19, November 2016

1.Monetary Policy Committee (MPC)- Ministry of Finance

Source: PIB

The Government has appointed all Members of the Monetary Policy Committee (MPC).

The Monetary Policy Committee(MPC) of the Reserve Bank of India (RBI) has been constituted by the Central Government in accordance with the provisions of the Reserve Bank of India Act, 1934 (RBI Act) and has been notified in the Gazette of India.

  1. Governor of the Reserve Bank of India—Chairperson, ex officio
  2. Deputy Governor of the Reserve Bank of India, in charge of Monetary Policy—Member, ex officio
  3. One officer of the Reserve Bank of India to be nominated by the Central Board—Member, ex officio
  4. And three others are members.

The Members of the MPC shall hold office for a period of four years or until further orders, whichever is earlier and are not eligible for re-appointment.

Monetary policy committee:

  • MPC has tasked with deciding benchmark interest rates.
  • The MPC is entrusted with the task of fixing the benchmark policy rate (repo rate) required to contain inflation within the specified target level, which has been fixed for a period of 5 years up to March, 2021 by the Government at 4% with a range of +/- 2%.
  • The decision of the MPC shall be binding on RBI.

Key facts:

MPC is mandated to contain the inflation within the specified target levels.

Further, if the average inflation is more than the upper tolerance level of 4% + 2%, that is, 6%, or less than the lower tolerance level of 4% – 2%, that is, 2%, for any three consecutive quarters, it would mean a failure to achieve the inflation target.

Where RBI fails to meet the inflation target, in terms of the provisions of RBI Act, it shall set out a report to

  • The Central Government stating the reasons for failure to achieve the inflation target;
  • Remedial actions proposed to be taken by RBI; and
  • An estimate of the time-period within which the inflation target shall be achieved pursuant to timely implementation of proposed remedial actions.

2.Indian economy witnessed growth in adverse global environment

Source: PIB

The growth rate of Gross Domestic Product (GDP) at constant (2011-12) market prices increased from 6.6 per cent in 2013-14 to 7.2 per cent in 2014-15 and further to 7.6 per cent in 2015-16, indicating that the growth rate of the economy has improved in the last three years despite adverse global environment. This has happened mainly on the strength of growth in domestic consumption.

As per the World Economic Outlook published in October 2016 by International Monetary Fund (IMF) the global growth was 3.4 per cent in 2014 and 3.2 per cent in 2015 and projected to slow to 3.1 per cent in 2016.

Economic slowdown:

To assess the effect of economic slowdown on employment in India in selected labour-intensive and export-oriented sectors, Labour Bureau under Ministry of Labour & Employment has been conducting Quick Quarterly Surveys on employment and unemployment.

  • Efforts are being made by the Government to promote employment generation among the marginalized and poor people particularly SCs, STs and OBCs through several programmes/schemes.
  • Some of them include Special Area Programme of Special Central Assistance to Tribal Sub-Plan (SCA to TSP), Special Central Assistance to Scheduled Caste Sub-Plan and other Central Sector / Centrally Sponsored schemes that provide funds for economic development of SCs, STs and OBCs in the States covering skill development and employment-cum-income generation activities.
  • National Rural Livelihood Mission (NRLM) has been aligned to the skill development initiatives which provide efficient and effective institutional platforms to the rural poor and enabling them to increase household income through sustainable livelihood enhancements and improved access to financial services.

Pradhan Mantri Rojgar Protsahan Yojana:

A new Scheme “Pradhan Mantri Rojgar Protsahan Yojana” has been announced in the Budget for 2016-17 with the objective to incentivize employers registered with the Employees’ Provident Fund Organisation (EPFO) for job creation by the Government paying the 8.33 per cent contribution of employers to the Employee Pension Scheme (EPS) in respect of new employees having a new Universal Account Number (UAN).

Government initiatives:

  • Skill India and Digital India initiatives; “Make in India”.
  • Start-up India Initiative has been launched to boost entrepreneurship and creation of job.
  • In addition, many initiatives like launching of Micro Units Development and Refinance Agency Ltd. (MUDRA) a SIDBI subsidiary;
  • “Stand Up India Scheme” to promote entrepreneurship among SC/ST and women entrepreneurs;
  • Boost to agricultural sector with focus on micro irrigation, watershed development, soil conservation and credit; and
  • For providing social security to the disadvantaged sections of the society; etc. have been also launched.

various initiatives to Strengthen  economy which, inter alia, include; fillip to manufacturing and infrastructure through fiscal incentives. Reforms and liberalization of foreign direct investment in major sectors; measures to debottleneck the supply of key raw materials etc

3.International Conference on Brucellosis 2016 inaugurated in New Delhi

Source: PIB

The International Conference on Brucellosis 2016 and the 69th meeting of the International Society on Brucellosis was inaugurated in New Delhi.

