current affairs 2017

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 Today Current Affairs Topics
How To Deal Shell Companies
Export Subsidy Issue
Plastic Roads In India
Costs Of Tobacco Use
Widening Current Account Deficit
Bangladesh - 16th Constitutional Amendment
Prelim Bits 18-09-2017

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 How To Deal Shell Companies
Why in news?
Recently union government has initiated action against more than two lakh shell
companies as part of Operation Clean Money.

What is operation clean money?

Operation Clean Money was initiated by Income Tax Department (ITD).
Initial phase of the operation involved-verification of large cash deposits made after
demonetization.
Second phase of the operation involves is identification of high risk persons for detailed
investigations by the ITD.

What are shell companies?

Shell companies are typically corporate entities which do not have any active business
operations or significant assets in their possession.
The government views them with suspicion as some of them could be used for money
laundering, tax evasion and other illegal activities.
Some laws helpin curbing illegal activities to target shell companies are

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Benami Transaction (Prohibition) Amendment Act 2016
The Prevention of Money Laundering Act 2002
The Companies Act, 2013.

How can name of these companies be removed?

Companies can be removed from the rolls of the Ministry of Corporate Affairs by two
means either by strike off by Registrar of Companies (RoC) or by voluntary strike off.
The strike off happens in case of companies which have failed to commence business
within a year of incorporation.
Voluntary closure can be done with the approval of the board and shareholders and the
firm should have nil liabilities.

What is the difference between dormant and shell companies?

A dormant company gets its title in three ways
If it has chosen to get a dormant status from the RoC by way of an application.
If it is in compliance of the requirements of Section 455 of companies act 2013.

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In case a company has not filed financial statements or annual returns for two financial
. years consecutively, the RoC shall issue notice and include it in the register of
dormant companies.
But a shell company is one which is typically suspected of illegal activities.

What actions can be taken against shell companies?

The RoC issues a show-cause notice to such companies and their directors seeking their
response within 30 days.
If the response is not satisfactory, the companys name would be removed from the
register.
Then companies have to make an application before the National Company Law Tribunal
for restoration which the NCLT will decide on a case-to-case basis.

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Export Subsidy Issue
What is the issue?
India's rising per capita income has created a problem for export subsidies.

What is the status Indias per capita income?

Income per capita is a measure of the amount of money earned per person in a certain area.
It can be calculated for a country by dividing the country's national income by its
population.
Indias per capita income is above $1000 formally qualifying a middle income country.

How India is responsible to WTO on this situation?

According to WTO rules, now India is ineligible to provide direct export subsidies.
Under WTO, production-based subsidies such as technological up gradation, capacity
building and infrastructure development are permissible.
Even for countries below the $1,000 per capita threshold, product-specific subsidies may be
questioned if the export of the product concerned accounts for over 3.25% of the global
exports for over two consecutive years.

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 In that case, the country concerned will have to phase out subsidies over eight years.
It can be reasonably expected that India will be dragged to the WTO for its subsidies
regime.

What are the issues with Indian actions in this regard?

India is recording consistent growth but centre failed to predict this issue.
Instead, the Centre announced the Merchandise Export from India Scheme, providing a
flat export benefit across 5,000 tariff lines at a cost of over Rs.22,000 crore.
Meanwhile, explicit export subsidy schemes such as duty drawback (reimbursement of
import duty on inputs) continue.

What actions should India take?

India needs to plan according to the global trends and frame its policies.
The commerce and industries ministry should push for a new regime of support to
exports, one that is based on improving ease of doing business.
The Government needs to reach out exporters struggling with GST and resolve their
concerns while telling them that direct subsidies cannot be continued.
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Plastic Roads In India
What is the issue?
India has a huge potential of using its plastic waste for laying plastic roads.

What are plastic roads?

Roads constructed from mix of aggregate (sand and stone chips), bitumen and shredded
plastic.
The new material mix is reported to have superior binding.
But plastic roads are quite the rage in the European Union which has taken on massive
environmental conservation and pollution mitigation goals.

