17, November 2017

Joint Indo-Bangladesh Exercise Sampriti 2017

Joint Indo-Bangladesh Training Exercise SAMPRITI 2017, which is being conducted at Counter Insurgency & Jungle Warfare School, Vairengte in Mizoram. It is the seventh such exercise in the SAMPRITI series.  The exercise has been aimed to strengthen and broaden the aspects of interoperability and cooperation between the Indian and Bangladesh Armies.

1.Cabinet approves the establishment of the National Anti-profiteering Authority under GST
Source: PIB, The Hindu

The Union Cabinet approved establishing the National Anti Profiteering Authority (NAA) under the Goods and Service Tax (GST) to ensure fair pricing.

The Centre notified the latest set of cuts in the rate of tax to be levied on a wide range of goods as part of the Goods and Services Tax (GST), the Union Cabinet recently approved the creation of the National Anti-profiteering Authority to ensure that businesses pass on the benefits of GST to consumers.

The decision was an outcome of sharp reduction in the GST rates of a large number of items of mass consumption.

About NAA:

  • NAA aims to ensure that benefit of the reduction in prices under the uniform tax regime reaches the consumers. This is the second major GST-related decision taken by the government
  • The NAA will be headed by a senior Secretary-level official of the Central government, with four technical members from either the Centre or the states.
  • The Cabinet consented to creating positions of Chairman and technical members of the authority which would lead to immediate establishment of the apex body.
  • It ensures that the latest tax rate reductions approved by the GST Council on more than 200 items are implanted immediately by businesses.
  • The GST Council, at its recent meeting, held that restaurants had failed to pass on the benefit of input tax credit to customers by way of lower prices.
  • Help in controlling inflation.
  • The objective of the anti-profiteering clause in GST is to ensure that any reduction in tax rate as a result of GST should be passed on to consumers by way of commensurate reduction in prices.

Composition:

The institutional framework comprises the NAA, a Standing Committee, and Screening Committees in every state and the Directorate General of Safeguards in the Central Board of Excise & Customs (CBEC).

Functions:

  • The NPP can impose a penalty on the defaulting business entity and even order the cancellation of its registration under GST.
  • It has the authority to order the supplier / business concerned to reduce its prices or return the undue benefit availed by it along with interest to the recipient of the goods or services.
  • If the undue benefit cannot be passed on to the recipient, it can be ordered to be deposited in the Consumer Welfare Fund.
  • In extreme cases, the NAA can impose a penalty on the defaulting business entity and even order the cancellation of its registration under GST.”

Positive Implications:

  • Inflation :GST may bring in general inflation in the introductory phase as some goods and service become expensive and others cheaper(but the reduction in price is not passed on to customers). The anti – profiteering clause will minimise this risk.
  • Confidence in GST :With a legal obligation on businesses to pass on the benefit, this will help in instilling confidence in GST among people.
  • Intermediate Goods :Sectors dependent on intermediate goods may face sudden rise in price. This clause protects them.

Negative Implications:

  • Against Free Market: In a free market prices are decided by demand and supply. They eventually balance out. This is a distortion
  • Fear of Tax Raj: Companies fear tax authorities may misuse this rule to unfairly target them or worse lead to bribed and corruption
  • Adverse Impact on Investments: There may be a fall in investments due to the confusion created in implementation of this clause.

2.Cabinet approves Continuation of sub-schemes under Umbrella Scheme “Integrated Child Development Services (ICDS)” for the period till November, 2018
Source: PIB

The Cabinet Committee on Economic Affairs has given its approval for continuation of Anganwadi Services, Scheme for Adolescent Girls, Child Protection Services and National Crèche Scheme till 30.11.2018 with an outlay of over Rs.41,000 crore. These are the sub-schemes under Umbrella Scheme “Integrated Child Development Services (ICDS)”.

