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