‘Know Your Budget’ better with finance ministry’s Twitter series

Seeking to educate the general public about the budgetary process, the finance ministry Tuesday started a series on Twitter providing definitions of various terms used in the budget.

The ‘Know Your Budget’ series, which explains the importance of Union Budget and its making, would continue for about a fortnight. The government on February 1 would unveil the interim Budget for 2019-20 as the general elections are due in the next couple of months. The final Budget for the next fiscal would be presented by the new government.

What is Budget?

Budget is the most comprehensive report of the government’s finances in which revenues from all sources and outlays for all activities are consolidated. The Budget also contains estimates of the government’s accounts for the next fiscal year called Budget estimates.

Bring in structural changes to make agriculture resilient, sustainable and profitable: VP

The Vice President of India, Shri M Venkaiah Naidu has called for the introduction of structural changes through policy interventions to bring in a positive bias towards agriculture and make it resilient, sustainable and profitable.

Indian Agriculture

  • Agriculture sector accounts for 18 percent of India’s GDP and provides employment to 50 percent of the workforce of the country.
  • The Gross Value Added by agriculture, forestry, and fishing is estimated at Rs 17.67 trillion (US$ 274.23 billion) in FY18.
  • During the 2017-18 crop year, food grain production is estimated at a record of 284.83 million tonnes.
  • The introduction of high yielding varieties, irrigation facilities, increased input flow through fertilizers and pesticides, farm mechanization, credit facilities, price support, and other rural infrastructure facilities ushered the green revolution over the past few decades.
  • The growth of Agricultural sector is important for inclusive growth and poverty alleviation.
  • Need for concerted efforts from all stakeholders to find long term solution to various challenges faced by the Agricultural sector, Loan waiver is only a temporary relief but proves futile in long run in addressing Farmers concerns
  • India today is not only self-sufficient in respect of demand for food but is also a net exporter of agri-products occupying seventh position globally. It is one of the top producers of cereals (wheat & rice), pulses, fruits, vegetables, milk, meat, and marine fish. However, we are still facing a deficit of pulses and oilseeds. Although the availability of fruits, vegetables, milk, meat, and fish has increased, the most important aspect is to ensure access and affordability to a vast majority of Indians, including farmers.

Food processing industry

  • Plays a critical role in improving the agrarian economy, raising farm incomes, reducing wastages, ensuring value addition, promoting crop diversification and generating employment opportunities as well as export earnings.
  • The vital link between agriculture and industry.
  • The Indian food and grocery market is the world’s sixth largest.
  • The Indian food processing industry accounts for 32 percent of the country’s total food market, one of the largest industries in India.

Organic Farming

  • India holds a unique position among 172 countries practicing organic agriculture.
  • India is home to 30 percent of the total organic producers in the world but accounts for just 2.59 percent (1.5 million hectares) of the total organic cultivation area of 57.8 million hectares.

Horticulture

  • leading horticultural country of the world with a total annual fruits and vegetable production of 306.82 million tonnes during 2017-18
  • India is the second largest fruit producer in the world.

Livestock

  • Has been growing faster than the crop sector.
  • The contribution of livestock output to the total output of the agriculture sector has significantly increased from 15 percent in 1981-82 to 29 percent in 2015-16
  • Acts as cushion and engine for agricultural growth.

Dairy industry

  • India is also the world’s second largest milk producer and is emerging as a major exporter now.
  • It is contributing around 26 percent to total agriculture GDP.

Challenges

  • Climate change, fragmented land holding, increase in demand for food, stagnating farm incomes, declining productivity, diminishing and declining natural resources etc.
  • Lack of favorable terms of trade, vagaries of monsoon, technology not reaching farmers in time, the absence of proper marketing strategies etc.
  • 85 percent of farmers are small and marginal with land holding of fewer than 2 hectares.
  • Linking these small farmers with the market is another major challenge in our system.
  • To enhance the farmers’ income, it is necessary to link them with marketers, traders, and exporters.
  • Challenges for food security in the 21st century is not only improving productivity but also yield stability through the development of crops which are disease-resistant, pest-resistant and adaptable to climate change.