The three day conference has been organised by the Department of Biotechnology (DBT) in collaboration with Indian Council for Agriculture Research (ICAR).

Highlights:

  • Provide a technical platform for scientist and experts from all over the world including Participants from 26 countries.
  • Help endemic countries in designing effective control strategies and eradication methods as per the laws governing the livestock production systems.
  • The conference is result of DBT’s network programme on Brucellosis launched in 2012 to address the epidemiology and development of new generation of vaccines and diagnostic kits.

Brucella Free Villages programme: This programme will be supported by guidelines and standard operating practices along with an IT enabled application.

Brucellosis: Brucella is a genus of Gram-negative bacteria

  • Brucellosis is a dreadful disease caused by genus of bacteria known as Brucella.
  • It infects various species of Brucella cows, buffalos, goats, sheep, pigs, dogs and other animals and also humans.
  • Human become infected by this disease by coming in contact with animals or animal products (meat and milk) contaminated with these bacteria

4.India and UK sign three Bilateral Advance Pricing Agreements 

Source: PIB

  • The Central Board of Direct Taxes (CBDT) signed three Bilateral Advance Pricing Agreements (APAs) with the Competent Authority of United Kingdom (UK) to reduce tax litigation.
  • Earlier both countries had exchanged mutual agreements amongst them under the Mutual Agreement Procedure (MAP) Article of the India-UK Double Taxation Avoidance Convention (DTAC). With this, CBDT so far has entered into 111 APAs.
  • These three APAs cover international transactions in the nature of payment of intra-group service charges and pertain to the telecom industry. They also have a roll-back provision.

Advance Pricing Agreement (APA) Programme

An APA is a binding agreement between tax administrations in two countries governing how future transactions between associated taxpayers established in their respective jurisdictions will be treated for tax purposes. An APA can cover a single transaction or a series of transactions.

The OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations (2016) describe an Advance Pricing Arrangement as “an arrangement that determines, in advance of controlled transactions, an appropriate set of criteria for the determination of the transfer pricing for those transactions over a fixed period of time.

  • The OECD issued its final reports on a package of measures or ‘actions’ as part of the Base Erosion and Profit Shifting (“BEPS”) Project.
  • The final report on Action 14 – Making Dispute Resolution Mechanisms More Effective, which was part of the final package of measures, contains a best practice recommendation that countries should implement bilateral advance pricing arrangement programmes.

Base Erosion and Profit Shifting (“BEPS”) Project: Base erosion and profit shifting (BEPS) refers to tax avoidance strategies that exploit gaps and mismatches in tax rules to artificially shift profits to low or no-tax locations. Under the inclusive framework, over 100 countries and jurisdictions are collaborating to implement the BEPS measures and tackle BEPS.

About Programme:

The APA Programme was introduced by Finance Act, 2012 with a view to provide a predictable and non-adversarial tax regime and to reduce litigation in Indian transfer pricing arena. Rollback of APAs was announced in the Budget in July 2014.

  • An APA is usually signed between taxpayer and central tax authority on an appropriating transfer pricing methodology for determining the value of assets and taxes on intra-group overseas transactions.
  • An APA can be entered into for a maximum of 5 years at a time.
  • It seeks to introduce certainty in tax law by reducing compliance costs and make tax regime investment friendly.
  • It provides certainty to taxpayers regarding transfer pricing that aim to avoid disputes between taxpayer and tax regulator.

Bilateral vs. unilateral APAs

  • Taxpayers may enter into APAs with more than one tax authority – i.e., bilateral or multilateral APAs – through the mutual agreement procedure (MAP) included in most income tax treaties.
  • Unilateral APAs involve agreements between only the taxpayer and one government.

APAs for small business taxpayers

  • Some APA programs provide for streamlined procedures to allow small business taxpayers (SBTs) to obtain the compliance certainty of an APA at a cost relative to the size and complexity of the transactions involved.
  • SBT APAs are generally unilateral, but can also be bilateral.

5.India and Cyprus ink Revised DTAA

Source: PIB

India and Cyprus have inked a revised Agreement for Avoidance of Double Taxation and Prevention of Fiscal evasion (DTAA) with respect to taxes on income, along with its Protocol.

