Home Daily Updates IMPORTANT CURRENT AFFAIRS & DAILY NEWS UPDATES : 06 - MARCH - 2016
IMPORTANT CURRENT AFFAIRS & DAILY NEWS UPDATES : 06 - MARCH - 2016
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DAILY NEWS UPDATES

06-MARCH- 2016

 

UNION BUDGET 2016-17: FINANCIAL SECTOR REFORMS

The Union Finance Minister Arun Jaitley presentedthe Annual Financial Statement or the Union Budget for 2016-17 in the Lok Sabha. In his budget speech the minister listed nine pillars on which the Government will focus on in order to transform India into a developed nation.

The nine pillars are - Agriculture and farmers' welfare, rural sector, social sector including healthcare, education, skills and job creation, infrastructure and investment, financial sector reforms, ease of doing business, fiscal discipline, tax reforms to reduce compliance burden.

Herein we present the new initiatives proposed to reform financial sector that are aimed at building trust and improving predictability.

Following measures were announced to reform financial sector -

• A comprehensive Code on Resolution of Financial Firms will be introduced as a Bill in the Parliament during 2016-17. This Code will provide a specialized resolution mechanism to deal with bankruptcy situations in banks, insurance companies and financial sector entities. This Code, together with the Insolvency and Bankruptcy Code 2015, when enacted, will provide a comprehensive resolution mechanism for our economy.

• Statutory basis will be provided for Monetary Policy Frameworkthrough amendments to the RBI Act, 1934. And, a Monetary Policy Committee will be set up through the Finance Bill, 2016. A committee-based approach will add lot of value and transparency to monetary policy decisions.

• A Financial Data Management Centre will be set up under the aegis of the Financial Stability Development Council (FSDC) to facilitate integrated data aggregation and analysis in the financial sector.

• To improve greater retail participation in Government securities, RBI will facilitate their participation in the primary and secondary markets through stock exchanges and access to Negotiated Dealing System – Order Matching Segment (NDS-OM) trading platform.

• New derivative products will be developed by the Securities and Exchange Board of India (SEBI) in the Commodity Derivatives market.

• To facilitate deepening of corporate bond market, the following measures were announced.

a) LIC of India will set up a dedicated fund to provide credit enhancement to infrastructure projects. The fund will help in raising the credit rating of bonds floated by infrastructure companies and facilitate investment from long term investors.

b) RBI will issue guidelines to encourage large borrowers to access a certain portion of their financing needs through market mechanism instead of the banks.

c) Investment basket of foreign portfolio investors will be expanded to include unlisted debt securities and pass through securities issued by securitisation Special Purpose Vehicles (SPVs).

d) For developing an enabling eco system for the private placement market in corporate bonds, an electronic auction platform will be introduced by SEBI for primary debt offer.

e) A complete information repository for corporate bonds, covering both primary and secondary market segments will be developed jointly by RBI and SEBI.

f) A framework for an electronic platform for repo market in corporate bonds will be developed by RBI.

g) The enactment of the proposed Insolvency and Bankruptcy Codewould also provide a major boost to the development of the corporate bond market.

• To tackle the problem of stressed assets in the banking sector, Asset Reconstruction Companies (ARCs) have a very important role.

• Amendments in the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002 proposed to tackle the problem of NPAs in the banking sector. The changes will also enable the sponsor of an ARC to hold up to 100 percentage stake in the ARC and permit non-institutional investors to invest in Securitization Receipts.

• A comprehensive Central legislation will be introduced in 2016-17 proposed to deal with the rising instances of illicit deposit taking schemes. The law is of significance as the worst victims of these schemes are the poor and the financially illiterate.

• Amendments to the SEBI Act, 1992 will be introduced in 2017 to provide for more members and benches of the Securities Appellate Tribunal.

Public Sector Banks and General Insurance Companies

• To support the Banks in dealing with the problem of NPAs, 25000 crore rupees will be infused towards recapitalisation of Public Sector Banks in 2016-17.

• The Bank Board Bureau (BBB) will be operationalized during 2016-17 and a roadmap for consolidation of Public Sector Banks will be spelt out. The BBB was formed under chairmanship of former CAG Vinod Rai on 28 February 2016.

