THE HINDU – CURRENT NOTE 26 APRIL
SC pulls up trial court in Sabarmati train blasts case
Orders release of undertrial on November 1
•A Supreme Court Bench of Chief Justice Khehar and Justice D.Y. Chandrachud on Tuesday gave the trial court in the 2000 Sabarmati train blasts case six months – October 31, 2017 deadline — to complete the proceedings.
•It ordered that undertrial Gulzar Ahmed Wani, who has spent the last 16 years in jail, be released on bail on November 1, 2017, whether or not the trial is completed. The Bench was hearing his appeal filed two years ago.
•Wani, who said he was a Ph.D scholar at Aligarh Muslim University before his arrest in the blasts case, has been acquitted in 10 of the 11 charges he faced.
•His bail application was rejected by the Allahabad High Court in 2015, which said the “release of such persons would adversely affect the interest of society.”
•“What a shame. This man spent the past 16 years in jail and he has been acquitted in 10 of the 11 charges… What a shame,” Chief Justice Khehar told the U.P. State counsel.
•The court found that the prosecution has only examined 20 prosecution witnesses in the case in the past decade-and-a-half.
•There are totally 96 witnesses. “Why should he suffer jail because you cannot lead evidence?” Chief Justice Khehar asked the State counsel. Mr. Wani earlier told the court: “The police made me a terrorist… may be because I am from Kashmir.”
•Wani, through his counsel Mohd. Irshad Hanif, was replying to Chief Justice Khehar’s question as to why a “legitimate man” needs so many names. The Supreme Court cause list identifies Wani as “Irshad, Ashraf and Abdul Hamid.”
•“How many names does a legitimate man need? I have only one name… why do you have so many aliases?” Chief Justice Khehar asked Mr. Hanif. “The police have given me [Wani] many names. I cannot tell you why they gave me aliases… I cannot answer for them,” Mr. Hanif responded.
Odisha’s famous tiger dance losing its charm for many
Experts feel the standard of the folk dance has gone down over the years as performers are not showing interest
•Though the biennial Thakurani Jatra festival of Berhampur showcases the famous tiger dance or ‘Bagha Nacha’, experts feel that the standard of this folk form has gone down over the years.
•“The Thakurani Jatra festival can be used as a platform to keep this tribal dance form alive among the common people. But till now it has not been used for this purpose,” rues Bighneswar Sahu, convener of the Odisha Folk Foundation. Performers at the festival do not show serious interest in this unique dance form or in learning its intricacies, as a result of which the standard has gone down, he adds.
•Mr. Sahu is the grandson of folk dance guru and Padma Shri awardee, the late Bhagaban Sahu, who had codified this tribal folk dance. It was part of the tribal life in the hilly regions of Bhanjanagar in Ganjam and adjoining Kandhamal districts. Sahu had learnt the folk dance from several tribal gurus. The dance was the key element of the critically acclaimed movie Bagh Bahadur by Buddhadev Bhattacharya, which won the National Film Award for the best feature film in 1989. The film had been choreographed by Sahu.
•Bhagaban Patra and Rajendra Patra, who are disciples of this folk dance guru and have performed all over the country and abroad, feel sad about the lack of seriousness as well as basic artistic skills of the performers during the Thakurani Jatra.
•Narendrapur Kalavikas Kendra, a folk music and dance institution established by Sahu near Berhampur, is still teaching and performing the authentic form of ‘Bagha Nacha’. They suggest that the State culture department, management of the Thakurani Jatra and amateurs interested in the dance form should come together to hold special workshops ahead of the festival. At the workshop amateur tiger dance performers can learn the basic skills and grammar of the art, they say.
•Mr. Bighneswar Sahu says amateur performers trained at such workshops can be used to promote social messages related to forest and wildlife protection during the festival.
•During the 21-day-long Thakurani Jatra festival, which is currently in progress in Berhampur, several people, including children, get their whole body painted like a tiger as a homage to Goddess Budhi Thakurani.
