📰 U.S. partnership vital in Asia-Pacific: India
•The Indo-U.S. partnership helps maintain stability in the Asia-Pacific region, the External Affairs Ministry said here on Tuesday, hours after President Donald Trump announced the new National Security Strategy of the U.S. and described India as a “leading global player”.
•The response came even as both sides held the inaugural India-U.S. Designations Dialogue focussing on specific groups and individuals responsible for cross-border terrorism against India.
Common objectives
•“We appreciate the strategic importance given to India-U.S. relationship in the new National Security Strategy released by the U.S. As two responsible democracies, India and the U.S. share common objectives, including combating terrorism and promoting peace and security throughout the world.
•A close partnership between India and the U.S. contributes to peace, stability and prosperity in the Indo-Pacific region as well as to the economic progress of the two countries,” a statement from the official spokesperson said.
•Tuesday also marked the first dialogue between India and the U.S. on terrorism-related designations.
•Both sides exchanged information about the strategy to be followed to isolate and ban terrorism-related individuals and organisations.
•India has been campaigning for banning Pakistan-based terror group Jaish-e-Mohammed’s chief Masood Azhar at the UN but has failed in its goal due to China’s opposition.
📰 Parliament gives nod to IIM Bill
As per the IIM Bill, 2017, a Board of Governors will appoint the Director of each IIM.
•Parliament on Tuesday unanimously passed a Bill to grant the Indian Institutes of Management the power to grant degrees instead of post-graduate diplomas.
•The Bill also allows students to acquire doctoral degrees from the IIMs.
•The Bill, passed by the Lok Sabha earlier, was passed by the Rajya Sabha on Tuesday.
Doctoral degrees
•Earlier, fellowships of the IIMs were not regarded as Ph.D.s, which led students to complete their diplomas and go abroad if they wanted to earn a doctoral degree.
•The hope is that the passage of this Bill will pave the way for more research at these prestigious instit- utions.
•The Bill also confers on the 20 IIMs the status of institutions of national importance, granting them greater functional autonomy by restricting the role of the government in them.
•Till now, the Centre had a role in the appointment of the chairpersons and directors to their Boards and also fixing the pay of the directors.
•As per the IIM Bill, 2017, a Board of Governors will appoint the Director of each IIM.
•A search-cum-selection-committee will recommend the names. And the director will be eligible for variable pay as determined by the Board.
📰 Govt. defends special courts for politicians
•Finance Minister Arun Jaitley on Tuesday defended the government’s decision to set up fast track courts for dealing with criminal cases against politicians and said lawmakers should take the lead in setting an example.
•After Opposition members in the Rajya Sabha expressed concern over the decision, Mr. Jaitley, who is also Leader of the House, said he felt that like Caesar’s wife, lawmakers should be above suspicion. “As elected representatives, can lawmakers say their trial should be delayed,” he asked.
•Earlier, Opposition parties, led by the Congress and the Samajwadi Party, raised the issue of the Supreme Court’s recent directive to the Centre to draft a scheme for setting up fast track courts to deal exclusively with criminal cases involving legislators and politicians.
•Raising the issue through a point of order, Naresh Agrawal of the Samajwadi Party said Article 14 of the Constitution provides for equity before law and elected representatives are on a par with other citizens. While there were no special courts to fast-track the trial of terrorists and dreaded criminals, setting up such a court for elected representatives would create a misleading perception of politicians, he said. He questioned the government’s affidavit supporting the fast-track courts.
•Anand Sharma of the Congress said that while there was no question of delaying prosecution of anyone, it would amount to profiling and excessive vilification of lawmakers if a perception was created that fast-track courts were needed only for the elected representatives. The government, he said, should ensure that enough funds were allocated for creation of enough number of courts to fast-track trial of all. But singling out the elected representatives would create a perception that could be abused by the government of the day, he said.
📰 Ensure level-playing field for the disabled in higher educational institutions: SC
•Higher educational institutions, both government ones and those who take government aid, should ensure a level-playing field for disabled persons or face action for discrimination, the Supreme Court warned.
•Reminding the government that the Rights of Persons with Disabilities Act provides for not less than 5% reservation in seats during admissions and this law has not so far been complied with, a Bench of Justices A.K. Sikri and Ashok Bhushan cautioned that appropriate legal action would be initiated against defaulting educational institutions.
