Centre had announced hike in surcharges paid by high net worth individuals
Part of: GS Mains Paper III – Government Budgeting
In News
Centre had announced hike in surcharges paid by high net worth individuals.
The increase in surcharges effectively increases the combined tax rate by 2% for those earning between Rs.2 crore and 5 crore and by 7% for those earning more than Rs 5 crore annually.
The higher tax will only apply to individuals and FPIs registered as trusts, which are also treated as individuals.
However, the FPIs that are registered as companies will not be affected.
The decision to increase rates drew criticism that it would lead to outflow of foreign funds from India because there would be decreased income as they have to pay more taxes now.
Do you know?
Surcharge is an additional charge or tax levied on an existing tax. For Example: A surcharge of 10% on a tax rate of 30% effectively raises the combined tax burden to 33%
Cess is also tax on tax. However, the difference is that Cess is levied temporarily for a specific purpose. Once the purpose has been fulfilled, cess is no longer levied. However, surcharges are general and permanent in nature.
The revenue earned via surcharge is solely retained by the Centre and, unlike other tax revenues, is not shared with States.
The proceeds of surcharges flow into Consolidated Fund of India.
Surcharges, in India, are used to make the taxation system more ‘progressive’ (average tax rate increases as the income increases) as they are generally levied on wealthy individuals and companies.
Foreign Portfolio Investments are those investments which hold less than 10% in a company, beyond which it is regarded as FDI (Foreign Direct Investment).
FPI hold a short term view on the company and generally participate through the stock markets and gets in and out of a particular stock at much faster frequencies. They are volatile in nature.
The authority monitoring the guidelines for FPI regulation is the Securities and Exchange Board of India.
Misuse of Money Bills
Part of: GS Prelims and Mains II – Parliament and State legislatures—structure, functioning, conduct of business, powers and privileges and issues arising out of these.
In News:
The opposition has charged that the 2019 finance bill had provisions to amend a number of laws including the Benami, SEBI and PMLA Acts and that these amendments to laws were not related to finance but brought as part of financial bill to avoid proper scrutiny.
Types of Bills
Constitution Amendment Bills: These are Bills which seek to amend the Constitution.
Money Bills: A Bill is said to be a Money Bill if it only contains provisions related to taxation, borrowing of money by the government, expenditure from or receipt to the Consolidated Fund of India. Article 110 deals with Money bills.
Do you know?
Money bill can only be introduced only in Lok Sabha with prior recommendation of the President and must be passed by simple majority.
Rajya Sabha can only recommend changes to the bill, which Lok Sabha may reject if it chooses to.
If such recommendations are not given within 14 days, it will have deemed to be passed by Parliament
Who decides if a Bill is a Money Bill?
The Speaker certifies a Bill as a Money Bill, and the Speaker’s decision is final.
Financial Bills: A Bill that contains some provisions related to taxation and expenditure, and additionally contains provisions related to any other matter is called a Financial Bill. Article 117 deals with Financial bills. There are two categories of Financial bills under Article 117
Article 117(i) – Can only be introduced in Lok Sabha with prior recommendation of President. Rajya Sabha can reject or modify it
Article 117(iii) – Can be introduced both in Lok Sabha and Rajya Sabha with prior recommendation of the President. Rajya Sabha can reject or modify it.
Ordinary Bills: All other Bills are called ordinary bills. This can be introduced in either of the Houses of Parliament. No prior recommendation of President is required and requires simple majority to pass the bill
Man-made highlands come to rescue of animals during floods
Part of: Main GS Paper III – Conservation, environmental pollution and degradation, environmental impact assessment; Disaster management
In News:
During monsoon season, Brahmaputra rivers overflows and floods the adjacent regions including the Kaziranga National Park. As a result, most of the animals seek safe places during these floods.
In order to keep animals above the water level, forest department has constructed highlands which were designed scientifically with provision of adequate grass and plants yielding fruits.
These islands have turned into islands of relative safety whereby animals move to such highlands during floods. This has prevented huge loss to wildlife and sustenance of Kaziranga ecosystem.
Do you know?
Floods are considered as necessary evil in Kaziranga, which comprises mix of wetlands, grasslands and forests. The flood water flushes out the aquatic plants and weeds that choke its ecosystem.
Kaziranga National Park is known for being the residence of ‘Big Five’ animals, ie, Great Indian One horned Rhinoceros, Indian Elephant, Royal Bengal Tiger, Eastern Swamp Deer and Wild Water Buffalo.
Structural reforms in Agriculture
Part of: Main GS Paper III – transport and marketing of agricultural produce and issues and related constraints; e-technology in the aid of farmers
In news:
CM’s panel tasked with recommending sweeping reforms in the agriculture sector has suggested the following measures at the recently held NITI Aayog meet:
Scrapping of the Essential Commodities Act for the food sector
Review of agricultural subsidies (The total outlay on fertilizer subsidy alone is around 70,000 crore rupees in 2018-19)
Dismantling of market monopolies (which ensures that farmer’s bargaining power increases fetching him more price for his produce)
Steps to increase private investment and investment credit in the sector (through tax benefits and subsidised credit). This will enhance private sector’s participation in supply chain infrastructure thereby reducing wastages and leakages in the process.
Obstacles to the implementation of the digital e-NAM system to be removed.
Do you know?
National Agriculture Market (eNAM) is a pan-India electronic trading portal which networks the existing APMC mandis to create a unified national market for agricultural commodities.
More Information about Essential Commodities Act
The ECA was enacted way back in 1955.
It has since been used by the Government to regulate the production, supply and distribution of a whole host of commodities it declares ‘essential’ in order to make them available to consumers at fair prices.
