Issues related to Health & Education
- Teachers’ Day 2019: A Day That Honours Sarvepalli Radhakrishnan
- WHO South-East Asia Region plans to banish measles, rubella by 2023
- India among top 10 nations in gold reserves
- RBI asks banks to link retail and MSME loans to external benchmark from 1 Oct
- CBDT enters into 26 APAs during April to August
Environment, Ecology & Disaster Management
- What ‘Red’, ‘Orange’ alerts mean
Bilateral & International Relations
- India, Russia Sign Pact to Open Maritime Route Between Chennai and Vladivostok
- US backs India’s move to declare Hafiz Saeed, 3 others terrorists under new anti-terror law
- Remembering Dadabhai Naoroji on his birth anniversary
Art & Culture
- Athi Varadar festival about to conclude
Key Facts for Prelims
- List of top 10 world’s most liveable cities 2019
For IASToppers Current Affairs Analysis Archive, Click Here
Issues related to Health & Education
Teachers’ Day 2019: A Day That Honours Sarvepalli Radhakrishnan
Each year on September 5, India celebrate the birth anniversary of Dr. Sarvepalli Radhakrishnan as Teacher’s Day.
About Sarvepalli Radhakrishnan
- His birth anniversary is celebrated as Teacher’s Day across India since 1962.
- He was the first Vice President of India (1952-1962) and the second President of India (1962-1967).
- He was awarded with Bharat Ratna in 1954.
- His philosophy was grounded in Advaita Vedanta. He defended Hinduism against “uninformed Western criticism” and played a major role in the formation of contemporary Hindu identity.
- He received the Templeton Prize (1975), which an annual award given for contributions in life’s spiritual dimension through insight, discovery or practical works.
- He earned the reputation of being the bridge-builder between India and the West.
- He was one of the founders of Helpage India, a renowned NGO for elderly underprivileged in India.
- He was awarded several other distinguished awards as well such as a knighthood in 1931 and honorary membership of the British Royal Order of Merit in 1963.
- In his memory, the Oxford University started the Radhakrishnan Chevening Scholarships and the Radhakrishnan Memorial Award.
WHO South-East Asia Region plans to banish measles, rubella by 2023
Member-countries of the World Health Organisation (WHO) South-East Asia Region have resolved to eliminate highly infectious childhood killer diseases measles and rubella by 2023.
- This resolution to eliminate the diseases was adopted at the recent 72nd session of the WHO Regional Committee for South-East Asia in Delhi.
- Bhutan, Korea, Maldives, Sri Lanka and Timor-Leste have eliminated measles and Bangladesh, Bhutan, Maldives, Nepal, Sri Lanka and Timor-Leste have controlled rubella.
To Know more about, refer IASTopper’s past Current Affairs here: https://www.iastoppers.com/11th-july-2019-current-affairs-analysis-iastoppers/
India among top 10 nations in gold reserves
According to the World Gold Council, India has gold reserves totalling 618.2 tonnes, which is marginally higher than the Netherlands’ reserves of 612.5 tonnes.
Top 10 countries having highest Gold Reserves in world
- United States (Appx. 8,100 tonnes)
- International Monetary Fund
- India (618.2 tonnes)
Pakistan ranked 45th position in total gold holding in world.
- India’s gold reserves have grown substantially in the past couple of decades from 357 tonnes in 2000 to the current 618.2 tonnes.
About World Gold Council
- The World Gold Council is the market development organisation for the gold industry.
- It has 26 Members.
- It is based in the UK, with operations in India, China, Singapore and the US.
RBI asks banks to link retail and MSME loans to external benchmark from 1 Oct
The RBI has made it compulsory for banks to link their new floating rate home, auto and MSME loans to an external benchmark from October 1 so that the borrowers can enjoy lower rate of interest.
What is external benchmarking of loans?
- When one borrows money from a bank, interest is levied based on certain methodologies (or benchmark) approved by the Reserve Bank of India (RBI).
- At present, banks use Marginal Cost-based Lending Rate (MCLR) to decide lending rate. Prior to this, banks were using Base Rate method and the Benchmark Prime Lending Rate (BPLR). These were all internal benchmarks.
What is MCLR (Marginal Cost of Funds based Lending Rate)?
