Current Affairs 11th Aug 2017

 

1.  CASSINI   TO   BEGIN   FINAL   FIVE   ORBITS

SOURCE – HINDU

RELEVANCE – GS PRELIMS

  • NASA’s Cassini spacecraft is set to begin its final five ultra-close orbits around Saturn, before the probe plunges into the atmosphere of the ringed planet and ends its 20-year-long journey.
  • The spacecraft will enter new territory in its final phase, making the first of the five passes over Saturn on August 13.
  • Cassini’s point of closest approach to Saturn during these passes will be between about 1,630 and 1,710 km above Saturn’s cloud tops.

CASSINI   SPACECRAFT

  • Cassini–Huygens is an unmanned spacecraft sent to the planet Saturn.
  • It is a Flagship-class NASA–ESA–ASI robotic spacecraft.
  • Cassini is the fourth space probe to visit Saturn and the first to enter orbit.
  • It has studied the planet and its many natural satellites since arriving there in 2004.
  •  Its design includes a Saturn orbiter (Cassini) and a lander (Huygens) for the moon Titan.
  • The spacecraft was launched on October 15, 1997, aboard a Titan IVB/Centaur and entered orbit around Saturn on July 1, 2004, after an interplanetary voyage that included flybys of Earth, Venus, and Jupiter.
  •  On December 25, 2004, Huygens separated from the orbiter, and it landed on Saturn’s moon Titan on January 14, 2005. This was the first landing ever accomplished in the outer Solar System.

 

2.  BY   2020   PETROLEUM   SUBSIDY   BILL   TO   HALVE

SOURCE – HINDU

RELEVANCE – GS MAINS – III. INCLUSIVE   GROWTH   AND   ISSUES   ARISING FROM   IT  

  • The government expects to more than halve its petroleum subsidy bill over the next three years, from Rs. 25,000 crore this year to just Rs. 10,000 crore by 2019-20.
  • While fertiliser subsidies are expected to stay flat, the food subsidy bill is estimated to shoot up sharply from Rs. 1.45 lakh crore this year to Rs. 2,00,000 crore by 2019-20, as per the medium-term expenditure framework tabled by the finance ministry in Parliament on Thursday.
  • Food, fertiliser and fuel subsidies for which the Centre has budgeted over Rs. 2.4 lakh crore are expected to rise to Rs. 2.8 lakh crore by 2019-20, but the government expects the overall proportion of subsidies to GDP to come down from 1.4% to 1.3% over the same period.
  • Following the abolition of price controls over diesel and petrol prices, the government has set its eye on rationalising kerosene and LPG subsidies, with a March 2018 target for eliminating the LPG cylinder subsidy altogether by raising prices by Rs. 4 each month.
  • One of the main reasons for an increase in food subsidy is to meet the repayment obligations of FCI (Food Corporation of India) to the National Small Savings Fund.

 

3.  SEVEN   HIDDEN   BENEFITS   OF   GST – ECONOMIC   SURVEY II

SOURCE – ECONOMIC  TIMES

RELEVANCE – GS MAINS – III. ISSUES   RELATING   TO   MOBILISATION   OF   RESOURCES

  • The second part of Economic Survey, which was tabled in Parliament on Friday has observed a rekindled optimism on structural reforms in the Indian economy.
  •  After narrating key benefits of GST such as furthering cooperative federalism, reducing corruption and leakage, simplifying complex tax structure and unifying tax rates across the country, and creating a common market, the survey goes on to list “hidden benefits” of GST.

1. Textile sector inclusion
The survey says that the textile and clothing sector is now fully part of the tax net, thanks to GST. “Previously, some parts of the value chain, especially fabrics, were outside the tax net, leading to informalisation and evasion. Some anomalies favoring imports of fabrics over domestic production will need to be rectified but overall the tax base has expanded,” it says.

2. Work contracts
Next hidden benefit of GST is the inclusion of an important part of real estate sector—“work contracts”, housing that is being built.
“This, in turn, would allow for greater transparency and formalization of cement, steel, and other sales, which tended to be outside the tax
net. The formalization will occur because builders will need documentation of these input purchases to claim tax credit,” the survey says.

3. Effective taxation of imports
Earlier, the countervailing duty to offset the excise tax and the special additional duty (SAD) to offset the state VAT was not adequate. “Under the GST, the full taxes on domestic sales levied by the Centre and the states (the IGST) will be levied when imported goods first arrive into the country with full tax credits available down the chain to a greater extent than previously,” says the survey. The new tax will remove the earlier inadequacies and will lead to more transparent and more effective taxation of imports.

4. Expanding tax base
The survey finds early signs of expansion of tax base, all due to GST. Between June and July 2017, 6.6 lakh new agents previously outside the tax net have sought GST registration. The survey says the number is expected to rise consistently as more people would find the benefits of GST. “Preliminary estimates point to potentially large increases in the tax base as a consequence,” it says.5. More data
GST will generate a lot of vital information on direct tax collections, says the survey. Earlier, as the excise was imposed at the manufacturing stage, the Centre had little data on small manufacturers and consumption. The states had little data on the activities of local firms outside their borders. “Under the GST, there will be seamless flow and availability of a common set of data to both the Centre and states, making direct tax collections more effective,” it says.6. Financial inclusion
Since businesses have to keep detailed records under GST, these can be beneficial for them in the long run. “Small businesses can build up a real-time track record of tax payments digitally, and this can be used by lending institutions for credit rating and lending purposes. Currently, small businesses are credit-constrained because they cannot credibly demonstrate their financial capability,” says the survey.

7. Smoother transport
The survey says GST has already made transport a lot smoother. The inter-state check-posts were removed within days of GST coming into force. “So far, 24 states have abolished these check-posts while others are in the process of eliminating them. If this trend continues, the reduction in transport costs, fuel use, and corruption could be significant,”it says. GST will also reduce logistics costs and boost inter-state trade.

 

4.  FARM   WAIVERS   MAY   CUT   GDP   BY   Rs 1 . 1  LAKH  CRORE

SOURCE –  ECONOMIC  TIMES

RELEVANCE –  GS MAINS – III. INCLUSIVE   GROWTH   AND   ISSUES   ARISING FROM   IT  

  • Increasing trends of states doling out farm loan waivers could reduce aggregate demand in the economy by as much as 0.7 per cent, shaving off Rs 1.1 lakh crore from GDP, the second volume of the Economic Survey tabled in Parliament on Friday warned.
  • This, it said, would impart a significant deflationary shock to an economy that has yet to gather its full momentum.
  •  According to the survey, it was assumed that other states could follow the UP model. “On this basis, an upper bound of loan waivers at the all-India level would be between Rs 2.2 lakh crore and Rs 2.7 lakh crore,” it said.
  •  According to the survey, the waivers will affect the aggregate demand in four ways: impact on private consumption via increases in private sector net wealth, impact on the public sector via changes in government expenditure or taxes, crowding out impact via higher borrowings by state governments and crowding in impact via higher credit availability as bank NPAs fall.
  • States with fiscal room for loan waiver will add about Rs 6,350 crore to demand, while those that don’t have the space will reduce demand by about Rs 1.9 lakh crore, the survey estimated.
  •  Analysing the crowding out impact, it said loan waiver will result in higher borrowing by states with fiscal space, which could squeeze out private funding.
  • However, bank balance sheets will improve inasmuch as non-performing farm loans are taken off their books.