Current News (March)

ECONOMY/BUSINESS Union Budget 2013-14: List of Commodities on which Taxes Increased or Decreased  

Union Finance Minister P Chidambaram tabled the Union budget in the Lok Sabha of Parliament for the financial year 2013-14. P. Chidambaram presented his 8th Union Budget. The Union Budget of 2013-14 emphasised fast track economic growth with due importance on infrastructure development, skill development, employment generation and funding for social schemes. In the Union Budget 2013-14, the prices of various commodities and products dwindled. While some of the products witnessed a rise in the price because of an increase in the customs duty, others saw a decline. Prices of some other products, on the other hand remained unaltered because of no change in the customs duty. An increase in the Customs Duty was announced on following products: Set-Top Boxes: In order to encourage domestic production of Set Top Boxes, as well as for value addition, the Finance Minister announced the doubling of customs duty on them. Now the duty will be increased from 5% to 10%. High-End Luxury Cars, Motorcycles, Yachts: The customs duty on imported luxury goods such as high-end motor vehicles, motorcycles, yachts and similar vehicles was increased. In the case of such motor vehicles, the duty was increased from 75% to 100%; on motorcycles with engine capacity of 800 cc or more the duty now will be 75% instead of 60%. Similarly, the duty on yachts and similar vessels was increased from 10% to 25%. SUVs: The Finance Minister also proposed a 3% increase in the excise duty on SUVs so that the duty on them will go up from 27% to 30%. However, such an increase will not apply to SUVs registered as taxis. Tobacco-Products: The Finance Minister has proposed to increase the specific excise duty on cigarettes by about 18%. Similar increases are also proposed on cigars, cheroots and cigarillos. Raw Silk: The duty on raw silk has also been increased from 5% to 15% so as to give a measure of protection to domestic sericulture.

Mobile phones: Expensive mobile phones i.e. mobile phones which are priced at more than Rs. 2000 will also have to bear higher excise duty of 6%. However, mobile phones which are not more than Rs. 2000 will continue to be levy a concessional excise duty of only 1%. Air-Conditioned Restaurants: All air conditioned restaurants will be brought under the service tax net. At present service tax does not apply to those air conditioned restaurants which do not serve liquor. But now the Finance Minister proposed the uniformity of service tax for the two. Concessions in customs duty announced: Duty on certain machinery for manufacture of leather and leather goods reduced: The Union Finance Minister proposed to reduce the duty on specified machinery for manufacture of leather and leather goods, including footwear, by 2.5%. Now the duty on such machinery will be 5% instead of 7.5%. Duty on pre-forms of precious and semi-precious stones drastically cut: To encourage exports, P. Chidambaram also announced in the Budget 2013-14, a drastic reduction in the duty on pre-forms of precious and semi-precious stones from 10% to a mere 2%. De-oiled rice bran oil cake: He also announced a total withdrawal of export duty on de-oiled rice bran oil cake. Handmade carpets and textile floor coverings of coir or jute: The Finance Minister proposed to totally withdraw excise duty from handmade carpets and textile floor coverings of coir or jute. Other products and services made cheaper are: Handmade carpets, electric and hybrid vehicles, leather and leather goods including footwear, precious and semi-precious stones, rice bran oil cake, readymade garments, textile floor coverings of coir or jute, duty free gold limit increased to 50000 in case of male passenger and 100000 in case of a female passenger, imported cheaper hazel nuts and dehulled oat grain, sabudana (tapioca sago) and truck chasis. Union Budget 2013-14: Allocation of Funds to Industrial Sector In the Union Budget 2013-14, the Union Finance minister P. Chidambaram assigned new proposals and plans. The plans and proposals as announced by the Finance Minister are as follows: Plans for seven new cities Plans for seven new cities were finalized for industrial corridors and work on two new smart industrial cities at Dholera (Gujarat) and Shendra Bidkin (Maharashtra) will begin during 2013-14 financial year. Also, an all-inclusive plan was under preparation for Chennai Bengaluru industrial corridor. Preparatory work for next corridor - Bengaluru Mumbai industrial corridor was started.

