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DAILY CURRENT EVENTS CIVILS360

September 25, 2017

UN must call upon India to halt provocations, says Pak.

  • If the international community wishes to “avoid a dangerous escalation between India and Pakistan,” it must call upon India to halt its “provocations and aggressive actions,” Pakistan told the United Nations General Assembly (UNGA) on Saturday, responding to Minister of External Affairs Sushma Swaraj’s scathing attack on Islamabad’s promotion of Islamist terrorism.
  • Pakistan’s Permanent Representative to the United Nations Maleeha Lodhi accused India of promoting terrorism against it, violation of human rights in Jammu and Kashmir and the spread of Hindu nationalism in India.
  • Exercising her right to response, Ms. Lodhi said Ms. Swaraj indulged in“an orgy of slander against Pakistan.”

Demand for separate religion tag for Lingayats gets a push

  • The demand for religion status for Lingayat gathered fresh momentum on Sunday with another large mobilisation of community members in Kalaburagi. It was the fourth rally in the last two-and-a-half months after Bidar, Belagavi and Latur (Maharashtra) pressing for the demand.
  • Lakhs of community members from different parts of Hyderabad Karnataka region as well as Maharashtra, Andhra Pradesh and Telangana thronged the city in thousands of vehicles and public transport systems.
  • Holding saffron flags and banners, wearing white Gandhi caps imprinted with social reformer Basaveshwara’s image, playing traditional drums, singing Vachana compositions of Basaveshwara and other Sharanas (reformers) of the 12th century and raising slogans, the community members marched from APMC Market Yard through the Supermarket and Jagat Circle to Nutan Vidyalay Grounds where a public meeting was held.
  • “Veerashaiva and Lingyayat are not one and the same. Vedas, Upanishats, Agama and other ancient Vedic literature form the basis for the Veerashaiva sect whereas Vachana literature composed by Basaveshwara and other social reformers of the 12th century is the basis for Lingayat religion. We are an independent religion and Vachana literature is our religious text,” Mr. Jamdar said.
  • Rashtriya Basava Sene, a united national organisation of Lingayats, was launched on the occasion. Mines and Geology Minister Vinay Kulkarni was declared its founding president.

Japan keen on friendship with northeast

  • “Kenko Sone, Minister, Economic Affairs, Embassy of Japan, speaking at the summit, said the northeastern region is located at a strategically and economically important juncture between India and Southeast Asia as well as within the Bimstec (Bay of Bengal) community. Therefore, Japan has placed a particular importance on the cooperation in the northeastern region,” said a press note by the Nagaland government on the summit.
  • The press release noted that for the northeast, Japan had undertaken works on road connectivity, energy projects, water supply and sanitation, forest resources management, Japanese language education and post-war reconciliation, which aimed to build a deeper understanding of the actions of Japanese forces in the region during the Second World War.
  • The summit also indicated Myanmar’s interest in the potential of the region. Speaking at the event, Myanmar’s Minister of Cultural Affairs Sai Kyaw Zaw urged people from Arunachal Pradesh, Nagaland, Mizoram and Manipur to forge closer ties with Myanmar as the country shared long borders with all four States.
  • Nagaland’s Chief Secretary Pankaj Kumar also urged improved connectivity with Myanmar for unlocking the regional trade potential. The summit included diplomatic participation from Bhutan, Russia, Bangladesh, Laos and Thailand.

Tech boost for soil quality scheme

  • The government’s massive scheme to analyse the soil quality of farms across the country may get a technology boost. The Department of Science and Technology (DST) is looking to link the programme with a research project at the Indian Institute of Technology Bombay that uses sophisticated imaging techniques and can picture the nutrient balance of a patch of land without necessarily collecting soil sample.
  • Hyper spectral imaging, as D. Ramakrishnan, Professor, IIT Bombay’s Earth Sciences Department explains, means analysing extremely detailed images of an object — frequently to the scale of nanometres — and then reconstructing its constituent elements. Using custom-developed algorithms, satellite-images, or those taken from low flying planes or drones, can be used to calculate the proportion of nitrogen, potassium and phosphorous — the three most vital nutrients — as well as other minerals in the soil and be used to gauge its health.

‘GST: MSMEs to gain via better competitiveness’

  • The Goods and Services Tax (GST) is all set to enhance the competitiveness of the almost five crore Micro, Small and Medium Enterprises (MSMEs) that account for 25% of employment, 40% of industrial output and 45% of exports of the country. This, by making them a part of organised commerce and offering them a level-playing field.
  • A simplified tax structure and a unified market are the two great promises of GST but the key benefits for MSMEs, a majority of whom are getting into the indirect tax net for the first time, include lower freight costs, which is estimated to come down by 1.5-2%. Significant benefits will be seen in lower cost of raw materials (in the past 2% CST was applied to raw materials imported from other states), and a lower tax burden. These benefits will have a more significant effect on boosting the cost competitiveness of MSMEs — a sector comprising tens of thousands of self-funded proprietary firms, private self-help groups, private cooperatives, khadi, village and coir industries.
  • The market base for MSMEs will grow as tax complexities of interstate sales disappear. Original equipment manufacturers and corporates will come forward to procure components, semi-finished and finished products from MSMEs irrespective of location. Since there is no burden of tax on interstate sales, MSMEs will also have no issues in accepting orders from other States. They can also compete with low-cost imports, as the tax is the same for both locally manufactured as well as imported products — especially those coming from overseas low-cost producers.
  • GST treats sales and services as one and the same. Hence, there is no additional tax burden for MSMEs that operate on the sales and services model of business.
  • MSMEs will also enjoy ease of doing business as there will be no complexities in registration. Centralised registration has now replaced multiple tax and registration rules in different states. There will be no, or minimal, physical interface of bureaucracy as registration, payments, input tax credit and tax liability adjustment, returns, and refunds will now happen electronically. This will bring transparency in compliance and will also reduce the compliance cost.
  • Thus, GST will allow flexibility in transfer of goods across states and reduce the cost of doing business for MSMEs.

‘Varying impact’

  • However, the impact of GST on MSMEs will not be the same for all segments — electrical equipment, for instance, is expected to benefit from lower freight costs and tax rates, while there may be no big positive impact for leather and footwear sectors that are facing stiff foreign competition.
  • On the other side, the cost of compliance is a big issue for MSMEs that do not have enough specialised manpower, managerial bandwidth, access to facilitation services. GST-registered organisations will have to file returns more often and regularly.
  • MSME staff are, mostly, not familiar with using computers and web portals. Hence, they may have to seek the help of intermediaries to use a technology-enabled platform like the GST.
  • In this context, it is important that there is handholding for MSMEs in transitioning them to this new tax regime. There is also a need to educate MSMEs about the various provisions and compliance requirements under GST for MSMEs through seminars, conferences, training sessions.
  • There is a view that availing input credit only for tax paid by the supplier shifts the onus on to the customer and this could affect the trust between supplier and customer, especially for one-time transactions. On the other hand, there will be a new situation where the customer and supplier relationship will be based on compliance.
  • That is, customers will prefer to do business only with suppliers who are compliant. MSMEs will have to get used to regularising the filings of their returns, as compliance will become a business imperative.
  • If the government can take corrective measures in a proactive manner, the GST system will prove to be a boon for industry in general, and MSMEs in particular.