Judgment turns focus on removal of police top brass
While reinstating Senkumar as Kerala DGP, SC relied on Prakash Singh case
•Monday’s Supreme Court judgment reinstating T.P. Senkumar as Director-General of Police in Kerala has brought the spotlight back on the issue of executive privilege in appointing and removing top officials. The verdict by Justices Madan B Lokur and Deepak Gupta draws from a September 2006 judgment in what is known as the Prakash Singh case where the Supreme Court said a DGP should have a two-year tenure and can be removed only in consultation with the State Security Commission under certain conditions.
‘Compelling reasons’
•“We are therefore clearly of the opinion that the removal or displacement of any senior level officer from a tenure appointment must be for compelling reasons…on material that can be objectively tested. This is what the rule of law expects…” the two-judge bench held.
•Interestingly, Uttar Pradesh is the only State of the five that recently held Assembly elections which has a new DGP — Javeed Ahmed was removed and Sulkhan Singh appointed in his place.
•“It’s imperative that the DGP must enjoy the confidence of the Chief Minister,” a top U.P. cadre police officer said on the condition of anonymity. The State has had eight DGPs in the last five years and, according to officials in U.P., the top cop does not have a fixed tenure of two years.
•On Monday night, Punjab transferred 18 senior IPS officers in a major reshuffle after a Congress government led by Capt. Amarinder Singh took power in the State.
Security Commission
•In the Prakash Singh case, the Supreme Court directed State Governments to constitute a State Security Commission to ensure that the State “does not exercise unwarranted influence or pressure on the State police and for laying down the broad policy guidelines so that the State police always acts according to the laws of the land and the Constitution of the country.”
•“This watchdog body shall be headed by the Chief Minister or Home Minister as Chairman and have the DGP of the State as its ex-officio Secretary. The other members of the Commission shall be chosen in such a manner that it is able to function independent of government control,” the 2006 judgment stated.
•A 2014 report prepared by the Commonwealth Human Rights Initiative revealed that while States have set up State Security Commissions, the intended independent character of these bodies has been given the go-by.
SC seeks common law against cross-border cattle smuggling
Asks Centre to extend rules framed for Nepal to Bangladesh
•The Supreme Court on Tuesday asked the Centre to extend to the India-Bangladesh border areas the rules framed to counter cross-border cattle smuggling to Nepal.
•A Bench led by Chief Justice of India J.S. Khehar was informed by government counsel that the Livestock Animals Rules and Case Property Animals Maintenance Rules to prevent cattle-smuggling across the Nepal border, framed in December 2016 on the basis of the Supreme Court’s orders, were now with the Union Law Ministry prior to its notification.
•The government said the rules would have far-reaching effect on the authorities’ efforts to curb cattle-smuggling and they envisaged joint action by paramilitary forces and the district administrations.
•Earlier on Monday, the Centre had proposed issuing “unique identification number sequences” for cows and their progeny to protect them from cattle smuggling.
•“ ... Government of India, has devised a method of tamper-proof identification of cattle using polyurethene tags with unique identification number sequence. This may be made mandatory for all cow and its progeny throughout India for all cattle that is owned,” said a government panel report in the Supreme Court.
Surgical strikes here to stay
Included in joint doctrine of the services as a possible response to terror
•India’s latest military doctrine has added surgical strikes, even those across the border, among the nation’s possible responses to terrorist attacks.
•The “Joint doctrine of the Indian armed forces” prepared by the Headquarters, Integrated Defence Staff, was released by the Chief of the Naval Staff, Admiral Sunil Lanba, Chairman, Chiefs of Staff Committee, in South Block here on Tuesday.
•The first joint military doctrine was released in 2006.
•“The response to terror provocations could be in the form of ‘surgical strikes’ and these would be subsumed in the sub-conventional portion of the spectrum of armed conflict,” the doctrine says.