• The process of transformation of IDBI Bank has already started. Government will take it forward and also consider the option of reducing its stake to below 50 percent.

• For speedier resolution of stressed assets, the Debt Recovery Tribunals will be strengthened with focus on improving the existing infrastructure, including computerised processing of court cases, to support reduction in the number of hearings and faster disposal of cases.

• Credit creation target under the Pradhan Mantri Mudra Yojana (PMMY) is pegged at 180000 crore rupees for 2016-17. Under the scheme, which was launched in April 2015 to fund the small entrepreneurs, Banks and NBFC-MFIs sanctioned one lakh crore rupees to over 2.5 crore borrowers in 2015-16.

• To provide better access to financial services, especially in rural areas, a massive nationwide rollout of ATMs and Micro ATMs will be undertaken in Post Offices over the next three years that is till 2019.

The general insurance companies owned by the Government, like New India Assurance, United India Insurance, etc, will be listed in the stock exchanges to ensure higher levels of transparency and accountability.

UNION BUDGET 2016-17: GOVERNANCE AND EASE OF DOING BUSINESS

The Union Finance Minister Arun Jaitley presentedthe Annual Financial Statement or the Union Budget for 2016-17 in the Lok Sabha. In his budget speech the minister listed nine pillars on which the Government will focus on in order to transform India into a developed nation.

The nine pillars are - Agriculture and farmers' welfare, rural sector, social sector including healthcare, education, skills and job creation, infrastructure and investment, financial sector reforms, governance and ease of doing business, fiscal discipline, tax reforms to reduce compliance burden.

The following are the new initiatives proposed in the Budget 2016-17to achieve the goal of Minimum Government and Maximum Governance and to enable people to realize their full potential.

• A bill to amend the Companies Act, 2013 will be introduced in the 2016-17 budget session. The proposed bill would also improve the enabling environment for start-ups by mandating the registration of companies in one day.

The Director General of Supplies and Disposal (DGS&D) will establish a technology driven platform to facilitate transparency and efficiency in procurement of goods and services by various Ministries and agencies of the Government.

• The Price Stabilisation Fund will be provided with a corpus of 900 crore rupees to support market interventions in procurement of pulses.

• Ek Bharat Shreshtha Bharat programme will be launched to link States and Districts in an annual programme that connects people through exchanges in areas of language, trade, culture, travel and tourism. The programme marks the celebration of 70th Anniversary of independence.

• Following three initiatives were announced to avoid leakage indisbursement of government subsidies.

1) A bill for targeted delivery of Financial and Other Subsidies,Benefits and Services by using the Aadhaar framework will be introduced in the budget session of 2016-17. A social security platform will be developed using Aadhaar to accurately target beneficiaries. This will be a transformative piece of legislation which will benefit the poor and the vulnerable.

2) Direct Benefit Transfer for delivering fertilizer subsidies will be used on pilot basis in a few districts across the country. It seeks to improve the quality of service delivery to farmers.

3) Out of the 5.35 lakh Fair Price Shops in the country, automation facilities will be provided in 3 lakh Fair Price Shops by March 2017.

UNION BUDGET 2016-17: FISCAL DISCIPLINE

The Union Finance Minister Arun Jaitley presentedthe Annual Financial Statement or the Union Budget for 2016-17 in the Lok Sabha. In his budget speech the minister listed nine pillars on which the Government will focus on in order to transform India into a developed nation.

The nine pillars are - Agriculture and farmers' welfare, rural sector, social sector including healthcare, education, skills and job creation, infrastructure and investment, financial sector reforms, governance and ease of doing business, fiscal discipline, tax reforms to reduce compliance burden.

The following are the new initiatives proposed in the Budget 2016-17aimed at achieving pudent management of government financesand delivery of benefits to the needy.

• The fiscal deficit in 2015-16 (Revised Estimates) and 2016-17(Budgetary Estimates) has been retained at 3.9 percentage and 3.5 percentage of GDP respectively.

• Revenue Deficit target is capped from 2.8 to 2.5 percentage in RE 2015-16.

• The total expenditure in the Budget for 2016-17 has been projected at 19.78 lakh crore rupees, consisting of 5.50 lakh crore rupees under Plan and 14.28 lakh crore rupees as Non-Plan expenditure.

