Short Notes for Competitive Exams, November...
Transcript of Short Notes for Competitive Exams, November...
Short Notes for Competitive Exams, November 2016 2016
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CONTENTS
101. Legal status of demonetised notes
102. Direct impact of demonetisation
103. The Shanghai Cooperation Organization
104. Functions of Reserve Bank of India
105. Stubble recycling after harvesting of crops
106 MSS or market stabilisation scheme
107 Sixth Heart of Asia Conference
108. Is there a case for scrapping the Rajya Sabha?
109 What is black money?
110. Globalisation and rising demand to regulate it
111 Start of Midday meals
112 Consumption after demonetisation as in Dec.2016
113 Likely impact of GST on ecommerce
114 How does food credit mechanism work
115 Phishing and hacking
116 Aadhaar Enabled Payment System (AEPS)
117 Banking the rural sector
118 Managing the Que or waiting line
119 SEBI‟s proposed definition of „real estate‟ to include all
defined as „infrastructure‟ by Ministry of Finance
120 Simplifying exports
121 Cash to GDP ratios
122 Demonetization in India
123 Under reporting and misreporting of income
124. Biggest Land Monetisation Drive
125 2016 a growing trend against Globalisation
126 Value Capture Financing
127 The results of Presidential Elections of United States of
America ,2016
128 Estimated impact of Goods and Services Tax to be started latest
by September, 2017
129 Demonetisation of 8th November,2016
130 At a glance graphic of development indices of Uttar Pradesh
131 Estimated tax slot on various goods and services under GST
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101. Legal status of demonetised notes: When a currency ceases to be a
legal tender, it means is that the physical note stops being in circulation
for public usage. Issued notes are still valid, because they are promissory
notes issued by the Reserve Bank of India and guaranteed by the Central
government. Once they stop being legal tender, the precedent in India
(and also other common law countries) is that they continue to be
exchanged by the specified offices of the central bank.
As per the accounting policy, currency notes in circulation are
accounted in the Balance Sheet of the Reserve Bank of India as a
liability. The liability on account of the currency notes not returned till
the stipulated date will continue unless there is an ordinance / order from
the government to this effect. However, such an order can be
constitutionally challenged.
102. Direct impact of demonetisation announced on 8th November
2016: On November 8, 2016, Government demonetised large-
denomination notes of Rs. 500 and Rs. 1000. These constituted about
80 per cent of currency in circulation, resulting is a major cash crunch in
the country.
A limit of withdrawal from ATM was set at Rs 2000 per card. By
cheque one could withdraw Rs. 10,000 per day and Rs 20,000 per week .
This was later revised to Rs 24,000 per person per week from saving
account, and Rs. 50,000 per week from current account. There was no
limit on deposit of old currency notes in one‟s account. For exchange
of notes a limit of Rs. 4500 per person per day was set, which was
reduced to Rs 2000 per day, as it was being misused. Long queues at
bank branches and outside ATMs to withdraw cash, were seen causing
some unrest among customers. Further relaxation was allowed for Rs.
2.5 lakh for wedding, and Rs. 50,000 per week for whole sellers and
businesses. Of the `5 lakh crore that banks are estimated to have got in
deposits in less than two weeks, the State Bank of India group has
accounted for `1.5 lakh crore. Exchange of notes has already come down
from an average of `600 crore a day to `200 crore by the end of the
second week. It'll be impossible to hide large amounts of cash when it has been through the system the forced shift of retail and trade activities to cashless transactions. This shift is a one way street, for the same reason. It leaves a data trail. There already is, a massive shift from the black economy to white. This is a
revolution.
103. The Shanghai Cooperation Organization (SCO), also called the
Shanghai Pact, is a loose security and economic bloc led by Russia and
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China. Other members are Kazakhstan, Kyrgyzstan and Tajikistan. In
2016, Turkey said that it plans to join SCO as Turkey‟s membership of
European Union has not progressed for many years.
104. Functions of Reserve Bank of India: The preamble of the Reserve
Bank of India describes its basic functions as regulating the issue of
bank notes and keeping of reserves with a view to securing monetary
stability in India and generally to operate the currency and credit system
of the country to its advantage. In November 2016, the central bank's
role is seen to have got sidelined from the strategic and policy-oriented
dimensions to execution. This is because the Prime Minister announced
the decision on demonetisation of Rs 500 and 1000 currency notes, and
the Secretary, Economic Affairs, has been making all the remaining
announcements.
105. Stubble recycling : is a better alternative to its burning, that causes
air pollution. If the crop residue is retained, and the land is not tilled
after the harvest, it retains soil nutrients, does not cause air pollution,
and helps in restricting growth of weeds, insect and disease control can
be overcome with more effective distribution of pesticides and
herbicides.