Solution to address the challenges

  • Some ways to address the issues – accord top priority to farmer-oriented marketing, providing adequate cold storage facilities and refrigerator vans, focusing on food processing through value addition, extending timely and affordable credit to farmers and ensuring that innovations and technologies reach the farmers, researchers and farm experts to come out with solutions to the multi-dimensional problems faced by the farming sector.
  • United efforts by governments, the scientific community, Krishi Vigyana Kendras, and farmers to realize the ambitious goal of doubling farmers’ income by 2022.
  • Students pursuing agri courses must spend at least six months with farmers to have a first-hand understanding of the problems faced by the latter.
  • Adopt the latest technologies from seeds to post-harvest management to marketing and to improve productivity on par with the other leading nations.
  • The use of Information Technology, Space Technology, Geo-Informatics, Internet of Things (IoT), Block Chain Technology, Artificial Intelligence, and Big Data Analytics and their first-mile connectivity to farmers is vital for enhancing farm incomes. Digital technologies can also help in countering vagaries in farming and optimizing the resources.

Government initiatives

  • Improve soil fertility on a sustainable basis through the soil health card scheme.
  • Provide improved access to irrigation and enhanced water efficiency through Pradhan Mantri Krishi Sinchai Yojana (PMKSY).
  • Support organic farming through Paramparagat KrishiVikasYojana (PKVY).
  • Creation of a unified national agriculture market to boost the income of farmers.
  • To mitigate risk in the agriculture sector, “Pradhan Mantri Fasal BimaYojana (PMFBY) has been launched for implementation from Kharif 2016.
  • Focusing on irrigation with schemes like “Per Drop More Crop”, provision of quality seeds and nutrients based on soil health, setting up warehouses and cold chains to prevent post-harvest crop losses, promoting value addition through food processing, creating a National Farm Market, removing distortions and e-platform across 585 Stations.
  • To achieve the target of doubling farmer income by 2022 increasing investments in agricultural R&D and rolling out efficient institutional reforms are vital to tackle the emerging challenges in agriculture, including food and nutrition security both at national and regional levels.

 

 

Partial Relief for Start-Ups as Centre Eases Angel Tax Exemption Rules

On the third anniversary of the government’s flagship Startup India campaign, the government has notified changes to Section 56 of the Income Tax Act, in a move that brings relief to start-up founders and investors dealing with the issue of “Angel Tax”. In a notification, the government on Wednesday said that all DIPP-recognised start-ups can apply to the department for approvals requesting an exemption from Angel Tax, or Section 56 2 (viib) of the Income Tax Act, which will then be sent to the Central Board of Direct Taxes (CBDT) for approval. But the changes do not ensure that start-ups will no longer receive notices on angel tax from the tax department.

Major Changes introduced:

As per the changes, all DIPP-recognised start-ups can apply to the department for approvals requesting an exemption from Angel Tax, or Section 56 2 (viib) of the Income Tax Act, which will then be sent to the Central Board of Direct Taxes (CBDT) for approval.

The changes are applicable to start-ups, recognized by DIPP, where the amount of paid-up share capital, and share premium of the capital after the proposed issue of share does not exceed Rs. 10 crore.

The notification specifies a list of documents that start-ups will have to submit to the DIPP while seeking approval. The CBDT is mandated to either approve or reject the applications within 45 days.

WHAT IS THE LATEST ISSUE?

At least 80 startups have received notices to pay angel tax since last year. Many founders have said they have been asked to pay up as much as 30% of their funding as a tax. Angels have also received multiple notices asking them to furnish details on their source of income, their bank account statements, and other financial data.

Way ahead:

The changes proposed do not ensure that start-ups will no longer receive notices on angel tax from the tax department. The start-up community views this as a step in the right direction but insists that the issues facing founders and investors due to angel tax remain unaddressed through the notification.

Reprieve for HUL as Delhi High Court stays Rs. 462-cr demand by anti-profiteering body

The Delhi High Court has stayed the demand of ₹462 crore, made on Hindustan Unilever (HUL) by the National Anti-profiteering Authority (NAA).