• The increase in Plan expenditure is in the order of 15.3 percentageover 2015-16 BE.

• Plan Allocations have given special emphasis to sectors like agriculture, irrigation, social sector including health, women and child development, welfare of SCs and ST, minorities, infrastructure, etc.

• Continuing with the policy of higher empowering States, the total resources being transferred to States are 99681 crore rupees more over RE 2015-16 and 246024 crore rupees more over Actuals of 2014-15.

• To improve the quality of Government expenditure, every new scheme being sanctioned by Government will have a sunset date and outcome review.

• To avoid overlapping of expenditure, 1500 Central Plan Schemes were rationalised and restructured into about 300 Central Sector and 30 Centrally Sponsored Schemes.

Plan vs Non-Plan Expenditure

In order to correct the present skewed allocations in the budget because of Plan and Non-Plan classification of Government expenditure and to facilitate Revenue and Capital classification, the Plan-Non-Plan classification will be done away with from fiscal 2017-18. The Union Finance Ministry will closely work with the State Finance Departments to align Central and State Budgets in this matter.

Committee on FRBM Act, 2003

A committee will be formed to review the implementation of the Fiscal Responsibility and Budget Management (FRBM) Act, 2003. The committee will suggest its opinions on the following issues while remaining committed to fiscal prudence and consolidation.

• To suggest necessary amendments to the Act in the context of the uncertainty and volatility which have become the new norms of global economy

• To looking into introduction of having a fiscal deficit range by replacing the present system of having fixed numbers as targets

• To look into the feasibility of deriving a mechanism whereby fiscal expansion or contraction will be aligned with credit contraction or expansion respectively.

BASANTA BAHADUR RANA WON GOLD IN 50KM RACE WALK AT NATIONAL CHAMPIONSHIPS

Olympian Basanta Bahadur Singh Rana won the gold medal in men's 50km race walk event on the final day of the National Championships in Jaipur.

Rana clocked 4 hours 7 minutes 24 seconds to finish first on a fast Jaipur course.

Uttarakhand's Chandan Singh, who has already achieved Rio qualification mark in men's 20km event, finished second with a time of 4:09:50 while Jitender Singh Rathore of Rajasthan grabbed the bronze medal in 4:12:10.

In junior women's 10km race walk competition, Neena K T of Keralaclinched the gold. She clocked 53:12.49 to cross the finish line.Bhawna Jat of Rajasthan finished second in 53:27:79. Priyanka Patelof Uttar Pradesh clocked 53:32:95 to win the bronze medal.

Vikash Singh of Bihar won the gold in junior men's 10km race walk competition by clocking 44:32:50. Naveen of Delhi clocked 4:37:76 for the silver and Eknath Turamberker clocked 44:55:67 for the bronze medal.

About Basanta Bahadur Rana

Basanta Bahadur Rana represented India in the 50 km race walk event at the 2012 Summer Olympics in London. His personal best in this event before the Games was 4:02:13 and he bettered it by clocking a time of 3:56:48, which was a national record then.

Rana qualified for the Olympics at the 2012 IAAF World Race Walking Cup in Saransk, Russia in May 2012, with a B qualifying standard.

He was trained by the former national record holder Gurdev Singh.

WINDHAM-CAMPBELL PRIZES FOR THE YEAR 2016 ANNOUNCED

Columnist and author Jerry Pinto was chosen for the 2016 Windham-Campbell Prize. Pinto, an Indian, won the award for his novel Em and The Big Hoom (published in 2012) in the fiction category.

Em and the Big Hoom was Pinto’s first work of fiction that tells the story of an unnamed narrator’s slow, painful attempt to come to terms with his mother’s bipolar disorder and suicidal tendencies.

The book narrates an acute exploration of the impact of mental illness on intimate relationships, as well as a window into the fraught lives of the Goan Christians of Mumbai.