•The apex court, in a 26-page judgment, directed the University Grants Commission (UGC) to constitute a committee to consider the feasibility of having guidelines for accessibility of students with disabilities in universities and colleges.
•“The expert committee may also consider the feasibility of constituting an in-house body in each educational institution (of teachers, staff, students and parents) for taking care of day-to-day needs of differently abled persons as well as for implementation of the schemes that would be devised by the expert committee,” the Bench said, adding that the exercise be completed by June 30 next year.
•It said that an action taken report in this regard be placed before it in July 2018.
•Delivering a judgment on an 11-year-old PIL plea filed by the Disabled Rights Group, the Bench raised three key issues - the non-implementation of reservation of seats in educational institutions as provided in the Disabilities Act, the lack of proper access for orthopaedically disabled persons in educational institutions and the absence of provisions and facilities for teaching disabled persons.
•The Bench noted that a provision under the 2016 Act provided that persons with benchmark disabilities shall be given an upper age relaxation of five years for admission in institutions of higher education.
•The court said the educational institutions concerned should submit a list of the number of disabled persons admitted in each course every year to the Chief Commissioner or State Commissioner under the Disabilities Act.
•“To ensure the level-playing field, it is not only essential to give necessary education to the persons suffering from the disability, it is also imperative to see that such education is imparted to them in a fruitful manner,” it said.
•The Bench said that such requirement was to ensure that a student with disability, after proper education, would be able to lead an independent, economically self-sufficient and fully participatory life.
•Regarding law colleges, the court said intimation about the number of admissions given to disabled students should be sent to the Bar Council of India (BCI).
📰 Centre examining health effects of e-cigarettes: Nadda
Health Ministry constitutes three groups to study the various aspects of e-cigarettes
•The government is examining the legal implications and health effects of e-cigarettes, Union Health Minister J.P. Nadda told the Rajya Sabha on Tuesday.
•Mr. Nadda said the Health Ministry had constituted three groups to study the various aspects of e-cigarettes.
•In reply to a question from Congress member Rajni Patil, Mr. Nadda said the Ministry formed three groups. One was to study the legal implications of this e-nicotine drug induce system, another was to go into the health effects and the other was to study advocacy. “All three sub-groups have given their reports. The Ministry is working on them. We are looking for legal opinion also, and very soon, we will be deciding the course of action,” he said.
•When Chairman M. Venkaiah Naidu asked Mr. Nadda to explain e-smoking, the Minister said it referred to the practice of inhaling capsules of nicotine in a vaporised form after they were heated. “This is actually an electronic nicotine delivery system. It has a nicotine capsule, which has no tobacco but nicotine that gives excitement as it hits the brain. Some countries have regulated e-smoking, while others have banned it,” he said.
📰 Seeing through a glass darkly: on combating terrorism
To deal with the terror threat, there must be far greater sharing of intelligence among agencies worldwide
•Yet another anniversary of the November 26, 2008 terror attacks on multiple targets in Mumbai has come and gone. Much has changed since then and terror has evolved into an even more dangerous phenomenon. Recent variants represent a paradigmatic change in the practice of violence.
A different genre
•It is difficult to recognise the new generation of terrorists as a mere extension of the earlier lot of radical Islamist terrorists who were influenced by the teachings of the Egyptian thinker, Sayyid Qutb, and the Palestinian Islamist preacher, Abdullah Azzam, and adopted the practical theology of the Afghan warlord, Jalaluddin Haqqani. There is less theology today and the new age terrorist seems to belong to an altogether different genre of terrorism.
•This is not to say that the 2008 terror attacks in Mumbai were not different in the methodology and the tactics used in the September 11, 2001 attack in New York City. Nevertheless, the spate of recent attacks in Europe and parts of Asia, from 2015 to 2017 — beginning with the attack on the Charlie Hebdo offices in Paris in January 2015, the major incidents at Brussels and Istanbul Ataturk airports as well as the Bastille Day attack in Nice, France, all in 2016, to the string of attacks in London, Stockholm, Barcelona and New York, in 2017 — are very different in structure and the morphology from attacks of an earlier period.