What is the status of plastic roads in India?

India has already built some 21,000 miles of roads using plastic waste.
The civic authority in Bengaluru has experimented with plastic roads building some 600
km of thoroughfare.
The Centre even issued a set of guidelines for plastic blending in rural roads programme,
the Pradhan Mantri Gram Sadak Yojana.

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Researchers in Tamil Nadu, has developed plastic blended water-resistant blocks, it can be
used to line canals and other flowing water bodies.
Plastic based roads are catching up in many other cities in India.

What are the advantages of plastic roads?

Safer disposal of plastic is ensured than melting it down and releasing copious quantities
of toxic fumes.
It is a cheap input that could pull down road construction cost.
Can be efficiently used for rural road building and smart city plans.
The bitumen usage is cut because of plastic thereby reducing the carbon footprint of road
construction.
It has greater durability than asphalt-concrete roads because they dont absorb water.

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Costs Of Tobacco Use
Why in news?
The Bombay High Court is hearing a PIL which questions the investments by companies
and government in tobacco despite its ill-effects.

What is the impact of tobacco use?

Costs of tobacco-related health issues including cases of death added up to around 1.2%
of GDP in that year.
Tobacco is also a cause for huge deforestation and nutrient depletion in soils.
PSU companies that are in the business of insuring lives are investing in products that
risks lives.

How effective are the measures taken?

Many anti-tobacco pledges have been signed in the past, but these contributed little to
curb the ill-effects of tobacco use.
Government has tried to discourage tobacco use by largely taxing its users.
However, this approach focuses primarily on the cigarette component of the tobacco.
The other forms of tobacco like the bidis and chewing tobacco which are consumed 4-5
times more than cigarettes are less focussed.

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So in spite of reduction in share of cigarettes in total consumption of
tobacco, the overall consumption has not reduced to any significant level.
Besides this, the acreage under tobacco and their production have
consistently increased over the years.
As a result, efforts to curb tobacco use are hampered by the arguments
supporting the farmers involved in this field.

What is the way forward?

The environment ministry could undertake EIA ( Environmental Impact

Assessment) to address the issues with tobacco in the forests.
More, importantly the government should revisit its approach on tobacco
control.

Read More..

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 Widening Current Account Deficit
Why in news?
A recent data has revealed that Indias Current Account Deficit (CAD) has widened to
2.4 % of GDP in the first quarter of 2017-18, which is the highest in the last four years.

What is CAD?
CAD refers to the deficit arising out of the difference between inflow and outflow of
foreign exchange as a result of imports and exports.
CAD stood at $14.3 billion in the first quarter of the current financial year.
This was valued at 2.4% of gross domestic product, compared to 0.1% last year.

What are the reasons for its increase?

Trade - Imports overall rose by over 20% year-on-year in August.

On the other hand, exports rose by only 10% in the same period.
The resultant higher trade deficit has translated into higher CAD.
Half of the rise in this import is contributed by the spike in gold imports prior to the
introduction of GST.
Exchange Rate - Rupee has appreciated by over 6% against the dollar this year.
An over-valued currency has resulted in reduced margins and made exports
uncompetitive; thus an imbalance in trade in favour of imports.
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How did India manage inspite of higher CAD?
Capital Account Surplus - India was able to pay its import bills easily due to a strong
capital account surplus.
Foreign investors have pumped huge sums into India as it remains one of the few places
offering higher yields.
Net FDI almost doubled in the first quarter this year.
Also, net FPI jumped about six times to $12.5 billion.
External Debt - Indias total external debt also declined by 2.7% during the financial year
2016-17.
However, this is not a sustainable solution to the problem.

What are the risks of this trend?

A large CAD to GDP is viewed as making a country more vulnerable to sudden stops or
reversals in foreign capital inflows.
There are signs that the U.S.Federal reserves & some other western central banks are
considering a monetary policy tightening.
This will impact the foreign investment flows to India.
This might also push the Rupee into a downward spiral.

