Current Affairs for SSC CGL Exams - 22 January 2018

SSC CGL Current Affairs

Current Affairs for SSC CGL Exams - 22 January 2018


President accepted disqualification of AAP MLA’s

  • President Ram Nath Kovind accepted the recommendation of the Election Commission to disqualify 20 MLAs of the Aam Aadmi Party (AAP), the ruling party in the national capital, for holding offices of profit.
  • A notification issued by the Law Ministry quoted the President as saying, “In the light of the opinion expressed by the Election Commission (EC), the 20 members of the Delhi legislative assembly have been disqualified.”
  • The AAP MLAs were appointed as Parliamentary Secretaries and a petitioner, in a complaint to the EC and the President in 2015, said being a parliamentary secretary was holding an office of profit and this invited disqualification. After the President’s decision, the AAP said it would use all legal options available.
  • AAP Delhi convener Gopal Rai said the 20 MLAs had requested for a meeting with the President to discuss the issue before his decision was announced. However, they could not get an appointment as the President was “not available.”
  • A Parliamentary Secretary assists a Minister, and the office usually comes with perks as well as a measure of political influence.
  • However, in a notification confirming the appointment of the 20 MLAs, the government had said no remuneration or perks would be given to the Parliamentary Secretaries.
  • The 20 MLAs who are facing disqualification include Transport Minister Kailash Gehlot, who is the MLA from Najafgarh.
  • “It is unfortunate that the President took the decision in such haste, without even giving us a chance to speak. It is a ploy by the Centre, using constitutional institutions to derail our government. But we will not give up. We have faith in the judiciary. The doors of the High Court and the Supreme Court are still open for us,” said Alka Lamba, representing Chandni Chowk and one of the 20 disqualified MLAs.
  • AAP spokesperson Saurabh Bharadwaj also questioned the speed at which the recommendation had been accepted by the President.

EC gives its rulling based upon SC judgements

  • Even as the AAP has criticised the Election Commission for not giving its MLAs a proper hearing, the panel has cited several rulings of the Supreme Court in its recommendation to the President that the 20 legislators be disqualified for holding office of profit.
  • The recommendation said the Supreme Court in Maulana Abdul Shakur vs RikhabChand (1958) had defined the concept of office of profit under the government.
  • The court said the government’s power to appoint a person to an office, or to keep him in that office, or revoke his appointment at its discretion, and payment from government revenues were important factors in determining if one held an office of profit. Payment from a source other than government revenue was not the decisive factor.
  • In Pradyut Bordoloi vs Swapan Roy (2001), the Supreme Court outlined the following questions for the test: whether the government makes the appointment; whether the government has the right to remove or dismiss the holder; whether the government pays the remuneration; what are the functions of the holder; does he perform them for the government; and does the government exercise any control over the performance of those functions?
  • Three other rulings were cited to highlight the grounds on which a distinction between the holder of an office of profit and of a post/service under the government could be made.
  • In Guru Gobinda Basu vs Sankari Prasad Ghosal (1964), the court said: “But all these factors need not coexist. Mere absence of one of the factors may not negate the overall test.
  • The decisive test for determining whether a person holds any office of profit under the government, the Constitution Bench holds, is the test of appointment; stress on other tests will depend on the facts of each case.”
  • The court said the final query was, whether, on account of holding of such office, would the government be in a position to influence him so as to interfere with his independence in functioning as an MLA and/or would his holding of the two offices involve a conflict of interest.
  • Citing the judgments, the EC said the AAP MLAs were appointed Parliamentary Secretaries by the Delhi government, which exercised control over them. The government had the power to remove them, their work was allocated by Ministers concerned as delegated authority and expenses of their office were paid from government revenues.
  • The Commission concluded that there could be “no dispute that the office of Parliamentary Secretary was an office under the government.”

