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26 July 2014

Current Affairs: July 19- 25, 2014

Union Cabinet gives nod to 49% FDI in insurance sector

The Union Cabinet approved the proposal of increasing the Foreign Direct Investment (FDI) limit in the insurance sector to 49% from the existing 26%. The move is in sync with the proposal made by Finance Minister Arun Jaitley in his maiden Budget speech to raise the FDI cap in insurance sector from 26% to 49%.

However, the management control of insurance firms will be with the Indian companies only. The step to enhanced FDI limit is expected to benefit private sector insurance companies, which require a huge amount of capital.

Unregulated e-rickshaws not permitted: Delhi HC

Delhi High Court lambasted the Delhi government for its inability to regulate or check e-rickshaws plying unbridled on the roads.
HC, while hearing a plea, has said that it would not permit unregulated e-rickshaws without license, registration or insurance and directed the government to ensure that there was no unregulated traffic in Delhi.
After going through an affidavit filed by the chief secretary saying these vehicles are to be treated as “public service vehicles” which are required to comply with all extant rules and regulations and that no separate policy is required for governing e-rickshaws as they are already covered by the Motor Vehicles (MV) Act and their operation as per the existing law is unauthorized and illegal, the court asked how they are plying despite being illegal.
As per the affidavit, the Delhi government stopped taking action against e-rickshaws after Union Minister of Road Transport, Nitin Gadkari, announced that laws pertaining to such vehicles will be amended to take them out of purview of MV Act. The union ministry has directed civic agencies, instead of transport department, to design policy for regulating operation of e-rickshaws.
The court observed that people are getting injured by e-rickshaws whose drivers get away scot free because the vehicles are unregistered. The court was hearing a petition by one Shanawaz Khan seeking a ban on the vehicles. The petition alleged that e-rickshaws are operating with four 12 volt batteries with power output of 650 to 850 watt and are designed to transport only four people, including the driver. But the vehicles routinely ferry more than 8 people at a time and endanger lives.
The court had issued the direction after going through the Delhi government’s reply that though e-rickshaws are operating illegally, the government is “not competent” to stop them as it will require amendment to the MV Act.

India support UNHRC resolution to probe Israel’s offensive on Gaza

India voted in support of a UN Human Rights Council resolution to begin an investigation of Israel’s offensive on Gaza.
In the 47-member council, 29 countries which also included other BRICS member voted in support of the Palestinian-drafted resolution on “Ensuring Respect forinternational law in The Occupied Palestinian Territories, including East Jersusalem” while 17 others abstained from voting.
The U.S. was the only country to vote against the resolution. European nations abstained.
The ongoing conflict between Israel and Palestine has resulted in a large number of civilian casualties and heavy damage to property. Over 680 Palestinians and 31 Israelis have been killed in the conflict so far.
India has asked Israel and Palestine to exercise political will to agree to a ceasefire and to resume negotiations for a comprehensive resolution of the Palestinian issue.

Sanitation projects, increasing green cover among top priorities for MGNREGA

The new NDA government led by PM Narendra Modi has designed a plan for re-orientation of the Mahatma Gandhi National Rural Employment Guarantee Act or MGNREGA which will now focus on sanitation projects to reduce open defecation, expanding green cover and emphasize on asset-creation.
The new roadmap for the rural employment guarantee scheme, being supervised by rural development minister Nitin Gadkari, will not just based on the number of man days of work provided but will also assess the tangible ground-level changes achieved.
For example, people digging a pond will have to mention the storage capacity being created, its impact on groundwater level etc. Likewise, workers building compost pits will have to mention the quantum of compost they will generate.
It is proposed that about half of the scheme’s fund allocations will be earmarked for rural sanitation projects and plantation of trees along highways and rural roads.
While farm-related projects will continue to get 60% of MGNREGA funds, as under the UPA, the NDA is deploying a more rigorous system to monitor asset creation.
The plan is in consonance with Finance Minister Arun Jaitley Budget speech where he said that wage employment would be offered under MGNREGA “through works that are more productive, asset creating and substantially linked toagriculture and allied activities”.
While payments won’t be dependent on accomplishing these outcomes, consistently poor outcomes will need to be explained.
The idea of planting trees and granting rights and responsibilities to the poor to boost their income is not new. It had been used in undivided Andhra Pradesh a few years ago.
This idea of planting trees and granting rights and responsibilities to the poor to boost their income will be implemented nationally in 2014-15. Villagers will be given Rs 15 as maintenance fee for every sapling that survives. This is expected to work as an incentive for them to care for the saplings and follow a specified schedule in the first year of plantation (apart from watering the plants).
Regarding the sanitation part, the national sanitation programme will pay for material and NREGA will pay for labour.