Background:

The ongoing schemes have been rationalized by the Government in financial year 2016-17 and have been brought under Umbrella ICDS as its sub-schemes. These sub-schemes need to be continued for delivering the child related services to the intended beneficiaries. The aims of these schemes are as under:

  • Anganwadi Services (ICDS) aims at holistic development of children under the age of six years and its beneficiaries are children of this age group and Pregnant Women & Lactating Mothers.
  • The objective of the Scheme for Adolescent Girls is to facilitate, educate and empower Adolescent Girls so as to enable them to become self-reliant and aware citizens through improved nutrition and health status, promoting awareness about health, hygiene, nutrition, mainstreaming out of school AGs into formal/non formal education and providing information/guidance about existing public services.
  • The objectives of Child Protection Services are to provide safe and secure environment for children in conflict with law and children in need of care and protection, reduce vulnerabilities through a wide range of social protection measures, prevent actions that lead to abuse, neglect, exploitation, abandonment and separation of children from families etc., bring focus on non-institutional care, develop a platform for partnership between Government & Civil Society and establish convergence of child related social protection services.
  • National Creche Scheme aims at providing a safe place for mothers to leave their children while they are at work, and thus, is a measure for empowering women as it enables them to take up employment. At the same time, it is also an intervention towards protection and development of children in the age group of 6 months to 6 years.

 Impact:

The sub-schemes listed above are not new schemes but are continuing from the XII Five Year Plan. The programme through targeted interventions will strive to reduce the level of malnutrition, anaemia and low birth weight babies, ensure empowerment of adolescent girls, provide protection to the children who are in conflict with law, provide safe place for day-care to the children of working mothers, create synergy, ensure better monitoring, issue negative alerts for timely action, encourage States/UTs to perform, guide and supervise the line Ministries and States/UTs to achieve the targeted goals and bring more transparency.

3.India to Host Global Conference on Cyber Space 2017: A Giant Leap Towards a Secure and Inclusive Cyberspace
Source: PIB

India, for the first time ever, is going to host the Global Conference on Cyber Space (GCCS), one of the world’s largest conferences in the field of Cyber Space and related issues, on 23 & 24 November 2017, at Aerocity, New Delhi.

Incepted in 2011 in London, second GCCS was held in 2012 in Budapest with focus on relationship between internet rights and internet security, the third edition of GCCS was held in 2013 in Seoul with commitment to Open and Secure Cyberspace. The fourth version GCCS 2015 was held on April 16-17, 2015 in The Hague, Netherlands.

Themed on Cyber4All: A Secure and Inclusive Cyberspace for Sustainable Development, this is the fifth edition of GCCS wherein international leaders, policymakers, industry experts, think tanks and cyber experts will gather to deliberate on issues and challenges for optimally using cyber space.

The overall goals of GCCS 2017 are to promote the importance of inclusiveness and human rights in global cyber policy, to defend the status quo of an open, interoperable and unregimented cyberspace, to create political commitment for capacity building initiatives to address the digital divide and assist countries, and to develop security solutions in a balanced fashion that duly acknowledge the importance of the private sector and technical community.

The plenary sessions and other activities during GCCS 2017 have been designed around the themes of Cyber4Inclusive Growth, Cyber4DigitalInclusion, Cyber4Security and Cyber4Diplomacy. During various sessions and activities focused around these themes, GCCS 2017 will bring forth the business, empowerment and developmental potential of Cyber space for realizing the goals of sustainable development.

4.‘Saubhagya’ Web-Portal – a Platform for Monitoring Universal Household Electrification
Source: PIB

Minister of Power and New & Renewable Energy, launched the Pradhan Mantri Sahaj Bijli Har Ghar Yojana – ‘SaubhagyaWeb Portal . The portal can be accessed at http://saubhagya.gov.in.

The Saubhagya Dashboard is a platform for monitoring household electrification progress, which would disseminate information on Household Electrification Status (State, District, village-wise), Household Progress on live basis, State-wise Target vs Achievement, Monthly Electrification Progress, etc.

