In News

Finance and Corporate Affairs Minister has introduced the Taxation Laws (Amendment) Bill in the Lok Sabha to nullify the relevant retrospective tax clauses.

About the News

• Amendments to the Income-tax Act, 1961, have been introduced for withdrawing all retrospective tax demands raised under the contentious law and issue refunds, without interest, against such.
• The proposed changes in the Bill are:
• Any tax demand made on transactions that took place before May 2012 shall be dropped.
• Any taxes already collected shall be repaid, albeit without interest.
• To be eligible, the concerned taxpayers would have to drop all pending cases against the government and promise not to make any demands for damages or costs.
• The move comes as Cairn Energy is threatening to confiscate overseas Indian assets following an international arbitration tribunal order in its favour. The tribunal had overturned the retrospective tax demand raised by India and ordered refund of shares sold, dividend confiscated and tax refunds withheld to recover such demand.
• Centre expects the removal of retrospective law would lead to foreign investment growing in India, a much needed development as the country looks to reverse the impact of the pandemic.

What is Retrospective taxation?

• In 2012, Indian government had retrospectively amended Income-tax Act to justify the retrospective tax demand raised against Vodafone for buying Hutchison Telecommunication's stake in Hutchison Essar.
• The amendment made the Section 9(1)(i) of the Income-tax Act applicable retroactively to generate tax demands on income through or from the transfer of an asset or a capital asset situated in India in consequence of the transfer of a share or interest in a company or entity registered or incorporated outside India.
• Arbitration under Bilateral Investment Protection Treaty with the United Kingdom and the Netherlands had been invoked in four cases, two of which India lost - against Cairn Energy and Vodafone. While the government has no liability against Vodafone, it still has to pay $1.2 billion to Cairn as arbitration award.

Note: For detailed information and analysis of Retrospective taxation, please refer the Feature article on Retrospective taxation, in Gazette newsletter published on May 20, 2021.

Sources:

• Centre moves to redact retrospective tax law
• Retro tax no more; refunds to Cairn, Vodafone demands likely

Image Source:

• Govt brings bill to scrap retrospective taxation

In News: The Supreme Court recently held that the Governor of a State can pardon prisoners, including the ones on death row, even before they have served a minimum 14 years of prison sentence and that the Governor’s power to pardon overrides Section 433 A of the Criminal Procedure Code.

Pardoning Power that Overrides 433 A

• Section 433Amandates that a prisoner’s sentence can be remitted only after 14 years of jail.
• Section 433-A cannot and does not in any way affect the constitutional power conferred on the President/Governorto grant pardon under Articles 72 or 161 of the Constitution.

Power Exercised by State Government

• The court noted that the sovereign power of a Governor to pardon a prisoner under Article 161 is exercised by the State government and not the Governor on his own.
• The advice of the appropriate government binds the Head of the State.

Order of Commutation and Release

• The action of commutation and release can thus bepursuant to a governmental decision and the order may be issued even without the Governor’s approval. 
• However, under the Rules of Business and as a matter of constitutional courtesy,it may seek approval of the Governor, if such release is under Article 161 of the Constitution.
• The state government can frame a policy of grant of remissions either under Section 432 of the CrPC or under Article 161 of the Constitution.
• If a prisoner has undergone more than 14 years of actual imprisonment, the state government, as an appropriate government, is competent to pass an order of premature release.

About Pardoning Power of the Governor

• According to Article 161 of the Constitution, the Governor of a State has the power to grant pardons, reprieve, respite, or remission of punishment or suspend, remit, or commute the sentence of any person who has been convicted of any offence against any law that relates to a matter to which the executive power of the State extends.

Source:

• Governors can pardon prisoners, including death row ones: Supreme Court
• Governor Can Exercise Pardon Power Even If Prisoner Has Not Undergone 14 Years Imprisonment : Supreme Court
• State can't, but Governor can release lifers before they spent 14 years in jail: Supreme Court
• Pardoning Power of President and Governor

In News

Following one of Maharashtra’s worst floods in decades, the state’s environment minister has called for a new Centre-state coordination council for climate.