Union Government notifies Public Servants Rules, 2014

The Union Government notified Public Servants (Furnishing of Information and Annual Return of Assets and Liabilities and the Limits for Exemption of Assets in Filing Returns) Rules, 2014.
The Department of Personnel and Training (DoPT) under Union Ministry of PersonnelPublic Grievances and Pensions notified the rules under Lokpal and Lokayuktas Act, 2013.
Under the new rules, it has been made mandatory for all Government employees to file declarations of their assets and liabilities and those of their spouses and dependent children.
As per Public Servants Rules, 2014
  • The Government will issue new forms that will seek information on cash in hand, bank deposits, investment in bonds, debentures, shares and units in companies or mutual fundsinsurance policies, provident fund, personal loans and advance given to a person or any entity, among others.
  • The employees will have to declare motor vehicles, aircraft, yachts or ships, gold and silver jewellery and bullion possessed by them, their spouses and dependent children.
  • The employees will have to furnish detail of their immovable properties and statement of debts and other liabilities on first appointment or as on March 31 of every financial year.
  • These declarations are in addition to such returns being filed by the government employees under various services rules.
  • The employees, who have already filed their declarations, information and annual returns of property, shall file revised declarations as on 1 August 2014, to the competent authority on or before 15 September 15 2014.
  • The competent authority may exempt a public servant from filing the information in respect of any asset if its value does not exceed his or her 4 months basic pay or Rs 2 lakh, whichever is higher.
The Lokpal and Lokayuktas Act, 2013:
As per the Lokpal and Lokayuktas Act 2013 which received President’s assent January 1, 2014, a Lokpal for the Union as well as Lokayuktas for the States will be established in order to inquire the corruption charges against Government officials.
As per this Act, a public servant shall furnish to the competent authority the information relating to the assets of which he, his spouse and his dependent children, jointly or severally, own. The Act also makes it mandatory for a government servant to declare his liabilities and that of his spouse and his dependent children, as per the Act.

OECD introduces ‘single global standard’ for automatic exchange of financial info

Taking a significant step towards combating the black money menace, the Paris-based Organisation for Economic Co-operation and Development (OECD)unveiled ‘single global standard’ for automatic exchange of financial account information between jurisdictions.
To enable automatic exchange of financial account information pertaining to tax issues, the new standard makes it mandatory for the financial institutions, including banks, brokers and fund houses to collect necessary details from their clients and submit the same to their respective regulators on an annual basis.
The new Standard provides for annual automatic exchange between governments in the field of financial account information. The financial account information includes balances, interest, dividends, and sales proceeds from financial assets which are reported to governments by financial institutions. It also includes accounts held by individuals and entities, including trusts and foundations.
The new framework also provides confidentiality clause and safeguards in the exchange of information. For this the countries will need to approve domestic laws according to their respective legal jurisdictions to facilitate such cooperation.
As per this framework, each competent authority needs to notify the other competent authority immediately regarding any violation of confidentiality or failure of safeguards and any sanctions and remedial actions consequently imposed.
The framework will be formally presented by the OECD the G20 Finance Ministers at their meeting in Cairns, Australia, in September 2014.
More than 65 nations and jurisdictions have already publicly committed to implementation of the new framework, while more than 40 have committed to a specific and ambitious timetable leading to the first automatic information exchanges in 2017. Those having already committed to follow this global protocol include the US, the UK, GermanyEuropean UnionJapanSingapore,ChinaLuxembourgBritish Virgin IslandsCayman IslandsGibraltar,CyprusBermudaIsle of ManGreece and Liechtenstein.
Importance in India’s context
The development assumes significance in case of India, as it has been facing difficulties in fetching information on cases of suspected tax evasion from other countries, especially Switzerland, which has been maintaining that such details cannot be provided without specific proof of financial irregularities by the concerned Indian client of Swiss banks.
An initial framework was released by OECD in this regard earlier this year and India became one of the first adopters of this global convention. Later,Switzerland also agreed to conform to this Standard, while a few more nations have now expressed their willingness to adopt the same and these includeMauritius — another country with which India has been working on a revised bilateral treaty due to concerns of money laundering.

Wages under MNREGA shouldn’t be less than minimum wage in states: Mahendra Dev Committee

As per the recommendations of a high-level committee set up by the Centre, wages under MNREGA should be equal to or higher than the minimum wage in the state.
According to the report submitted by the seven-member panel, headed by S Mahendra Dev, director of Indira Gandhi Institute of Development Research:
The baseline for MNREGA wage indexation from 2014 may be the current minimum wage rate for unskilled agricultural labourers fixed by the states under the Minimum Wages Act or the ‘current MGNREGA wage rate’, whichever is higher.
MGNREGA wage rates must be revised every year on the basis of Consumer Price Index for Rural (CPI-Rural) as the appropriate index.
At present, wages under MNREGA are linked to the Consumer Price Index (CPI) and the annual revision is based on the CPI-AL (Agriculture Labour).
The panel was set up to examine whether the Consumer Price Index for Agriculture Labour (CPIAL) is the suitable index for protecting the wages against inflation and what would be the appropriate index for revising MGNREGA wage rates every year.