Among the options
•The reclassification of surgical strikes, officials said, shows that they are not a one-off event any more but part of several options that would be considered. In the past two years, the Army had carried out surgical strikes across the border with Myanmar and the Line of Control (LoC) with Pakistan, targeting terrorist camps.
•The doctrine will serve as a cornerstone document for application of military power in a “synergised manner leading to enhanced efficiency, optimum utilisation of resources and financial savings”, the Navy said in a statement.
Out in record time
•The revised doctrine was formulated in a record time of nine months, a senior officer said.
•Last year’s event of surgical strikes and increased tensions on the border gave further impetus to its preparation.
•“Doctrines are always works in progress and keep evolving from time to time. A collegiate approach was adopted and all three Service Headquarters actively participated in the formulation of this capstone document,” a senior officer toldThe Hindu .
More doctrines
•In the past decade or so, a lot of integration has taken place in the Indian armed forces, which is highlighted in this doctrine, especially integration in the field of operations, training, management and perspective planning.
•The officer stated that this would be followed by formulation of other keystone doctrines such as information warfare, training and so on in due course.
•“It speaks of the threat posed by radicalisation of youth and also lays emphasis on a proactive philosophy of the Indian armed forces,” the officer added, highlighting the key points in the document.
India, Sri Lanka slip on oil, trade deals
Ranil’s visit accompanied by disquiet back home
•Sri Lankan Prime Minister Ranil Wickremesinghe arrived in New Delhi on Tuesday for official meetings expected to announce several MoUs on developing energy and infrastructure projects in Trincomalee and fast-tracking negotiations for an upgraded free trade agreement — the Economic and Technical Cooperation Agreement (ETCA). But both face opposition in Sri Lanka.
•Mr. Wickremesinghe, whose visit is expected to confirm a number of agreements to be announced during Prime Minister Narendra Modi’s visit to Sri Lanka from May 12 to 14, will meet Mr. Modi, External Affairs Minister Sushma Swaraj, Home Minister Rajnath Singh and Transport Minister Nitin Gadkari.
Trincomalee oil storage
•External Affairs Ministry officials said they hoped to see the agreement on the Trinco Oil storage, which was first negotiated in 2003, and the development of infrastructure — highways, power plants, a refinery and an SEZ — around the key port town of Trincomalee to be wrapped up during Mr. Wickremesinghe ’s talks on Wednesday.
•In a last-minute hitch on Sunday night, oil union workers in Colombo went on a strike against the planned MoU with India for 84 tanks in the Trincomalee upper oil tank farm, of which Sri Lanka is keen to retain at least 10 for use by the Ceylon Petroleum Corporation. After day-long talks with Sri Lanka’s Petroleum Minister Chandima Weerakoddy, and an intervention by Mr. Wickremesinghe , the unions called off the strike that hit fuel supplies in the country on Monday, but claim they have an assurance that their concerns over leasing the tanks to India will be taken into consideration before any announcement is made.
•Backing their protest were members of the Joint Opposition and the leftist JVP, who said the deal would give India control over energy resources in the island nation.
Upgraded FTA
•Meanwhile in Delhi, Commerce Ministry officials continued their three-day talks on the ETCA, which began on Monday, to iron out differences on the upgraded Free Trade Agreement (FTA) of 2000 to include services, investment and technological trade, which has also faced opposition from political parties as well as some businessmen.
•“There is widespread opposition to the ETCA in Sri Lanka. Professionals are strongly against it, so are businessmen,” said G.L. Peiris, the leader of the Joint Opposition who is close to former President Mahinda Rajapaksa.
•“The actual working experience of the FTA for the past 17 years is responsible [for the opposition]. A variety of means have been resorted to, that make it difficult for Sri Lankans — import licenses, restrictions on ports, times of the year they are allowed to use the ports, certification and quarantine times,” Mr. Peiris told The Hindu in an interview in Delhi. He went on to warn of opposition protests if PM Wickremesinghe “shuts his eyes to the problems.”