Background of SAUBHAGYA SCHEME:

‘Saubhagya’ scheme was launched by Prime Minister of India, Shri Narendra Modi on 25th September, 2017 . Under Saubhagya scheme, all willing households in rural areas and poor families in urban areas are given free electricity connections. There are around 4 Crore un-electrified households in the country and they are targeted for providing electricity connections by December 2018.

Till recently, the focus of electrification has been on village electrification through creation of village electricity infrastructure for all households and providing free electricity connections to poor household families in rural areas. Now, Saubhagya has come into existence for providing free electricity connections to all households (both APL and poor families) in rural areas and poor families in urban areas.

Rural Electrification Corporation Limited (REC) is the Nodal Agency for the operationalization of the scheme throughout the country.

5.Indian Bank to seek bids for sale of NPAs worth Rs 1,100cr
Source: The Hindu

The Chennai-based Indian Bank has decided to invite bids for sale of NPAs (non-performing assets) worth close to 1,100 crore.

  • NPA’s covering over 8,250 accounts will be sold and the sale is without any recourse to the bank.
  • The bank has invited proposals from eligible asset reconstruction companies (ARCs), banks, non-banking financial companies and financial institutions.
  • The deadline e had been set to November 30 for submission of the bids.
  • The sale will comprise seven NPA accounts with a book balance of 25 crore and above worth 572 crore.
  • The bank will be short listing the top three bidders based on the bid amount quoted.
  • It could adopt either the e-auction process or could go for negotiation with the highest bidder as recommended by the asset sale committee.
  • Though the bank has indicated the reserve prices for these NPA categories, the ultimate reserve price for each portfolio of accounts would be based on the dues on the cut-off date i.e. November 24, 2017.
  • Indian Bank is attempting to bring down the gross NPAs to below 5% or at least in the range of 5-5.5% from the current level of 7% and the net NPAs to less than 3% from the current level of 4%.

6.Moody’s lifts India’s rating to Baa2, outlook stable
Source: The Hindu

India’s sovereign rating has been upgraded by Global rating agency Moody’s Investors Services for the first time in 14 years, from Baa3 to Baa3

Possible reason behind this: Due to central government ongoing reforms such as the new Goods and Services Tax (GST) regime and the mechanisms for resolving bad loans and re-capitalise ailing public sector banks

  • Baa2 are subject to moderate credit risk
  • They are considered medium grade and as such may possess certain speculative characteristics
  • Baa3, by contrast, was the lowest investment grade rating

On debt-to-GDP ratio: Moody’s expects India’s debt-to-GDP ratio to rise by about one percentage point this fiscal year to 69% of GDP

Comments by the rating agency

  • The rating agency agreed that a lot remains to be done such as fixing the GST’s implementation challenges, weak private sector investment and the slow resolution of banking bad loans
  • Moody’s said it expects at least some of these issues to be addressed over time and will help further improve the Indian government’s effectiveness and overall institutional framework

About Moody’s Investors Service:

  • Moody’s Investors Service, often referred to as Moody’s, is the bond credit rating business of Moody’s Corporation, representing the company’s traditional line of business and its historical name
  • Moody’s Investors Service provides international financial research on bonds issued by commercial and government entities
  • Moody’s, along with Standard & Poor’s and Fitch Group, is considered one of the Big Three credit rating agencies
  • The company ranks the creditworthiness of borrowers using a standardized ratings scale which measures expected investor loss in the event of default. Moody’s Investors Service rates debt securities in several bond market segments
  • These include government, municipal and corporate bonds; managed investments such as money market funds and fixed-income funds; financial institutions including banks and non-bank finance companies; and asset classes in structured finance
  • In Moody’s Investors Service’s ratings system, securities are assigned a rating from Aaa to C, with Aaa being the highest quality and C the lowest quality

 



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