TOPIC : GS 3 Indian Economy and issues relating to Planning, Mobilization of Resources, Growth, Development and Employment.
An unequal providence
What is the news?
Finance minister steered through parliament the Finance Bill of 2021 which includes 127 amendments
- Among the major changes is a tweak in proposal to tax income on PF contribution over 2.5 lakh a year
- Minister also justified nearly 93% PF account holders will be covered by 2.5 lakh per year limit while a mere 1% were abusing the system but also introduced an amendment doubling threshold for annual PF contribution to 5 lakh only whose employers do not remit any contribution to their retirement fund account
- For the crores of employee PF account holders in the private sector , this 5 lakh threshold is a non-starter as an employer – employee relationship is a implicit requirement to open an EPF account
- While employees may voluntarily enhance contribution beyond the statutory wage limit of 15000 a month and employers are not bound to match enhanced contribution , a ‘zero employer contribution ‘ scenario is not possible for EPF members
- This suggests that only some senior government staff who joined service before 2004 and are not part of NPS will benefit from this concession , as they contribute to the GPF account and get defined benefit pension separately
Problem to be addressed
- In country with large informal workforce and sparse social security system ,reasonable savings for retirement should not be penalized
- But to give tax relief for such savings only to government employees smacks of bureaucratic preservation of self-interest deriding an equitable approach to taxation
- The least the government could have done was to offer the same cap of 5lakh rupees to EPF members , by including their employees contribution during the year
- As things stand now , annual investments into PPF that anyone can open , are capped at 1.5 lakh
- Similarly , employee PF contribution beyond 1.5 lakh are not tax deductible under section 80C of the I-T act , but income on such contribution beyond 2.5 lakh will be taxable and employer contribution into EPF ,NPS or any superannuation pension pension capped at 7.5 lakh
- This will show unconscionable disconnect between policy makers and the aspirations of the working class to save for their sunset years
- The new wages code will compel employers to pay higher EPF contribution by linking at least half of their total pay on cost to company basis , rather than 24% basic pay presently
Way forward
With two arms of government working at cross purposes or an ingenious ploy to stir up tax collection . With doubts on implementation of this new tax yet to be addressed , the government must consider putting it on hold and think through its implication
Mains question
Modified tax provision on PF income discriminates against non – government employees. Critically analyze
TOPIC : GS 2 India and its Neighborhood- Relations.
Remove the wedges in India –Bangladesh ties
What is the news?
While celebrating the fiftieth anniversary of Bangladesh-India relations, one needs to recognize the past to its fullest as the past paves the way to create and construct the basis of a relationship.
- Bangladesh’s birth as a sovereign nation was a historic moment at the height of the Cold War. Seldom has the world seen such a pull of diplomacy in the birth of a nation that reconfigured friends and foes in the early 1970s
- The geographical contiguity left Bangladeshis with no other choice—of 10 million people—but to take refuge in India
- For India, this was not only a matter of good neighborliness or strategic opportunity placed before it but also driven by the principles of Gandhian and Nehruvian philosophies that dictated in taking an overwhelming international role for fighting for those who could not do it for themselves.
- Bangabandhu Sheikh Mujibur Rahman laid the foundation of Bangladesh’s foreign policy as ‘Friendship with all, malice to none that led to developing a meaningful engagement of Bangladesh in international politics as well as with India.
Recent Relationship
- What started with a historical 2015 Land Boundary Agreement (LBA) to settle legacy issues with Bangladesh has developed into a close partnership with India making it a priority to supply Covid-19 vaccine to Dhaka under the “Vaccine Maitri” initiative.
- PM Modi has made it clear to all that Bangladesh, like Bhutan, Nepal and Myanmar, occupy a special place in Indian diplomacy and all help should be extended to them for mutual growth and security
- Since 2014, the bilateral relationship with Dhaka has achieved the following milestones:
- Land Boundary Agreement
- Restoration of pre-1965 rail links with India. Five out of six have been completed.
- Reviving the protocol on inland water and trade transit.
- Agreement on the use of Chittagong and Mongla ports for trade and transit.
- Building of the Maitree Bridge on the Feni River.
- Agreement to export power including building a transmission line from Berhampur in India to Bheramara in Bangladesh
- Supply of diesel to Bangladesh from Numaligarh refinery.
- While Bangladesh is the key to connectivity to north-eastern India, it also fits into the calculus of trans- Asian highways that will link India to Vietnam by road and could become an economic engine for growth in Myanmar, Thailand, Cambodia, Laos and Vietnam.
- The government owned National Highways and Infrastructure Development Corporation Limited (NHIDCL) has constructed the vital bridge at a cost of around Rs 129 crore and the 1,476 metre stretch of approach roads, of which 1,193 metre falls in the Indian territory and the remaining 283 metre is in Bangladesh
- While India has given duty-free access to a number of Bangladeshi goods, its physical enormity precludes circumstances that could have Bangladesh enhance the quantum of exports
Way forward
Maintaining stable and friendly relations with India has been to Bangladesh’s advantage in terms of both countries sharing a common position on regional security. Bangladesh’s strong stand against religious militancy and terrorism has resonated with policy makers in Delhi and vice versa.