•Acknowledging the problems, a Commerce Ministry official said India had sent a team to Sri Lanka recently to make presentations on the benefits of widening the FTA and had formally asked the government for a list of perceived “non-tariff barriers” that businessmen were complaining about. “Every country is hesitant these days to negotiate trade in services. This is an inevitable part and has to be navigated,” the official said. External Affairs Ministry officials conceded that the ETCA was far from being concluded at present.
Boots on the ground alone won’t help
Experts say that rather than just a security-centric approach, a coherent policy is required to quell unrest
•Security experts are calling upon the government to come up with a cohesive response to internal security challenges, against the backdrop of the deadly attack on CRPF personnel on Monday in Chhattisgarh and unprecedented scenes of protests in Kashmir.
•One senior official said the “incoherence of policy” had worsened the internal security situation, with violence in both Maoist-affected areas and Kashmir breaking new records in recent years.
•In Chhattisgarh, for example, the number of security personnel killed in 2017 is already 72, higher than the 67 in 2011, the highest in recent years. In Kashmir, total casualties last year was 267, the highest since 2010, and in 2017, already 64 people have been killed.
•“Perversity of policy is resulting in the situation in J&K very certainly,” said Ajai Sahni, Executive Director of the Institute for Conflict Management.
•Dr. Sahni said Kashmir was now paying for the polarising campaigns of all key political parties. “The PDP [Peoples Democratic Party] and for that matter, the NC [National Conference] have always pushed for soft separatists, and the BJP pushes a Hindutva line. And when the rage and frustration expresses itself in violent campaigns, they ask why is Pakistan doing it,” he said.
•In the case of Maoist violence, he blamed the Union government for the present situation. “This government has pulled back on a lot of Central funding for Maoist-affected areas. There is a lack of sustained attention,” he said.
•A senior official said the fact that the CRPF, India’s key counter insurgency force against Maoists and a key presence in Kashmir, have gone without a a full-time Director-General for two months speaks volumes about the government.
Narrow approach
•Lieutenant-General D.S. Hooda, who retired as the Commanding-in-Chief of the Northern Army Command in 2016, said, “We are looking at these internal problems — LWE [left-wing extremism] or Jammu and Kashmir — with a very narrow security-centric approach like how many terrorists killed and so on.”
•“A whole government approach is required like reaching out, development, and political moves,” he said.
•He said what the Army called human terrain, such as ground conditions, impact of social media, radicalisation and so on, were not being taken on board for policy making.
•In the case of naxal areas, intelligence and equipment for paramilitary forces need to be urgently stepped up, the former Army commander said.
•For many observers, what is adding to the problem is the lack of informed debates in mass media. “No one is accountable, if you go by the public discourse. That is resulting in some kind of lethargy within the government,” a senior military officer said.
A call for reform
The IMF could turn irrelevant unless it reforms to keep up with rival global institutions
•Finance Minister Arun Jaitley has demanded reforms to the International Monetary Fund’s controversial quota system, shedding light on the problems facing the Bretton Woods institution in today’s global economy. Quotas determine the size of contingency funds at the disposal of the IMF to lend to countries in need of help, as well as the power of individual countries to influence lending decisions and tap into the funds themselves. Though developing countries hold less than half the overall quota at the moment, with their rapidly increasing economic heft they have demanded a greater share — with limited success. In this context, speaking at the spring meetings of the IMF, Mr. Jaitley reiterated the need to reform the quota system further. Else, he warned, the legitimacy and credibility of the IMF could be eroded. The 15th General Review of Quotas (GRQ), the most recent attempt to revise the size and composition of the system, was to be completed by October 2017, but the deadline has now been extended to 2019. The delay was not unexpected, given the poor precedent set by the long delay in adoption in 2016 of the previous GRQ (originally approved in 2010). That had doubled the overall size of the quotas to $659 billion (from $329 billion) while allotting an additional 6% of quotas to the developing world. But with the rise of competing global institutions ready to meet the capital needs of the developing world, the patience of countries such as India may be tested more easily.