Standing out from the crowd
•A large number of terror attacks in the past three years have been attributed to the handiwork of the Islamic State (IS), and reveal its leaning towards the “nihilism” of Sayyid Qutb. It is this which distinguishes the IS from many of the other radical Islamist groups such as al-Qaeda and its affiliates. The IS’s recruitment techniques, especially its ability to proselytise over the Internet, including “direct to home jihad” as also its more sanguinary brand of violence, set it apart from earlier variants of radical Islamist terror.
•Even while the IS has gained a great deal of prominence due to its brand of violence, other terror networks have continued to be no less active. For example, al-Qaeda and its affiliates. The Boko Haram in Africa has been responsible for more killings than most people would realise. Closer home, the Afghan Taliban and the Haqqani network have carried out several spectacular attacks inside Afghanistan. The Tehrik-e-Taliban Pakistan (TTP) and the Lashkar-e-Jhangvi have carried out several attacks inside Pakistan. Pakistan provides the wherewithal and the support to terror outfits such as the Lashkar-e-Taiba and the Jaish-e-Mohammad to launch well-planned attacks on Indian targets.
•Most of these outfits continue to adopt earlier methodologies. These have proved no less effective than those followed by the IS. The terror attack on a mosque in North Sinai, Egypt in November this year, which killed over 230 persons, is one such example. In December, the TTP was responsible for a terror attack on an agricultural training institute in Peshawar, Pakistan. Differences among terror outfits, do not, however, preclude a complicated pattern of relationships when it comes to operational aspects.
Incorrect perception
•Understanding the constantly altering trajectory of terror is important before charges of intelligence failure are levelled. It has become axiomatic to attack agencies of intelligence failure whenever a major terror attack takes place. This need not be the case in every instance. The usual charge levelled is of the failure of intelligence agencies “to connect the dots”. Most often, this is not true. There are many other reasons for adequate intelligence not being available to prevent a terror attack. The danger is that a wrong diagnosis could prevent further improvements in intelligence collection and analysis.
•One common fallacy is that intelligence agencies have remained static, are rooted in the past, and that their personnel are inadequately trained to handle current day intelligence tasks. While there is room for improvement, it is a mistake to presume that intelligence agencies have not made rapid progress and kept up with the times. Intelligence agencies today are well-versed in the latest techniques of intelligence gathering and analysis. Agencies obtain vast amounts of information from both human and technical intelligence, not excluding signal intelligence and electronic intelligence, intelligence from satellites and photo reconnaissance, etc. This is apart from open source intelligence.
•Agencies employ data mining techniques and are familiar with pattern recognition software. Today, noise and signals constitute valuable meta-data. Analysing meta-data has produced more precise information and intelligence than is possibly envisaged, and agencies well recognise the value and utility of this.
•In addition, intelligence agencies have become highly adept in monitoring and exploiting open source material. Mapping and analysis of social networks is today a critical aspect of their work. This is especially useful when it comes to unearthing covert terror networks. Many intelligence agencies today have an extensive database of several thousands of terrorists and potential terrorists.
•Admittedly, intelligence agencies, like many other organisations, are risk-prone. They do make mistakes. Intelligence analysts, like analysts in other fields, are particularly vulnerable. Problems also arise from inadequate sharing of intelligence across institutions and countries. All these, however, are a far cry from the charge of an inability or failure “to connect the dots”.
•The real problem is that when dealing with terrorism and terror networks, no two situations in the actual world are identical. The nature of threats is such that they continue to evolve all the time. Both the 2001 terror attack in New York and the November 2008 attack in Mumbai were one of a kind with few parallels at the time. Anticipating an attack of this nature remains in the area of an “intelligence gap” rather than an “intelligence failure”. Most experts explain an intelligence gap as one denoting an absence of intelligence output while an intelligence failure is one where, based on available evidence, no warning was issued.
Newer challenges
•One of the major challenges that all intelligence agencies face is a qualitative understanding of the newer, and many post-modern threats. These newer generation threats, including those by terror groups and outfits, often lie “below the radar” or beyond the horizon. Anticipating such threats and their nature requires intelligence agencies to be constantly ahead of the curve. Anticipating newer threats is only partly facilitated by today’s technical advances such as new computing and communication technologies. However, these alone are not often enough to meet today’s intelligence needs.