Apart from Pinto, eight other writers were chosen for the award in three categories, namely fiction, non-fiction and drama. The winners will each receive 150000 dollar to support their work. List of 2016 Windham-Campbell Prize winners

Fiction

• Tessa Hadley (United Kingdom)

• CE Morgan (United States)

• Jerry Pinto (India)

Nonfiction

• Hilton Als (United States)

• Stanley Crouch (United States)

• Helen Garner (Australia)

Drama

• Branden Jacobs-Jenkins (United States)

• Hannah Moscovitch (Canada)

• Abbie Spallen (Ireland)

Jerry Pinto

He is an editor, journalist, novelist, poet, and translator and his works explores the pains of familial and political life. He has written several books, including

• Asylum and Other Poems (poetry collection)

• Surviving Women

• Helen: The Life and Times of an H-Bomb, an award-winning biography of Bollywood actress Helen Richardson Khan

• Reflected in water: writings on Goa

Windham-Campbell prizes

The Donald Windham Sandy M. Campbell Literature Prizes is an American literary award which offers prizes in three categories: fiction, non-fiction and drama. The award was established at Yale University in 2011 with the first prizes presented in 2013.

The awards is administered by the Beinecke Rare Book & Manuscript Library and recognizes English language writers from anywhere in the world.

TAMIL NADU WANTS CENTRE’S ADVICE ON RELEASING CONVICTS IN RAJIV GANDHI ASSASSINATION

  • In yet another bid to release the seven convicts in the Rajiv Gandhi assassination case, the Tamil Nadu government wrote to the Centre, seeking its views on its decision to free them.
  • Under Section 435 of the Cr.PC, the State has to consult the Centre before releasing prisoners prosecuted by the CBI or under a Central law.
  • In December last year, the Supreme Court had ruled that the State government had no power to release the convicts without the Centre’s concurrence.
  • In 1999, the Supreme Court found the seven guilty of con- spiring to assassinate Rajiv Gandhi in May 1991.
  • The State government’s earlier attempt in 2014 to release the seven failed, as itscommunication to the Centre gave only three days’ time for a response.
  • The main petition questioning the legality of the government’s order of release is still pending before a three-judge Bench of the SC.

AFTER INCREASING STATES SHARE UNION GOVERNMENT IS CUTTING THE FUNDING

  • For the second year in a row, the Modi government has reduced fund available to child health interventions, with a massive cut — from Rs. 15,483.77 crore last year to Rs. 14,000 crore in the latest budget.
  • The National Family Health Survey (NFHS)-4 data for 15 States shows that 37 per cent of children under the age of five are stunted; 22 per cent are wasted while 34 per cent under the age of 5 are under weight.
  • The Integrated Child Development Scheme (ICDS) has seen a 7 per cent reduction in fund.
  • The scheme, implemented by the Women and Child Development (WCD) Ministry, is the country’s flagship intervention to improve child nutrition in the country.
  • That’s not all — the percentage share of the Mid-Day Meal (MDM) scheme in the total Union Budget allocation has gone down from 0.74 per cent in 2014-15 (BE) to 0.49 perCent in 2016-17 (BE).
  • The allocation for the MDM scheme for 2016-17 stands at Rs. 9,700 crore (2016-17 BE).
  • The budget comes a week after the Economic Survey states that India needed to increase investments on child nutrition programmes if it were to capitalise on the demographic advantage offered by its young population.
  • The total amount spend on child health by the government would be Rs. 65,758 crore. Over the last two years, allocations for ICDS has seen a sharp decrease, maintain experts.

CABINET COMMITTEE ON SECURITY CLEARED PURCHASE OF AWACS FROM ISRAEL

  • Ahead of PrimeMinister Narendra Modi’s visit to Israel later this year, a first by an Indian Prime Minister, the Cabinet Committee on Security (CCS) has cleared the purchase of additional surveillance aircraft from the country.
  • The CCS chaired by Mr. Modi cleared the proposal to acquire two more Phalcon Airborne Early Warning and Control Systems (AWACS) at a cost of Rs. 7,500 crore under a tripartite agreement with Israel and Russia.
  • The AWACS are advanced radars mounted on an aircraft to give 360 degree coverage to detect incoming aircraft and missiles at long ranges.
  • India had procured three Phalcon AWACS, Israeli radars mounted on Russian IL-76 transport aircraft, in 2003 at cost of $1 billion. Indo-Israel ties got a major boost after Mr. Modi came to power.

