(Current Affairs) National Events | March: 2017

National Events

Economic survey points out positive s and negatives

  • The government’s Chief Economic Adviser said there was a sense of anxiety about the economy’s prospects following demonetisation and stressed the need to allay the fears of an overzealous tax regime in its aftermath.
  • Mr. Subramanian termed the move to cancel the legal tender nature of high-value currency notes a “radical currency-cum-governance-cum-social engineering measure to permanently and punitively raise the cost of illicit and unaccounted transactions or kala dhan (black money).”
  • “Bank credit growth has come down, two-wheeler sales have come down. There will be an impact on GDP. But the question is how much,” he said.
  • The Survey pegs economic growth in 2016-17 at 7.1%, but this is based mainly on information for months before the November 8 demonetisation of Rs. 500 and Rs. 1,000 notes.
  • This is half a percentage point lower than the 7.6% growth last year, but the CEA warned that comparisons attributing the difference in growth numbers to demonetisation alone would be foolhardy.
  • Mr. Subramanian declined comment on the design and implementation of demonetisation, but did speak on the costs, and long-term benefits of what was “an unusual and unique monetary experiment” aimed at a structural break.
  • After a temporary slowdown in GDP growth, the Survey expects the economy to return to normal, once the scrapped currency is replaced by March.
  • In the long run, tax revenues and GDP growth would be bolstered on account of greater tax compliance and a reduction in real estate prices.

Supreme Court refused to stay the new law on Jallikattu

  • A few hours after the President gave his assent to the Tamil Nadu amendments in the Prevention of Cruelty Act of 1960 to allow jallikattu, the Supreme Court refused to stay the new State law.
  • Allowing the Central government to withdraw its January 7, 2016 notification permitting jallikattu, a Bench of Justices declined the plea for an interim stay on the operation of the Prevention of Cruelty to Animals (Tamil Nadu Amendment).
  • It asked the organisation and other animal rights activists the ‘basis’ of their challenge to the new State law.
  • Referring to the amendments made by the Tamil Nadu Assembly to the 1960 Central Act, Justice Misra pointed out that the declared object of the new legislation is the preservation of a particular breed of bulls.
  • Attorney-General Mukul Rohatgi told the Supreme Court that jallikattu was a matter of culture and that citizens had the right to take measures to “conserve their culture.”
  • Mr. Rohatgi then referred to Section 11 (3) (e) of the 1960 Act which permits slaughtering of animals for food.
  • The State government and others supporting jallikattu in the current litigation were given four weeks to file their counter-affidavits.

New restrictions introduced in H-1B visa

  • The White House said it was working on changes in H-1B and other guest worker visa programmes through legislative and executive actions as part of immigration reform.
  • These visa programmes are mandated by the legislature and are widely used by Indian IT companies to place skilled workers in the U.S.
  • It also proposed to roll back the permission to work now available to spouses of H-1B visa holders and to replace the current lottery system that selects the 85,000 annual H-1B visa beneficiaries.
  • This year’s selection process opens on April 1. According to the draft published by Vox.com, the Trump administration is also planning to have federal inspectors regularly visit the sites where guest workers are employed.
  • A new Bill introduced by Democrat Zoe Lofgren proposes changes in the H-1B programme, to make hiring of foreign workers expensive.
  • IT stocks plunged over 4%, knocking off more than Rs. 33,000 crore in market valuation of the top five companies, after a new H-1B Bill in the U.S. caused concerns that it would affect the hiring plans of Indian technology firms.

President delivered address to the Parliament

  • President Pranab Mukherjee called for a constructive debate on simultaneous elections to the Lok Sabha and the Assemblies and funding of polls to eradicate money power.
  • During his customary address to the joint session of Parliament at the beginning of the budget session, Mr. Mukherjee spoke about the need to debate these issues, which are pet themes of Prime Minister Narendra Modi.
  • “Frequent elections put on hold development programmes, disrupt normal public life and impact essential services and burden human resource with prolonged period of election duty,” he said.
  • Mr. Mukherjee referred to the government’s demonetisation decision to fight black money and corruption as also the surgical strikes as bold decisions, both of which were received with thumping of desks by members.
  • Referring to the surgical strikes, he said the government had taken decisive steps to give a fitting reply to the repeated incursions.
  • On demonetisation, he said the resilience and forbearance demonstrated by people, especially the poor, in the fight against black money and corruption, were “remarkable”.
  • He emphasised that “financial inclusion is key to poverty alleviation. An unprecedented 26 crore plus Jan Dhan accounts have been opened for the un-banked.”
  • He also said that the government was taking special initiatives to develop Northeast India, including opening new road and rail routes to neighbouring countries for boosting the economic development of the region.

