Current Affairs Analysis

25th February 2017 Current Affairs Analysis – IASToppers

Svalbard Global Seed Vault; Motor Vehicles (Amendment) Bill, 2016; Moody’s; East Coast Economic Corridor; Place of Effective Management (POEM) rules; Sylhet; India’s first hill station bicycle path; Asian Para-Road Cycling Championship; etc.
By IT's Current Affairs Analysis Team
February 25, 2017


Polity & Governance

  • While Google and Uber fight, Indian govt throws out red carpet for self-driven cars


  • India to be fastest growing economy among G-20 nations: Moody’s
  • India, ADB ink $375 mn loan pact for industrial corridor
  • Companies with sales below Rs 50 crore out of POEM loop: Govt
  • Plan to allow larger firms to shut shop sans govt. nod

Environment & Ecology

  • Arctic vault receives new seed deposits

Bilateral & International Relations

  • India, Bangladesh sign MoU for development of Sylhet

Key Facts for Prelims

  • India’s first hill station bicycle path
  • Asian Para-Road Cycling Championship


Polity & Governance

While Google and Uber fight, Indian govt throws out red carpet for self-driven cars

India could soon see driverless cars on its roads as proposed amendments to the motor vehicles law will empower the government to permit the testing of such vehicles, an area in which companies such as Google, Tesla and Uber are heavily engaged.


  • The government will allow testing of these vehicles on a case-by-case basis once the law is in place.
  • The move will allow Indian carmakers and technology firms to join the global race to develop self-driving cars.


The new provision is part of the Motor Vehicles (Amendment) Bill, 2016, which had grabbed headlines for its focus on safety and hefty penalties for traffic violations.

The Bill, introduced in Parliament in August last year, has since been referred to a parliamentary standing committee.

Highlights of the Motor Vehicles (Amendment) Bill, 2016:

  • The Bill propose to improve the transport scenario in the country by permitting the States to grant exemptions in Stage carriage and contract carriage permits for promoting rural transport, public transport, last mile connectivity and for passenger convenience and road safety.
  • The Bill proposes that the State Government can specify a multiplier, not less than one and not greater than ten, to be applied to each fine under this Act and such modified fine.
  • The bill proposes that the State Government can regulate the activities in a public place of pedestrians and such means of transport.
  • Improving delivery of services to the stakeholders using e-Governance is one of the major focuses of this Bill. This include enabling online learning licenses, increasing validity period for driving licenses, doing away with the requirements of educational qualifications for transport licenses are some of the features.
  • To improve the registration process for new vehicles, registration at the end of the dealer is being enabled and restrictions have been imposed on temporary registration.
  • In the area of road safety, bill proposes to increase penalties to act as deterrent against traffic violations.
  • To help the road accident victims, Good Samaritan guidelines have been incorporated in the Bill.
  • The Bill also proposes to mandate the automated fitness testing for the transport vehicles with effect from 1st October 2018. This would reduce corruption in the Transport Department while improving the road worthiness of the vehicle.
  • The penalties are also proposed for deliberate violation of safety/environmental regulations as well as body builders and spare part suppliers.
  • To bring harmony of the registration and licensing process, it is proposed to create National Register for Driving Licence and National Register for Vehicle registration through “Vahan” & “Sarathi” This will facilitate uniformity of the process across the country.
  • The process for testing and certification for automobiles is proposed to be regulated more effectively. The testing agencies issuing automobile approvals have been brought under the ambit of the Act.
  • The driving training process has been strengthened enabling faster issuance of transport licenses. This will help in reducing the shortage of commercial drivers in the country.
  • To facilitate transport solutions for Divyang, the bottlenecks have been removed in respect of grant of driving licenses as well as alterations in the vehicles to make it fit for use of Divyang.
[Ref: Economic Times, PIB]



India to be fastest growing economy among G-20 nations: Moody’s

International rating agency Moody’s report titled ‘Modest Acceleration in the Global Economy’ has predicted that India will be the fastest growing economy among G-20 countries in year 2017 with 7.1% growth.


Key facts:

  • It held that India remained fastest growing economy even after its growth slowed down in the fourth quarter of 2016 due to demonetisation.
  • The report also mentioned that continuing cyclical recovery in global economic activity with growth in G-20 countries picking up modestly to 3% in 2017 and 2018 from 2.6% in 2016.
  • However, there is a high risk of a significant protectionist shift in United States trade policy that could inflict lasting damage to the global economy.
  • It held that China’s economy stabilised around the official growth target of 6.7% in 2016 but it will likely continue to decelerate to 6.3% and 6% in 2017 and 2018.
[Ref: Economic Times]


India, ADB ink $375 mn loan pact for industrial corridor

India and ADB have signed USD 375 million pact for loans and grants to develop 800—km Visakhapatnam—Chennai Industrial Corridor, which is the first phase of a planned 2,500-km East Coast Economic Corridor.