•As problems become more complicated, and as terror networks become even more sophisticated, there has to be recognition that the situation demands better understanding of factors that are at work. Levelling mere charges or accusations against intelligence agencies of a failure to anticipate an attack by not “connecting the dots” could be misleading, if not downright dangerous. All professional analysts in whichever field they operate face the same problem as intelligence agencies, and vividly outlined by David Omand, a former U.K. Intelligence and Security Coordinator as “seeing through a glass darkly when the information available to them is incomplete or partially hidden”.
•Alongside this, and to fill the gap, there is a case for far greater sharing of intelligence and information among intelligence agencies worldwide than it exists at present. This is important to prevent another terror attack on the lines of the Mumbai 2008 attack. It now transpires that certain foreign intelligence agencies had additional information about the possible attack which was not shared in time, and which led to an intelligence gap. This could have been avoided.
•More important, such a situation should never arise in the future. Terror and terrorism is a universal phenomenon. Every nation is bound to share the intelligence available with it to prevent a possible major terror attack.
📰 230% increase in ceasefire violations: govt.
The Lok Sabha was informed on Tuesday
•There was a 230% increase in ceasefire violations along the Line of Control (LoC) this year compared to 2016, the government informed the Lok Sabha on Tuesday.
•In 2017, Pakistan violated ceasefire 771 times along the LoC while the figure stood at 228 last year. There were 153 violations in 2014. There were 110 violations along the International Border in Jammu and Kashmir, the lowest in four years.
•Pakistan violated the ceasefire a total of 881 times along the Line of Control (LoC) and the International Border (IB) in Jammu and Kashmir this year, killing 30 people, the Lok Sabha was informed.
•The 740-km LoC is under the operational control of the Army and 192 km of IB in Jammu is manned by the Border Security Force.
•The truce between India and Pakistan along the International Border, the Line of Control and the Actual Ground Position Line in Jammu and Kashmir came into force in November 2003.
•In 2016, there were 449 ceasefire violations in which 13 civilians and 13 security personnel were killed. As many as 83 civilians and 99 security personnel were injured.
Note ban impact
•The government also released data on the impact of demonetisation on terror incidents, which showed an increase Jammu and Kashmir in 2017 in comparison to last year. There were 341 terror incidents in Jammu and Kashmir from November 1, 2016, to October 31, 2017 in comparison to 311 in the corresponding period the previous year, the Lok Sabha was informed.
•Minister of State for Home Hansraj Gangaram Ahir said in Lok Sabha that incidents of stone throwing had reduced considerably in Jammu and Kashmir. “..the overall security situation in the country post demonetisation has shown improvement,” he said in reply to a written question.
•He said ₹90 lakh had been seized from Maoist cadres and supporters in Naxal-affected areas after the government scrapped ₹1,000 and ₹500 notes on November 8, 2016.
•As many as 564 Naxal cadres and sympathisers surrendered during the period from November 8 to November 29, 2016.
•The Minister said insurgency in the Northeast was at a low ebb in many States. There were 857 incidents of Naxal violence from November 1, 2016, to October 31, 2017 in comparison to 1,078 in the same period the previous year.
•There were 323 militancy-related incidents in the Northeast between November 1, 2016, to October 31, 2017 in comparison to 507 in the same period of the previous year, the Minister added.
📰 CAG picks flaws in Centre’s accounting
FRBM audit shows FY16 fiscal deficit possibly understated
•The Comptroller and Auditor General of India (CAG) has highlighted several flaws in the Union government’s accounting procedures for the financial year 2015-16, which could have led to an understatement of the fiscal deficit and revenue deficit for that year.
•The CAG Audit Report on the government’s compliance of the rules and targets set by the Fiscal Responsibility and Budget Management (FRBM) Act 2003 also highlighted the fact that the government had deferred payments amounting to more than ₹1.87 lakh crore in 2015-16, which would have also had an impact on its fiscal and revenue deficits for that year.
•“As a result of deficiency in estimating the expenditure on grants for creation of capital assets, the provision included in the Budget at a Glance for grants for creation of capital assets was underestimated by ₹18,827 crore, which has also impacted the correct estimation of effective revenue deficit,” the CAG said.