The High Court has, however, asked HUL to deposit ₹90 crore in two installments (₹50 crore by March 15 and ₹40 crore by May 15) in the Consumer Welfare Fund by May 15.

The NAA had held HUL guilty of profiteering, for failing to pass on the benefit of lowered Goods and Services Tax on certain FMCG products. The core of the issue is the reduction of GST on 178 items to 18 percent from 28 percent, which came into effect from November 15, 2017. The reduction covered items such as detergents, washing and cleaning preparations, liquids and creams for washing the skin, shampoos, shaving cream, and beauty or make-up preparations.

Soon after the order, an anonymous complaint was filed before the Director-General, Anti-Profiteering, alleging that the FMCG major had not passed on the benefit of lower taxes to its customers.

After a probe, the authority held that the company profiteered to the extent of ₹455.92 crore by not passing on the benefit to its customers. It was also held guilty of wrongly availing itself of the benefit of TRAN-2 credit (credit on tax paid under the pre-GST regime) to the tune of ₹78.97 crore. The total profit arising out of the alleged infractions was calculated to be ₹534.89 crore.

However, the authority allowed the company’s claim of ₹68.77 crore, which the latter said was the value of benefit passed on to the consumers by way of higher grammage. It also allowed ₹3.80 crore for the supplies made to the armed forces. Adjusting for these amounts and the amount already paid, the company will have to deposit ₹383.25 crore with the Consumer Welfare Funds at Central and States levels.

HUL, on the other hand, maintained that in the absence of set rules and guidelines on profiteering, it has gone by the spirit of the law, and passed on the entire benefit received under GST to consumers — either through the reduction in prices or through an increase in grammage. In addition, HUL suo moto offered to pay to the Government the benefits which accrued to the company but could not be passed on to the consumers. This amount aggregating to ₹160 crore (including ₹36 crore on behalf of redistribution stockists), has since been deposited with the Consumer Welfare Fund.

The Global Risks Report 2019

The Global Risks Report 2019 is published against a backdrop of worrying geopolitical and geo-economic tensions. If unresolved, these tensions will hinder the world’s ability to deal with a growing range of collective challenges, from the mounting evidence of environmental degradation to the increasing disruptions of the Fourth Industrial Revolution.

Global Risks Report and its significance:

Based on the work of the Global Risk Network, the report describes changes occurring in the global risks landscape from year to year and identifies global catastrophic risks.

The report explores the interconnectedness of risks and is intended to raise awareness about the need for a multi-stakeholder approach to the mitigation of global risk

Top 10 risks by likelihood as per the latest report:

  • Extreme weather events.
  • Failure of climate change mitigation and adaption.
  • Major natural disasters.
  • A massive incident of data fraud/theft.
  • Large scale cyber attacks.
  • Man-made environmental damage and disasters.
  • Large-scale involuntary migration.
  • Major biodiversity loss and ecosystem collapse.
  • Water crises.
  • Asset bubbles in a major economy.

Analysis of the report and key takeaways:

Environmental risks dominate the global risks landscape in terms of impact and likelihood for the third year in a row. This includes extreme weather events and the failure of climate mitigation and adaptation. Only 12 years left to stay beneath 1.5C. However, there is a lack of political will to set more stretching targets to cut emissions. The report finds that business leaders are more concerned about the climate in the long term. This disconnect will need to be tackled.

Global risks are intensifying, but our capacity to respond to them is declining. Power is moving towards more nationalist, authoritarian states and they are becoming more inward-looking. With greater geopolitical friction, our ability to cooperate to solve challenges such as cyber risks and climate change has become more challenging.

Geopolitics and geo-economic factors, such as uncertainty and nationalism are fuelling risks. Innovation is also outpacing our ability to manage it and there are growing concerns around technology misuse.

Shorter-term fears are around geopolitical and cyber threats. For top business leaders, cyber risk concern is rising globally and is the highest ranked threat. Other concerns also exist including fiscal crises, unemployment, energy price shocks, national governance failure, interstate conflict, and natural disasters.

