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Current Affairs Analysis

11th May 2016 Current Affairs Analysis

By IT's Current Affairs Analysis Team
May 11, 2016

Contents

Polity & Governance

  • Centre to consult residents, monks on Tawang hydel projects

Economy

  • Capital gains on FDI from Mauritius to be taxed

Environment & Ecology

  • MP Tourism wins ‘Best Indian Destination for Wildlife’ award

Defence & Security Issues

  • India bids farewell to Sea Harrier fighter planes
  • Indian Navy launches underwater vigil system in Visakhapatnam

Science & Technology

  • 11th May: National Technology Day

 

Polity & Governance

Centre to consult residents, monks on Tawang hydel projects

 Fearing Chinese support in the unrest at Tawang, the Union government has decided not to go ahead with the planned hydroelectric projects in the Tawang district without consulting the local people and the monks, who have been protesting against the dams.

About Tawang:

Location:

  • Situated in western most part of Arunachal Pradesh, Tawang is a town on India-China border.

Population:

  • It is the smallest of the 16 administrative districts of Arunachal Pradeshin north-eastern India and with a population of 49,977 it is the eighth least populous district in the country. It is inhabited by the Monpa people.

Rivers:

  • The district has two main rivers, the Tawang Chhuand the Naymjang Chhu, that together have 10 main tributaries. These two rivers meet each other before exiting the district in a south-westerly direction.

Festivals:

  • There are two major religious festivals of the Monpas viz “LOSAR” and “TORGYA”. Both festivals are celebrated once annually. The LOSAR is celebrated to the commencement of New year. Every third year of Torgya, the festival of Dungyuris celebrated.

Claim:

  • The area is historically part of Tibet and is claimed by both the People’s Republic of China and the Republic of China (Taiwan).
  • Visitors to Tawang district require a special Inner Line Permit from the government.
[Ref: Hindu, Wiki]

 

Economy

Capital gains on FDI from Mauritius to be taxed

India and Mauritius have signed a protocol for amendment of a three-decade-old double taxation avoidance agreement. 

  • A landmark protocol is meant for amendment of the Convention for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and capital gains.

The key features of the Protocol:

  • The Protocol seeks to prevent “abuse” of the tax avoidance treaty. It also provides for updation of Exchange of Information Article as per international standard, source-based taxation of other income, provision for assistance in collection of taxes, amongst other changes.
  • With this, India, for the first time will be allowed to tax capital gains(profit from the sale of property or an investment) arising out of Mauritius.
  • The protocol can tax capital gains between April 1, 2017 and April 1, 2019 at 50% of domestic rates in India. However, investments made prior to April 1, 2017 will not be liable to capital gains tax. Further, all past share sale transactions from Mauritius would be safeguarded.
  • Also, the benefit of 50% reduction in tax rate during the transition period from 2017 to 2019 shall be subject to Limitation of Benefits. This means a resident of Mauritius will have to pay the full rate if it fails the main purpose test and bonafide business test.

Currently, Mauritius and Singapore together contribute 50% of the total FDI inflows into India.

Background:

India and Mauritius had signed a Double Taxation Avoidance Agreement in 1983.

  • The pact allowed only Mauritius to tax capital gains. However, the island nation generally doesn’t impose a capital gains tax. This meant that companies gaining from investments made in Indian companies via Mauritius-based entities managed to avoid paying taxes in both countries.
  • The tax treaty made Mauritius the biggest source of foreign direct investment into India. According to data from the Department of Industrial Policy and Promotion, the total FDI inflows into India from Mauritius between April 2000 and December 2015 is 34% of the total FDI inflows into India.
  • Many private equity and venture capital firms also invest in India through funds registered in Mauritius.

Major impact of the move:

  • The Protocol will tackle the long pending issues of treaty abuse and round tripping of funds attributed to the India-Mauritius treaty, curb revenue loss, prevent double non-taxation, streamline the flow of investment and stimulate the flow of exchange of information between India and Mauritius.
  • It will improve transparency in tax matters and will help curb tax evasion and tax avoidance. At the same time, existing investments, i.e. investments made before 1.4.2017 have been grand-fathered and will not be subject to capital gains taxation in India.
[Ref: PIB, Hindu]

 

Environment & Ecology

MP Tourism wins ‘Best Indian Destination for Wildlife’ award

Madhya Pradesh Tourism (MPT) has received the “Best Indian Destination for Wildlife” award by the Lonely Planet Group. 

Key facts:

  • Madhya Pradesh has 25 wild life sanctuaries including nine National Parks. Among them Kanha, Bandhavgarh and Pench are ideal habitat for tigers. 
  • Madhya Pradesh has launched number of programmes for the conservation of flora and fauna because of which Kanha and Pench were regarded as the most beautiful national parks in Asia while Bandhavgarh and Pench are known world over because of tiger reserves.
[Ref: BS]

 

Defence & Security Issues

India bids farewell to Sea Harrier fighter planes

The Indian Navy will phase out its iconic Sea Harrier maritime fighter planes.

Key facts:

  • The Sea Harriers, built by British Aerospace and part of INAS 300 (Indian Naval Air Squadron 300, also called White Tigers), were inducted into the navy in 1983 and were deployed onboard INS Vikrant and INS Viraat.
  • The Indian Navy’s Sea Harrier squadron was deployed during Operation Vijay in 1999 and embarked on the Viraat during Operation Parakram in 2001.
  • The Indian Navy had a hard time maintaining the Harriers as British firm Rolls-Royce stopped producing parts – the planes featured a Rolls-Royce Pegasus turbofan engine.
[Ref: Hindu]

Indian Navy launches underwater vigil system in Visakhapatnam

The Indian Navy has launched the state-of-the-art harbour defence systems, viz., Integrated Underwater Harbour Defence and Surveillance System (IUHDSS) and Mine Warfare Data Centre (MWDC) in Visakhapatnam.

  • The harbour defence systems would enhance the Navy’s surveillance capability and response to security threats at the naval dockyard.

About IUHDSS:

  • The Integrated Underwater Harbour Defence and Surveillance System (IUHDSS) is a multi-sensor system capable of detecting, identifying, tracking and generating warnings for all types of surface and underwater threats to Visakhapatnam harbour.

About MWDC:

  • The Mine Warfare Data Centre (MWDC) will collate, analyse and classify data collected by the Navy’s Mine Hunting Ships from various ports along the East coast.
  • This state-of-the-art facility will be the nodal centre for maintaining an underwater database of harbours along the coast.
[Ref: ToI]

 

Science & Technology

11th May: National Technology Day

Every year May 11 is observed as National Technology Day. 

  • The theme for this year’s Technology Day is ‘Technology enablers of Startup India’.
  • On this day, the President of India gives National Technology Award to companies and also to individuals for their great contributions to science.

Why May 11 is chosen as National Technology Day?

National Technology Day is a very special day for Indian Technology since 1999. It is so significant because India achieved a huge technological advancement on the day. 

  1. The first, indigenous aircraft “Hansa-3” was test flown at Bangalore on this day.
  2. Not only this, India also performed successful test firing of the Trishul missile on the same day.
  3. India also executed three successful nuclear tests, carried out at Pokhran, in Rajasthan May 11.

 [Ref: PIB, ToI]

 

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