Mains question
India – Bangladesh relations have been gaining positive momentum over the last decades . Discuss
PRELIMS PUNCHERS
1.Lonar lake
Lonar Lake, also known as Lonar crater, is a notified National Geo-heritage Monument, saline, soda lake, located at Lonar in Buldhana district, Maharashtra, India. Lonar Lake was created by a meteorite collision impact during the Pleistocene Epoch. It is one of the four known, hyper-velocity, impact craters in basaltic rock anywhere on Earth. The other three basaltic impact structures are in southern Brazil. Lonar Crater sits inside the Deccan Plateau – a massive plain of volcanic basalt rock created by eruptions some 65 million years ago
Lonar Crater is understood to be the result of a meteorite impact that occurred between 35,000 and 50,000 years ago. The water in the lake is both saline and alkaline. The lake was declared a protected Ramsar site in November 2020. Lonar Lake lies within the only known extraterrestrial impact crater found within the great Deccan Traps, a huge basaltic formation in India
- Saral Jeevan Bima
The Insurance Regulatory and Development authority of India (IRDA) has introduced a standard, individual term life insurance product called Saral Jeevan Bima. This will be mandatory offered by all life insurance companies from January 1, 2021 onwards. I t will be a non-linked, non-participating individual pure risk premium life insurance plan providing for payment of the sum assured in lump sum to the nominee in case of the insured death during the policy term
The plan will be for those in the 18-65, policy term will be 5-40 years, while the sum assured beyond 25 lakh rupees with all other terms and condition remaining the same. There will be no maturity benefit, they will neither be any surrender value nor can any loan be taken against the product
Source: https://pib.gov.in/PressReleseDetailm.aspx?PRID=1604852
- National Bank for Financing Infrastructure and Development
The Rajya Sabha cleared the legislation to establish the National Bank for financing infrastructure and development as the principal development financial institution (DFIs) for infrastructure financing. DFIs are set up for providing long-term finance for such segments of the economy where the risks involved are beyond the acceptable limits of commercial banks and other ordinary financial institutions. Unlike banks, DFIs do not accept deposits from people. They source funds from the market, government, as well as multi-lateral institutions, and are often supported through government guarantees.
NBFID will have both financial as well as developmental objectives. Financial objectives will be to directly or indirectly lend, invest, or attract investments for infrastructure projects located entirely or partly in India. Central government will prescribe the sectors to be covered under the infrastructure domain. Developmental objectives include facilitating the development of the market for bonds, loans, and derivatives for infrastructure financing.
- Artificial Photosynthesis
Artificial photosynthesis is a chemical process that biomimics the natural process of photosynthesis to convert sunlight, water, and carbon dioxide into carbohydrates and oxygen. The term artificial photosynthesis is commonly used to refer to any scheme for capturing and storing the energy from sunlight in the chemical bonds of a fuel (a solar fuel). Photo catalytic water splitting converts water into hydrogen and oxygen and is a major research topic of artificial photosynthesis. Light-driven carbon dioxide reduction is another process studied that replicates natural carbon fixation.
Research of this topic includes the design and assembly of devices for the direct production of solar fuels, photo electrochemistry and its application in fuel cells, and the engineering of enzymes and photoautotrophic microorganisms for microbial biofuel and bio hydrogen production from sunlight.
Source: https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1705690
PRELIMS QUESTION
- Consider the following statement regarding lonar lake
- Lonar Lake was created by a meteorite collision impact during the Holocene Epoch.
- It is one of the four known, hyper-velocity, impact craters in sedimentary rock anywhere on Earth.
Select the correct statement using code given below.
(a). 1only (b) 2 only
(c).Both (d). None of above
Answer: D
Lonar Lake, also known as Lonar crater, is a notified National Geo-heritage Monument, saline, soda lake, located at Lonar in Buldhana district, Maharashtra, India. Lonar Lake was created by a meteorite collision impact during the Pleistocene Epoch. It is one of the four known, hyper-velocity, impact craters in basaltic rock anywhere on Earth. The other three basaltic impact structures are in southern Brazil. Lonar Crater sits inside the Deccan Plateau – a massive plain of volcanic basalt rock created by eruptions some 65 million years ago
Lonar Crater is understood to be the result of a meteorite impact that occurred between 35,000 and 50,000 years ago. The water in the lake is both saline and alkaline. The lake was declared a protected Ramsar site in November 2020. Lonar Lake lies within the only known extraterrestrial impact crater found within the great Deccan Traps, a huge basaltic formation in India
- Consider the following statement regarding Saral Jeevan Bima
- Life Insurance corporation has introduced a standard, individual term life insurance product called Saral Jeevan Bima.
- There will be no maturity benefit, they will neither be any surrender value nor can any loan be taken against the product
Select the correct statement using code given below.
(a). 1only (b) 2 only
(c).Both (d). None of above
Answer: B
The Insurance Regulatory and Development authority of India (IRDA) has introduced a standard, individual term life insurance product called Saral Jeevan Bima. This will be mandatory offered by all life insurance companies from January 1, 2021 onwards. I t will be a non-linked, non-participating individual pure risk premium life insurance plan providing for payment of the sum assured in lump sum to the nominee in case of the insured death during the policy term
The plan will be for those in the 18-65, policy term will be 5-40 years, while the sum assured beyond 25 lakh rupees with all other terms and condition remaining the same. There will be no maturity benefit, they will neither be any surrender value nor can any loan be taken against the product