Government Schemes & Policies
- President Kovind lays foundation stone for Link-4 of SAUNI scheme
- CBDT signs 4 more Advance Pricing Agreements
- RBI includes HDFC Bank in the ‘too big to fail’ list
Bilateral & International Relations
- 9th BRICS summit adopts Xiamen Declaration
Defence & Security Issues
- CERT-In issues alert on ‘Locky Ransomware’
Science & Technology
- Social media campaign to promote Geographical Indications
Key Facts for Prelims
- 12th Indo-Nepal Joint Exercise Surya Kiran
- 5 September: National Teachers Day
- Prakriti Khoj
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Government Schemes & Policies
President Kovind lays foundation stone for Link-4 of SAUNI scheme
President Ramnath Kovind laid foundation stone for link-4 of Saurashtra Narmada Avataran Irrigation Scheme (SAUNI) Yojana in Rajkot district, Gujarat.
What is the SAUNI Yojana?
Unlike traditional irrigation projects, SAUNI is a ‘linking’ project, where the water will be filled in irrigation dams that are already equipped with canal network.
- In 2012, Narendra Modi as chief minister of Gujarat had announced the project.
- The government has set a target to complete the four phase project by 2019.
- This network of canals will then help channel water into farms.
- To meet the water demands of Saurashtra region, under the SAUNI scheme, 115 dams will be provided with excess water of the Sardar Sarovar Dam from the river Narmada.
- This will be done through a network of pipelines.
- The total cost of the project is Rs. 12,000 crore. In the first phase, the government has constructed 57km of pipeline, which will fill up 10 dams of three districts of Saurashtra region.
Does it benefit farmers?
- Saurashtra region faces drought-like situation. This project will irrigate over 4 lakh hectares of land and tackle water woes.
- The government claims that when all the 115 dams are filled farmers in 5,000 villages will benefit.
- Farmers can reap both Kharif and Rabi crop — as opposed to Kharif crop cultivation so far — once the project makes more water accessible for agriculture.
- Though the project will not be added to the command area under irrigation, it will strengthen the existing network by providing 1 acre million cubic feet of surplus Narmada water from the Sardar Sarovar Dam through a new pipeline network connecting existing dams.
CBDT signs 4 more Advance Pricing Agreements
The Central Board of Direct Taxes (CBDT) has entered into four more Advance Pricing Agreements (APAs), pertaining to sectors like telecom, banking, manufacturing and education in August 2017.
- Out of these four agreements, three were unilateral and one was bilateral.
- The bilateral APA was for international transactions between an Indian company and UK-based company.
- With this, total number of APAs entered into by CBDT has reached 175. This includes 162 unilateral APAs and 13 bilateral APAs.
About the APA scheme:
The APA scheme was introduced in the Income-tax Act in 2012 and the “Rollback” provisions were introduced in 2014.
- The scheme endeavours to provide certainty to taxpayers in the domain of transfer pricing by specifying the methods of pricing and setting the prices of international transactions in advance.
- Since its inception, the APA scheme has attracted tremendous interest and that has resulted in more than 700 applications (both unilateral and bilateral) having been filed in just four years.
Significance of the APA scheme:
- The progress of the APA Scheme strengthens the Government’s mission of fostering a non-adversarial tax regime.
What is the meaning of the APA?
An Advance Pricing Agreement (APA) is a contract, usually for multiple years, between a taxpayer and at least one tax authority (CBDT) specifying the pricing method that the taxpayer will apply to its related-company transactions.
- These programmes are designed to help taxpayers voluntarily resolve actual or potential transfer pricing disputes in a proactive, cooperative manner, as an alternative to the traditional examination process.
RBI includes HDFC Bank in the ‘too big to fail’ list
The Reserve Bank of India (RBI) has added HDFC Bank, the second largest private sector lender of country in list of Domestic Systemically Important Banks (D-SIBs).
- HDFC Bank is third bank in country to be added in list of D-SIBs after State Bank of India (SBI) and ICICI Bank which were added in 2016 and continue to be in that category.
What does this mean?
- The addition means that HDFC has now being considered as too big to fail bank. These banks are subject to more rigorous regulation and capital requirement.
- Since 2015, RBI has been identifying banks whose failure would impact the whole financial system.
What are Systemically Important Banks?
SIBs are perceived as certain big banks in country. Since country’s economy is dependent upon these banks, they are perceived as ‘Too Big To Fail (TBTF)’.
There are two types of SIBs:
- Global SIBs, identified by BASEL committee on banking supervision and
- Domestic SIBs; identified by central Bank of country.
RBI Framework for dealing with D-SIBs
RBI had issued Framework for dealing with D-SIBs in July 2014.
