamu (Jharkhand).
Your answer should contain some of the following points
Marathwada region of Maharashtra, Hyderabad – Karnataka region and Telangana region– Falling under 100 cm isohyet these regions are drought prone. Canal and bore well irrigation are not suitable due to hard surface. Tank irrigation is the most suitable technique.
Tank irrigation uses natural topography and involves less cost for construction but has less storage capacity and failure of one monsoon can lead to severe depletion of stored water. Silting and evaporation are also a concern.
Bikaner-Jaisalmer of Rajasthan and Saurashtra-Kutch of Gujarat – Canal irrigation will be suitable in these regions. Advantage is connectivity from long distance, fertile soil, provide perennial irrigation and supply water as and when needed.
Limitation is risk of flooding during monsoon. Canal requires constant desilting and will have pollutants due to use of fertilizers. Due to excess heat in drought hit areas, evaporation is high and overhead covering is very expensive. Water logging , over flowing , suitable only in plain areas are other concerns.
The Mayurbhanj-Balasore region of Orissa and adjoining region of Jharkhand– Due to erratic rainfall and inadequate rainfall this region also suffers from draught. Tube well/Bore well in required region and canal irrigation can be used. Advantage of bore well is less expenditure but it depletes water table. Only limited area can be irrigated, well may dry up and ground water level may fall.
Punjab and Haryana has Hydrological drought, Agricultural draught in western U.P, and socio-economic draught in urban centres like Delhi, Kanpur, Chennai, Bangalore, Mumbai etc due to unavailability of facility to store waters. We must practice drip irrigation, sprinklers and rainwater harvesting in these regions.
Drip Irrigation and sprinklers – In this technique, water is dropped near the plant roots with the help of extensive network of pipes & dripper, hence more efficient use of water. Water soluble nutrients are better absorbed using such techniques, leading to better productivity. Reduction in water usage would result in better ground water recharge, thus preventing salination of soil.
Limitations – High cost of installation and maintenance is its disadvantage. Drip and sprinklers needs huge investment cost which farmers in our country are not in position at present. The sun can affect the tubes used for drip irrigation, shortening their usable life. Sprinkler irrigation requires use of power. Considerable areas are not connected to grid.
Availability of proper irrigation facilities is tantamount for every country and for India which is an agrarian economy it is indispensable. Increased cooperation with countries like Israel and initiation of schemes like PMKSY are encouraging. Many more such steps should be undertaken as any reformation in irrigation infrastructure would be rewarding for all.
3. The city of future is the future of city. Comment
“The city of future is the future of city” is the shortest sentence to highlight the necessities of cities when we are aspired to design our cities into smart, appeasing and habitable ones. Urbanisation, town planning and urban management is not new to India; she had tasted in the ancient times itself. However, the present day woes of cities and urban agglomerations are innumerable right from population explosion to distressed livelihoods.
Issues that need concentration are:-
Infrastructure: – Like Roads, Public transport, Safe drinking water and sanitation, Health facilities and affordable housing should be given due concentration.
Environment and pollution: – Pollution free environment for pink health.
Safety and security: – Especially Women and children for their dignity and healthy development.
Service delivery: – Government services like LPG, Electricity, Water and grievance redressal forums should be enhanced.
Self-sustenance and sustainable development: – Like enough employment creation and addressing migration problems and usage of bio degradable and clean resources.
Waste management: – Most of the cities are clogged with unresolved waste problem either day to day wastes or e-wastes or toxic industrial wastes. Proper facilities to process every category should be set in place.
Some initiative in this regard can be:
TOD based development as successfully implemented in some west European cities.
Intensive zone planning and land use planning so as to keep industries as far as possible from residential areas.
Dedicated zones for green cover.
Technically integrated development: creation of paper free governance, efficient use of electricity, service delivery and security infrastructure (CCTV) fully integrated with mobiles.
Automated systems for public service delivery to standardize the system as well as reduce congestion at such points.
Pre planned satellite town development.
Smart security systems including cyber security.
Governments’ “Smart City” Initiative is a step in right direction envisaging development of “city of future”. The focus is on both area based development through redevelopment, retrofitting, and Greenfield projects; and pan city based development through initiatives like Integrated Transport solutions, waste management. This in convergence with schemes like AMRUT, HRIDAY, SWACCH BHARAT ABHIYAAN will ensure that a holistic sustainable development of cities take place converging with the cities as “imagined” by the policymakers and city dwellers alike.