•Further, the report added that due to the misclassification of revenue expenditure as capital expenditure and vice versa, the revenue deficit was understated by ₹1,583 crore during financial year 2015-16. In addition to this, ₹20,911 crore collected under levies and cesses were not transferred to the relevant funds, which led to an “understatement of revenue/fiscal deficit by an equivalent amount” during 2015-16.
•The report also found that, at the end of 2015-16, subsidy claims of ₹1,62,530 crore relating to fertiliser, food, and petroleum were pending, and that the devolution of taxes to the States was short by ₹24,942 crore that year, which had a bearing on the computation of the deficit ratios for that year. “Though the accounts of the government are prepared on cash basis, yet the deferment of liabilities to subsequent year cyclically has a bearing on computation of fiscal indicators,” the CAG noted.
•“The practice of deferring committed liability on the ground that accounts are prepared on cash basis, while serving as an instrument to contain the current level of deficit, may not ensure inter-generational equity in fiscal management as envisaged in the [FRBM] Act.”
Budgetary variances
•The CAG also noted that there were several issues with the transparency of the government’s account statements.
•“Refunds of ₹1,29,482 crore were made from gross direct tax collections in FY2015-16 but no corresponding disclosure was available in the government accounts,” the report said.
•It added that variations were noticed in the deficit figures depicted in the Budget at a Glance and the Annual Financial Statements of the Union government, and that similar variations were noticed in the disclosure of actual expenditure on grants for the creation of capital assets, and in the liability position of the government.
•The CAG pointed out that the government had failed to meet the FRBM targets for 2015-16 on both the fiscal deficit and the revenue deficit, and that it had subsequently changed the targets and deadlines without making the relevant changes in the Act itself.
•“During 2015-16, in respect of all the three deficit indicators, viz. effective revenue deficit, revenue deficit and fiscal deficit, the annual reduction targets were not in accordance with the provisions of the FRBM Act/Rules,” the report said.
📰 ‘Northeast policy to aid trade with ASEAN’
Govt. to work on improving FDI inflow
•The new Industrial Policy being framed for the development of industries in the northeast would prove catalytic to the trade with southeast Asian nations, according to the government.
•The department-related Parliamentary Standing Committee on Commerce, in its report on trade with Association of South East Asian Nations (ASEAN), said that the Secretary, Department of Industrial Policy and Promotion (DIPP) had informed it that the department would work with ASEAN nations to improve FDI inflow. “... it would be done through... Business Leaders’ Forums, CEOs’ forums and Invest India and by further intensifying present efforts in this direction. The Committee was briefed about the new Industrial Policy being framed for the development of industries in the North East Region and how it would prove catalytic to the trade with ASEAN,” the panel.
•Of the $56 billion of FDI that came in in 2000-2017 from ASEAN countries, $54 billion was from Singapore. “[Secretary, DIPP] attributed reasons for the bulk investment to the Double Tax Avoidance Agreement between India and Singapore.”However, the Agreement has now been renegotiated and it is hoped that the skewed investment would be addressed.” The Committee said it was also told that outbound FDI from India to ASEAN countries is a substantial amount of $52 billion.
📰 ‘Need to bolster WTO process’
•The World Trade Organisation (WTO) process needs to be strengthened and taken forward as India has a strategic interest in the functioning of the multilateral trade system, according to Commerce Minister Suresh Prabhu.
•Briefing members of Federation of Indian Chambers of Commerce and Industry in a closed-door meeting on Tuesday on the outcome of WTO’s recently held Buenos Aires meeting, Mr. Prabhu said that India would host a mini-ministerial (meeting of a few WTO member nations) in February to further its position on the multilateral trade body and to pursue its interest in a fruitful manner. FICCI informed this in a statement.
•In a separate meeting organised by the industry body CII, Mr. Prabhu spoke on the objective behind the mini-ministerial and stated, “if you want to make sure that WTO becomes relevant to times that are changing, then we must also incorporate into WTO some of the very emerging important issues.”
•The Buenos Aires meeting ended in an impasse with the US blocking the demands of over 100 developing nations, including India and China, on food security issues. The US had also questioned the centrality of development in multilateral trade negotiations. Mr. Prabhu had earlier also said that India will be organising a meeting of some WTO members in February to get more support for food sovereignty and other issues including the ‘development agenda’ of the Doha Round talks.