Two new ports to be established in West Bengal and Andhra Pradesh The plan for establishing two new ports in Sagar (West Bengal) and in Andhra Pradesh was under way. Apart from this, a new outer harbour will be developed in the VOC port at Thoothukkudi (Tamil Nadu) through PPP at an estimated cost of 7500 crore Rupees. Power transmission system A power transmission system was also planned to be constructed from Srinagar to Leh. An amount of 226 crore Rupees was provided in 2013-14 financial year for this. The oil and gas exploration policy It was decided in the Union Budget 2013-14 that the oil and gas exploration policy shall be reviewed to move from profit sharing to revenue sharing contracts. The Finance Minister announced that the policy for encouraging the exploration as well as production of shale gas will be announced. The natural gas pricing policy will be reviewed and uncertainties regarding pricing will be removed. Support to Micro, Small and Medium Enterprises (MSMEs) In order to facilitate assistance to the Micro, Small and Medium Enterprises (MSMEs), the refinancing capability of SIDBI was proposed to be enhanced from 5000 crore Rupees to 10000 crore Rupees. Additionally, it was proposed that SIDBI would be provided an amount of 500 crore Rupees for setting up the Credit Guarantee Fund for factoring. Apparel Parks to be set up It was also proposed that apparel parks shall be set up within the Integrated Textile Parks. These apparel parks will house the apparel manufacturing units. A scheme called Integrated Processing Developing Scheme was initiated to address to environmental concerns of the textile industry. Term loans as well as the working capital to handloom sector will be made available at the concessional interest of 6 percent. This in turn will forward the benefit to 1.5 lakh weavers as well as 1800 primary co-operative societies. Facebook acquires Microsoft’s digital-ad service Facebook Inc. announced that it has reached a deal with Microsoft Corp. to acquire its Atlas Advertiser Suite, a service that enables marketers and agencies to get the most out of their online advertising. The purchase of Atlas, a set of tools that help companies choose the placement of their ads on web sites and monitor their effectiveness, is part of Facebook’s bid to battle Google for market share in the online display-ad business. Market research company eMarketer Inc. forecasts that Google and Facebook will have 18 percent and 15 percent shares of the US market for display ads respectively.

India and Republic of Portugal Signed a Social Security Agreement A Social Security Agreement (SSA) was signed between India and Republic of Portugal in New Delhi. The agreement was signed by Vayalar Ravi, the Minister of Overseas Indian Affairs and Paulo Sacadura Cabral Portas, Minister of State of Foreign Affairs of Portugal. The bilateral Social Security Agreement would help in taking advantage of the emerging employment opportunities and strengthening the trade and investments between the two countries. At present about 75000 Indians are living in Portugal and it includes self-employed people as well as working professionals. Benefits that Indian nationals working in Portugal will get with the Social Security Agreement • For short term contract of up to 5 year, no social security contribution should be paid under the Portuguese law by the detached workers, in case they are making their contribution of social security payment in India. • In case an employee is sent to Republic of Portugal by an Indian Company from a third company, even then the benefits of the agreement will be available to the Indian worker. • Indian workers shall be entitled to the export of the social security benefit if they relocate to India after the completion of their service in Republic of Portugal. • The self-employed Indians in Republic of Portugal would also be entitled to export of social security benefits on their relocation to India. • The period of contribution in one contracting state will be added to the period of contribution in the second contracting state for determining the eligibility for social security benefits. India has signed the Social Security Agreement with 17 countries of the world and they are Belgium, Germany (Social Insurance), Hungary, Switzerland, France, The Czech Republic, Republic of Korea, Germany (Comprehensive SSA), Luxemburg, The Netherlands, Japan, Denmark, Norway, Finland, Canada, Sweden and Austria. World Bank bars L&T for 6 months over forgery by executive World Bank has barred Larsen & Toubro (L&T) from doing any business with it or the projects funded by it for six months, after finding that a senior executive of the Indian conglomerate has indulged in fraud. This would make L&T ineligible for being awarded contracts for any World Bank funded projects, from receiving any loan proceeds made by the Bank or participating in any Bank-financed project till September 6.

