Wednesday 3 December 2014

Daily Updates - 3rd December, 2014

Events of National & International Importance

China, Maldives sign preliminary accord on bridge construction
1.       China and Maldives — a major element of the Beijing-sponsored Maritime Silk Road project — have signed an accord to conduct preliminary study on constructing a bridge.
2.       It would connect capital Male with the city’s international airport.
3.       The Memorandum of Understanding (MoU) for a pre-feasibility study of the project has been signed. 
4.       The bridge may be named “China-Maldives Friendship Bridge.
India’s concerns
1.       China’s Maritime Silk Route has raised concerns in India, which opposes the militarisation of the Indian Ocean. 

2.       National Security Advisor Ajit Doval stressed during his keynote address that Indian Ocean must remain a zone of peace.
      Economic Development
Govt. notifies relaxed FDI norms for construction sector
1.       Government on Wednesday relaxed rules for FDI in the construction sector by reducing minimum built-up area as well as capital requirement and easing the exit norms.
2.       It have been notified the Department of Industrial Policy and Promotion (DIPP). India allows 100 per cent FDI in the sector through automatic route.
3.       In view of depleting FDI inflow in construction and real estate sector in last couple of years, the government has reduced the minimum floor area to 20,000 sq. mt. from the earlier 50,000 sq. mt.
4.       It also brought down the minimum capital requirement to $5 million from $10 million.
      IR & Diplomacy
India, France to 'Fast Track' Rafale Fighter Deal
1.       The two ministers (Parrikar and French Defense Minister Yves Le Drian) agreed to put the issue of concluding a deal on India’s acquisition of 126 French Rafale fighter jets on a fast track.
2.       The deal is expected to cost India upwards of $15 billion and will fulfill India’s Medium Multi-Role Combat Aircraft (MMRCA) contract.
3.       It was awarded to France’s Dassault Aviation for the Rafale fighter in 2011 over several other bidders.
4.       Both the sides agreed to take forward the partnership between the two countries that was envisaged in 1998. 
5.       The meeting between Parrikar and Le Drian puts to rest rumors that the MMRCA contract could be scrapped.
6.       India views France as a “strategic partner.” In addition to the Rafale negotiations, Parrikar and Le Drian vowed to increase cooperation on counter-terrorism and maritime security.
      Public Policy & Governance
Reasons for the failure of SEZs in India 
1.       Special Economic Zones (SEZs) are likely to be central to realising Prime Minister Narendra Modi’s ambitious ‘Make in India’ agenda.
2.       But the withdrawal of tax incentives has made SEZs an unattractive proposition, say industry experts.
3.       Under the original scheme, businesses in SEZs were exempted from the minimum alternate tax (MAT) on book profits.
4.       Developers were exempted from payment of the dividend distribution tax (DDT).
5.       But with indications that companies were misusing the policy for real estate arbitrage.
6.       Information technology companies were using the policy to recoup tax benefits that they lost when the Software Technology Parks of India (STPI) scheme ended these exemptions were withdrawn.
7.       From 2011-12 onwards, MAT exemptions for SEZ units and developers were withdrawn and DDT exemptions for developers were terminated.
8.       A key attraction for corporate houses was the income tax holiday. “With taxes being levied, the savings for companies on account of tax concessions was reduced, impacting interest in SEZs.
9.       Though the issue of taxation is contentious, it is the unpredictability of the tax regime that has had an impact on investments. 
10.   The withdrawal of direct tax benefits has been a setback for the SEZ programme and has affected its future prospects.
11.   Of the 564 SEZs that have been formally approved so far, only 192 were operational in June this year.
12.   Total employment in these enclaves was 1,277,645 in 2014, as against an expectation of 1,743,530 by 2009.
13.   The total area under SEZs currently stands at 61,624 hectares, while Shenzhen in China alone covers 49,300 hectares.
14.   The SEZ policy continues to be relevant from a ‘Make in India’ perspective, but several policy initiatives are necessary to get those going.
15.   For improving their viability, manufacturers should be allowed to sell goods in the domestic market but duty should be imposed on individual parts imported and not on the entire product, which would make it unviable. 
16.   No Customs duty should be imposed on domestic value added.
17.   India has signed a number of free trade agreements (FTAs), with countries like Sri lanka, Japan and the Association of Southeast Asian Nations (Asean), under which import duties have been slashed to zero for several product lines.