•Developed countries have been taking the lead in forming groups to initiate discussions on ‘new issues’ such as e-commerce, investment facilitation and proposed norms relating to small firms, while India and other developing nations are insisting that such issues should be taken up for negotiations at the multilateral-level only after resolving the ongoing Doha Round’s outstanding issues such as the ones on food security.
•India to host mini-ministerial in Feb to take forward its position on multilateral trade talks
📰 Amendments to Companies Act passed; to ease compliance
New law will ensure better corporate governance: Minister
•A bill to amend the companies law to strengthen corporate governance standards, initiate strict action against defaulting companies, and help improve the ease of doing business in the country, was passed by Parliament on Tuesday.
•The Rajya Sabha passed the Companies (Amendment) Bill, 2017 by a voice vote. It was adopted by the Lok Sabha in July this year during the Monsoon Session. Replying to issues raised by the members during a discussion on the Bill, Minister of State for Corporate Affairs P.P. Chaudhary said the amendment would ensure better corporate governance and improve the ease of doing business.
•The Bill provides for more than 40 amendments to the Companies Act, 2013, which was passed during the previous UPA regime.
•The Bill was introduced in the Lok Sabha in March 2016 and then referred to the Standing Committee on Finance. After taking into consideration the recommendations of the panel, the Cabinet had cleared a revised Bill in March this year.
•The Companies Act, 2013 has already been amended once under the present government.
‘Procedures simplified’
•The latest legislation would help in simplifying procedures, make compliance easy, and take stringent action against defaulting companies, Mr. Chaudhary said.
•The Minister dismissed apprehensions raised by members that the government was not doing enough to ensure that companies complied with the Corporate Social Responsibility (CSR) provisions. Congress leader Jairam Ramesh said CSR had become “PSR or political social responsibility”, especially for PSUs.
📰 ‘Centre planning strategy to boost services exports’
Healthcare among sectors with huge job potential: Prabhu
•The government is formulating a new strategy to boost services exports by identifying new markets such as Latin America as well as services, including healthcare and financial services, which have tremendous potential in terms of exports and job creation, according to Commerce Minister Suresh Prabhu.
•Addressing the Services Conclave, organised by CII in cooperation with the Commerce Ministry and Services Export Promotion Council, Mr. Prabhu said with manufacturing becoming increasingly automated, services would contribute more to employment generation. He said his Ministry, along with the EXIM Bank, was working on a strategy to define each market along with the kind of products that could be exported.
‘Not just back office’
•“I don’t think we are just the back office of the world. We should be the front office... providing services of all kinds,” he said. Uday Kotak, chairman, CII National Council on Services, said the sectors which had the most potential for exports included health and wellness, media and entertainment and leisure.
📰 UIDAI tightens norms for Aadhaar-bank account linking
According to the latest rules, ‘explicitly informed consent’ from customers has been made compulsory.
•Following the Airtel India-Aadhaar subsidy fiasco, the Unique Identification Authority of India (UIDAI) on Tuesday has tightened the norms for mapping Aadhaar number to a different bank account.
•According to the latest rules, ‘explicitly informed consent’ from customers has been made compulsory.
•The National Payments Corporation of India (NPCI) will disable the override feature that UIDAI said was being misused by many banks while seeding Aadhaar to accounts without informed consent of residents.
•As a result subsidy from the government was being credited to new accounts without their knowledge
•The UIDAI further said that there have been complaints pertaining to customer verification. “When an Aadhaar holder visits the telecom service provider for verifying his mobile number, as per Supreme Court's Feb 6, 2017 order, the telecom firm is opening the customer’s payment bank account and puts that bank account on NPCI's Aadhaar Payment Bridge, overriding the existing bank account. The mapping was done without the informed consent of the Aadhaar holder, UIDAI said.
•Similar problem was being faced when Aadhaar holders verified their bank accounts to comply with Prevention of Money Laundering rules (the last date for which is now March 31, 2018).