- D-SIB Framework requires RBI to disclose names of banks designated as D-SIBs every year in August starting from August 2015.
- The framework also requires that D-SIBs may be placed in four buckets depending upon their Systemic Importance Scores (SISs).
- Based on bucket in which D-SIB is placed, an additional common equity requirement has to be applied to these listed banks, as mentioned in Framework.
- In case foreign bank having branch presence in India is Global-SIB, it has to maintain additional CET1 capital surcharge in India as applicable to it as a G-SIB, proportionate to its Risk Weighted Assets (RWAs) in India under the D-SIB Framework.
Identification of D-SIBs
- The D-SIB Framework specifies a two-step process of identification of D-SIBs.
- In first step, sample of banks to be assessed for systemic importance has to be decided. The selection of banks in sample for computation of SIS is based on analysis of their size as a percentage of annual GDP.
- Moreover, additional Common Equity Tier 1 (CET1) requirements are also applicable to D-SIBs from April 1, 2016 in phased manner and will be fully effective from April 1, 2019. The additional CET1 requirement will be in addition to the capital conservation buffer.
Need for recognition of banks as SIBs:
- Following the global financial crisis of 2008, it was observed that problems faced by certain large and highly interconnected financial institutions hampered orderly functioning of financial system, which in turn, negatively impacted real economy.
- As some of the banks are perceived as TBTF, they can lead to reckless practices on their part like increased risk-taking, reduction in its market discipline, creation of competitive distortions etc. because of expectation of government support them at time of distress. All this can increase probability of distress in future.
- Therefore, it is required recognition of these banks as SIBs and subjected to additional policy measures to deal with systemic risks and moral hazard issues posed by them. They are forced to have additional capital against financial emergency, so that taxpayer money not wasted in rescuing them during crisis.
Bilateral & International Relations
9th BRICS summit adopts Xiamen Declaration
The leaders of all five BRICS nations including Brazil, Russia, India, China and South Africa convened for the 9th BRICS Summit in Xiamen, China.
- At the end of the summit, Xiamen declaration was adopted by the leaders of the five countries.
- The main theme of the summit was, “BRICS: Stronger Partnership for a Brighter Future”.
- This is the second time the China has hosted the summit after the 2011 summit.
Highlights of the Xiamen declaration:
- BRICS countries agreed to strive towards broad partnerships with emerging markets and developing countries and pursue equal-footed and flexible practices and initiatives for dialogue and cooperation with non-BRICS countries, including through BRICS Plus cooperation (It includes Thailand, Tajikistan, Egypt, Kenya and Mexico).
- Member countries resolved to promote development of BRICS local currency bond markets and agreed to jointly establish a BRICS local currency bond fund and facilitate financial market integration.
- They will also encourage explorations toward the establishment of the BRICS Institute of Future Networks.
- They agreed to enhance joint research, development and innovation in information and communications technology (ICT), including internet of things (IoT), big data, data analytics, cloud computing, nanotechnology, artificial intelligence, 5G and their innovative applications.
- They agreed to strengthen BRICS cooperation on energy and work to foster open, flexible and transparent markets for energy commodities and technologies.
- They also agreed to work together to promote most effective use of fossil fuels and wider use of gas, hydro and nuclear power to move towards low emission economy, better energy access and sustainable development.
- It is proposed to be established in India which will serve as virtual network facilitating cooperation in priority areas.
- They called upon international community to establish genuinely broad counterterrorism coalition and support UN’s central coordinating role in this regard.
- It should be promoted for development and enhancing mutual understanding, friendship and cooperation among BRICS countries.
Defence & Security Issues
CERT-In issues alert on ‘Locky Ransomware’
The Indian Computer Emergency Response Team (CERT-In) has issued an alert about spread of a new malicious software ‘Locky’ that can lock computers and demand ransom for unlocking them.
- The CERT-In advised the users to exercise caution while opening emails.
- The CERT-In also advised the organizations to deploy anti spam solutions and update spam block lists.
What is Locky Ransomware
- First surfaced in 2016, Locky ransomware is being circulated through massive spam campaign in which spam emails with common subject lines target computers by locking them and demanding ransom for restoring access to users.
- It encrypts files on victims’ PCs and adds a locky file extension. The attackers then demand ransom in Bitcoin payment to unlock the files. It is demanding ransom of half bitcoin, which at present rate is equivalent to over Rs 1.5 lakh.
- So far, it has extorted more than $7.8 million in payments, according to a recent study. However, its impact on Indian systems is not clear so far.
What are the concerns?
- While the impact of this ransomware on Indian systems is not clear so far, this could be the third major ransomware attack this year after Wannacry and Petya that crippled thousands of computers, including those of multinational corporations.