•Also at stake is the potency of the IMF in keeping up with the changed fundamental needs of developing economies. The developing world is looking beyond the short-term crisis management tools that the IMF, as the sole international lender of last resort, has traditionally offered them for decades now — albeit in an unsatisfactory and politically biased way. China, for instance, with its steadily rising influence on the global economy, has grown to be the focal point for economies seeking alternative sources of capital to fund their long-term growth needs. This month, Mr. Jaitley announced that India is seeking $2 billion from the New Development Bank, set up by the BRICS countries in 2015 with a more equitable power structure, to fund infrastructure projects. The Asian Infrastructure Investment Bank, launched in 2014, could be an even bigger threat to the IMF’s influence given its larger membership, lending capacity and international reach. In this environment of competition, the IMF will have to do more than just superficially tinker with its asymmetric power structure and outdated quota system. Else, it could be slowly but steadily pushed into irrelevance. Meanwhile, it remains to be seen whether India will continue to push for reforms at the IMF even as it simultaneously seeks to diversify its funding base, or whether it will assume a bolder stance in openly favouring one over the other.
The expanding universe of IP
Granting data exclusivity for clinical trials would undermine access to medicines
•April 26 is World Intellectual Property (IP) day. Over the years, global IP standards have steadily expanded beyond World Trade Organisation (WTO) requirements, thanks to free trade agreements such as the Regional Comprehensive Economic Partnership (RCEP) which India is currently negotiating with its trading partners. But there is new cause for worry. Apart from increasing the scope of existing IP rights, there is a move to create new IP-like rights. A case in point is data exclusivity exclusivity over clinical trial data submitted by drug companies to the regulatory authorities for market approval, the grant of which could severely undermine access to medicines.
•The propensity to expand the universe of IP is not new: businesses have demanded patent protection for the way they do business; motorcycle manufacturers have got into dispute over the trademark on the exhaust sound of motorcycles; and animal activists have fought for copyright in a selfie taken by a monkey. IP in the modern world defies definition, transcends boundaries and has become synonymous with ascribing value to things that we don’t fully understand. The issue of whether India should offer data exclusivity — one of the key issues discussed in the RCEP — is tied to our understanding of what amounts to IP and whether we are obliged to protect it.
Why data exclusivity?
•Data exclusivity prevents drug regulators from referring to or relying on data submitted by an originator company relating to a drug’s safety and efficacy while approving bioequivalent versions of the same drug, i.e. therapeutically equivalent generics and biosimilars for a fixed period of time. A drug that comes to the market for the first time undergoes extensive preclinical and clinical trials on animals initially and human beings later before it is introduced for public use — a time-consuming and expensive process. Developed countries, on behalf of their pharmaceutical lobbies, seek data exclusivity in developing countries arguing that this is necessary to recognise and incentivise the efforts put in to bring a new drug to the market along with recovering the research and development costs incurred — arguments similar to those used to justify the grant of patents.
•However, such exclusivity would prevent market entry of generic versions of the drug, which could be detrimental to the larger public interest.
•Pharmaceutical companies have been pushing for data exclusivity to prolong already existing monopoly and delay competition from generics even after the expiry of the 20-year patent term or to gain exclusivity on non-patented drugs. In India, such a system may negate the impact of Section 3(d) of the Patents Act, which disallows evergreening patents. With data exclusivity, a company could nevertheless gain exclusive rights over such drugs even though they are not patented. This is because during the period of exclusivity, regulators are barred from using the originators’ data to grant marketing approval to generics; generic companies would then be required to repeat the entire cycle of clinical trials already conducted instead of merely establishing bioequivalence to prove efficacy. As seen in countries where data exclusivity is granted, generic companies do not undertake such clinical trials and their versions of the drug accordingly stay off the market as long as the period of data exclusivity lasts. With restricted market entry of generics, artificially high drug prices remain which puts medicines beyond public reach. Apart from the financial costs, repeated clinical trials on human subjects raise ethical and moral concerns.
