GS Paper I- History and Geography of the World and Society.

SoftBank, China’s GCL Team Up For $930 Million Indian Solar Venture.

Background

  • Japan’s SoftBank Group Corp has agreed to launch a $930 million Indian joint solar energy venture with Chinese firm GCL System Integration Technology Co as part of its India solar investment roadmap.
  • The venture will work on photovoltaic technology, which is used in solar panels. GCL will provide technology and SoftBank will assist in obtaining land and regulatory approvals, GCL said in a filing to the Shenzhen stock exchange dated 30th March, 2018.
  • SoftBank said in 2015 that it would invest up to $20 billion along with Foxconn Technology and Bharti Enterprises in solar projects in India and aimed to have a capacity of up to 20 gigawatts (GW).

Highlights Of The Development-

  • India has set a target to achieve an operational solar power capacity of 100 GW by 2022, five times current levels, under Prime Minister Narendra Modi’s renewable energy strategy.
  • The country plans to have a total renewable energy capacity of 175 GW by 2022 through a mix of sources such as solar, wind, biomass and small hydro.
  • But challenges remain. A recent study showed India will need at least $125 billion to fund its ambitious plan here to increase the share of renewable power supply by 2022, which may be hard to come by due to falling tariffs.
  • SoftBank, which currently has an installed and under-construction solar capacity of 750 MW, itself sought very low tariffs in its last bids in May 2017, where it quoted 2.45 rupees per unit.
  • India has also been urged to strengthen its power grids here and focus on a clear policy framework to bring down the cost of capital investment, the head of the International Renewable Energy Agency said in March.
  • SoftBank and GCL’s new venture will eventually have a capacity of 4GW and will be implemented in two 2GW phases.
  • The Japanese firm will hold 60 percent of the venture’s shares and GCL will own 40 percent.
  • Funding for the project will come from SoftBank’s Vision Fund, which counts Apple Inc, Foxconn and Saudi Arabia’s sovereign wealth fund among its backers.
  • As of last May, it had raised over $93 billion, making it the world’s largest private equity fund.
  • The fund recently announced it would invest in building the world’s largest solar power project in Saudi Arabia – a project expected to cost up to $200 billion and have a capacity to produce up to 200 GW by 2030.

Sources- REUTERS.

 

GS Paper II- Governance.

Working Group Formed: Panel To Assess Tax Risks Of HNIs Migrating Abroad.

Background

  • The Central Board of Direct Taxes (CBDT) has constituted a five-member working group to examine the taxation aspects related to High Net Worth Individuals (HNIs) who are migrating abroad to other jurisdictions.
  • The CBDT in its order on the formation of the group termed such HNWIs as a “substantial tax risk” as they may treat themselves as non-residents for taxation purposes in India.
  • The announcement of the Working Group, which has been formed with the approval of CBDT Chairman Sushil Chandra, comes at a time when there are concerns over the recent cases of HNWIs such as Nirav Modi and Vijay Mallya fleeing from the country amid ongoing investigations against them.

Highlights Of The Development-

  • In recent times, there has been a trend of HNWIs migrating from their country of residence to other jurisdictions. Such HNWIs pose a substantial tax risk since they may treat themselves as non-residents for taxation purposes in the first jurisdiction even though they may have strong personal and economic ties with that jurisdiction. For examining the taxation aspects of such HNWs, a Working Group has been constituted, the order stated.
  • The Working Group will be headed by Pragya Sahay Saksena, a joint secretary with Foreign Tax & Tax Research Division of CBDT.
  • It shall make recommendations for policy decision in respect of tax risks of the migrating HNWIs, the order said. The Group has also been empowered to coordinate with various divisions /directorates of Board to formulate India’s position for various aspects related to taxation of migrating HNWIs.

Sources- The Indian Express.

GS Paper III- Economic Development.

RBI Explores Feasibility Of Launching ‘Fiat’ Digital Currency.

Background

  • The Reserve Bank of India (RBI) has clamped down on virtual currencies, including Bitcoin, directing all entities regulated by the central bank — mainly banks, finance companies and wallets — not to deal with or provide services to any individual or business entities dealing with or settling virtual currencies, joining the global crackdown on trading of virtual coins.
  • The RBI crackdown came a day after Amit Bhardwaj, the bitcoin entrepreneur who allegedly cheated over 8,000 people to the tune of Rs 2,000 crore was arrested from the Delhi Airport on 4th April, 2018. Regulated entities which already provide such services shall exit the relationship within a specified time. A circular in this regard is being issued separately, the RBI said.
  • Simultaneously, the RBI has constituted an inter-departmental group to study and provide guidance on the feasibility to introduce a central bank digital currency. The report will be submitted by end-June 2018, RBI said.

 

Highlights Of The Development-

  • Rapid changes in the landscape of the payments industry along with factors such as emergence of private digital tokens and the rising costs of managing fiat paper/metallic money have led central banks around the world to explore the option of introducing ‘fiat’ digital currencies, the RBI said. Fiat currency is currency that a government has declared to be legal tender. However, cryptocurrency, or virtual currency like Bitcoin, is not legal tender and not backed by a government.
  • Several central banks are debating the possibility of introducing a fiat digital currency. As opposed to private digital tokens, these are issued by a central bank. They constitute liability of the central bank, and they will be in circulation in addition to the paper currency, RBI Deputy Governor B P Kanungo said.
  • The RBI said that Reserve Bank has repeatedly cautioned users, holders and traders of virtual currencies, including Bitcoins, regarding various risks associated in dealing with such virtual currencies. Technological innovations, including those underlying virtual currencies, have the potential to improve the efficiency and inclusiveness of the financial system. However, virtual currencies raise concerns of consumer protection, market integrity and money laundering, among others, it said.
  • They have decided to ring-fence the RBI regulated entities from the risks of dealing with virtual currencies. These operators are required to stop having a business relationship with the entities dealing with virtual currencies forthwith and unwind the existing relationships within three months, Kanungo said. On the fiat currency that the RBI has proposed, he said having such a currency will also reduce the cost of printing and circulating paper currency.

Sources- The Indian Express.