25 january 2017 - netaji ias · the coal scam, or what’s popularly called the coalgate, first...

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NETAJI IAS

25

JANUARY

2017

NETAJI IAS

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w w w . n e t a j i i a s . c o m

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Tax Cosmetic And Medicine

Why in news?

A question of whether a product is cosmetic or medicine for tax purposes

arose over the products of Johnson & Johnson.

What is the issue?

The revenue authorities of Rajasthan imposed 12.5% VAT on two

products of Johnson & Johnson, ‘Shower to Shower’, Savlon and

‘Listerine’ mouthwash.

They maintained that these were not medicines which are entitled for a

lower tax which is generally 4 or 5 %.

The Tax Board upheld the view, against which the company appealed to

the high court.

What is the company’s defence?

It argued they have medicinal value as shown in the licence granted to it

and are special products for specific purposes.

It further submitted that similar products like Nycil, Vicks and others

have been granted tax benefits by other courts.

What was the revenue authority’s rationale?

The revenue authorities stated that the presence of a small percentage

of chemicals does not make the products medicine.

These products are available in ordinary shops and are not commonly

understood as medicines.

The court agreed with this view and dismissed the appeal of the

company.

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It also dismissed the appeal of the authorities that Savlon was also a

cosmetic.

The judgment said that Savlon is an anti-septic formulation with curing

properties and hence a medicine.

This issue, as it deals with the tax matters of products sold over the

counter, it cannot be decided under the central excise law.

Ultimately it is the state law which decides the issue.

Category: Mains | GS-III | Economy

Source: The Hindu

Cease Of Solar Subsidies And Its Implications

Why in news?

The Union government has planned to subsidize solar power panel

manufacturing may come at the expense of solar power generation.

The Centre is planning to do away with the subsidy schemes for the

solar power sector — from rooftop to central financing assistance in

several projects.

What are the implications?

The government is moving fast to give direct subsidies to solar panel

manufacturing, as solar tariffs are market-determined now, subsidies

were no longer needed for solar programmes.

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To help domestic manufacturing and bring down the cost of solar power

equipment, the government is designing a subsidy-cum-support

programme for solar panel manufacturing.

The removal of the subsidy will strengthen competitive bidding in the

sector, leading to a faster adoption of technology and a fostering of

relations between the government and the sector.

In a bid to promote domestic solar equipment manufacturing and also

comply with the global trade norms, the government was looking to

refurbish the domestic sourcing scheme under the flagship National

Solar Mission (NSM).

This would involve boosting manufacturing through subsidy

programmes and increasing the procurement of indigenous solar panels

by government agencies and public sector utilities (PSUs).

Conclusion:

Some power generators, however, say that programmes such as rooftop

projects need subsidies.

The low tariffs discovered in some of the projects is because the Centre

or the States provide financial support or some sort of subsidy in capital

cost. Removing central grants could escalate the tariffs.

The government is not looking to provide opportunity to the domestic

players but also open up the solar panel manufacturing sector for global

players.

The aim is to amalgamate the Make in India campaign with the

promotion of green energy. It would provide for a level playing field and

investment environment.

Category: Mains | GS – III | Economics

Source: Business Standard

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Budget During Elections

Why in news?

Noting that there is “nothing concrete” to back the notion that presentation of

the annual budget can sway the minds of people during the Assembly polls,

the Supreme Court dismissed a petition seeking the postponement of the

Union budget till the Assembly elections in five States are over.

Can the budget be rolled out once the state election is announced?

The National Election Commission recently announced the dates in the

high-stake Assembly elections for five states.

Sixteen political parties, including the Congress, have written to

President Pranab Mukherjee and the CEC claiming that the move to

advance the Budget is an indirect move to hold sway in the upcoming

assembly elections by the ruling BJP-led NDA government.

Concerns were also raised that whether the Central government's bid

to roll out the Union Budget early this year will also fall under the

Election Commission scanner and would have to be rescheduled.

What Supreme Court says?