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What should be done?

The imbalance in trade is now to be resolved by boosting exports.

The blockage of funds under GST and uncertainties has left little or no working capital
at the disposal of exporters.
Focussing on manufacturing in the labour-intensive sectors would bring the double
benefits of boosting exports and generating employment.
Efforts are needed to reduce paperwork and costly over-regulation so as to make
exporting easier.
Besides, RBI should keep a check on the external commercial borrowings to keep debt
under control.

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 Bangladesh - 16th Constitutional Amendment
Why in news?

Bangladeshs Parliament recently passed a unanimous resolution to take proper legal

steps over a Supreme Court verdict that nullified the 16th Constitutional
amendment.

What are the features of 16th amendment?

It was passed in 2014.

It empowered the Parliament to remove judges of the Supreme Court who are found
incompetent or guilty of misconduct, based on a two-thirds majority.
This amendment had in a way restored the power of Parliament to impeach judges
which was a part of the original Constitution of 1972.
Earlier this year, SC had scrapped the amendment.
The court found the provision to be against the independence of the judiciary.
It restored the Supreme Judicial Council with powers to remove errant judges.

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What was the courts rationale?

The Supreme Courts is of the view that the Bangladeshs political system is different
from the parliamentary systems in the UK and India, where legislators are empowered
to impeach judges.
Bangladeshi MPs are bound by Article 70 that prevents legislators from voting against
their partys decision on any matter.
So they do not have the freedom to vote on conscience on issues including
impeachment.
This gives political parties an undue influence over appointments in the judiciary.

What should be done?

Instead of taking a course of confrontation against the judiciary, Bangladeshs

parliamentarians should proceed with a review petition to the SC.
The justification of the SC that it is seeking to protect judicial independence need to be
contested by the government point by point and not by a mere resolution.
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 Prelim Bits 18-09-2017
CBI and RTI

Delhi High Court has ruled that CBI is not fully exempted from Right to Information
(RTI) act.
When a RTI activist sought information pertaining to corruption in several top
offices from the CBI, it declined to share it.
The CBI has been denying information citing Section 24 of the RTI Act.
Section 24 of the act says that provisions of revealing information to the public will
not apply to intelligence and security organisations, which include IB, RAW, NIA,
CBI and the Enforcement Directorate.
However, the act clearly states that the information pertaining to the allegations of
corruption and human rights violations will not fall under Section 24 of the RTI act.
The High court has ruled that the allegations of corruption do not attract blanket
exemption given to the CBI under Section 24.
It can be denied only if they fell under Section 8(1) of the RTI Act which gives 10
grounds on which information can be denied.

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 GST Composition Scheme
The scheme has been designed to simplify and reduce the burden of compliance for smaller
taxpayers.
It is covered under Section 10 of the Goods and Services Tax Act.
Under the Scheme, small taxpayers with a turnover of Rs.75 lakh can file quarterly returns instead
of the normal monthly returns.

Impact of Tropical Cyclones in Pacific Region

Tropical Cyclones in the Western Pacific region appear to be the reason for the drying upon
monsoon rain in August month across India.
During the monsoon months, cyclones in the Western Pacific move westwards towards India and
aid rain-bearing systems over the sub-continent.
But during some years they recurve, or start to swing north-east, and do not give as much of a
push to the rains as they do in the good monsoon years.

Alzheimer's disease
Scientists have developed an artificial intelligence system that can accurately identify signs of
Alzheimers disease almost 10 years before clinical symptoms appear.
They developed a machine-learning algorithm to distinguish structural changes in the brain caused
by the disease.
The idea is to correctly classify and discriminate between diseased and healthy brains with more
accuracy and identify changes almost a decade before clinical symptoms appear.
Alzheimer's is the most common form of dementia, a general term for memory loss. Read More..

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