- Marginal Cost of Funds based Lending Rate (MCLR) is the minimum interest rate, below which a bank is not permitted to lend, except in some cases allowed by the RBI.
- Marginal cost is charged on the basis of interest rate for various types of deposits, borrowings and return on net worth.
Options for bank
Banks had four options from which to choose the external benchmark for loan pricing:
- The repo rate
- The 91-day treasury bill
- The 182-day T-bill
- Any other benchmark interest rate produced by the Financial Benchmarks India Private Ltd (FBIL)
However, a bank will have to adopt a uniform external benchmark within a loan category, meaning that the adoption of multiple benchmarks by the same bank is not allowed within a single loan category.
Why the need for a new method?
- Since February, RBI cut its policy rate by 110 basis points (100 bps=1 percentage point), including the reduction of 35 bps in its August 2019 policy review.
- However, until August, Banks had only passed on 29 bps in rate cuts to borrowers, which was unfair.
- In other words, the transmission of policy rate changes by RBI to the lending rate of banks, under the current MCLR framework, has not been satisfactory.
- Hence, the RBI has now made it compulsory for banks to link their new floating rate home, auto and MSME loans to an external benchmark from October 1 so that the borrowers can enjoy a lower interest rate.
CBDT enters into 26 APAs during April to August
Central Board of Direct Taxes (CBDT) has entered into 26 Advance Pricing Agreements (APAs) in the first 5 months of the current financial year (April to August, 2019).
About the CBDT’s 26 APAs
- With the signing of these APAs, the total number of APAs entered into by the CBDT as of now stand at 297, which includes 32 Bilateral Advance Pricing Agreements (BAPAs).
- Out of the 26 APAs, 1 is a BAPA entered into with the United Kingdom and the remaining 25 are Unilateral Advance Pricing Agreements (UAPAs).
- The BAPAs and UAPAs pertain to various sectors like Information Technology, Banking, Semiconductor, Power, Pharmaceutical, Hydrocarbon, etc.
What is Advance Pricing Agreement (APA)?
- Advance pricing can be understood as an agreement between a taxpayer and a tax authority fixing the transfer pricing methodology to decide the pricing of future international transactions of the taxpayer.
- Transfer price is the charges at which one company makes available goods or finance or services to another company that is related to it.
- APA was introduced in India in 2012 through Finance Act, 2012.
- For example, suppose that Maruti Suzuki India has higher profit and has to pay higher tax to the Government of India. In this case, if Suzuki Japan (parent company of Maruti Suzuki) charges a high price for a component it sold to Maruti, profit of Maruti will come down and the tax payment of the company to GoI will also come down.
- On the other hand, the revenue of Suzuki Japan will go up. Altogether, the Suzuki Motor Coroporation (SMC) who owns India’s Maruti improves is position; but GoI’s tax revenue affected.
Purpose of Advance Pricing Agreement
- The main purpose of transfer pricing and APA is to keep a check on big MNCs so that they do not indulge in tax evasion.
- Such big companies have subsidiaries and associate companies in several countries and they tend to adjust their profits based on their inter-corporate transactions.
- These MNCs are known to divert profits out of India by applying various methods that reduce their tax liability in the country.
- For example, an MNC in India can show higher than actual costs of goods and services purchased from their subsidiaries thereby showing higher expenditure and getting relaxation in tax.
Types of Advance Pricing Agreement (APA)
- As the name itself signifies, Unilateral Advance Pricing Agreement involves only the taxpayer company and just the tax authority of the country where the company is located.
- Bilateral APA actually involves four entities in total. First is the taxpayer located in the country. Second is the tax authority of the taxpayer’s location. The third entity is the associated enterprise (AE) of the taxpayer in a foreign country and fourth if the tax authority of the country where the associated enterprise is located.
- A multilateral APA involves multiple entities which get into an agreement about transfer pricing.
- These entities include the taxpayer in a country, the tax authority of the taxpayer’s company, two or more associated enterprises of the taxpayer and the respective tax authorities of the countries where these AEs are located.
Benefits of Advance Pricing Agreement (APA)
- The very first benefit of APA is to check evasion of taxes. APAs offer certainty in terms of the tax liability of taxpayer’s foreign transactions by the application of ‘Arm’s Length’ Pricing technique to decide upon the prices of international transactions.