There is a significant financing gap (US$18 trillion) in infrastructure capital – with only US$79 trillion currently planned between now and 2040. This means 20% more financing is needed than we are putting in today. Furthermore, the infrastructure needs to be resilient to extreme weather events. Business, with its reliance on public sector infrastructure, will be impacted and need to work with the government on solutions.

UN chief hails ‘historic’ moment as Palestine takes over reins of G77

UN Secretary-General Antonio Guterres welcomed the “historic leadership” of Palestine which assumed the chairmanship of G77, the global body’s largest intergovernmental organization of developing countries including India.

Egypt was the previous Chair of the Group of 77 (G77), a coalition of 134 members, along with China which aligns itself with the bloc.

India’s Permanent Representative to the UN Ambassador Syed Akbaruddin Tuesday wished Palestine success, saying “India is privileged to stand up for the global South’s quest for greater equity and justice”.

The decision to elect Palestine as the 2019 Chair of the G77 was taken in September 2018 by the foreign ministers of the Groups’ member states.

A month later, the UN General Assembly approved a resolution that enabled Palestine – a non-member Observer State at the world body – additional privileges and rights, such as participating in international conferences held under its auspices, for the duration of its role as G77 Chair. “You are well-placed to take up the chairmanship of this important group of countries,” Guterres said.

As multilateralism continues to come under “intense pressure from many sides”, the UN chief underscored the importance of the G77 and China’s continued support. “The Group of 77 and China have demonstrated strong leadership throughout 2018 and proved once again to be a central force in demonstrating that multilateralism is the only way to address our shared challenges,” Guterres said.

G-77, established in 1964 by 77 developing countries in Geneva, claims to provide the means for the countries of the South to articulate and promote their collective economic interests and enhance their joint negotiating capacity on all major international economic issues within the UN system and promote South-South cooperation for development

UK Lawmakers Reject Brexit Deal, Theresa May To Face No Confidence Vote

Britain’s parliament on Tuesday resoundingly rejected Prime Minister Theresa May’s Brexit deal, triggering a no-confidence vote in her government and plunging its plans to leave the EU into further disarray.

MPs voted 432 to 202 against May’s plan for taking Britain out of the European Union, the biggest parliamentary defeat for a government in modern British political history.

The EU immediately warned that it heightened the risk of a “no deal” Brexit — an outcome that could disrupt trade, slow down the UK economy, and wreak havoc on the financial markets, where London is a global player.

The government of Ireland — the only EU member state with a land border with Britain — said it would now intensify preparations to cope with a “disorderly Brexit”.

Moments after the outcome in parliament, which was met with huge cheers by hundreds of anti-Brexit campaigners who watched the vote on big screens, opposition Labour leader Jeremy Corbyn submitted a motion of no-confidence in May’s government, calling her defeat “catastrophic”.

May sought to strike a conciliatory tone, telling MPs they had the right to challenge her leadership and promising to hold more talks to salvage a workable deal by the rapidly approaching March 29 Brexit deadline.

She promised to hold discussions with MPs from across parliament to identify ideas “that are genuinely negotiable and have sufficient support in this House”.

Most lawmakers opposed Brexit, as did May herself and leading members of her government, ahead of the June 2016 referendum on EU membership, which has caused bitter divisions across the island nation.

Now, nearly three years after the fateful referendum and with just over two months to go, Britain still cannot decide what to do.

With their nation’s fate hanging in the balance, noisy supporters and opponents of Brexit, some banging drums and others driving floats with huge dolls mocking top UK politicians, rallied outside the ancient parliament building in London.

The withdrawal agreement includes plans for a post-Brexit transition period until a new relationship is drawn up, in return for continued budget contributions from London.

What ASER says about quality of learning in India

The Annual Status of Education Report (ASER) 2018 published by education non-profit Pratham shows the prevalence of learning deficit and the poverty of basic reading and arithmetic skills among students in Indian schools. Mint analyses the highlights of the report.

What does the ASER 2018 report say?