CJI might put the system for allocations of PILs in public domain

  • Chief Justice of India Dipak Misra has examined suggestions from stakeholders to bring transparency in allocation of sensitive PILs to judges and is likely to bring in the public domain soon the system he is going to adopt for it, sources close to him said on Sunday.
  • They said the listing of two petitions seeking an independent probe into the death of CBI special judge B.H. Loya before a Bench headed by the CJI manifests that all issues, including allocation of cases, raised by the four seniormost judges on January 12, are being considered.
  • The Loya case petitions will come up for hearing. Justice Misra held deliberations with fellow judges and also took into account the suggestions put forth by the Supreme Court Bar Association, and a clear-cut roster system is likely to be followed in the Supreme Court for the allocation of cases.
  • “The court registry is very likely to upload on its website the decision of the CJI on allocation of matters. The system will be brought in the public domain as to who will hear what categories of cases,” a highly placed source said

Om prakah rawat to be next CEC

  • The Union Law Ministry on Sunday appointed seniormost Election Commissioner Om Prakash Rawat as the next Chief Election Commissioner (CEC) as the incumbent A.K. Joti will retire on Monday.
  • Former Finance Secretary Ashok Lavasa was appointed as Election Commissioner to fill the vacancy created by Mr. Rawat’s elevation.
  • Mr. Rawat, who will take charge on Tuesday, will have a tenure of almost a year till his retirement in December 2018. He will oversee elections in Tripura, Meghalaya and Nagaland scheduled next month.
  • Crucial States like Karnataka, Madhya Pradesh, Rajasthan and Chhattisgarh will also go to the polls under his watch.
  • Sunil Arora, presently the second seniormost Election Commissioner, will continue until April 2021.
  • As per convention, Mr. Arora will be the CEC during the 2019 Lok Sabha elections.Mr. Lavasa, due to demit office in October 2022, will be the Chief Election Commissioner after Mr. Arora.
  • Election Commissioners have a fixed term of six years but have to step down if they reach 65 years of age before their term expires.
  • A Madhya Pradesh cadre IAS officer, Mr. Rawat has served as secretary, Department of Public Enterprises in the Ministry of Heavy Industries.
  • Mr. Rawat had also served as principal secretary to Babu Lal Gaur, the former Chief Minister of Madhya Pradesh, between 2004 and 2006.
  • Mr. Rawat has a post graduate degree in Social Development Planning from the United Kingdom, completed in 1989, and has been a recipient of the Madhya Pradesh Award for recognition of forest rights in 2009.
  • Mr. Lavasa, before retiring as the finance secretary, served in the Ministries of Environment and Forests, Civil Aviation, Power, Home and Finance at the Centre and in the department of industries, tourism and public relations in his home cadre of Haryana.

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US blames opposition for the stop of funding

  • U.S. President Donald Trump on Sunday launched a fresh attack on his opponents ahead of a new effort in the bitterly divided U.S. Congress to end a government shutdown.
  • “Great to see how hard Republicans are fighting for our Military and Safety at the Border. The Dems just want illegal immigrants to pour into our nation unchecked,” Mr. Trump wrote on Twitter.
  • He also encouraged the Senate’s Republican leaders to invoke a procedural maneuver known as the “nuclear option” to change the chamber’s rules to allow passage of a budget by a simple majority of 51 votes to end the shutdown.
  • Senate leaders have been wary of such a move in the past, as it could come back to haunt them the next time the other party holds a majority.
  • “If stalemate continues, Republicans should go to 51% (Nuclear Option) and vote on real, long term budget, no C.R.’s!” he tweeted. Late on Saturday, top Senate Republican Mitch McConnell set a key vote for a funding measure for 1 a.m. on Monday, with both houses of Congress set to reconvene.
  • At the heart of the dispute is the thorny issue of undocumented immigration.
  • Democrats have accused Republicans of poisoning chances of a deal and pandering to Mr. Trump’s populist base by refusing to fund the programme that protects an estimated 700,000 “Dreamers” — undocumented immigrants who arrived as children — from deportation.
  • Vital Abu Duhur military airport captured back by the Syrian forces
  • Syria's Army announced it had captured the vital Abu Duhur military airport in the country's northwest, more than two years after losing it to rebels and jihadists.
  • "After a string of special operations, units from our armed forces in coordination with allied fighters succeeded in their military operation and took control of the Abu Duhur military airport in Idlib province," the Army said in a statement.
  • "Engineering units are now dismantling and clearing mines, explosives, and bombs planted by terrorists in the area," he said.
  • An alliance of jihadists and rebels overran the vast majority of Idlib province in 2015, seizing Abu Duhur in September of that year.
  • Syrian troops had been advancing on the northwest province of Idlib, and Abu Duhur in particular, as part of a fierce offensive launched in late December with Russian backing. Moscow on Sunday confirmed that allied troops were now in control of Abu Duhur.