•People, particularly in rural and remote areas, were being put to inconvenience as they were clueless about receipt of subsidy and also unable to withdraw the subsidy amount credited in payment bank accounts as payment banks are not having branches or cash out points in sufficient number in these areas, the UIDAI said.
•The UIDAI has notified changes to its rules to avoid further inconvenience to Aadhaar holders and to ensure that the Aadhaar collected for a purpose is not used for any other purpose without informed consent of the Aadhaar holders.
📰 Centre wants GST on fuel: Arun Jaitley
Finance Minister, however, says a consensus from the States is required before taking such a step
•The Centre favours including petroleum products within the ambit of the Goods and Services Tax (GST), but it would want a consensus among the States before taking such a step, Union Finance Minister Arun Jaitley told the Rajya Sabha on Tuesday.
•During Question Hour, Congress leader and former Finance Minister P. Chidambaram sought to know the Centre’s position on bringing petrol and diesel under the GST.
•He also sought to know why the prices of petrol and diesel did not decline with a fall in the global crude prices.
•Mr. Jaitley said a person familiar with the issue had asked the question.
‘Issue a deal-breaker’
•He said the previous UPA government in its draft GST Bill had kept petrol out of its ambit as it knew that the issue would be a deal-breaker between the Centre and the States.
•“Now you are in the Opposition and have greater flexibility in changing your position,” Mr. Jaitley said.
•He said the present government had persuaded the States to include petrol within the GST and the States reluctantly agreed to do so. However, it is only when the States demanded it and a consensus was formed, that it would be done.
•Responding to the charge that petrol and diesel prices were not coming down in line with global prices, Mr. Jaitley said it has to be kept in mind that a large number of duties on these products were imposed by the States.
•He said that on the Centres advice, many States had brought down these taxes but those ruled by the UPA (Congress and its allies) had not done so.
📰 Transit gambit: on e-way bill mechanism for transport of goods
The Centre needs to do more to ease the shift to e-way bills for transport of goods
•Already grappling with the Goods and Services Tax transition, businesses are now anxious about how the roll-out of e-way bills will pan out. Starting February 1, all inter-State movement of goods worth over ₹50,000 will be tracked with the introduction of the e-way bill system under the GST regime. All consignments moving more than 10 km from their origin will require prior registration and generation of an e-way bill through the GST Network, which will be valid for varying durations depending on the distance travelled. While a few States have already imposed their own requirements for such bills since the GST roll-out in July, all States must implement the bill system for capturing intra-State trade by June 1. Therefore, a fully integrated tracking system for all taxable goods can be expected only then. This poses an interim headache for firms operating across States, as they will now face differing compliance requirements for inter-State trade and intra-State trade, depending on when individual States launch their own e-way bill systems. To be fair, inter-State movement of goods was also tracked under the VAT (value-added tax) regime, but intra-State transactions were not. Over 150 items of common use, including LPG cylinders, vegetables, foodgrain and jewellery, will be exempt from such transport permits, which can be checked by designated tax officials by intercepting a transporting vehicle. Goods moved on non-motorised conveyance, such as carts, have been left out.
•In October, the GST Council had decided to introduce e-way bills in a staggered manner from January 1, with a nationwide roll-out on April 1, 2018. After easing the GST burden on small businesses and exporters in its recent meetings, the GST Council’s decision on Saturday to advance the implementation of e-way bills just two days after polling closed in Gujarat signals that there are serious concerns on the tax collection front. After a monthly ₹90,000 crore-plus inflow in the GST’s first three months, revenue in October plummeted to just over ₹83,000 crore. And this was even before substantive tax rate cuts made by the Council kicked in. With States claiming a revenue shortfall of about ₹40,000 crore so far under the GST, the Centre, which has to fill that gap, is also feeling the pinch. Finance Minister Arun Jaitley, who faces a serious fiscal dilemma even before he presents the Union Budget in less than two months, has said the next set of GST features, such as e-way bills and matching of invoices, will make tax evasion difficult and bump up collections. Plugging revenue leakages is essential, and encouragingly, Karnataka’s e-way bill experience in the first month saw very few glitches. Given industry’s nervousness, the government must simplify the onerous rules proposed for e-way bills (a one-day validity for distances up to 100 km, for instance), ensure that the IT backbone is robust, and make inspections the exception, not the norm.