The sanction order, said that L&T's ineligibility would continue across the entire World Bank group and has been imposed on L&T "for fraudulent practices" as per the bank's Procurement Guidelines against Fraud and Corruption. During the debarment period, L&T as well as any of the entities controlled directly or indirectly by it can't be nominated even subcontractor, consultant, manufacturer, supplier or even service provider to an otherwise eligible firm being awarded a World Bank financed project. The matter pertains to a bid submitted by L&T through the regional business head of its Medical Equipment and Systems unit to a World Bank-financed project in Tamil Nadu. It was set up to improve the effectiveness of health systems in the state by increasing access to critical health services for poor, disadvantaged and tribal groups. In July 2008, bidding documents were issued by the Tamil Nadu Medical Service Corporation for a contract to supply 130 ultrasound scanners under the project, following which L&T submitted a bid on September 3, 2008 through the regional business head. Upon technical and financial evaluation, L&Ts bid was found to be the lowest-priced, but a complaint was received later that some of the certificates submitted with the bid might have been forged. After the company was asked to explain, the regional business head said that some medical facilities may have mistakenly denied issuing the certificates and requested that L&T "not be viewed as (having) indulged in fraudulent practice". In December 2008, L&T was informed that the tender has been cancelled and the contract was awarded to another firm through a new bidding process. After looking into the matter, the World Bank's Integrity Vice Presidency (INT) alleged that L&T "engaged in fraudulent practices by submitting forged performance certificates with its bid". Japan and US agreed on Free Trade Auto Exception  

The two Pacific powers, Japan and the US in the month in March 2013 agreed on exemptions for the auto industry in a thoughtful Pacific-wide free trade pact, with Japan showing its readiness to announce its entry into negotiations. Both the countries agreed in principle that the US will be able to keep tariffs on car imports — 2.5 per cent for passenger cars and 25 per cent on trucks for at least 5 to 10 years under the Trans-Pacific Partnership (TPP).

But the US auto sector is opposed to Japan’s entry, claiming that Tokyo maintains non-tariff barriers on autos, and says the deal would give Japanese automakers unfettered access to their market, without allowing them the same chances. Japan’s agriculture lobby is also firmly opposed; fearing unprecedented foreign competition would devastate Japan’s small-scale farming sector and rural communities. Tokyo and Washington agreed in preparatory talks that there would be at least a 5 to 10 year delay in the removal of import tariffs on autos. Significance of the Free Trade Auto Exception • The emerging pact could boost growth and set rules to govern trade in the dynamic but unwieldy region, which includes much of East Asia, as well as some American countries. • The participation of both Japan and the US, the world’s two largest developed economies, would mean the pact covers nearly 40 per cent of the world’s economy. Cadbury India Ltd. Slapped with 250 Crore Rupees Excise Duty Evasion Notice  

Cadbury India Ltd., the confectionary giant was slapped with a notice demanding Rs. 250 crore by the Directorate General of Central Excise Intelligence on the grounds of excise duty evasion. The Directorate General of Central Excise Intelligence issued the show-cause notice to Cadbury after it investigated that Cadbury misused the area-based exemption for the new unit in Baddi, Himachal Pradesh, much before this unit existed. Under the norms of the Central Government, area-based exemption for new industrial units of the companies in Himachal Pradesh facilitate full exemption for certain kinds of goods for tenure of 10 years. But in order to avail this exemption, the unit should have been established before March 2010. FIPB Cleared Investment Proposal of AirAsia to Enter India’s Aviation Sector The Foreign Investment Promotion Board (FIPB) cleared the investment proposal of Malaysian budget carrier AirAsia to launch a new airline in partnership with the Tata Group and Arun Bhatia's Telestra Tradeplace.