•Unlike in the West, India does not offer data exclusivity and allows bioequivalent generics to be registered based on, among other things, trial data available in the public domain.
Test data as a public good
•The argument that clinical trial data needs exclusivity in the light of the money expended is an untenable one. Automotive companies spend millions of dollars on data generated in car crash tests to ensure passenger and pedestrian safety. Automotive companies have not made any proprietary claim on the data generated, yet. Unlike automotive companies which use crash test dummies, pharmaceutical companies that test their drugs on human subjects have a greater obligation to make the data public and IP-free. The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) does not mandate data exclusivity. Providing data exclusivity is a TRIPS-plus measure. According IP-like protection to data exclusivity is not advisable for three reasons.
•First, it is an absolute protection granted without any institutional check such as opposition and revocation as available in other forms of IP and ends up as an irrevocable exclusivity to the originator. Second, the U.S. Supreme Court in Mayo v. Prometheus, 132 S. Ct. 1289 (2012) has excluded patent protection to biological correlations, terming it as an extension of natural laws. Extending IP-like protection to clinical observations — the primary objective of data exclusivity — will open a window to claim exclusivity in a subject matter traditionally excluded under patent law. Third, offering IP-like exclusivity solely on the basis of money spent in regulatory testing will set a bad precedent for other industries that may now claim an IP when there is none.
Merging PSU banks will help: RBI’s Patel
‘This will aid in handling stressed assets problem’
•Reserve Bank of India Governor Urjit Patel has said the Indian banking system could be better off if some public sector banks are consolidated to have fewer but healthier entities, as it would help in dealing with the problem of stressed assets.
•“As many have pointed out, it is not clear that we need so many public sector banks. The system could be better off if they are consolidated into fewer but healthier banks,” Dr. Patel said while delivering the Kotak Family Distinguished Lecture at Columbia University.
•He said since there were cooperative banks and micro-financial institutions to provide community-level banking, “some banks can be merged, as a quid pro quo for timely government technical injection.”
•Dr. Patel said a challenge that India’s central bank was grappling with was the large stressed banking sector balance sheets. He noted that a series of measures have been taken in the past year on resolving the problem of the non-performing assets, including completion of a comprehensive asset quality review of the banks.
•In the instance of the insolvency and bankruptcy code, the RBI has been preparing actively for the next step in an orderly resolution and this will be undertaken concomitantly with the resolution of the weakest bank balance sheets under a revised prompt corrective action framework, he said.
‘Raise private capital’
•“One of the things that the public sector banks need to do is to raise private capital from the market and not rely on government largesse,” he said. Public sector banks have to be required to share the burden of recapitalising, Dr. Patel said.
•This will be a good way to restore some market discipline and get the banks and their shareholders to more seriously care about management decisions, he said.
•Dr. Patel also said that consolidation of banks could also entail sale of real estate where branches are redundant as well as offering voluntary retirement schemes to manage headcount and adding younger, digital-savvy personnel.
•“The weaker banks are losing market share (and) that is a good thing,” he said.
•“The stronger banks are gaining market share, which is a good thing, particularly the private sector banks. In a way it is working; those who need to shrink are shrinking.”
•Improved market valuations would create an opportune time for the government to divest some of the ownership in the restructured banks and this would reduce the overall amount that the government needs to inject into them to deal with the problem of NPAs and stressed assets, he said.
•Looking ahead, Dr. Patel said India’s economic growth was getting a boost with domestic drivers and was poised to be 7.4% in 2017-18.
•He stressed that the collateral benefit of demonetisation was faster transmission of monetary policy, which strengthened in the second half of 2016-17. “...evidence points to effects of demonetisation being transitory... GDP slowdown was cushioned by robust consumption and government spending,” he said.