- APA minimizes the time and effort that goes into audit tasks. This removes the threat of audit for an enterprise taxpayer who has business across several countries.
- As for tax authorities in various countries, the application of APAs removes extra pressure on their resources and reduces the cost of administration as well.
Environment, Ecology & Disaster Management
What ‘Red’, ‘Orange’ alerts mean
The India Meteorological Department (IMD) issued a ‘Red’ alert for Mumbai for the next 24 hours owing to active weather systems leading to continuous downpour across the city and suburbs.
Types of warning declared by IMD
Alerts by the IMD are colour-coded from Green to Red.
- Green (No Warning): No action needs to be taken by the authorities, and the forecast is of light to moderate rain.
- Yellow (Watch): Authorities are advised to “Be updated” on the situation.
- Orange (Alert): Authorities are expected to “Be prepared”. The forecast during an Orange warning is of heavy to very heavy rainfall.
- Red (Warning): The forecast is for extremely heavy rainfall and asks authorities to take action. Red colour warning does not mean Red Alert and that it only means take action.
Bilateral & International Relations
India, Russia Sign Pact to Open Maritime Route Between Chennai and Vladivostok
India and Russia agreed to open a maritime route between the ports of Chennai and Vladivostok to ensure connectivity between the two countries.
- Vladivostok-Chennai sea link will reduce the transport time from existing 40 days to 24 days.
- It will ensure the connectivity between the two major ports which will give impetus to the cooperation between India and the Russian Far East.
- Vladivostok-Chennai sea link is also seen as a counter to China’s Maritime Silk Route (MSR) plan as part of One Belt One Road project.
Russian Far East
- The Russian Far East comprises the Russian part of the Far East, the easternmost territory of Russia, betweenLake Baikal in Eastern Siberia and the Pacific Ocean.
- It borders two oceans: The Pacific and the Arctic.
- The Far Eastern Federal District shares land borders with Mongolia, China and Koreato its south, and shares maritime borders with Japan to its southeast and with the US to its northeast.
- It constitutes over one-third of Russia’s territory. It is home to major natural resource deposits and essential to maintaining increasingly valuable Asian trade routes.
- Although traditionally considered part of Siberia, the Russian Far East is considered separate from Siberiain Russian regional schemes.
Significance of the Far East
- The Far East is rich in natural resources like diamonds, stannary, borax materials, 50 gold, tungsten, and fish and seafood.
- About 1/3 of all coal reserves and hydro-engineering resources of the country are here.
- Forests of the region comprise about 30% of the total forest area of Russia.
- Realizing its geostrategic significance, India opened a consulate in Vladivostok in 1992. India was the first country to have a resident consulate in Vladivostok then.
US backs India’s move to declare Hafiz Saeed, 3 others terrorists under new anti-terror law
The United States backed India’s move to declare Jaish-e-Mohammad (JeM) leader Masood Azhar, Jamaat-ud-Dawa chief Hafiz Saeed, Lashkar-e-Taiba leader Zakiur Rehman Lakhvi and Dawood Ibrahim as terrorists under UAPA amendments.
For Key Amendments in Unlawful Activities (Prevention) Amendment Bill 2019 along with its analysis, refer IASToppers’ Editorial: https://www.iastoppers.com/editorial-notes-jurisprudence-judicial-rubber-stamp/
Remembering Dadabhai Naoroji on his birth anniversary
September 4, 2019 was the 194th birth anniversary of Dadabhai Naoroji, who was among the first leaders who stirred national consciousness in the country.
About Dadabhai Naoroji
- Dadabhai Naoroji, also known as the ‘Grand Old Man of India’, was an Indian political leader.
- He was the first Indian to be elected to membership in the British Parliament. He helped form an Indian parliamentary committee to attend to Indian interests.
- In 1867, he put forward the ‘drain of wealth’ theory in which he stated that the Britain was completely draining India. He mentioned this theory in his book Poverty and Un-British Rule in India.
- He was also member of the Indian National Association, founded in 1876 by Surendranath Banerjee and Ananda Mohan Bose.