Why do we need to involve the states in Climate Action Plans?

• Diverse Geography: India has diverse geography, with landscape ranging from snow-capped mountain ranges to deserts, plains, hills, coasts and plateaus. This necessitates customised and relevant policies to address the fragility of specific systems.
• Critical elements connected to states: States are the beating heart of climate action, constitutionally responsible for areas such as agriculture, water, and local government, and jointly responsible for electricity and forests, which are critical to India’s emissions.
• Sub-national actions are critical in addressing climate change due to their proximity to the consequences of climate change. Arguably, in a ‘bottom-up’ strategies should emanate from sub-national considerations of vulnerability and opportunity.
• Finance and disaster severity mismatch: Frequent disasters are battering India’s states and creating additional burdens on state finances and administrators. The increase in extreme events put severe stress on the natural and urban ecosystem of the country, damaging infrastructure and impacting livelihoods of billions of people.
• Variation in climate understanding: There is a considerable variation between states in the level of recognition of climate change as a priority as well as in the level of effort that has gone into policy development.
• Gujarat has set up the first state climate change department in India, and Kerala has announced a green fund equivalent for various climate objectives. Yet some other states are still to recognize climate change as a policy concern.

Possible challenges in getting the states on board

• Climate not part of any sector: The whole climate change problem doesn’t fit neatly into any sector. Like electricity is a concurrent subject while the environment is a state subject, there is no such specific mention of carbon. It is still not clear whether it is a part of energy or a part of the environment.
• Lost in Translation: While these estimates are done at the moment for international commitments, there is no translation mechanism from national target to state target. There is an assumption that there will be enough economic changes throughout the country that eventually will help achieve these targets.
• Top- heavy federalism: The Centre’s bureaucratic, financial, and agenda-setting capabilities are more potent than those of the states. Giving the states room to innovate will require multiple strands of change.
• Overlapping institutional arrangements: Responsibility for defining and implementing state climate policy varies, from the Department of Science and Technology in some states to the State Pollution Control Boards or the Department of Environment in others. These different institutional arrangements can influence the focus of policy in different states.

How can states be enabled to transition toward climate-resilient and low-carbon societies?

• Enabling low carbon policy changes: The Centre can play an important supporting role by providing credible analysis on low-carbon policy choices to the states when required. It can also help by expanding the capacities of central universities and agencies and supporting knowledge creation and policy ideas emerging from civil society.
• Fiscal incentives: States that update their plans can be given a clear sense of how much additional support they can rely on. To meet its constraints, the Centre could selectively incentivise actions that align with national priorities and international pledges.
• Co-ordination between policies: Coordination is challenging because varied state efforts must ultimately coalesce into a coherent national story, even while allowing for local experimentation. A strategic national framework that lays out broad guidance and signals opportunities and priorities is an important starting point.
• A national analysis body: A national framework would have to be arrived at through a structured deliberative process with the states, something the National Action Plan on Climate Change (NAPCC) failed to do. An independent expert body at the national level, can be tasked with advancing an analytically sound national mitigation strategy and providing advice on demand to states.
• Balance of Powers: Promoting state climate action requires multiple, interlocking institutional reforms at all levels of government. Crucially, it involves getting the balance between the Centre and the states right and allowing the states room to experiment despite the constraints of the federal structure.

Conclusion

Being among the most vulnerable countries to climate impacts, India has a very real stake in negotiations reaching a meaningful outcome and a growing awareness of its own potential role in helping achieve such an outcome. As the international climate negotiations increasingly show signs of adopting a ‘bottom-up’ regime, it is becoming increasingly important to understand what factors drive or condition climate actions in different state.

Question: Discuss the need to involve states in the fight against climate change. What can be the challenges in this process and steps to resolve this?