AirAsia, through its investment arm, AirAsia Investment Ltd. (AAIL), intends to own 49 per cent in the new airline with the remaining stake held by the other two Indian firms. After the FIPB cleared the AirAsia's proposal civil aviation minister Ajit Singh sought clarity on the FDI policy in the aviation sector on the grounds that it spoke of allowing such investment in an existing Indian carrier and not a new one. AirAsia will be the first foreign carrier to enter India's aviation sector since the government changed its rules in September last year to allow foreign carriers pick up to 49 per cent stake in domestic airlines. Ratan Tata met civil aviation minister Ajit Singh. A high-level team of the Tata Group and AirAsia executives met senior ministry officials to fast-track clearances. Tata Sons, the holding company of the $100 billion salt-to software conglomerate, would hold 30 per cent in the joint venture but will not have any operating role in the airline, while Telestra Tradeplace would hold 21 per cent stake. This will mark the return of Tatas to the aviation sector. AirAsia has announced it would set up a 49:30:21 JV with the Tata Sons and Telestra Tradeplace of Indian investor Arun Bhatia to launch the new airline. The three companies would infuse $9 million within a fortnight of the FIPB clearance to set up the venture. According to sources, the initial investment by the AirAsia led joint venture would be around Rs 80 crore. AirAsia is looking to start flying operations from June this year with 3-4 planes and would be headquartered in Chennai. It would focus on providing domestic connectivity to Tier-II and Tier-III cities. The proposed airline would not fly on international routes any time soon as the current rules allow only those airlines to operate on international routes which have completed five years of domestic operations and have a minimum fleet of five aircraft. SEBI enables two-way fungibility of IDRs  

Holders of Indian Depository Receipts (IDRs) will now have an option to convert it into shares of the issuing company. The Securities and Exchange Board of India (SEBI) has issued detailed guidelines which will allow shareholders to convert their depository receipts into equity shares of the issuer company and vice-versa. The issuer could provide exchangeability to IDR holders by converting IDRs into underlying shares or converting IDRs into underlying shares and selling the underlying shares in the foreign market where the shares of the issuer are listed and providing the sale proceeds to the IDR holders. Existing IDR issuers can follow the new framework, and have to provide the option of redemption/conversion within three months from the date of completing a year of listing.

What are IDRs? IDRs are generally instruments denominated in rupees and allow overseas companies to raise funds

from the Indian market. How this step would help India’s capital market?

This move of allowing for two-way fungibility of IDRs will encourage greater foreign participation in the Indian capital market.

So far only the UK-based banking major Standard Chartered PLC was listed as an IDR.

GENERAL AWARENESS

Nicolas Maduro sworn in as the Interim President of Venezuela  

Venezuelan Vice- President Nicolas Maduro was sworn in as Venezuela’s acting President, despite the opposition’s resistance as it is being considered to the violation of the country’s Constitution. Late President Hugo Chavez who died on 5 March 2013 after a long fight against cancer named Maduro as his successor before undergoing the latest surgery in December 2012. He picked Nicolas Maduro as the presidential candidate of Chavez’s Socialist Party. As per the country's 1999 Constitution, the National Assembly speaker becomes the interim President in the event of a President’s death or inability to be sworn in. The Constitution also says that new elections should be called within 30 days. The earlier interim President of Venezuela was Ramón José Velásquez who served as acting President of Venezuela between 1993 and 1994. Uhuru Kenyatta won Kenya Presidency  

Uhuru Kenyatta, the Deputy Prime Minister who faces trial for alleged crimes against humanity, clinched victory in a tightly fought race for Kenya's presidency in March 2013. Uhuru Kenyatta needed over 50% of the national vote to avoid a run-off. He received 50.07% to win the elections but the victory is being disputed by his main rival, Prime Minister Raila Odinga, who has now unsuccessfully sought the presidency three times.