Business and Economy

GST leads to budget making problems

  • As a watershed tax reform, Goods and Services Tax (GST) promised to have a profound impact on India’s budget-making exercise.
  • The debut year has proved something of a disappointment. But as teething troubles with the new tax regime are addressed, there are three key areas where its reformative impact on the budget process may be felt.
  • One reason why Indian Finance Ministers (FMs) have such a tough time balancing their budgets is the our narrow tax base. While a crackdown is on to identify evaders, the GST was expected to expand the indirect tax base and plug leaks in the indirect tax compliance structure.
  • The GST was expected to deliver an expansion in the indirect tax base, sweeping more small and mid-sized businesses under its ambit, compared with the excise duty regime. It mandates registration for all entities with an annual turnover of Rs. 20 lakh or above.
  • To ensure better compliance, GST has a self-policing mechanism by way of invoice matching of supplies by every registered assessee, a reverse charge mechanism for unregistered suppliers and e-way bills to check under-invoicing.
  • So has GST managed to net new taxpayers? It started off well by reporting 72 lakh registrations at the outset, which has steadily climbed to 99 lakh by December 2017.
  • While the bulk of these numbers came from the automatic migration of erstwhile state VAT, excise and service tax assessees to the GST network, government estimates suggested that about 18 lakh new assessees had registered afresh.
  • The GST tax base of 99 lakh is prima facie a good number, given that the combined taxpayer base under all the taxes that GST subsumed (excise, service tax, VAT, sales et al) was estimated at 75-80 lakh.
  • Some official estimates have placed the revenue foregone due to these rate cuts at Rs. 20,000 crore a year.
  • The other reason for moderating collections though, is lacklustre compliance. Even as registrations have been growing significantly, the number of GST return filers has dwindled from about 59 lakh in July to 53 lakh for November.
  • Excluding taxpayers under the composition scheme who are supposed to file their returns only on a quarterly basis, this suggests that less than two-thirds of registered 99 lakh entities, are filing their returns and paying the tax due.
  • With filers dwindling and rates declining, GST collections have predictably headed south. With the monthly run rate on collections for the first five months of FY18 at about Rs. 88,000 crore, doubts are now emerging as to whether GST will even match the taxes it has subsumed this year.
  • While there are no official targets for this year, analyst estimates suggest GST will have to mop up anywhere from Rs. 10 lakh crore to Rs. 12 lakh crore for FY18, for the fisc to remain revenue neutral.
  • While the Central budget at least used estimates, State budgets were a complete black box. By unifying central and State levies, GST is expected to render budget revenue forecasts more reliable. The monthly return filings are designed to give the FM a real-time handle on collections, with rich data to assess compliance.
  • But while GST can help the FM arrive at better forecasts in the long run, transitional issues in GST have made this year’s budget exercise more challenging.
  • The 2017 Budget had to skip GST targets as the law was still in the making, and presented numbers for excise and service taxes alone. The Budget may now have to sum up excise/service tax mop-ups until June, patching on GST collections from July to measure the annual mop-up.
  • In India, one aspect of the annual budget spectacle is industry groups lobbying for indirect tax cuts. The FM, after considering conflicting demands, doled out cuts or effected increases, with the stock markets eagerly hanging on to his every word.
  • But with excise duty and service tax now under GST and the decision-making powers on rates vesting with the Council, the FM may have limited room for such giveaways.
  • Budget speeches from now on may have to dwell more on direct taxes and basic customs duty changes. And yes, products still outside the GST ambit (alcohol, fuel and energy, land) offer scope for rate changes.
  • But then, this may be a good development from a policy perspective. Without all the trimming and tucking on rates, the Budget exercise can now focus on aspects of government finance that really matter — measuring the outcomes of allocations made in previous budgets, changing the skewed capital-revenue mix of the fisc, reforming the draconian tax administration and attacking the bloat in unproductive revenue expenditure.