18.   This impacts local sales of SEZ units, which are taxed at higher rates. 
19.   Manufacturers in India should have the ‘most favoured nation’ status that implies lowest tariff under the FTAs.
20.   Taxation issues are not the only ones impeding SEZs.
21.   Despite offering over 300 incentives and schemes for promotion of manufacturing at the Centre and state levels, manufacturing growth has not risen substantially.
22.   Incentives need to be carefully evaluated and studied.
23.   Location, infrastructure, logistics and professional zone management are four key factors determining success of SEZs”.
24.   A major reason for the success of SEZs in China was the creation of complementary infrastructure, power, roads and ports; these are lacking in India.
25.   The focus should be on creating the necessary infrastructure which will require a more holistic approach.
26.   Another major reason for the SEZs languishing is the absence of external infrastructure support.
27.   The SEZs have to be connected with ports and airports with world-class roads and rail; ports and airports, too, have to be world-class, with Customs authorities adopting international best practices in trade facilitation. 
     Bio-diversity & Climate Change
Peru summit; dignitaries call for equitable climate treaty
1.       Outgoing COP President Marcin Korolec(new COP President Manuel Pulgar-Vidal ) urged parties to take forward the legacy of the Warsaw summit, which resulted in significant developments on mitigation, finance and forests.
2.       Pulgar-Vidal, who is also environment minister of Peru, said he wanted this COP to provide “a clear and solid foundation for the new global climate agreement”.
3.       He stressed that adaptation needs to be given equal emphasis as mitigation and also hoped that the framework for an effective “Loss and Damage” mechanism would be operationalised.
4.       Pulgar-Vidal declared the COP 20/CMP 10 officially open and added that Lima Climate Action Day would be observed on December 11, during the summit.
5.       Finally, Rajendra Pachauri highlighted the findings of the latest IPCC report. He pointed out that 35 per cent of total emissions are a result of the energy sector while 24 per cent are from agriculture. 
6.       The Peru summit is the last crucial step before the final summit in Paris in 2015. Parties are expected to negotiate a draft text of the new agreement. 
      Environment & Ecology
Urban farming now covers area equal to size of Europe, says study
1.       Urban farming is playing an important role in global food security, finds a new study.
2.       The international team of scientists that conducted the research used satellite imagery to carry out the study and found out that around 456 million hectares—an area the size of European Union—is being cultivated by city dwellers across the world.
3.       It aims to highlight the role that urban farming can play in food security and sustainable development. 
4.       The UN data shows that more than 50 per cent of the world's population now lives in urban areas.
5.       The most interesting factor when we look at India is that it could be map the whole country as urban or peri-urban because there are so many towns and cities.
6.       The study also finds that urban farming helps in controlling flood, increases job opportunities for the poor and puts marginal lands into productive use.
7.       The study suggested that the urban croplands will play a greater role in densely populated and water-scarce regions, especially in South Asia.
      Science & Technology
Earth’s most abundant mineral gets name
1.       American geologists have named the earth’s most abundant mineral Bridgmanite.
2.       It had hitherto remained nameless as a large enough sample of the mineral, found in the earth’s lower mantle, had not been recovered.
3.       Under the rules of set down by the International Mineralogical Association, a mineral cannot be given a formal name until a specimen has been found and examined first hand.
4.       A group of American geologists were recently able to extract a sample large enough to analyse from a meteorite.
5.       The new name is in honour of Percy Bridgman, a pioneer in the use of high pressure experiments to better understand how many geological formations come about.
6.       Bridgmanite makes up about 70 percent of the earth’s lower mantle and 38 percent of the total volume of the earth. It is made up of high-density magnesium iron silicate.
7.       The lower mantle, which starts at 670 km under the crust, is difficult to access for samples.
8.       The researchers looked at a meteorite that had fallen inside Australia in 1879 as a likely candidate for samples, and found what they were looking for.
     Editorial
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