“Presentation of the Central budget has nothing to do with State

Assembly elections… you have not presented even a single concrete

illustration to suggest that Central budget can shake the minds of voters

in a State,” Chief Justice of India J.S. Khehar said, addressing Supreme

Court advocate Manohar Lal Sharma.

Mr. Sharma contended that policies like giving homes to the

economically-deprived in States introduced in the annual budget

influence people to vote in a particular fashion.

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“They present schemes like these in the budget to control the minds of

the citizens. These schemes declared during election time are against

the Model Code of Conduct,” the lawyer argued.

What is the option in case of Lok Sabha election?

Experts said that had these been the Lok Sabha elections, then Union

Budget would have to be cut to a Vote on Account.

A vote on account is essentially a special provision to obtain a vote from

the Parliament to withdraw funds from the budget when the Union

Budget for the fresh year has not yet been released.

However, it entails certain restrictions that differentiate it from a full

budget, such as it cannot change direct taxes and it usually lapses after

two months.

However, it can be extended if the year is an election year and it is

anticipated that the main demand and the appropriation bill will take

longer to be passed by the house.

Category: Mains | GS – II | Polity

Source: The Hindu

CBI Ordered To Probe ‘Abuse Of Office’

Why in news?

The Central Bureau of Investigation (CBI) under a new chief will, on the basis

of a Supreme Court order, investigate and, probably prosecute, its former

director for abusing his authority while in office.

What the Supreme Court says?

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A three-judge Bench led by Justices Madan B. Lokur, Kurian Joseph and

A.K. Sikri asked CBI chief Alok Verma, who took office only last week, to

form a Special Investigation Team (SIT), which he will personally head,

to probe the role played by former CBI director Ranjit Sinha to

“scuttle enquiries, investigations and prosecutions being carried out by

the CBI in coal block allocation and other important cases.”

The court directed the SIT under Mr. Verma to take the assistance of

two CBI officers nominated by him and with due intimation to the court.

The CBI director was directed to take the Chief Vigilance Commissioner

into confidence in respect of the investigations and also seek the legal

aid of senior advocate R.S. Cheema, who is the Special Public Prosecutor

in the coal block allocation cases.

The court was of the opinion that it was necessary to enquire whether

any one or more such meetings that Mr. Sinha had with the accused

persons had any impact on the investigations and subsequent charge

sheets or closure reports filed by the CBI.

Logbook entries:

The order came on the basis of revelations made by NGO Common

Cause, represented by advocate Prashant Bhushan.

It had accessed the visitors’ log maintained at Mr. Sinha’s official

residence when he headed the agency.

The log showed frequent and unofficial meetings held by Mr. Sinha at

home with the accused in the multi-crore coal scam cases in the absence

of investigating officers.

What is Coal scam?

The coal scam, or what’s popularly called the coalgate, first came to light

when India’s audit watchdog, The Comptroller and Auditor General of

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India, raised the issue of inadequacies in the allocation of coal blocks

from 2004 onwards. It created a political storm, as the loss to the

exchequer was initially pegged at over Rs. 10 lakh crore. The final report

scaled it down to Rs. 1.86 lakh crore.

CAG’s criticism was that though the government had decided to allot

coal blocks through a system of competitive bidding, what it ended up

following was a method that was opaque and subjective.

Further, its point was, there was no legal impediment in introducing a

more transparent process.

The Supreme Court ruled that coal blocks allocated by the government

between 1993 and 2010 were illegal.

Category: Mains | GS – II | Polity

Source: The Hindu

Rail Safety

Why in news?

39 people have lost their lives after the Hirakhand Express derailed in

Vizianagaram on Saturday evening.

This is the third such horrific incident in the past three months. In

November – 146 people died when 14 coaches of the Indore-Patna

Express derailed. In December – 15 coaches of the Sealdah-Ajmer

Express went off the rails.

Apathetic Attitude:

Every incident has led to loud cries from experts and the public, asking

the government to address safety concerns.

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But on every occasion, a routine inquiry is ordered and the inquiry

commission gives its report after months. By then, the public would

have forgotten about this accident till another such unfortunate

accident takes place, then yet another inquiry commission will be

ordered.

