CAO The Hindu NOTES – 16th April, 2018 (Daily News Paper Current Affairs Analysis)
📰THE HINDU NEWSPAPER – DAILY Hindu Current Affairs Analysis
Date:- 16th April, 2018
PMLA WILL NEED MORE CHANGES (GS 3 INTERNAL SECURITY)
To comply with FATF norms India will make money laundering an explicitly standalone offence ahead of the on-site mutual evaluation by the Financial Action Task Force (FATF), which is due in November-December 2020.
It is one of the key recommendations of the FATF, to make money laundering be made a standalone offence. But despite several amendments, the Prevention of Money Laundering Act (PMLA) remained a predicate-offence-oriented law, meaning that the case under the Act depends on the fate of cases pursued by primary agencies such as the CBI, the Income Tax Department or the police.
The predicate offense conviction condition creates fundamental difficulties when trying to confiscate the proceeds of crime in the absence of a conviction of a predicate offense.
The Prevention of Money Laundering Act, 2002 (PMLA) forms the core of the legal framework put in place by India to combat money laundering. It came into force in 2005. PMLA defines money laundering offence and provides for the freezing, seizure and confiscation of the proceeds of crime.
PMLA (Amendment) Act, 2012 has enlarged the definition of money laundering by including activities such as concealment, acquisition, possession and use of proceeds of crime as criminal activities
Enforcement directorate the agency which handles cases under PMLA. The Enforcement Directorate is empowered to investigate the financial aspects of those crimes, as defined under the other penal laws, which are listed in the PMLA schedule.
Financial Action Task Force (FATF)
FATF is an inter‐governmental policy making body that aims to establish international standards for combating money laundering and terrorist financing. It was established in 1989 during the G7 Summit in Paris (France) to combat the growing problem of money laundering.
It comprises over 39 member countries including India. FATF Secretariat is housed at the headquarters of the OECD in Paris. Initially, FATF was only dealing with developing policies to combat money laundering. But in 2001 its purpose was expanded to act against terrorism financing.
INDIA TO ALLY WITH CHINA ON ‘ASIAN PREMIUM’ (GS 3 ECONOMY)
Petroleum Minister Dharmendra Pradhan has said India would coordinate with China and other Asian countries to raise voice against the “Asian premium” being charged by the Organisation of the Petroleum Exporting Countries (OPEC).
Taking the initiative forward the Indian Oil Corporation will coordinate with the head of China National Petroleum Corporation (CNPC) to chalk out the strategy that would result in getting better price from OPEC
As regarding India, it sources about 86 per cent of crude oil, 75 per cent of natural gas and 95 per cent of LPG from OPEC member nations.
What is Asian premium?
Asia is far more dependent on oil imports from the Middle East (ME) than any other major importing region in the world and because of this dependence, it is widely believed that Asian customers are being charged a premium for the Middle East crude oil relative to those for the US and EU
Asian Premium is the extra charge being collected by OPEC countries from Asian countries when selling oil, and India has been voicing its dissent against this practice.
WHAT DEMONETISATION DID TO TAX COLLECTIONS (GS 3 ECONOMY)
The argument about whether demonetization was good or bad for the economy refuses to die down even a year after the event. Though most of the outcomes of the aspects which demonetization targeted, can only be debated and not quantified due to shortage of enough data, one area where its impact can be quantified with data is tax compliance.
Country had a second consecutive year of strong growth in its direct tax collections in FY18. Net collections of direct tax increased by 17.1% in the just concluded fiscal year, following a 14.6% increase in the mop ups in FY17, to Rs. 9.95 lakh crore. This was achieved without much changes in the tax rate.
This is a pretty good growth, considering that in FY15 and FY16, India’s direct tax kitty witnessed growth of just 8.9% and 6.9%.
But then again seen from a historical perspective, a 14% or even 17% annual increase in direct taxes isn’t unprecedented or extraordinary for the Indian economy. For instance, in fiscal year FY11 and FY14 direct tax collections had rose by 18% and 14.3% respectively, clearly without any tinkering with high-value currency notes.
But then to understand the effect of demonitisation the concept of Tax buoyancy can be utilized
For Indian economy in the seven years from FY08 to FY14, direct tax buoyancy hovered between 0.5 and 1.1 times, averaging out at 1 for the period, meaning every additional rupee of nominal GDP growth for India yielded an equivalent new rupee of direct taxes for the Centre
After showing a slump in FY15 and FY16, buoyancy numbers have perked up quite a bit since then. It doubled from 0.6 times in FY16 to 1.3 times in FY17 and accelerated further to 1.7 times in FY18.
This is indeed a good sign for the economy
Improving tax base.
Income tax payers in India have always made up only a small sliver of the population, about 3%. But recent numbers on India’s tax base suggest that this figure is now quite outdated. But in the latest Budget, the Finance Minister pegged India’s current direct tax base at 8.27 crore taxpaying entities.
Detractors will point out that, though India’s tax base has grown at a furious pace in the last couple of years, the CBDT has mostly netted small fish. Which indeed is true.
CBDT data does show that newbie return filers have mostly joined the bottom of the pyramid where tax rates are nominal or nil.
Demonetization has sharply lifted tax buoyancy and ushered in many new return filers into the income tax net, but on the flip side, only return filers at low tax rates have joined the bottom of the pyramid.
WHAT ARE NEUTRINOS AND HOW ARE THEY DETECTED? (GS 3 S&T)
Mistrust continues to rule the minds of the villagers, in Theni district in Tamil Nadu, where the India-based Neutrino Observatory is proposed to be set up.
While preparing for exam we must be aware of what neutrinos are and why the INO project in Theni.
What are neutrinos?
The neutrino is a tiny elementary particle which unlike electron and proton, is not a part of an atom. Neutrino has a very tiny mass, no charge and spin half and interacts very weakly with other matter particles, that we don’t realise the presence of neutrinos that are there around as naturally. In fact every second trillions of neutrinos fall on us and pass through our bodies unnoticed.
The proposed India-based Neutrino Observatory (INO) once setup will study atmospheric neutrinos produced from produced from cosmic rays.
Why do we study Neutrinos?
Neutrinos interact very little with the matter around them, so they travel long distances uninterrupted. Since they take time to cross these distances, they are in effect uninterrupted for very long times. The extragalactic neutrinos we observe may be coming from the distant past. These inviolate messengers can give us a clue about the origin of the universe and the early stages of the infant universe, soon after the Big Bang.
Why does INO need the mountain?
The mountain consists of 1km of solid rock that filters away most of the charged particles from the cosmic rays. The filtered set consist of a part of the incident cosmic rays and practically all the neutrinos
On the other side if the detector was placed at the surface of the mountain, it would pick up billions of cosmic ray every hour and about 10 neutrino events per day.
After placing inside the rock, it would detect only limited number of other cosmic rays. . This would enable the scientists study neutrinos without the disturbance of other charged particles.
About INO project
The proposed INO project primarily aims to study atmospheric neutrinos in a 1,300-m deep cavern in the Bodi West Hills in Theni district, Tamil Nadu.
But the Project has run into several controversies mainly due to unfounded fears spread among the local population.