The list of items under the Act include drugs, fertilisers, pulses and edible oils, and petroleum and petroleum products.
Here’s how it works:
If the Centre finds that a certain commodity is in short supply and its price is spiking, it can notify stock-holding limits on it for a specified period.
Anybody trading or dealing in a commodity , be it wholesalers, retailers or even importers are prevented from stockpiling it beyond a certain quantity. It thus empowers authorities to crack down on hoarders and black-marketeers of such commodities during crisis period.
The ECA gives consumers protection against irrational spikes in prices of essential commodities.
Miscellaneous
Gender Equality
Part of: Main GS Paper I – Role of women and women’s organization
In News
Presently women officers cannot be posted immediately on board ships as there are no separate facilities.
In order to induct more women into services, Navy has recently issued tender for cadet training ships which has facilities catered for women
This initiative will go a long way in increasing women participation in Navy who presently constitute only 6.7% of the Navy officers
National Parks in news: Pench National Park in Madhya Pradesh and Bandipur wildlife sanctuary in Karnataka
India is spending 1300 Crore rupees to build 9 kilometres underpass on National Highway passing through Pench National Park in Madhya Pradesh to provide safe passage for wildlife (especially Tigers) in the region.
Similar demand is being made to build underpass on the National Highway between Mysuru and Waynad to protect tigers in Bandipur wildlife sanctuary.
Concerns
In a developing country like India with limited resources and nearly 23% of our population living below poverty line, we need to balance our developmental needs with our responsibility to protect the ecology.
(MAINS FOCUS)
INTERNATIONAL
TOPIC: General studies 2
Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests
India and the World ; India and its neighbourhood- relations.
Effect of policies and politics of developed and developing countries on India’s interests, Indian diaspora
Important International institutions, agencies and fora- their structure, mandate
Organisation of Islamic Cooperation (OIC) report to Xinjiang on Uighurs
Context:
The below article deals with OIC record on China’s Xinjiang province, which is in the news on account of alleged violations of human rights and curbs on religious freedom of Uighurs and other Muslim ethnic groups.
A Human Rights Watch report issued in September 2018 had also criticised Beijing’s policies in Xinjiang.
About OIC
The OIC, represents 57 member states and a population of about 1.8 billion people.
It is the world’s second-largest intergovernmental organisation after the UN
It is committed to protect the interests of the Muslim world.
It routinely expresses solidarity with Palestine, Iraq, Afghanistan, Syria and Bosnia, as well as with the peoples of the Turkish Cypriot state, Kosovo and Jammu and Kashmir
Who are Uighurs?
The Uighurs are a minority Turkic ethnic group originating from and culturally affiliated with the general region of Central and East Asia.
The Uighurs have been recognized as native to only one region, the Xinjiang Uyghur Autonomous Region of the People’s Republic of China
Indian and OIC:
India became the ‘Guest of Honour’ at the 46th session of the Council of Foreign Ministers of the Organisation of Islamic Cooperation (OIC) held in Abu Dhabi in March.
The final declaration ignored the customary reference to Jammu and Kashmir.
Reasons for the ignorance
The strong personal and state-to-state ties built by the Indian government with important OIC states, especially the UAE.
However, one of the resolutions did refer to Kashmir and expressed concern at the situation of Muslims in India.
OIC’s report on China’s Xinjiang province:
The main Abu Dhabi declaration, like the Dhaka Declaration, made no reference to China or its Muslim minorities.
It is fascinating to come across the resolution passed at Abu Dhabi which chose to commend the efforts of the People’s Republic of China in providing care to its Muslim citizens.
China has defended its policies and claimed that it’s so-called ‘internment camps’ are actually vocational centres meant to “to educate and save the local people of Xinjiang who were influenced by religious extremism”.
Reasons for favouring China:
China is a major power
It is a permanent member of the UN Security Council
It has a large market for hydrocarbons and a source of arms and investment
Moreover, China refrains from preaching to others about human rights or systems of governance.
As China’s continued import of oil from Iran suggests, countries under U.S. pressure and sanctions often turn to China for relief. In return, they do their best to guard China’s interests at the OIC.
Do you know?
Recently Pakistan’s Minister for Religious Affairs urged China to lift restrictions on Muslims in Xinjiang.
Pakistan chief raised concerns about the Uighur issue with the Chinese Ambassador that has cone has deep embarrassment to the OIC.
Connecting the dots:
What is Organisation of Islamic Cooperation? Discuss its objectives and also discuss the significance of OIC’s first-time invitation to India.
(TEST YOUR KNOWLEDGE)
Model questions: (You can now post your answers in comment section)
Note:
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Q.1) Consider the following statements about Foreign Portfolio Investment (FPI):
Returns in FPI are in the form of dividends and interest payments
Investment through FPI entails control of the management of the company
FPI is the passive holding of securities and other financial assets by a foreign firm
Which of the following statements is/are correct?
1 and 2 only
2 and 3 only
1 and 3 only
All of the above
Q.2) Consider the following statements:
Kaziranga National park is a Ramsar site.
Kaziranga National Park is a 117-year-old park and a UNESCO World Heritage Site since 1985.
Which of the following statements is/are correct?
1 only
2 only
Both 1 and 2
Neither 1 nor 2
Q.3) Rajya Sabha has equivalent powers as that of Lok Sabha with respect to which of the bills
Ordinary Bills
Money Bills
Financial Bills
Constitutional Amendment Bills
Select the correct answer using the codes given below :
1 and 3 only
1,3 and 4 only
1 and 4 only
1,2,3 and 4
Q.4) Consider the following statements
Proceeds from cess and surcharges form a divisible pool of Central resources.
Only Centre can levy cess
Which of the following statements is/are not correct?
