Polity & Governance
- Income Tax Dept. can reveal taxpayers’ details
- Most death row convicts first-time offenders
- RBI for easier bank permits
- Overseas investors continue to shun oil palm industry
- Steel firms may get NIIF funding support
- Sagarmala project to be completed in 5 years
- Australia offers multiple-entry visa to Indians
Polity & Governance
Income Tax Dept. can reveal taxpayers’ details
According to an amendment in the Finance Bill, 2016, the taxman in the country can reveal information related to taxpayers disclosing previously concealed income under the Budget’s Income Declaration Scheme, if it is deemed to be in public interest.
- The amendment is aimed to allay any misconceptions that the government would keep such taxpayers’ details confidential under any circumstance.
Key features of the amendments:
- The Finance Bill has imported Section 138 of the Income Tax Act into the declaration scheme’s ambit. Bringing in Section 138 to the Scheme brings in objectivity on confidentiality of income tax information and the limitations thereof.
- The aim behind bringing in this section is to dispel the perception that the details disclosed under the scheme are confidential under any circumstances — they can be disclosed if it is deemed to be in public interest.
- However, the discretion has been given to the Chief Commissioner who is a very senior authority and he has to see if it is in public interest to share the information.
About the Income Declaration Scheme:
- The Income Declaration Scheme offers people with undisclosed income to declare it by paying a penal tax rate of 45% on such income.
Most death row convicts first-time offenders
According to the recently released “Death Penalty India Report”, most death row inmates in India are poor, uneducated and first-time offenders.
Highlights of the report:
- According to the report, a total of 241 out of the 385 death row inmates in India are first-time offenders.
- Around 60% of the prisoners did not complete secondary education and nearly 75% belonged to economically vulnerable sections.
- Three-fourth of the prisoners sentenced to death belong to backward classes and religious minorities.
- Overall, ‘murder simpliciter’ or accidental murder constitute most of the cases, followed by ‘rape with murder’.
- Median duration of trials and High Court proceedings in cases involving sexual offences is the lowest as compared to other cases. State-wise analysis also shows that trails were fastest in cases of sexual offence.
- Most prisoners who shared information didn’t have a lawyer during interrogation. Most of them claimed they had experienced custodial violence and were tortured in police custody.
Concerns raised by the report:
Lack of education:
- According to the report, education levels affect the extent to which the death row prisoners are able to understand details of the case filed against them; lack of which results in alienation from the system. Alienation experienced by prisoners through lack of awareness of proceedings increased as cases rise in the appellate system.
Pendency and lengthy trials:
- Pendency of legal proceedings greater than five years is considered a grave violation of speedy justice by the Supreme Court. While the median duration of trial for the death row prisoners was around four years, trials went beyond five years for 127 prisoners. Though lengthy trials happen to be a concern in general, it has more significance in the case of death penalty.
Fees of private lawyers:
- Also, the seriousness of charge often forces the families to hire a private lawyer than rely on poor quality of free legal aid provided by the government. The report finds that while the high fee of private lawyers – opted by more than 60% of the prisoners during trial and high court – deepens the economic vulnerability of the already poor families, it doesn’t ensure access to competent legal representation. This makes it difficult for an accused to “navigate through the various stages of the legal process without sufficient socio-economic and political resources.”
RBI for easier bank permits
The Reserve Bank of India (RBI) has proposed a relaxation of norms for on-tap licenses for universal banks, as the RBI seeks to open the key economic sector to wider participation.
- This is first time since the financial industry was opened up in 1991 that the RBI has decided to make the bank licensing process continuous as opposed to a ‘stop-and-go’ approach.
What is ‘on tap mechanism?
- The central bank has been opening the bank licence window only periodically. Under the ‘on tap’ mechanism, however, an application can be made at any time subject to certain conditions.
Criteria for eligibility:
- According to the draft RBI guidelines, non-banking finance companies and resident individuals or professionals with 10 years of experience in banking and finance will be eligible to apply.
- Also eligible are private sector entities and groups owned and controlled by residents, provided they have total assets worth at least 5,000 crore, with the non-financial group business not accounting for more than 40% of the total assets or the gross income.
- Individuals and companies directly or indirectly connected with large industrial houses may also take equity in a new private bank but only up to 10%. Such shareholders will not get any representation on the board.
Criteria for capital requirements:
- The initial minimum paid-up voting equity capital for a bank has been left unchanged at 500 crore. But the bank has to have a minimum net worth of Rs. 500 crore at all times.
- The promoters need to hold a minimum 40% of the paid-up voting equity capital, which will be locked-in for five years from the date of commencement of business.
- The RBI has allowed banks to get their shares listed within six years (three years earlier) of commencement of business.
- In the case of an NBFC applying for a licence, if the entity has diluted the promoter shareholding to below 40% but above 26%, the RBI may not insist on the promoters’ minimum initial contribution. However, the lock-in period of five years will apply to the 26% promoter shareholding.
Overseas investors continue to shun oil palm industry
A recently released report has indicated that the government’s decision to allow 100% foreign direct investment (FDI) in oil palm plantations in November last year has failed to draw even a single investor.