Income tax reduced for earning between Rs. 2.5 lakh and Rs. 5 lakh

  • Those earning between Rs. 2.5 lakh and Rs. 5 lakh a year will now have to pay income tax at the rate of 5% instead of the earlier 10%.
  • Mr. Jaitley also announced that all the other categories of tax payers in the subsequent slabs will also get a uniform benefit of Rs. 12,500 per person.
  • He said the existing rebate for those earning Rs. 5 lakh or less will now be reduced to Rs. 2,500 and available only to those earning an income of up to Rs. 3.5 lakh.
  • The Finance Minister has also proposed to levy a surcharge of 10% of tax payable on those whose annual taxable income is between Rs. 50 lakh and Rs. 1 crore.
  • The existing surcharge of 15% of tax on people earning more than Rs. 1 crore will continue.
  • Therefore, post-demonetisation, there is a legitimate expectation of this class of people to reduce their burden of taxation.
  • Also, an argument is made that if a nominal rate of taxation is kept for lower slab, many more people will prefer to come within the tax net.

Political funding from unknown sources capped at 2000 rupees

  • In a move to cleanse the system of political funding, FM proposed a Rs. 2,000 ceiling on cash donation by any individual to a party.
  • Presenting the Budget, he, however, said political parties, could receive donations by cheque or digital mode from donors.
  • He also indicated that the Reserve Bank of India Act would be amended to facilitate issuance of electoral bonds in line with the scheme that the government would come out.
  • All the opposition parties welcomed the move to clean up the political funding for elections in India.

Budget for reviving investment and generating jobs

  • This is a budget with three principle goals. It wants to revive the flagging domestic investment, which has threatened to turn turtle.
  • It does this by ramping up public capital capital expenditure by a whopping 24.5% in the hope that it will ‘crowd in’ private investment; cutting corporate income tax rate from 30% to 25% for SMEe with an annual turnover of less than Rs. 50 crore.
  • Secondly, it responds to the dire requirement for urgently generating a large number of employment opportunities for the increasingly restive youth.
  • The massive push to affordable housing with its vast backward linkages in the economy and high employment intensity will contribute to achieving this goal.
  • The special package for textiles and some other labour-intensive sectors will also help as will the enhanced allocation to infrastructure sectors. The tax relief for SMEs will also help.
  • Third, it aims at cleansing the economy of black money flows and illegal incomes, thereby sharply squeezing the scope and space for the parallel economy.
  • Following the enactment of the Benami Properties and Illegal Income Acts and demonetization, the budget has announced a direct attack on the fountainhead of political corruption by reducing the amount of individual donations to political parties to a paltry Rs. 2,000.
  • These are commendable objectives and the Modi-Jaitley duo should be complimented for refraining from populist temptations, which would have been rather strong in the face of impending elections in five states.
  • The budget also has three firsts to its credit. By presenting it on February 1, the Finance Minister has ensured that inefficient practice of ‘vote on account’ will be avoided and the finance bill will now be approved by the end of the present fiscal year.
  • Second, the somewhat spurious and dysfunctional distinction between plan and non-plan expenditure has been done away with, which will permit a clearer distinction between the share of capital and revenue expenditure.
  • By allowing fiscal deficit to rise to 3.2% of the GDP in 2017-18 while bringing down revenue deficit to 1.8%, the FM has displayed sagacity and responsibility towards the priority of promoting investment and employment.
  • As its third new initiative, this budget has done away with the colonial legacy of a separate Railway budget.

PM Modi termed Budget as step for overall development

  • PM termed his govt's fourth Budget as an important step towards the overall development of the nation, with focus on fulfilling the “dreams” of every section, including the poor, the farmers and the underprivileged.
  • The Budget, he said, was “associated with our aspirations, our dreams and in a way depicts our future. This is the future of our new generation, the future of our farmers.”
  • “In FUTURE, the letter ‘F’ stands for the farmer, ‘U’ stands for underprivileged, ‘T’ stands for transparency, technology, ‘U’ stands for urban development, ‘R’ stands for rural development and ‘E’ stands for employment for youth, entrepreneurship, enhancement to give a push to new employment and boost to young entrepreneurs,” the PM said.
  • “The focus of the Budget is on agriculture, rural development and infrastructure, which is also a reflection of the government’s commitment to raise investment and create employment opportunities,” he added.

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