  • ADB had last September approved USD 631 million in loans and grants for the industrial corridor.
  • The approved loans comprised a USD 500 million multitranche facility to build key infrastructure in the four main centers along the corridor — Visakhapatnam, Kakinada, Amaravati, and Yerpedu—Srikalahasti in Andhra Pradesh.
  • The first tranche of USD 245 million that was signed will finance subprojects to develop high-quality internal infrastructure in 2 of the 4 nodes of the corridor — Visakhapatnam and Yerpedu—Srikalahasti.
  • Loan will also be used for capacity development of institutions engaged in corridor management, provide support to enhance ease of doing business and for supporting industrial and sector policies to stimulate industrial development.

About East Coast Economic Corridor:


  • The East Coast Economic Corridor (ECEC) is India’s first coastal economic corridor along its eastern coast, stretching about 2,500 kilometers from Kolkata in the north to Kanyakumari in the south.
  • ECEC’s long coastline and strategically located ports allow multiple international gateways to connect India with global value chains (GVCs) in East and Southeast Asia.
  • ECEC supports the Government of India’s (GoI) Make in India campaign, which aims to boost manufacturing by attracting foreign investment and facilitating the establishment of manufacturing hubs.
  • ECEC also aligns with port-led industrialization under the Sagar Mala initiative and the Act East Policy by linking domestic companies with the vibrant global production networks of East and Southeast Asia.
  • Because of the vastness of India’s eastern coastline, ECEC’s developmet is conducted in a phase manner ECEC is being undertaken in 3 phases:
  1. Phase 1 covers the Visakhapatnam–Chennai Industrial Corridor (VCIC);
  2. Phase 2 involves the Chennai–Kanyakumari Industrial Corridor (CKIC); and
  3. Phase 3 supports Orissa and West Bengal Industrial Corridor.
[Ref: The Hindu]


Companies with sales below Rs 50 crore out of POEM loop: Govt

In a relief to smaller companies and firms, the Central Board of Direct Taxes (CBDT) has clarified that place of effective management (PoEM) regulations won’t apply to companies and firms that have a turnover or gross receipts of less than Rs 50 crore per annum.


  • While this leeway was already present in the original regulations it was not explicitly mentioned in the PoEM circular issued recently by the government.

What is PoEM?

  • Place of Effective Management (POEM) rules is a tax framework recently amended by the government to determine the tax liability of any foreign company that for all purposes is managed from India but do not pay tax domestically.
  • The PoEM is mainly used to determine whether a company, subsidiary or a firm really has a base in India and if all the decisions regarding the running of the company are taken from India.
  • If PoEM test proves that a subsidiary of a multinational or any other company or firm is managed from India, domestic taxation laws would be applied to such an organisation.

Rationale behind these rules:

Last month, the tax department had come out with the long-awaited Place of Effective Management (POEM) rules that will require foreign companies in India and Indian firms with overseas subsidiaries to pay local taxes based on where the business if effectively controlled.

  • The government has introduced PoEM as many Indian multinationals hold foreign companies through intermediary companies registered in tax-friendly countries like Mauritius and Singapore.
  • These companies are only used for collecting dividend or interest. The government has taken a view that since such shell companies are only brought in as part of tax planning, they should pay tax in India.
  • The regulations are mainly aimed at companies which for all purposes have a base in India but as part of tax planning have holding companies registered outside India.
[Ref: Indian Express]


Plan to allow larger firms to shut shop sans govt. nod

In a bid to give firms flexibility in hiring and firing employees, the Labour Ministry has proposed that factories with up to 500 workers be allowed to lay off workers or shut shop without seeking government permission.


  • The Ministry is set to discuss the proposed Labour Code on Industrial Relations at the next meeting of the Group of Ministers (GoM).

Implications of this move:

  • Most of the establishments in India needn’t take government permission to retrench workers or close their set up. So, the amendments will only impact a very small proportion of the total establishments in the country.

Present scenario:

  • At present, factories with up to 100 workers are allowed to go in for retrenchment, lay-off or closure without seeking government permission, according to the Industrial Disputes Act, 1947.

Demand for review:

  • There has been demand from the industry to increase the threshold limit for factories to seek permission for retrenchment from 100 workers to 500 workers.