- The current policies of the Centre do not allow companies to either acquire or lease land beyond a specific acreage as defined by land ceiling norms. Thus, there is no scope for the corporate sector for large scale plantation of oil palm.
- Oil palm should be declared as a plantation crop. There should be relaxation of land ceiling norms. This paves the way for large scale plantation of oil palm.
- Oil palm developers say that the potential of this crop could be realised effectively if there is a separate oil palm development board, a separate import policy for palm oil and a separate budget for oil palm industry development.
Government’s efforts to promote oil palm industry:
- In order to encourage its cultivation in the country as a part of its effort to reduce imports and ensure edible oil security, the government came out with a National Mission on Oilseeds and Oil Palm (NMOOP).
- NMOOP envisages bringing an additional 1.25 lakh hectares under oil palm cultivation through area expansion approach in the States including utilisation of wastelands.
Oil palm industry in India- key facts:
Oil palm is comparatively a new crop in India and is stated to be the highest vegetable oil yielding crop.
- The States currently engaged in oil palm cultivation are Andhra Pradesh, Chhattisgarh, Goa, Gujarat, Maharashtra, Mizoram, Karnataka, Kerala, Odisha, Tamil Nadu, Arunachal Pradesh, Assam, Bihar, Manipur, Meghalaya, Nagaland, Sikkim, Tripura and West Bengal.
- India’s edible oil imports are rising steeply. In the past 13 years, import of crude and refined oil was reported to have quadrupled and the import bill in this regard is expected to touch $ 15 billion in 2016-17.
Steel firms may get NIIF funding support
The government is looking at creating a fund under India’s first sovereign wealth fund, NIIF, which will address capital requirements of domestic steel companies.
- The move is aimed at bringing down capital costs for the steel industry, which could see a staggering $190 billion in investment if the country has to reach a 300-mtpa target by 2025-26.
- The government feels that though domestic demand has grown slower than anticipated in the last couple of years, in the medium term demand would pick up, making room for steel capacity expansion.
India’s steel industry:
- Steel sector is capital-starved sector in the country.
- India currently has around 110 mtpa steel capacity. The country aims to create an additional 190 mtpa capacity by 2025-26. Approximately $1 billion investment is required to develop 1 mtpa steel capacity.
About National Investment and Infrastructure Fund (NIIF):
Proposed in Union Budget 2015, National Investment and Infrastructure Fund (NIIF) has been set up in last month of 2015.
- The objective of NIIF is to maximize economic impact mainly through infrastructure development in commercially viable projects, both greenfield and brownfield, including stalled projects, NIIF would solicit equity participation from strategic anchor partners.
- The Fund aims to attract investment from both domestic and international sources.
- The government’s contribution would be limited to 49% of the subscribed capital.
- The government has budgeted to contribute Rs.20,000 crore to the fund in the current fiscal year while another Rs.20,000 crore is expected to be raised through sovereign wealth funds.
- The government will seek participation from strategic investors such as sovereign fund, quasi sovereign funds and multilateral or bilateral investors, which can help leverage this fund to many times.
- Cash-rich PSUs, pension funds, provident funds, National Small Saving Fund will be able to pick up stake in the fund.
Sagarmala project to be completed in 5 years
The government has decided to halve the previously estimated 10-year timeframe to complete the Sagarmala port development project.
About Sagarmala port project:
The Sagarmala project seeks to develop a string of ports around India’s coast.
- The objective of this initiative is to promote “Port-led development” along India’s 7500 km long coastline.
- The Union Ministry of Shipping has been appointed as the nodal ministry for this initiative.
- The project aims to develop access to new development regions with intermodal solutions and promotion of the optimum modal split, enhanced connectivity with main economic centres and beyond through expansion of rail, inland water, coastal and road services.
- It also aims at simplifying procedures used at ports for cargo movement and promotes usage of electronic channels for information exchange leading to quick, efficient, hassle-free and seamless cargo movement.
- It also strives to ensure sustainable development of the population living in the Coastal Economic Zone (CEZ).
- The project, envisaging port-led development, targets to provide one crore employment, direct employment to 40 lakh persons and indirect employment to 60 lakh persons.
Three pillars of focus:
The Sagarmala Project Stands on Three Pillars of Focus
- Supporting port-led development with pro-active policy initiatives and providing institutional framework to assist all stakeholders.
- Modernising port infrastructure.
- Developing integrated transport infrastructure for connecting the coast to the hinterland.
Australia offers multiple-entry visa to Indians
Australia has decided to provide a three-year multiple-entry visitor visa for Indians by July 2016 on a trial basis.
- This will allow entry into Australia multiple times on the same visa and each stay will be valid up to three months. It will be applicable to eligible applicants on tourist and business visitor visa streams.
- This is aimed at boosting Australia’s future tourism
- Apart from India, this will be implemented in three countries — Thailand, Vietnam and Chile.
- The announcement of the trial was made as part of the Australian government’s 2016-17 budget.