On protectionism
•Cautioning against protectionism, Dr. Patel said “I don’t think that we have heard the last word on U.S. policy talk about this because there is a push back internationally that the world has benefited from an open trading system.”
•“Where would Apple be, where would Cisco be, where would IBM be if they were not sourcing the best products and talent from across the world? And if policies come in the way of that, then the big wealth creators in a country that advocates protectionism are ultimately affected,” he said.
14 States to pass GST Bill by mid-May
New tax regime will soften inflation, says Revenue Secretary Adhia
•Fourteen state legislatures will approve their respective State Goods and Services Tax (SGST) laws by mid-May, according to Revenue Secretary Hasmukh Adhia.
•Addressing a GST Conclave here on Tuesday, he said all states were expected to pass their SGST laws by May-end to ensure that the GST regime was rolled out by July.
•Bihar and Telangana had already passed the SGST laws while Rajasthan was likely to approve the bill on Wednesday.
•Mr. Adhia said the new regime would not have any inflationary impact on the economy since the country would be shifting away from the multiple-level taxes that had a cascading effect. The GST regime would also aid in easing inflation.
•Allaying fears that consumers would have to pay more for goods and services under the GST regime due to an increase in tax rates, Mr. Adhia said the prices of most items would decrease while those of services might stay at the same level.
•“Around 60% of the income of the Centre and States comes from items that attract 12.5% excise duty and 14% value added tax. There will be a likely reduction in tax on these items under GST,” he said.
•Also, though a majority of the services would see service tax rising to 18% under the GST regime from the current 15%, most services would get the benefit of input tax credit on purchases and, therefore, the overall tax incidence wouldstay the same, he said.
•However, there could be a marginal increase in tax for some services, Mr. Adhia added.
Essential items
•All foodgrains and absolute essential items for people were likely to be exempted from GST, the official said. Therefore, GST would not have an inflationary impact. Mr Adhia, however, said the GST Council would take a call on it.
•The GST Council’s next meeting is scheduled for May 18-19 and is expected to discuss fitment of commodities in the four-tier tax structure under GST.
•Under GST, every registered person would be assigned a compliance rating on the basis of the record of compliance in respect of specified parameters. The ratings would be made public.
•A prospective client would be able to see a supplier’s rating and decide whether to deal with the supplier or not, said Prakash Kumar,CEO, GST Network (which provides IT infrastructure and services for implementation of GST).
•Mr. Kumar said it would help in healthy competition among taxable persons.
NITI Aayog moots taxing agriculture income
Bid to curb tax evasion by non-agricultural entities
•Government think-tank NITI Aayog has suggested that agriculture income be brought under the purview of personal Income Tax in a bid to curb tax evasion.
•In its three-year action agenda, discussed at the Governing Council meeting, the Aayog reasoned that non-agricultural entities sometimes use the blanket relief to evade taxes.
•“All agricultural income is currently exempted from Income Tax regardless of its size. While the provision is meant to protect farmers, non-agricultural entities sometimes use it to evade taxes by declaring agriculture as the source of their income,” a senior official told The Hindu.
•“In order to mitigate the generation of black money, the loopholes need to be plugged,” the official said.
•“A key limitation of personal Income Tax regime is the small tax base. In assessment year 2014-15, only 3.65 crore individuals filed returns. Of this group, only 1.91 crore individuals or around 1.5% of the population paid any Income Tax at all,” the official said.
•The official added that this situation was not optimal. “Therefore, we should endeavour to bring a large number of citizens into the direct tax net even if their tax liabilities are minimal.”
Widening tax base
•Speaking at a press conference, NITI Aayog Member Bibek Debroy said this would widen the tax base and more funds could be made available for the social sector schemes.
•“On the personal Income Tax side, exemption should go... also tax rural sector, including agriculture income, above certain threshold,” Mr. Debroy said. There were about 225 million households in India of which roughly 2/3rd were in rural India. Rural India, he said, was effectively out of the purview of all personal income taxation.