- In fact, according to an Assocham PWC study, India was the third worst affected country in a list of over 100 countries hit by Wannacry in May.
About the CERT-In:
CERT-In is nodal government agency that deals with cyber security threats like hacking and phishing in India.
- It is nodal department under the aegis of Union Ministry of Communications and Information Technology.
- According to the provisions of the Information Technology Amendment Act 2008, CERT-In is responsible for overseeing administration of the Act.
Objectives of the CERT-In:
Its objectives are to:
- Protect Indian cyberspace and software infrastructure against destructive and hacking activities.
- Strengthen security-related defence of the Indian Internet domain. Issue guidelines, vulnerability notes, advisories, and whitepapers regarding to information security practices, prevention, procedures, response and reporting of cyber security incidents.
Science & Technology
Social media campaign to promote Geographical Indications
The Cell for IPR Promotions & Management (CIPAM) under Department of Industrial Policy and Promotion (DIPP) has launched social media campaign to promote Indian Geographical Indications (GIs).
- It has been launched under CIPAM’s ongoing campaign #LetsTalkIP to make more people aware about importance of Intellectual Property Rights (IPRs).
- The promotion of GIs is in line with Government’s ambitious ‘Make in India’ campaign.
What is Geographical Indication?
- Geographical Indication (GI) is sign or insignia used on products that have specific geographical origin and possess qualities or reputation that are due to that origin.
- Such name, sign or insignia conveys assurance of quality and distinctiveness which is essentially attributable to its origin in that defined geographical locality.
- The status to products marks its authenticity and ensures that only registered authorised users are allowed to use popular product name.
- Darjeeling Tea, Blue Pottery of Jaipur, Mahabaleshwar Strawberry, Banarasi Sarees and Tirupati Laddus are some of examples for products having GIs.
Significance of GIs to India
- GIs products are of utmost importance as they are integral part of India’s rich culture and collective intellectual heritage.
- GI tag has accorded protection to number of hand-made and manufactured products, especially in informal sector.
- Certain GI products benefits rural economy in remote areas, by supplementing incomes of artisans, farmers, weavers and craftsmens who possess unique skills and knowledge of traditional practices and methods, passed down from generation to generation, which need to be protected and promoted.
- Cell for IPR Promotion and Management (CIPAM) has been created as a professional body under the aegis of DIPP to take forward the implementation of the National IPR Policy that was approved by the Government in May 2016, with the slogan – “Creative India; Innovative India”.
- CIPAM is working towards creating public awareness about IPRs in the country, promoting the filing of IPRs through facilitation, providing inventors with a platform to commercialize their IP assets and coordinating the implementation of the National IPR Policy in collaboration with Government Ministries/Departments and other stakeholders.
Key Facts for Prelims
12th Indo-Nepal Joint Exercise Surya Kiran
- The 12th edition of India-Nepal joint military exercise- Surya Kiran XII was held in Nepal.
- In this edition of exercise, Indian Army was represented by troops of Kumaon Scouts and Narayan Dal Battalion participated on behalf of Nepal Army.
- Both troops focused on the various counter insurgency operations. They also focused on important aspects such as humanitarian assistance and disaster relief (HADR) operations and environmental conservation.
- The exercise mutually benefited both armies by gaining varied experiences and also strengthened friendly relation between India and Nepal.
- The Surya Kiran series of military exercises are being conducted bi-annually, alternatively in India and Nepal.
- It is largest exercise in terms of troop’s participation in series of military training exercises undertaken by India with various countries.
- It aims at promoting military relations while increasing interoperability in conducting joint counter insurgency operations in mountainous terrain.
- The 11th edition of the joint exercise was held in Pithoragarh in Uttarakhand.
5 September: National Teachers Day
- The National Teachers Day is observed every year on 5th September in India to commemorate birthday of country’s first Vice President and second President Dr Sarvepalli Radhakrishnan.
- Dr Sarvepalli Radhakrishnan was first recipient Bharat Ratna, India’s highest civilian award along with politician C. Rajagopalachari, scientist C. V. Raman.
- On the occasion of Teachers’ Day (5th September), the Union Environment Ministry launched an environment awareness initiative.
- Under the initiative, an online environmental quiz competition named Prakriti Khoj will be conducted at the national level.
- The Prakriti Khoj will be an ideal medium to reach out to young minds through a fun-filled interactive learning mode to trigger their sensitivity towards environment protection and conservation.
- This quiz will provide a unique platform for students to measure their awareness level regarding environmental issues.
- As per the ministry, the objective of the quiz is to generate interest among school children about the science related to environment.