It will replace the existing DTAA that was signed by two countries in June 1994. The provisions of new DTAA will enter into force after completion of necessary internal procedures in both countries.

Key facts:

  • Provides source based taxation of capital gains arising from alienation of shares, instead of residence based taxation provided under the existing DTAA.
  • Provides for Assistance between the two countries for collection of taxes.
  • Updates the provisions related to Exchange of Information to accepted international standards.
  • Enables exchange of banking information and allow the use of such information for purposes other than taxation with the prior approval of the Competent Authorities.
  • Expands the scope of ‘permanent establishment’ and reduces the tax rate on royalty in the country from which payments are made to 10% from the existing rate of 15%.
  • Updates the text of other provisions in accordance with the international standards and consistent policy of India in respect of tax treaties.

  1. 6. Quami Ekta Week (National Integration Week) 2016

Source: PIB

The Qaumi Ekta Week (National Integration Week) will be observed all over the country from 19th to 25th November, 2016.

The week long programmes under it with a view to foster and reinforce the spirit of Communal Harmony, National Integration and pride in vibrant, composite culture and nationhood.

Highlights:

Highlight the inherent strength and resilience of the India and to withstand actual and potential threats to the eclectic and secular fabric of our country.

It also seeks to Provide an opportunity to reaffirm age old traditions and faith in the values of tolerance, co-existence and brotherhood in a multi-cultural and multi-religious society.

November 19: It will be observed as National Integration Day. Based on themes of secularism, anti-communalism and non-violence programmes like meetings, symposia and seminars will be organized.

November 20: It will be observed as Welfare of Minorities Day. On this day, items of the 15 Point Programme will be emphasized.

November 21: It will be observed as Linguistic Harmony Day. To enable people of each region to appreciate the linguistic heritage of other parts of India programmes like Special literary functions and Kavi Sammelans will be organized.

November 22: It will be observed as Weaker Sections Day. Help SCs/STs and weaker sections with particular emphasis on the distribution of surplus land to landless labourers.

November 23: It will be observed as Cultural Unity Day. Various cultural functions will be organized to present the Indian tradition of unity in diversity and for promoting cultural conservation and integration.

November 24: It will be observed as Women’s Day. It will highlight the importance of Women in Indian Society and their role in development of nation-building.

November 25: It will be observed as Conservation Day. It will give emphasise to the growing need for awareness and action to conserve the environment.

  • On the concluding day, National Foundation for Communal Harmony (NFCH) will organise Communal Harmony Campaign and Communal Harmony Flag Day.
  • NFCH is an autonomous organisation of the Union Ministry of Home Affairs. It promotes Communal Harmony and strengthens National Integration.
  • It also provides financial assistance for relief and rehabilitation of children rendered orphan or destitute in communal, caste, ethnic or terrorist violence.

  1. Mauritius Prez inaugurates salt tolerant plant garden in TN

Source: Business Standard

Tamil Nadu gets world’s first salt-tolerant plant garden

Mauritius President Ameenah Gurib Fakim today inaugurated a genetic garden of naturally occurring salt-tolerant plants called halophytes at the coastal town of Vedaranyam in Tamil Nadu.

The garden was  inaugurated by president, the garden which was set up by the M S Swaminathan Research Foundation (MSSRF).

Key Facts

The garden has been set up by M S Swaminathan Research Foundation (MSSRF) founded by eminent agriculture scientist Prof M S Swaminathan, father of Indian Green Revolution.

It will have over 1,600 species belonging to 550 genera and 117 families of Halophytes plants.

Initially it will comprise halophytes occurring along the coasts of India including the Andaman and Nicobar Islands.

Halophytes

According to MSSRF, plants such as these are important in the context of increasing salinisation of land, one of the adverse effects of climate change

  • Halophytes are salt-tolerant or salt-resistant plants.
  • They can thrive and complete their life cycles in soils or waters containing high salt concentrations. They constitute two per cent of terrestrial plant species.
  • Their seeds contain high oil (30 per cent) and protein (35 per cent) like soyabeans and other oilseed crops and the salt content is less than three per cent.

Significance

  • Halophytes plants are important in the context of increasing salinisation of land especially due sea level rise because of climate change and global warming.
  • In recent times, alarming rise in the sea level has prompted agriculture scientists to call for the cultivation of saline-tolerant crops in light danger of sea intrusion.
  • In future, anticipatory research of these plants could reap rich rewards to mitigate impact of climate change as they can provide food for people, fodder for livestock, bio fuel and also can be used for ornamental purposes.


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