And so, the cycle of accidents and routine inquiry commissions will

go on — but who will never forget such horrible yet avoidable

accidents?

An accident report is of use if its recommendation is followed in letter

and spirit. But nothing much happens with these recommendations.

Otherwise, why would reports prepared by experts in consultation with

the railways gather dust? The Kakodkar and Sam Pitroda committee

reports are just two, in recent times.

Also after every such accidents, the government has chosen to believe

that the incident is likely to have been the result of sabotage. This is

the view of the Indian Railways spokesperson in the latest case as well.

However, given the spate of accidents, the government and the Indian

Railways would be well advised to introspect and prioritise safety.

What is the core reason for the mishaps?

Indian railways is being systematically damaged by successive

governments because of the lack of understanding of this

organisation’s potential.

Indian railways needs to be benchmarked to the Japanese railway

system, Shinkansen, which, since 1964, has been carrying millions of

passengers with zero fatality.

The present problem of the railways is that the organisation is on the

verge of bankruptcy.Biggest worry is safety as the Depreciation

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Reserve Fund (DRF) and Development Fund (DF) are getting depleted,

since the railways are cash-starved.

The railways are not generating enough operating cash surplus to even

meet daily operating expenses. To replace an old asset (tracks, rolling

stock or signalling systems), you need to put money in the DRF.

On an average, the system requires Rs 20,000-25,000 crore year after

year to replace old assets. Instead of that, a provision had been made for

a mere Rs 3,200 crore for the DRF in the 2016 budget. Therefore, the

much required replacement of old assets is postponed — knowingly

compromising safety.

The railways have lost their focus from operation with safety, to

peripheral activities like catering, Wifi, bullet trains, etc. The railway

organisation is totally demoralised as uncertainty looms large in terms

of major changes at the top level.

The quality of maintenance isn’t being monitored. Further, continuous

track circuiting (CTC) is needed on all tracks to detect rail fractures.

With CTC, the derailment of the Indore-Patna Express would not have

occurred.

Technological measures to improve safety:

Advanced Signalling System.

Technological aids of Automatic Train Protection System to Loco pilots:

In order to avoid collisions due to Signal Passing at Danger or over

speeding.

Train Protection and Warning System: Prevents train accidents caused

by human error.

Train Collision Avoidance System: Has dual capability of preventing

train accidents caused due to Signal Passing at Danger or non

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observance of speed restrictions by train drivers as well as preventing

train collisions.

Complete Track Circuiting.

Automatic Block Signalling: For augmenting Line Capacity and to reduce

headway on existing High Density Routes on Indian Railways.

Block Proving Axle Counter: To enhance safety, automatic verification of

complete arrival of train.

Train Management System: Helps in real-time monitoring of trains in

the control room.

Recent Standing Committee Report:

The Standing Committee on Railways headed by Sudip

Bandopadhay submitted its report on Safety and Security in Railways on

December 14, 2016. Key observations and recommendations of the

Committee include:

1. Institutional framework:

a. For Indian Railways to ensure safety in the backdrop of inter

department differences is difficult. The Committee recommended

that a separate department solely entrusted with providing

safety and security.

b. The Ministry of Railways should appoint a Member (Safety) to

provide dedicated focus to the railway safety operations.

2. Under-investment in Railways:

a. The Committee observed that slow expansion of rail network

has put undue burden on the existing infrastructure leading to

severe congestion and safety compromises.

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b. Further, under-investment in Railways has resulted in congested

routes, inability to add new trains, reduction of train speeds, and

more rail accidents.

3. Accidents at unmanned level crossings (UMLCs):

a. In 2014-15, about 40% of the accidents occurred at UMLCs, and in

2015-16, about 28%. The Committee recommended that certain

measures such as Approaching Train Warning Systems, Train

Actuated Warning Systems for giving audio-visual warning to

road users about an approaching train should be implemented.

b. Further, additional road speed breakers should be constructed

before the level crossing gates to reduce the speed of approaching

traffic. Such measures should be provided at all manned and

unmanned crossings.

