News Highlights : 14 september 2016

DOWNLOAD PDF

Arundhati Bhattacharya

CURRENT AFFAIRS SEP 14, 2016

01. Government issues model guidelines for states to curb Ponzi schemes :

To protect consumers from Ponzi frauds, the Centre on 12TH Sept 2016 , issued model guidelines for states to regulate direct selling and multi-level marketing businesses while prohibiting pyramid structures as well as money circulation schemes. The ‘Direct Selling Guidelines 2016’ framework was released by the Food and Consumer Affairs Minister Ram Vilas Paswan and has been sent to the states and Union Territories for adoption. In the guidelines, the government has clearly defined legitimate direct selling and differentiates it from pyramid and money circulation schemes to help investigating agencies identify fraudulent players. “Direct selling means marketing, distribution and sale of goods or providing of services as a part of network of direct selling other than under a pyramid scheme,” the guidelines said. They have also defined Pyramid Scheme. Money Circulation Scheme has the same meaning as defined under Prize Chits and Money Circulation Schemes (Banning) Act, 1978.

02. Compulsory rotation, likely direct entry of foreign MNCs spell bad times for Indian auditors :

Indeed, multinational auditing firms in India, or MAFs. now dominate the auditing market in India. The Big Four accounting firms — Deloitte, EY, PWC, and Deloitte — and two other firms, Grant Thornton and BDO, collected Rs 3300-3500 crore in auditing fees last year, according to industry estimates. The combined billings of the 40 top Indian auditing firms fall short of the total fees of these six foreign firms.

As if this wasn't calamitous enough, Indian auditing firms, or IAFs, like KS Aiyar & Co face two other pressing threats. One, a rule that requires businesses to change their auditors after two terms of five years each. The audit rotation mandated by the Companies Act 2013 will set in from April 1, 2017 and many other IAFs, might lose clients to multinational competitors. True, foreign audit companies too stand to lose several high profile clients, but they seem better prepared than their Indian competitors to ride out the new rules. Two, a proposal that the Ministry of Corporate Affairs is reviewing about allowing multinational audit firms to operate directly in India. Currently, these firms operate in India through a network of Indian affiliates.

03. 'Implementation of GST to attract more FDI' :

Implementation of Goods & Service Tax (GST) will lead to increased tax compliance and attract more foreign direct investments across sectors due to tax transparency and ease of doing business, says a survey. According to a survey of corporate India by Feedback Business Consulting Services, which covered 67 companies from various sectors, GST rollout will be positive for the economy. Around 72 per cent respondents felt investments will rise across sectors and a significant portion of this will come in the form of FDI especially in heavy engineering and automotive sectors. Some of the other major benefits of GST implementation include, reduced logistics cost, supply chain efficiency, reduction in costs for tax & regulatory compliance, better penetration of markets and export effectiveness. However, companies are concerned about the timing of implementation of GST and fixing of rate at which tax will be charged, the survey said. "There might be some heartburns like inflation in the early days of implementation but GST will improve GDP of the country in the long run," it added.

04. ‘Bhattacharya, Kochhar among most powerful women outside US’ :

India’s top women bankers, SBI chief Arundhati Bhattacharya, ICICI head Chanda Kochhar and Axis Bank CEO Shikha Sharma, are among the 50 most powerful women based outside the US, according to a list by Fortune, which is topped by Banco Santander’s boss Ana Bot . Bhattacharya, 60 is ranked second on the list, while Kochhar comes in at the fifth spot and Sharma in the 19th position in Fortune’s ‘50 Most Powerful Women International’ list, which has ranked the women based outside the US.

Bot, Group Executive Chairman of Banco Santander, Eurozone’s largest bank by market value, repeats as No. 1, in a time of economic and political volatility for all. The 2016 list spans 19 countries. “Bhattacharya’s profile has risen during her three-year tenure atop India’s largest bank,” Fortune said. ICICI Bank Managing Director and CEO Kochhar, 54, is regarded even by rival bankers as a “visionary”,Fortune said.

05. Cabinet approves setting up of Higher Education Financing Agency:

To give a major push for creation of high quality infrastructure in premier educational institutions, the Union Cabinet on 12th Sept 2016, approved the establishment of a Higher Education Financing Agency (HEFA). “The HEFA would be jointly promoted by the identified promoter and the Ministry of Human Resource Development (MHRD) with an authorised capital of Rs 2,000 crore. The Government equity would be Rs 1,000 crore,” an official statement said, after the meeting of the union Cabinet, chaired by Prime Minister Narendra Modi. The HEFA would be formed as a SPV within a PSU Bank or Government-owned-NBFC (Promoter). “It would leverage the equity to raise up to Rs 20,000 crore for funding projects for infrastructure and development of world class Labs in IITs/IIMs/NITs and such other institutions,” the statement added. The HEFA would also mobilise CSR funds from PSUs or corporates, which would in turn be released for promoting research and innovation in these institutions on grant basis. The HEFA would finance the civil and lab infrastructure projects through a 10-year loan. The principal portion of the loan will be repaid through the ‘internal accruals’ (earned through the fee receipts, research earnings etc) of the institutions. The government would service the interest portion through the regular Plan assistance. For joining as members, the institution should agree to escrow a specific amount from their internal accruals to HEFA for a period of 10 years.