- The Indian National Congress, founded later in December, 1885, merged with Indian National Association and Naoroji was elected as the Congress President in 1886. He acted as Congress president thrice (in 1886, 1893, and 1906).
- In 1885, he joined the Bombay Legislative Council at the invitation of the Governor of Bombay, Lord Reay and also being elected as vice president of Bombay Presidency Association.
- He was a vocal critic of the colonial economic policy in India. In 1895, he became a member of the royal commission on Indian expenditure.
Contribution of Dadabhai Naoroji
- He is credited with the founding of the Indian National Congress, along with A.O. Hume and Dinshaw Edulji Wacha.
- In pursuit of restoring the sanctity of the Zoroastrian religion, he established the Rahnumae Mazdayasne Sabha (Guides on the Mazdayasne Path) in 1851.
- He founded Dadabhai Naoroji & Co., a cotton trading company, in 1859.
- He founded the religious, cultural and social organization for Zoroastrians, ‘The Zoroastrian Trust Funds of Europe’ (ZTFE) along with Muncherjee Hormusji Cama.
- He was instrumental in the formation of the ‘London Indian Society’ in 1865. The objective of the society was to discuss Indian social, political and scholarly subjects.
- He also helped in setting up the ‘East India Association’ in 1867 that aimed at conveying the Indian perspective to the Britain public.
- As the secretary of the East India Association, Naoroji travelled in India to gather funds and raise national awareness.
What is Drain Theory?
- Imperial Britain was draining away India’s wealth to itself through exploitative economic policies, including India’s rule by foreigners; the heavy financial burden of the British civil and military apparatus in India; the exploitation of the country due to free trade; non-Indians taking away the money that they earned in India; and the interest that India paid on its public debt held in Britain.
Art & Culture
Athi Varadar festival about to conclude
The Athi Varadar festival is set to conclude today, with preparations underway at the Devarajaswamy temple.
About Athi Varadar festival
- It is 48-day festival celebrated at the Devarajaswamy temple in Kancheepuram district of Tamil Nadu.
- It is celebrated every 40 years.
- In this festival, the idol of Lord Athi Varadar is uplift from the water-filled tank, Ananthasaras, after 40 years. At the end of the festival, the idol is again immersed in the tank.
- The Vigraham was previously raised in 1937, 1979, 2019 and will be next raised in 2059.
- Athi Varadharaja is one among the 4 Brahma Kararchita Varadaja idols, carved out of Athi Tree by Vishwakarma.
Key Facts for Prelims
List of top 10 world’s most liveable cities 2019
New Delhi dropped by six places to rank 118th on a list of the world’s most liveable cities due to increase in cases of petty crimes and poor air quality.
Highlights of the Global Liveability Index 2019
Top 10 countries (Top 10 most liveable countries in world)
- Vienna, Austria
- Melbourne, Australia
- Sydney, Australia
- Osaka, Japan
- Calgary, Canada
- Vancouver, Canada
- Tokyo, Japan
- Toronto, Canada
- Copenhagen, Denmark
- Adelaide, Australia
- Last rank (140th): Damascus, Syria
- Among the BRIC countries, Rio de Janeiro (Brazil) was positioned at the 89th place, Moscow (Russia) at 68th, St Petersburg (Russia) 71st.
- Asian cities overall have scored slightly below the global average while three Asian cities — Port Moresby in Papua New Guinea (135th), Pakistan’s Karachi (136th) and Bangladesh’s Dhaka (138th) — are among the ten ‘least liveable’ cities globally.
India specific highlights
- Delhi registered the biggest decline in Asia and dropped by six places to rank 118th.
- Mumbai also fell two places since 2018 to rank 119th.
Reason behind decline in New Delhi, Mumbai ranking
- Decline in Mumbai’s rank was mainly due to a downgrade in its culture score, while New Delhi has fallen in the index because of downgrades to its culture and environment score as well as fall in the stability score owing to rising crime rates.
About the Global Liveability Index
- It was published by the Economist Intelligence Unit (EIU), a British company.
The ranking is based on five broad categories:
- Culture and environment
- The 2018 update to the World Health Organisation (WHO) Global Ambient Air Quality Database shows that New Delhi has the sixth-highest annual mean concentration of fine particulate matter among cities around the world.