Deputy Prime Minister Uhuru Kenyatta is a controversial figure as he is wanted by the International Criminal Court (ICC) on charges of crimes against humanity from his alleged role in the country's 2007-2008 election. Kenya would become the second African country after Sudan to have a sitting President indicted by the ICC. Mukul Manda Sangma Sworn in as the Chief Minister of Meghalaya In March 2013, Mukul Manda Sangma of Congress was sworn in as the Chief Minister of Meghalaya for the second term. He took oath for the second term as 26th Chief Minister of the state. The Governor, R.S. Mooshahary administered him the oath of office and secrecy at the Raj Bhavan premises in Shillong. 47-year old Mukul Sangma led the Congress with 29 seats, merely two seats short of the majority in a house of 60. Ashwani Kumar Appointed as Governor of as Nagaland Former CBI director and Himachal Pradesh DGP Ashwani Kumar took oath as Governor of Nagaland at Raj Bhavan in Kohima. He was administered the oath by the Chief Justice of Guahati High Court A. K. Goel. He is the 19th Governor of Nagaland. Kumar, a 1973 batch IPS officer, was the director of the agency from August 2008 to November 2010. He is also the first head of the agency to be appointed as a governor. Vice Admiral Anurag G. Thapliyal is the New Director General of Indian Coast Guard Vice Admiral Anurag G. Thapliyal took over as the twentieth Director General of the Indian Coast Guard. He succeeds outgoing Vice Admiral M. P. Muralidharan. Admiral Anurag G. Thapliyal • He was commissioned in the Indian Navy in July 1977 and since then held different sea and operational appointments. • He is a Navigation and Aircraft Direction specialist. • Few of his sea appointments include command of INS Ajay, Khukri, Tabar and Mysore. • He had served as the fleet operations officer for the Eastern Fleet at Visakhapatnam. • He was promoted to the rank of Vice Admiral, when he was a Commandant of Indian Naval Academy Ezhimala.

India and the UK Signed MoU to strengthen co-operation in earth sciences India and the UK signed a Memorandum of Understanding (MoU) to strengthen their cooperation in Earth Sciences and environmental research by sharing information on meteorology, hydrology and climate variability. The MoU between the Earth System Science Organisation of the Ministry of Earth Sciences and UK’s Natural Environment Research Council was inked in New Delhi in the presence of Science and Technology Minister S Jaipal Reddy. Vice President of India Released ‘Walking With Lions: Tales from a Diplomatic Past’ The Vice President of India, M. Hamid Ansari released a book titled ‘Walking with Lions: Tales from a Diplomatic Past’, written by K. Natwar Singh, the former Union Minister for External Affairs. In the book, experiences of Natwar Singh have been described in interesting approach. In the book, K. Natwar Singh has put together 50 episodes which will entertain and inform the readers. Russia and US to Sign Agreement on Defence Cooperation  

Russia and the United States have decided to sign an agreement envisaging cooperation of the two nations on missile defence systems and not to use them against each other. There is a standoff between the two countries on the US global missile defence. Washington is providing security guarantees to Moscow that the system is not aimed at Russian nuclear deterrence forces. The US will provide a ‘presidential agreement’ that does not require legislative approval. President Vladimir Putin for his part will sign a memorandum of understanding confirming the agreement. Neiphiu Rio: New CM of Nagaland Neiphiu Rio was sworn in for a third term as the Chief Minister of Nagaland along with 11 ministers by the Governor at the Raj Bhavan. Governor Nikhil Kumar administered the oath of office and secrecy to Neiphiu Rio, followed by his ministers, Noke Konyak, T. R. Zeliang, G. Kaito Aye, Imkong L. Imchen, Kuzholuzo Nienu, Kiyaneilie Peseyie, Yanthungo Patton, C M Chang, E E Pangteang, S Pangyuh Phom and R Merentoshi Jamir. Jamir the youngest among the ministers was the only fresh face to be given a berth. All the eleven ministers were from his own party, the Naga People's Front (NPF), which had won 38 seats in the 60-member house. The NPF is supported by two alliance partners, BJP and JD(U) with one MLA each, while it has the unconditional support of 7 Independents.

Electronics Project Proposal System (e-PPS) launched by Ministry of Communication and IT  

The Ministry of Communications and IT has launched the Electronics Project Proposal System (e-PPS), developed by the Department of Electronics and Information Technology, through the Centre for Development of Advanced Computing (C-DAC). What is e-PPS? The Electronic Project Proposal System (e-PPS) is a web-based system that covers the complete life-cycle of funding of R&D projects, starting from online submission of project proposals for funds, to monitoring and management of funded projects. It supports the following processes: • Online submission of project proposals • Evaluation of proposals by experts • Project recommendations • Project Monitoring What’s more: This system will replace the current manual procedure of project funding wherein the Project Investigators (PI) submit hard copies of R&D proposals, which are presented to a working group and based on the recommendations of the working group the proposals are further processed. It would cut down the total processing time of proposals and facilitate easy dissemination of project information.