Sources:

• States are the beating heart of climate action
• Net zero debate: Where do Indian states stand on the decarbonisation pathway?
• SOME INDIAN STATES GEAR UP TO TACKLE CLIMATE DISASTERS
• Climate Policy in India: What Shapes International, National and State Policy?.
• The Climate Group’s latest report calls for ‘aligning’ climate action at Indian States

On August 6, 1945, the United States dropped the very first deployed nuclear bomb in the city of Hiroshima, Japan, wiping out an estimated 39 per cent of the population, most of who were civilians. This day is solemnly observed as Hiroshima Day around the world. The Manhattan Project, commissioned by the US, created two atomic bombs. The first one, called 'The Little Boy' was dropped in the city of Hiroshima while the second one, dubbed 'The Fat Man' was dropped in Nagasaki by the US on August 6 and 9, respectively. This day reminds the world that all wars are terrible, and nuclear warfare even more so.

Source:

• Hiroshima Day 2021: History, significance, and impacts of World War II atomic bombings

This is the image of Si.427, which is a hand tablet from 1900-1600 BC, created by an Old Babylonian surveyor. The tablet was originally discovered in the 19th century. A mathematician from Australia's University of New South Wales discovered that a 3,700-year-old tablet, previously thought to be a "teacher's list of school difficulties," is the earliest example of applied geometry. This is a significant object because the surveyor uses what are now known as "Pythagorean triples" to make accurate right angles.

Source:

• Trigonometry 1,000 years before Pythagoras: Applied geometry engraved on 3,700-yr-old clay tablet found

• Context: Indigenous Aircraft Carrier (IAC) 1 named INS Vikrant has started sea trials recently.
• India acquired the Vikrant from the United Kingdom in 1961, and the carrier played a crucial role in the 1971 war with Pakistan that led to the birth of Bangladesh.
• This is the first aircraft carrier designed (by Indian Navy’s Directorate of Naval Design (DND) and built (at Cochin Shipyard Limited (CSL)) in India.
• Over 76% of the material and equipment on board IAC-1 is indigenous.
• It will have an air component of 30 aircraft, comprising MiG-29K fighter jets, Kamov-31 airborne early warning helicopters and the soon-to-be-inducted MH-60R multi-role helicopter, besides the indigenous Advanced Light Helicopters. 
• The shipborne weapons include Barak LR SAM and AK-630.

Source:

• Maiden indigenous aircraft carrier starts sea trials off Kochi
• Explained: The importance of IAC-1, the Made-in-India aircraft carrier
• INS Vikrant leaves port for maiden sea trials. Watch video
• Carrier will be the Navy’s most potent platform

Image Source:

• India’s New Aircraft Carrier IAC 1 – INS Vikrant Passes Basin Trials

• Context: Conservation efforts have been taken to save the world’s most endangered turtle- the Swinhoe's Softshell Turtle from extinction.
• Swinhoe’s softshell turtle (Rafetus swinhoei) also known as the Hoan Kiem turtle locally or Yangtze giant softshell turtle, are of special cultural significance in Vietnam.
• These are the largest freshwater turtle species in the world.
• These turtles are grey with light gray or yellow spots and inhabit wetlands and large lakes.
• They play an important role to the seafloor biosystem, where they contribute by enriching soil nutrients and facilitating seed dispersion.
• They are hunted for food and used as an ingredient in traditional medicine.
• It has been listed as ‘Critically Endangered’ on IUCN Red List and in Appendix II of CITES.

Source:

• New discovery gives world’s most endangered turtle a fighting chance
• Yangtze Giant Softshell Turtle Facts

Image Source:

• Yangtze giant softshell turtle

• Context: The Lok Sabha has passed the Bill to formalize the Commission for Air Quality Management for National Capital Region and Adjoining Areas.
• The Air Quality Commission would be a permanent body to address pollution in the National Capital Region and sources of pollution in Delhi, Punjab, Rajasthan, Haryana and Uttar Pradesh.
• The all-powerful body would assume several powers to coordinate action among States, levy fines ranging up to ₹1 crore or five years of prison to address air pollution.
• The body has a full-time chairperson, representatives from several Ministries and independent experts and will have the final say on evolving policy and issuing directions.
• The Commission may impose and collect environment compensation on pollution by stubble burning.