4. Accidents due to derailments:

a. Between 2003-04 and 2015-16, derailments were the second

highest reason for casualties. In 2015-16, around 84% accidents

occurred due to derailments.

b. One of the reasons for derailment is defect in the track or

rolling stock. Of the total track length of 1,14,907 km in the

country, 4,500 km should be renewed annually. However, of the

5,000 km of track length due for renewal currently, only 2,700 km

of track length was targeted to be renewed.

c. The Committee also noted that the Linke Hoffman Busch (LHB)

coaches do not witness higher casualties in case of derailments as

the coaches do not pile upon each other. It recommended that

Indian Railways should switch completely to LHB coaches.

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5. Accidents due to failure of railway staff:

a. The Committee noted that more than half of the accidents are due

to lapses on the part of railway staff. Such lapses include

carelessness in working, poor maintenance work, adoption of

short-cuts, non-observance of laid down safety rules and

procedures.

b. The Committee recommended that a regular refresher course

for each category of railway staff should be conducted.

c. The course can cover case studies of accidents due to common

errors, pattern of working, modernisation and technology

upgradation.

6. Accidents due to loco-pilots:

a. With rail traffic increasing, loco-pilots encounter a signal at every

kilometre and have to constantly be on high alert.

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b. Further, currently no technological support is available to the

loco-pilots and they have to keep a vigilant watch on the signal

and control the train accordingly. Loco-pilots are also over-

worked as they have to work beyond their stipulated hours of

duty.

c. The Committee recommended that loco-pilots be provided with

sound working conditions, better medical facilities and other

amenities to improve their performance.

d. The location of signals can be uniformly displayed and be linked

with visibility, braking distance, and speed.

Conclusion:

We need to go for a generational change in our railway system and

completely modernise it with latest technology. For this, the

government needs a massive investment programme without

relying on revenue from the railway’s internal generation.

Indian Railways has been taking a hit on its revenues on the one hand

and on the other it has been losing out to both air travel and road

transport. If lax safety standards are not addressed urgently, the Indian

Railways will acquire an unsafe tag soon.

Category: Mains | GS – III | Infrastructure

Doha amendment to Kyoto protocol:

The Kyoto Protocol signed in 1997, is an international treaty that

commits state parties to reduce greenhouse gas emissions.

Under the Kyoto Protocol, industrialized nations agreed to cut their

greenhouse gas emissions below 1990 levels.

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It is operational since 2005.

A group of rich and industrialized countries were assigned emission

reduction targets with the first commitment period of 2005-2012.

The Doha amendment was made to Kyoto protocol in 2012 to extend

the obligations of the developed countries for the second commitment

period of 2012-2020.

It requires ratification from a total of 144 of the 192 parties of the Kyoto

Protocol to become operational.

As only 75 countries have so far ratified the Doha amendments it could

not be enforced.

China, Poland, Australia, Mexico, South Africa, Indonesia are some of

the countries that ratified Doha amendments.

India is expected to ratify it this month.

US have not ratified the Kyoto Protocol and Canada withdrew from

Kyoto protocol in 2012.

ATM machine on Warship:

INS Vikramaditya is the largest warship and latest aircraft carrier of the

Indian Navy.

INS Vikramaditya has a new ATM machine with other transaction

facilities like deposit and transfer, installed onboard by SBI.

This is to enable 1500 personnel of the ship to manage their domestic

financial requirements and money transactions at their own

convenience

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New Programme under National Health Mission:

The Ministry of Health and Family Welfare is launching population

based prevention, screening and control programme for five common

non-communicable diseases i.e Hypertension, Diabetes, and Cancers of

oral cavity, breast and cervix.

There are many prevention strategies.

Population based prevention strategies target the whole population e.g

a mass-media anti-smoking campaign.

These interventions are a one size fits all type, with no allowance for

targeting specific populations.

While these programs are usually expensive, they are quite economic

when calculated on a cost-per-person basis.

Population-based prevention strategies include:

1. legislation

2. media-based strategies (including mass media campaigns and

reduction in the advertising and promotion of alcohol and

tobacco)

3. drug education (including school drug education)

25 january 2017 - netaji ias · the coal scam, or what’s popularly called the coalgate, first...

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