06. Indian Railways offers Rs 10 lakh insurance for 0.92 paise premium; over 4 million opt for it :

It seems that Suresh Prabhu-led Indian Railways’ scheme to offer insurance cover for rail yatris has become a big hit among passengers. Railway Minister Suresh Prabhu tweeted, “No. of people opting for new insurance scheme crossed 4 million mark. The insurance cover being offered by Railways goes up to Rs 10 lakh and the premium is only 92 paise. Some reports even suggest that this may very well be the world’s cheapest rail travel scheme. The passenger will be given the option of insurance cover at the time of booking the ticket on the IRCTC website. If the passenger decides to opt for it, then the premium amount will be added to the ticket cost. The insurance company will send an SMS or e-mail to confirm the policy number along with a link to update nomination details. The coverage includes death or total disability insurance cover of Rs 10 lakh; partial disability insurance of up to Rs 7.5 lakh; hospitalisation expenses of up to Rs 2 lakh. The facility is available to those who book e-tickets through the IRCTC platform. This does not include the sub urban trains. It insurance scheme is available only for confirmed and RAC tickets and covers all passengers except children below 5 years of age and foreign citizens. However, no refund of the premium will be given in case of cancellation of the ticket.

07. Center to give shield to serving, retired public servants; rejects CBI’s objection :

A protective shield is likely to be given to both serving and retired public servants by making it compulsory for probe agencies like CBI to take previous approval of the central and state governments concerned before conducting any such enquiry against them. The move assumes significance as there have been demands from IAS officers and other civil servants of protection to them from the investigating agencies on bonafide decisions taken by them. They had cited legal cases being faced by former Telecom Secretary Shyamal Ghosh, and former coal secretaries P C Parekh and H C Gupta, for their alleged involvement in second generation (2G) spectrum and coal blocks allocations scams respectively. They are known for for their good reputation but facing investigations, these officers had claimed. The Department of Personnel and Training (DoPT) may give shield to both the serving and retired public servants, official sources said. It may make it mandatory for the probe agencies to seek prior approval from the competent authority which may be the appointing authority or administrative department where the officer concerned is working or has worked, they said.

08. Andhra Pradesh becomes second state to achieve 100% electrification :

Andhra Pradesh has become the second state in the country after Gujarat to achieve 100 per cent electrification of households, a latest report has said. JM Financials published the report based on a national -level survey on electrification in various states. Discussing this through a tele-conference with top officials of the Energy Department, Chief Minister N Chandrababu Naidu said, "We achieved 100 per cent electrification by June-end. Now, you have to set a target of ensuring uninterrupted world-class quality power supply." He said access to electricity was a key socio-economic development indicator, but this was an area where there was still a significant gap in India. About 35 per cent rural households in states like Uttar Pradesh, Madhya Pradesh, Bihar, Odisha and Assam still lacked access to power supply, he claimed. The Chief Minister asked the Department officials to chalk out an action plan to be implemented from the grassroots level so as to make the power sector self-sufficient in the long run.

09. Why so many food product imports get rejected:

Monthly data on import refusals by the US Food and Drug Administration (FDA) this year paint a grim picture of Indian food products. India consistently ranked among the top three countries whose products were rejected for import by the regulator.

An average of the first eight months of 2016 puts India's tally of rejects at 220, second after China's 253. Mexico is third at 189. India topped the list of import refusals by the FDA in August with 202 products, including soaps, detergents and food products. Food products constituted nearly 60 per cent of the refusal list for August, with salt, rice, edible oils, instant noodles, snacks, bakery products, and carbonated drinks and juices being rejected. Violations include mislabelling and products containing allergens. Among the manufacturers were Hindustan Unilever, Mondelez India and Nestle India. The three companies insisted they complied with all the norms and these were not legitimate exports by them.

10. Soon, Aadhaar must to avail rail concession :

The Indian Railways may soon make it mandatory for senior citizen passengers to provide their Aadhaar numbers to avail concessions on rail tickets. To begin with, senior citizens will be able to get ticket concessions only through Aadhaar from December this year, Indian Railway Catering and Tourism Corporation (IRCTC) Chairman and Managing Director A.K. Manocha told The Hindu. At present, male senior citizens can avail 40 per cent discount on ticket fares and female passengers 50 per cent reduction on ticket fares on all trains including Rajdhani, Shatabdi and Duronto. Railways provides 53 such concessions, including those for the differently-abled and patients, incurring a loss of Rs.1,500 crore every year. “The Railway Board has taken a decision to give discount on fares to senior citizens only on the basis of Aadhaar numbers from December,” Mr. Manocha said. He further said that IRCTC was likely to incentivise all passengers to book rail tickets through Aadhaar by offering them several sops.