Source:

• Parliament approves Bill to set up commission for air quality management in NCR, adjoining areas
• Lok Sabha passes Air Quality Commission Bill for NRC, Adjoining Areas

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• MoEF to table Bill for panel on NCR air pollution: Bill on air quality commission drops clause on jail term

• Context: The Union Cabinet has given its approval to the proposal for National Mission on Edible Oil-Oil Palm (NEMO-OP).
• India imported nearly 133.5 lakh tones of edible oil in 2020-21 to meet the domestic requirement and the share of imported palm oil was around 56%.
• The mission aims to ramp up the domestic production of palm oil by over three times in order to cut down the country’s import dependency of edible oils.
• The north-eastern states along with the Andaman and Nicobar Islands will be particularly focused upon to expedite the production and cultivation of palm oil in India.
• Farmers will be provided with certain financial assistance and the government will draw out a formula price and the viability cost of the produce.

Source:

• Govt Targets Three-Fold Increase In Domestic Production of Palm Oil To Cut Import Dependency
• To cut ballooning import bill, government targets threefold increase in domestic palm oil output.

Image Source:

• As world’s largest importer of palm oil, India has a duty to push for ethical production practices

Essence: This article talks about the year 1991 which was paradigm of economic change any nation could witness. That year witnessed the Indian economy opening its gates to the global world and welcoming the private sector. It narrates that how the opening up of economy brought along with it, various challenges and opportunities for the Indian economy to grow, ranging from stiff competition faced by the foreign products to how some Indian companies evolved to become the world leaders.

Though many old players of the market sank, not able to cope up with the changes, at the same time some sectors came out to be revolutionized from the core, example banking and infra.

Why you should read this article?

• To understand the nuances of changes witnessed by the Indian economy.
• Will help you in paper 3 of GS, economy and globalization.

Source:

• What changed after the economic tsunami that hit India in 1991

Essence: Number of persons facing moderate to severe food insecurity in India has increased since the outbreak of COVID, ironically when the government had an unprecedented amount of food grains (larger than the food stocks of any country). According to the State of Food Security and Nutrition in the World (SOFI) report, problems of hunger and food insecurity are grave in India because of widespread economic distress, high unemployment, and high levels of inequality. These longstanding problems were aggravated last year because of lack of preparation to deal with the pandemic. The sharp increase in food insecurity points to an urgent need for the government to establish systems for regular monitoring of the food security situation in the country and to universalise access to the public distribution system, at least during the pandemic.

Why should you read this article?

• To get an overview of status of food insecurity in India.
• To understand why despite being self-sufficient in production of major food commodities, problems of hunger and food insecurity are grave in India?
• To understand the State of Food Security and Nutrition in the World (SOFI) report.
• To know what steps India should take to tackle the problem of food insecurity and hunger.

Source:

• India’s godowns are overflowing. So why are people starving?

Essence: The article talks about the efforts from the end of Bihar state to handle flood that ravages the state every season. The article delves into the past actions and efforts being taken in the present and presents a new course of management between India and Nepal, which could assist in averting/managing this disaster.

Why you should read this article?

• To understand the basics of flooding in Bihar.
• To gain insights into history of flooding.

Source:

• India-Nepal flood management needs course correction

Background

• The force behind boxing star Lovlina Borgohain has been coach Sandhya Gurung.
• She is a former boxer from Sikkim who overcame paralysis to chase her dreams. Today, her efforts helped her ward win a historic bronze at Tokyo Olympics.

Contribution of coach

• Instil courage: Sandhya helped turn Lovlina from someone who would crumble under pressure into a lion in the ring.
• Create a belief: Before her match, Lovlina would say to herself: “You aren’t a lioness, you are a lion.”
• Overcoming the fear: What Sandhya taught Lovlina was to deal with her fear.

Lesson

• Strong people don’t put others down. They lift them up.
• Fear is a natural reaction to moving closer to the truth.
• Courage is the mother of all virtues because without it, you cannot consistently perform the others

Sources:

• Overcoming Paralysis, This Coach Helped Lovlina Borgohain Create History in Tokyo