Donald Trump on Environment
- US President Donald Trump has said countries like China, India and Russia are doing “absolutely nothing” to clean up their smokestacks and industrial plants and the garbage that they drop in sea floats into Los Angeles.
- Terming climate change as a “very complex issue”, Trump said he considers himself to be, “in many ways, an environmentalist, believe it or not”.
No CAR relief for foreign banks
- Gujarat International Finance Tec-City (GIFT City) was mooted with a grand plan.
- To develop it as India’s 1st International Financial Service Centre (IFSC) capable of getting a good slice of the huge business the likes of Dubai and Singapore generate as IFSCs.
- Regulatory hurdles continue to dog its progress.
- The Reserve Bank of India (RBI) is learnt to have insisted that foreign banks setting up shop in GIFT City would have to maintain the same CAPITAL ADEQUACY RATIO (CAR) as the domestic banks are required to.
- CAR is the ratio of capital to risk-weighted assets, and is considered to be a measure for banks’ ability to protect depositors.
- A higher CAR for a bank makes it safer for the financial system as it could absorb losses before becoming insolvent.
- Under Basel III norms, the CAR required is 8% but the RBI has set it at 9% for commercial banks and 12% for public sector banks.
- Since any exemption or special dispensation could pose a risk to the country’s financial sector and its balance of payments situation.
- India needed to follow the Hong Kong model where foreign banks were during the initial stages exempted from maintaining CAR at par with domestic regulations of the autonomous territory and the norm has since been tightened.
- The regulator actually needed to be creative to ensure that GIFT City is taken seriously by foreign financial institutions.
- The GIFT City provides a vastly relaxed regime of approvals required for setting up an IFSC unit.
- Further, the government has also waived off commodity transaction tax, dividend distribution tax and long term capital gains tax for these units.
- In the budget earlier this year, the government also extended the tax holiday to 10-years for 100% of the profit for IFSC units.
- According to the RBI regulations, only foreign banks already having presence in India will be eligible to set up IFSC banking units (IBUs).
- Also, this shall not be treated as a normal branch expansion plan in India and therefore specific permission from the regulator for setting up of an IBU will be required.
- Each of the eligible banks will be permitted to establish only one IBU in each IFSC.
- The rupee on Wednesday weakened to 72.09 against the dollar.
Restore of GSP benefits
- Generalised System of Preferences (GSP).
- Commerce and industry minister Piyush Goyal is in the US.
- India is pushing for a complete restoration of duty-free export benefits under GSP.
- 2 sides are in an advanced stage of hammering out broad contours of a limited trade deal.
- The limited deal could cover India’s willingness to extend greater market access in agriculture and also sweeten its initial offer on easing price caps in medical equipment, especially stents.
- For its part, the US is willing to only partially restore the GSP benefits for India — which stood at $240 million in 2018.
- The two sides are targeting low-hanging fruits first and decisions on the more difficult matters will be taken later.
- The US also wants India to abolish/cut “not justified” tariff on motorcycles (50%), automobiles (60%) and alcoholic beverages (150%).
- The US has also expressed concern over what it thinks India’s “frequent changes” to e-commerce FDI rules, and data localisation.
- USA is still using the issue of its trade deficit with India to extract more from New Delhi.
Tax Rates: Govt seeks inputs from industry
- Govt has commenced the Budget-making process.
- Finance Ministry has sought suggestions from the industry and trade associations “for changes in the duty structure, rates and broadening of tax base on both direct and indirect taxes”.
- The government policy with reference to direct taxes in the medium term is to phase out tax incentives, deductions, and exemptions while simultaneously rationalising the rates of tax.
- The Ministry also sought suggestions related to customs and central excise among indirect taxes as goods and services tax is under the ambit of the Goods and Services Tax (GST) Council.
Rural women to audit govt’s welfare schemes
- In a bid to empower women in the rural areas.
- The Centre has decided to carry out a social audit of its flagship welfare schemes by rural women.
- Rural women will also work as the nodal persons to resolve the complaints of the beneficiaries of these programmes.
- In a social audit, the beneficiaries themselves assess the impact of government schemes and programmes by comparing official records with the actual ground situation.
- Educated women in the rural areas associated with the self-help groups (SHGs) working under the National Rural Livelihood Mission (NRLM) will check whether the welfare works were being carried out properly or not.
- The government, along with the Tata Institute of Social Sciences (TISS) and the National Institute of Rural Development and Panchayati Raj, Hyderabad, has also developed a short-term certificate course on social audits for district and block resource persons and SHGs.
- The ministry has finalised the auditing standards for the social audit with the Comptroller and Auditor General (CAG).
Occupational Safety Code
- The Centre will seek the passage of the Occupational Safety, Health and Working Conditions (OSH) Code in the next Budget session of Parliament for approval.
- The government intends to subsume 44 labour laws into four codes to improve the ease of doing business and attract investment for spurring growth.
- The OSH Code, which was introduced in the Lok Sabha on July 23 this year, proposed to enhance the safety coverage of workers manifold and also merge 13 central labour laws into a single code which would apply to all establishments employing 10 or more workers.
- It has been referred to the Parliamentary Standing Committee for review on October 9 and the panel is expected to submit its report by January 9, 2020.
Justice Bobde on Commercial Disputes
- Chief Justice of India-designate Justice SA Bobde has called for making pre-litigation mediation a must for commercial disputes.
- So if there is a commercial problem or dispute between two businesses, they could first undergo pre-litigation mediation.
- If it cannot be solved, then they can approach the courts.
Q1 As per latest UN WIPO report, which country accounted for nearly half of global patent filing last year?
Q2 In its latest World Economic Outlook, IMF’s forecast for India this fiscal is?