  • In May 2015, the Labour Ministry had proposed integrating three labour laws — the Trade Unions Act, the Industrial Disputes Act and the Industrial Employment (Standing Orders) Act — into a single code for industrial relations.
  • It had then also proposed allowing factories with up to 300 workers to retrench workers or close down without seeking official sanction.
  • However, the Centre had put the proposals on the back-burner after series of protests from the central trade unions on the proposed labour law reforms.
[Ref: The Hindu]


Environment & Ecology

Arctic vault receives new seed deposits

Nearly 10 years after a “doomsday” seed vault opened on an Arctic island, some 50,000 new samples from seed collections around the world, including India, have been deposited in the world’s largest repository built to safeguard against wars or natural disasters wiping out global food crops.



  • The latest specimens sent to the bank included more than 15,000 reconstituted samples from an international research centre that focuses on improving agriculture in dry zones.
  • The specimens consisted of seed samples for some of the world’s most vital food sources like potato, sorghum, rice, barley, chickpea, lentil and wheat.
  • The newly deposited 50,000 samples were from seed collections in Benin, India, Pakistan, Lebanon, Morocco, Netherlands, the US, Mexico, Bosnia and Herzegovina, Belarus and Britain.

About Svalbard Global Seed Vault:

The Svalbard Global Seed Vault, a gene bank built underground on the isolated Norwegian island in a permafrost zone some 1,000 kilometres from the North Pole, was opened in 2008 as a master backup to the world’s other seed banks, in case their deposits are lost.


  • It is located on the Svalbard archipelago between mainland Norway and the North Pole.
  • Conservationist Cary Fowler, in association with the Consultative Group on International Agricultural Research (CGIAR), started the vault to preserve a wide variety of plant seeds that are duplicate samples, or “spare” copies, of seeds held in gene banks worldwide.
  • The seed vault is an attempt to insure against the loss of seeds in other genebanks during large-scale regional or global crises. The seed vault is managed under terms spelled out in a tripartite agreement between the Norwegian government, the Global Crop Diversity Trust (GCDT) and the Nordic Genetic Resource Center (NordGen).
  • The Norwegian government entirely funded the vault’s construction.

Who will own the seeds in the SVALBARD GLOBAL SEED VAULT?

  • Storing seeds in the vault is free to end users, with Norway and the Global Crop Diversity Trust paying for operational costs.
  • Depositors will retain ownership rights over the seeds sent to the facility. The boxes with seeds will be sealed by the depositors and will not be distributed to or given access to by anyone other than the depositors.

Will genetically modified seeds be stored in the seed vault?

  • Norwegian law, promulgated prior to the establishment of the Seed Vault and intended therefore to apply more generally to research and use of genetically modified organisms in Norway, effectively prohibits importation of genetically modified seeds and their storage in Svalbard at this time.
[Ref: LiveMint, croptrust.org]


Bilateral & International Relations

India, Bangladesh sign MoU for development of Sylhet

India has signed MoU with Bangladesh for the sustainable development of Sylhet, a north-eastern Bangladeshi city.


  • Under the Memorandum of Understanding (MoU), three development projects would be taken up in Sylhet.
  • Under the project in Sylhet, the Indian government will provide financial aid for the construction of a five-storey Kinder Garten and High School Building, a six-storey cleaner colony building; and for some development work in Dhupa Dighirpar area at a total cost of around Taka 240 million.



Sylhet is an ancient city and a historically vibrant city. It had been a part of the former Assam province of India. It has been a focal point for 1971 Liberation War.

[Ref: Economic Times]


Key Facts for Prelims

India’s first hill station bicycle path


  • India’s first hill station bicycle path was inaugurated in Darjeeling, West Bengal at an altitude of over 2,000 metres.
  • The 20 km long cycle route runs through thick pine forest and Senchal wildlife sanctuary, one of India’s oldest nature reserves.
  • The route starts from near Jorebunglow, south of Darjeeling and ends at a small local First Hill Station Bicycle Patheco-village resort in Chatakpur.
  • Darjeeling is a popular tourist destination in India. It is famous for its tea industry, spectacular views of Kangchenjunga, the world’s third-highest mountain and UNESCO World Heritage Site and Darjeeling Himalayan Railway.


Asian Para-Road Cycling Championship


  • India made a rousing start at the sixth Asian Para-Road Cycling Championship, bagging all three medals in the 12.8 Km Individual Time Trial on the opening day of the tournament at Bahrain.
  • Abhishek from Chandigarh won the gold medal, Divij Shah from West Bengal won silver and Harinder Singh from BSF bagged the bronze medal.
  • Nine members of Indian Para Cycling team are participating in the event under the aegis of Cycling Federation of India.


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