TRUMP AND HILLARY GETS MASSIVE LEAD

  • Donald Trump and Hillary Clinton won seven States each among the 11 States their respective parties contested in and placed themselves far ahead of their rivals in the race for Republican and Democratic presidential nominations.
  • Mr. Trump, whose highly controversial and confrontational campaign has deeply divided the Republican leadership as well as electorate, sought to bridge that gap by declaring himself as the “unifier and the most inclusive candidate in the field”
  • Mr. Trump lost four States — three to Texas Senator Ted Cruz and one to Florida Senator Marco Rubio — but these losses only take him closer to the nomination.
  • Neither Mr. Cruz nor Mr. Rubio will quit the race, and is certain to go for each other’s throat, after a week of coordinated attacks against Mr. Trump
  • Ms. Clinton, now confident that she is closer to the nomination than ever before, made a victory speech that for the most part sounded like Mr. Sanders’s previous speeches.

MALAYSIAN MISSING AIRPLANE MH 370 DEBRIS SUSPECTED NEAR MOZAMBIQUE

  • A piece of debris found along the eastern African coast between Mozambique and Madagascar may be from the tail section of the Malaysia Airlines plane that dis- appeared two years ago.
  • Engineers who have looked at the debris have said there is a good chance it belonged to MH370.
  • Reuters could not immediately confirm the report, and Mozambican authorities have no information on the sighting of such an object of the coast of Inhambane province.

ANOTHER TERRORIST ATTACK IN JALALABAD CONSULATE

  • In the fourth attack since 2007, heavily-armed terrorists, including suicide bombers, struck the Indian consulate in Afghanistan’s Jalalabad city, killing nine persons, including an Afghan security person and causing damage to the chancery.
  • All Indians in the mission were safe and six terrorists, who carried out the attack, were dead.
  • While two terrorists blew themselves up, four militants were killed by the Afghan police. Two civilians were also killed in the crossfire.
  • The attack on the Indian consulate was part of a trend of such operations launched from Pakistan.
  • They are simply attacking India’s presence in Afghanistan, whenever they get the opportunity.
  • The whole spectrum of the India- Afghan relations, the relationship itself, is the target of the attacks.

GOVERNMENT WILL TAKE FINAL CALL ON EPF TAX

  • Finance Minister Arun Jaitley said that the government would take a final decision on his budget proposal to tax 60 per cent of employees’ provident fund (EPF) savings of those earning over Rs.15,000 per month, before it responds on the issue during a debate on the Finance Bill in Parliament.
  • The finance ministry had issued a clarification that EPF savings won’t be taxed at retirement, if the retiring employee opts to use 60 per cent of his EPF account balance to buy an annuity product that provides them a monthly pension.
  • The Budget had announced that 40 per cent of EPF savings will be tax-free at the time of withdrawal on retirement. Till now, EPF savings are tax-exempt at the time of retirement.
  • Mr. Jaitley said that the tax proposal was not aimed at revenue generation, but help everyone get a pension in their old age.
  • “The balance 60 per cent (of EPF savings) if converted to annuity and used for a regular pension will not be taxed. The objective is to incentivise people to get pension and disincentivise consumption of savings,” he said.
  • Stressing that the proposal would only impact high-income private sector employees, the minister said that nearly three crore active EPF members receive monthly salaries of less than Rs.15,000 and would not be affected by the tax.

CORPORATE WANTS TAXATION OF INCOMES FROM CORPORATE DIVIDENDS TO BE REVIEWED

  • After protests from middle class against the EPF provisions, the super-rich too have raised demands that the NDA Government reconsider its Budget proposal regarding the taxation of incomes from corporate dividends in excess of Rs.10 lakh.
  • Former CII President Rajive Kaul and Salil Singhal of PI Industries both said that the proposal “amounts to triple taxation.”
  • The CII will collate the various requests for reconsideration and comments on various budget proposals made at meeting to be submitted to the Finance Ministry.
  • Under the existing rules, dividends are taxed at the rate of 15 per cent at the time of distribution in the hands of the company declaring dividends.
  • As a result, tax payers even with high dividend income and who fall in higher income tax brackets are subjected to dividend tax only at the rate of 15 per cent.
  • It is with the view to eliminate this vertical inequity across dividend income earners that the budget has proposed an additional 10 per cent tax on income in excess of Rs.10 lakh from dividends on corporate profits.

 

 

Last Updated on Monday, 07 March 2016 04:11
 

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