World Inequality Report 2018

  • The Union Budget will be presented soon. The twin disruptions of demonetisation and GST have left the poor in India poorer and the rich, richer. This is no empty rhetoric of a roadside romantic. These are the findings of the World Inequality Report 2018 released recently.
  • The top 1% income earners received 6% of the total income in the early 1980s; it went up to 15% in 2000 and today stands at 22%. IMF research papers give country-wise figures of the share of the billionaires in the GDP of each country.
  • The worth of dollar billionaires is most skewed in Russia, the U.S. and India which are home to a substantial number of billionaires.
  • World Inequality Report points out that inequality actually declined in China in the past decade and growth was faster compared to India. China’s per capita income was five times that of India in 2016.
  • Data from India’s Income Tax department showed that 59,830 individuals reported gross total income more than Rs. 1 crore. Over 30,500 individuals reported earning salary income of over Rs. 1 crore.
  • Five individuals reported earning salary income between Rs. 100 crores and Rs. 500 crore. Thirty two persons showed gross total income over Rs. 100 crore. Only one individual showed the income over Rs. 500 crore.
  • The 10% tax on dividends above Rs. 10 lakh is a mirage; it should have been at least 25% with exemption for dividends up to Rs. 10,000.
  • Additional resource mobilisation is concentrated on indirect taxes with a slew of relief measures in direct taxes, benefiting only the rich.
  • The stock market boom calls for revisiting the present policy of exempting long term capital gains on shares held for 12 months and more. India’s market to GDP ratio stands at 104%.Inheritance tax, abolished in 1987, should be reintroduced.
  • Every time the question of taxing the super-rich is raised, the affluent lobby comes out with the criticism that growth will be affected adversely and there can be a flight of capital to lower tax jurisdictions. Think of the poorer sections.
  • The International Food Policy Research Institute has come out with a Global Hunger Index. India is Ranked 100 among 119 countries behind North Korea, Bangladesh and Iraq this year. It was ranked 97 last year. The remedy lies in introducing Universal Basic Income as done in rural Kenya.
  • In contrast, there has been steady growth in the numbers belonging to the million-dollar salary club from 94 in 2013-14 to 100 in 2014-15 and 119 in 2015-16. It now stands at 120.
  • The total compensation its members earn has risen from Rs. 1,528 crore in 2015 to Rs. 1,979 crore in 2017. Average compensation is about Rs. 17 crore. Among 190 CEOs in the club, 61 are professional CEOs and 59 are promoters.
  • Promoter CEOs gained from equity appreciation and commissions. The Ambanis, the Birlas and the Marans figure at the top of this club.

Credit scores to get the credit worthiness of a person

  • A credit score determines how creditworthy a person is and helps banks and financial institutions decide on loans. A person with a high credit score enjoys access to credit facilities without hassles.
  • In India, the scores are issued by credit reporting agencies such as CIBIL, Equifax, Experian and the like. These agencies are regulated by the RBI and collect data from banks on their loans and come up with credit scores through use of algorithms. The data is updated frequently. Credit scores in India range from 300-900.
  • A credit report may be obtained for free once a year from every credit reporting agency. However, what is free is a matter of debate. More frequent reports cost Rs. 300-Rs. 400 apiece.
  • Arun Ramamurthy, founder, Credit Sudhaar, a credit advisory, points out that data in the credit bureau is critical to lending and pricing decisions made by banks and errors in them affect credit scores. The errors include:
  • Reporting error: sometimes, banks report wrong client data to the bureau which can, in turn, lead to errors in the credit report.
  • Algorithmic error: the bureau uses a matching algorithm to generate a credit report based on multiple data sets (pertaining to each bank) submitted by banks. Often, due to the lack of unique identifiers, the matching logic can go wrong which can lead to errors
  • Identity theft error: this happens when someone impersonates another person (who has a good credit record) to take a loan and then defaults on the loan.
  • Mr. Ramamurthy suggests customers monitor credit reports at least once in two months and protect them from identity fraud by using good firewall protection on their devices.
  • If an error is spotted, a customer should write to the bureau concerned for a resolution on the link provided on the respective bureau website.