Cricket: India registers historic test victory at Lord’s against England

India bagged their first Test victory at the historic Lord’s in nearly three decades as they rode on Ishant Sharma’s inspired spell of fast bowling to flatten Englandby 95 runs and take a 1-0 lead in the five match series being played in England.
The tall pacer, whose consistency has always been questioned, played a pivotal role as he grabbed a career-best 7 for 74 to bowl out the home team for a 223 chasing a competitive victory target of 319.
It took 28 long years for India to win a Test match at the ‘Home of Cricket’ after ‘Kapil Dev’s team achieved the feat back in June 1986 winning by five wickets.
The victory also marked Mahendra Singh Dhoni’s first major victory as Test captain outside the sub-continent. The last time India won a Test match outside the South Asian region was back in 2011 when they defeated West Indies in a 1-0 series win.

Management of PM Relief Fund to be emulated on Gujarat model

Prime Minister Narendra Modi has directed that the management of the PM’s National Relief Fund (PMNRF) should emulate the Gujarat model in selection of beneficiaries, giving priority to the poor and children.
PM Modi reviewed the working of the PMNRF and recommended several qualitative changes in the way the fund is managed.
 PM Modi’s directions to PMNRF:
  • Selection of beneficiaries should be done in a more comprehensive, scientific and humanitarian basis, giving priority to children, poor and cases from government hospitals.
  • Priority should be accorded to cases involving life-threatening diseasesand applications should be decided on need and merit.
  • Pendency in appeals for help should be minimized and the draw to select the cases should be conducted in a manner that does not exclude any genuine case.
  • A letter from the Prime Minister should be sent to all beneficiaries.
  • SMS alert to be sent to beneficiaries whose appeals have been approved for grant of relief.
World Bank President Jim Yong Kim on India visit
On his three-day visit to India, the World Bank President Jim Yong Kim arrived in New Delhi. During his visit, he will meet PM Narendra Modi for understanding the development priorities in India. Kim is also scheduled to meet the Union Finance Minister, Arun Jaitley.
He will also be visiting the World Bank assisted project sites in Tamil Nadu with a view to understand rural-urban transformation challenges.

Bolivia legalizes Child Labour

Contrary to the efforts across the globe to curb child labour, Bolivia has become the first nation to legalize it from age 10. Country’s Congress approved the legislation, and Vice-President Alvaro Garcia inked it into law in the absence of President Evo Morales, who was travelling.
As per the supporters and sponsors of bill, lowering the minimum work age from 14 simply acknowledges a reality: Many poor families in Bolivia have no other choice than for their kids to work. The bill also stipulates safeguards for working children.
Under the legislation, 10-year-olds will be able to work as long as they are under parental supervision and also attend school. The minimum age for a child to work under a contract has been set at 12. They also would have to attend school.
The legislation is also in support of the unionized young workers who marched on Congress to prevent it from ratifying a lower limit of work age of 14.

CBDT sets up panel to recommend steps to reduce litigation

In an unprecedented move, the Central Board of Direct Taxes (CBDT)set up a six-member panel to examine the “efficacy” of the existing primary litigation mechanism in the Income Tax (IT) Department. The step has been taken in the wake of an estimated Rs 4 lakh crore of tax revenue locked up in litigation. The empowered committee, under the chairmanship of senior IRS officer and Chief Commissioner of Income Tax office in Ahmedabad Rani S Nair, has also been mandated to suggest steps to reduce legal cases at the IT department’s two dispute resolution forums and asked to submit its report within 8 weeks.
The panel has been constituted with an objective to evaluate the efficacy of existing dispute resolution forums of Commissioners of I-T (Appeals) and Income Tax Appellate Tribunal (ITAT) and to recommend steps to reduce litigation before these forums.
Currently, there is a four-stage grievance redressal and litigation mechanism available to a taxpayer. It starts with an appeal to the Commissioner of I-T Appeals called CIT (A), further up to the ITAT and subsequently to the High Court and the Supreme Court.
CBDT, the topmost policy making body of the I-T department, has also assigned the new committee with the task of undertaking a fresh initiative and categorize and examine select assessment orders issued by I-T officers across the country under various income groups (returned income).
The categories defined by CBDT include income under Rs 25 lakh, income between Rs 25 lakh-Rs 1 crore, between Rs 1 crore-Rs 10 crore and above Rs 10 crore.

German World Cup-winning captain Philipp Lahm retires

Philipp Lahm, the captain of Germany’s football team, announced his retirement from international football. His retirement announcement comes just five days after Germany led by him bagged its fourth football World Cup defeatingArgentina in the final of the 2014 FIFA World Cup held in Brazil.
Lahm is the country’s fourth most-capped player behind Lothar Matthaus (150), Klose (137) and Lukas Podolski (116).He is also the 4th Mannschaft captain to win the World Cup Trophy, after Fritz Walter in 1954, Franz Beckenbauer in 1974 and Matthaus in 1990.

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