The report shows that Indian students, especially those in elementary school (Classes I-VIII), are not learning enough. To cite one metric, only half (50.3%) of all students in Class V can read texts meant for Class II students. There seems to have been some improvement in learning levels, especially among students of Class III and Class V, in 2018 compared with those of the previous five years. However, the improvement is not visible at a higher level, for example among students of Class VIII. The latest report collected data from 596 districts by surveying 546,527 students from 354,944 homes.

Is this learning deficit prevalent only in government schools?

The deficit is across government and private schools. Traditionally, students in private schools have fared better than their government school counterparts, but that’s a relative situation. For example, while 40% of Class VIII students in government schools can do simple division, the figure is 54.2% in private schools. But this success rate is three percentage points below that of 2012 and the same as in 2014. “Private school students are believed to have a better family background, both in economic and education front. That’s a key differentiator,” said Pratham chief executive Rukmini Banerjee.

Why is learning level in schools important?

The quality of the learning level bears directly on India’s future workforce, its competitiveness and the economy. India’s demographic dividend depends on the learning level of students.

Are learning levels improving in government schools?

Yes; there is a gradual improvement in some segments and in some states. The reading ability among Class V students in Kerala jumped 10 percentage points in 2018 from that in 2016. In Himachal Pradesh, the growth is nearly 8 percentage points and in Chhattisgarh and Odisha, it is around 7 percentage points between 2016 and 2018. Still, data from states such as Jharkhand, West Bengal, Gujarat, Rajasthan, and Tamil Nadu shows a marginal dip in the same criterion for the same cohort.

Do private schools have more students?

The situation has been almost static in the last five years. While 30.9% of students in the 6-14 age group were in private schools in 2018, the figure was 30.6% in 2016 and 30.8% in 2014. This is less than a percentage point growth since 2014. In Rajasthan and Uttar Pradesh, there is a two percentage point drop in private school enrolment. In Gujarat, Bihar, Jammu, and Kashmir, it has risen by a similar margin. Private school dependence in Manipur (70.4%) and Haryana (55.3%) is much higher than the national average.

IIT-Hyderabad launches B.Tech in Artificial Intelligence

The Indian Institute of Technology (IIT), Hyderabad will launch a full-fledged B Tech program in Artificial Intelligence (AI) from the coming academic year (2019-2020). Admissions to the course will be accepted based on the JEE Advanced score. With this, the institute claims it has become the first Indian educational institution to offer a full-fledged B Tech programme in AI. IIT-Hyderabad is also the third institute globally after US-based Carnegie Mellon University and Massachusetts Institute of Technology (MIT).

The course will have an intake of around 20 students and the admission will be done on the basis of the JEE-Advanced score. Taught by the Department of AI, IIT-Hyderabad, the course syllabus will comprise of the study of algorithms from the computer science department, signal processing from the electrical engineering department, robotics from mechanical engineering department and mathematical foundations.

The course will also focus on application verticals such as healthcare, agriculture, smart mobility, among many others.

Further, the ethical impact of AI and its technologies on areas such as privacy, bias, and related issues will also be a key component of this B Tech program, according to the institute.

Students pursuing other degrees such as B.Tech. in chemical engineering or mechanical engineering can also pursue a minor in AI as well from the coming academic year onwards.

IIT Hyderabad’s Department of Liberal Arts in collaboration with faculty from Computer Science and Electrical Engineering has also launched a minor in ‘AI and Humanity.’

Volcano erupts on Japan’s Kuchinoerabu Island

A volcano has erupted on a remote island in southern Japan, spewing ash and smoke into the air over the sparsely-populated area but causing no damage or injuries.

About 80 residents initially took refuge at a shelter on the island but have since started to return home after an evacuation advisory was lifted.

The same peak erupted explosively in 2015, sending ash and smoke thousands of meters into the sky and releasing potentially deadly pyroclastic flows that reached the sea.

The island’s entire population was evacuated at the time but eventually returned. Some 100 people now live there.

Japan has 110 active volcanoes and monitors 47 constantly.