GS Paper I- Issues relating to poverty and hunger.

Farmers’ deaths a human rights issue: Supreme Court

What’s Happening-
The Supreme Court asked the Centre and the States to explain whether there was a lifeline, including a comprehensive insurance plan, for farmers to end the vicious circle plaguing the agriculture sector.
It was alarmed that crop failure and natural calamities were driving debt-ridden farmers across the country to take their lives.

Key Points discussed were:

PIL’s scope widened

  • Widening the scope of a public interest litigation.
  • Petition filed by an NGO on the farmers of Gujarat, a Bench led by Chief Justice of India J.S. Khehar included all the States, the Centre and the Reserve Bank of India in the litigation in an effort to get a holistic picture of the plight of farmers.
  • Terming the death of farmers due to crop losses a “human rights issue,”.
  • The Bench asked why the government had not yet formulated a national policy to protect the lives of the country’s bread-winners.

Petition:

  • The court was hearing a petition filed by the NGO, Citizens Resource and Action and Initiative.
  • seeking a compensation of Rs 5 lakh each for the families of 692 farmers who committed suicide in Gujarat between January 2003 and October 2012.
  • Their crops had failed and their bank loans began to choke them.
  • The petition also sought financial relief from the government for farmers facing drought.
  • It pleaded for a humane agricultural policy, taking into consideration the probable loss of crops, to help farmers tide over a drought-like situation.

Background-
Centre informed the  that despite a multi-pronged approach to improve income and social security of farmers, over 12,000 suicides were reported in the agricultural sector every year since 2013.
In 2014, the  of India reported 5,650 farmer suicides.
The highest number of farmer suicides were recorded in 2004 when 18,241 farmers committed suicide.
The farmers suicide rate in India has ranged between 1.4 and 1.8 per 100,000 total populations, over a 10-year period through 2005.
Government Measures Problems:
The government’s response and relief packages have generally been Not Much Effective.
It has focused on credit and loan, rather than income, productivity and farmer prosperity.

Sources- The Indian Express, The Hindu. Page 22

GS Paper IIIIndian Economy and issues relating to planning, growth, development and employment.

National Apprenticeship Promotion Scheme

What’s Happening-
In order to realise the potential of the favourable demographic dividend of India, Hon’ble Prime Minister Shri Narendra Modi launched the Skill India campaign.
subsequently, a separate Ministry of Skill Development and Entrepreneurship (MSDE) was formed in November 2014 with an ambition to convert India into the Skill capital of the world.
The young and start-up ministry in a very quick time has covered good ground in terms of putting together policy frameworks, launching and scaling up the flagship skill development scheme
Pradhan Mantri Kaushal Vikas Yojana (PMKVY),
revamping the ITI ecosystem, launching new schemes for entrepreneurship development, etc.

Key Points discussed were:

  • The key benefits of apprenticeship as a mode of skill development are that it is a win-win model for both the industry and the apprentice.
  • It leads to the creation of an industry-ready workforce.
  • Most countries around the world have implemented the apprenticeship model – Japan has over 10 million apprentices, Germany has 3 million apprentices and USA has 0.5 million apprentices.
  • while India has only 0.3 million apprentices.
  • This number is relatively low considering the huge population and demography of India with more than 300 million people in the age group of 18 -35 years.

Ministry has taken two key steps to increase the adoption of apprenticeship model in India:

  1. Amendments to the Apprenticeship Act, 1961
  2. Launching of National Apprenticeship Promotion Scheme (NAPS) to replace Apprentice Protsahan Yojna (APY)

National Apprenticeship Promotion Scheme:

  • The government has launched the National Apprenticeship Promotion Scheme (NAPS) on 19th August 2016
  • To promote apprenticeship training and incentivize employers who wish to engage apprentices.
  • NAPS has replaced Apprentice Protsahan Yojna (APY) from 19th August 2016.
  • While APY provided sharing of 50% of the stipend as prescribed by the Government only for the first two years, NAPS has provision for sharing of expenditure incurred in both providing training and stipend to the apprentice as follows:
  • Reimbursement of 25% of prescribed stipend
  • Sharing of the cost of basic training in respect of fresher apprentices (who come directly for apprenticeship training without formal training) limited to Rs. 7500/- per apprentice for a maximum duration of 500 hours/3 months.

Background-
Since the early ages, the transfer of skills has been happening through the tradition of apprentices.
A young apprentice would work under the tutelage of a master craftsman to learn the craft, while the master craftsman would get an inexpensive form of labour in exchange of training the apprentice and basic amenities.
This tradition of skill development through on the job training has survived the test of time around the world.

Sources- The Indian Express, The Hindu. Page 22

GS Paper III Indian Economy and issues relating to planning, mobilization of resources.

Centre says GAAR effective April 1, industry demurs

What’s Happening-
The Centre has reiterated that the General Anti Avoidance Rules – aimed at curbing tax avoidance – will come into force on April 1, ignoring industry’s suggestion to defer the rules on account of uncertainty over their applicability and to provide adequate time to prepare for the new regime.

Key points discussed were:

The Finance Ministry, as part of the clarifications, made clear its rules regarding several issues that the industry had demanded greater clarity on, including the specific cases in which GAAR would apply to Foreign Portfolio Investments (FPI), the treatment of Limitation of Benefits (LOB) clauses and the precedence given to court rulings in such situations.

LOB clause clarity:

  • One good thing is that Govt have clarified that if the limitation of benefits (LOB) clause sufficiently addresses tax avoidance, then GAAR will not apply,”.
  • Therefore, foreign investors have clarity now.
  • Another positive thing is that court-approved arrangements are outside the purview of GAAR.”
  • The clarifications partially fulfil a long-standing demand of the industry, said Rajesh H. Gandhi, Partner at Deloitte Haskins & Sells.
  • However, “the benefit has now got diluted to a large extent because the LOB clause in the India-Singapore and Mauritius treaties is relevant only for availing the 50% tax rate for two years,”.
  • The official clarification also said that, if at the time of sanctioning an arrangement, the court had explicitly and adequately considered the tax implications, then GAAR would not apply to such an arrangement.
  • It has also been clarified that GAAR would not apply if an arrangement was permitted by the Authority for Advance Rulings.

Background-
General anti-avoidance rule (GAAR) is an  Rule of .
It is framed by the Department of Revenue under the Ministry of Finance.
Originally proposed in the Direct taxes code 2009,
They are targeted at arrangement or transactions made specifically to avoid taxes.
It was introduced by then Finance Minister, Pranab Mukherjee, on 16 March 2012 during the .
It was considered controversial because it had provisions to seek taxes from past overseas deals involving local assets retrospectively.