106. MSS or market stabilisation scheme of Reserve Bank of India, that
had a ceiling of Rs 30,000 crore for issue of Bonds, has been permitted a
20 fold increase to neutralise excess liquidity from the banking system
that accumulated following the demonetisation of high value currency
notes. Bonds ceiling approved in December 2016 is Rs 6 lakh crore.
This will enable banks to earn some interest by investing the excess cash
in government bonds or Treasury Bills in the absence of a matching
credit demand. The interest on MSS bonds, which have fixed tenures,
will be borne by the government while the money will be impounded by
RBI. The government will issue fresh bonds to support the scheme.
107. 6th
Heart of India Conference was held in Amritsar, in December
2016. The 40 member meeting is on future of Afghanistan. There are 14
core member countries such as India, Pakistan, Turkey , China, Russia,
Iran, Saudi Arabia. In addition are 20 “supporting countries” including
United States, Britain, Canada, Australia, Japan, Norway and European
Union.
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108. Two reasons to do away with the Rajya Sabha include (a) the
frequent disruptions of the House, preventing it from transacting
business and the Rajya Sabha's (b) ability to frustrate the will of the
directly elected representatives in the Lok Sabha.
However, there also exist reasons to retain the Rajya Sabha (a) It
prevents hasty legislation by the Lok Sabha, by vetting the laws in a
more detached manner. The General Elections to the Lok Sabha could
be based on , national emotional surges, as seen in 1984 after Indira
Gandhi‟s assassination. (b) The composition of the Rajya Sabha
changes gradually as 1/3 seats are filled every two years by legislatures
in the States. This is part of the checks and balances framework
provided for the federal structure, by the Constitution. (c) A balance
needs to be maintained between the will of the people and the will of the
States.
109. What is Black Money? According to the white paper on Black
Money tabled in Parliament in May 2012, Black money is defined as
assets or resources that have neither been reported to the public
authorities at the time of their generation nor disclosed during its
possession. In the context of demonetization, black money is that
component of cash that has not been declared to authorities nor has any
tax been paid on it .
Money generated through illegitimate activities such as crime, drug
trade, terrorism and corruption is also termed as black money.
110. Globalization is a multidimensional process with economic,
political, cultural, and developmental dimensions. These dimensions
involve different interpretations.
a) Economic globalization involves increasing integration of
factors, goods, services and markets. This is involving
modifications of governance institutions.
b) Political globalization focuses on political organization and
activities and asks questions such as the extent to which
globalization has weakened or strengthened the state and its
capacities.
c) Globalization has presented an opportunity for growth and
development. Trade, Learning and Knowledge are assets for
economic growth. However, its pace needs to be slowed down
to dilute its impact on culture and society.
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d) The positive side of economic growth due to globalization is
that social equality of larger groups. Its negative side is
resources depletion, pollution, unemployment, disruption of
traditional social structures, new wave immigrants, large scale
criminality.
e) There is an increasing demand on state to solve the negative
impact of globalization while protecting the positive side. The
state is expected to evolve multiple of reforms for sustainable
development. Therefore pressure on government is to regulate
globalization. In 2016, this demand has expressed itself
through Brexit and Republican Party‟s victory in USA
Presidential Election of 2016.
111. Midday meals in India: a midday meal scheme was begun in some
municipal schools of Madras in 1920. A review of the experience of
midday meals in some municipal schools in 1955, persuaded then-chief
minister, K Kamaraj to adopt the scheme for the state in 1956. It
reached 87% of students by 1962. This was expanded by M G
Ramachandran to add extra nutrition.
112. After demonetisation, consumption as on 7th
December , 2016:
113. Likely impact of GST on ecommerce
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114. How does the food credit mechanism work?
Besides availing short term loans that are unsecured, FCI avails of a cash
credit limit (CCL), fixed by the RBI, that it borrows from banks through
a consortium led by the State Bank of India. These limits are fixed
against the value of food grain stocks held with the corporation. But
grain stocks, against which the credit is available, are often held by the
state-run agencies in food grains surplus states of Punjab and Haryana.
115. Phishing and hacking: Debit cards of about 3.2 million users of
a few prominent banks in India were compromised in October 2016.
Customers from 19 leading banks such as State Bank of India, ICICI
Bank, HDFC Bank and Axis Bank were reportedly affected. Numerous
cases of phishing, the practice of sending emails pretending to be from
reputable companies, to induce individuals to reveal personal
information such as passwords and credit card numbers online have been
reported.
116. Aadhaar Enabled Payment System (AEPS) AEPS is a bank led
model that varies from bank to bank. The 1.26 lakh bank mitras
services through a single bank as transactions of other banks through
their micro ATMs are often denied. Inter operability issues are being
worked through the National Payments Corporation of India (NPCI) and
the Unique Identification Authority of India (UIDAI). National
Common Mobility Card is being expedited. NPCI is already working to
roll out a contact less platform for travelling by any means of transport
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and enabling account based retail applications. Micro ATMs are to be
installed in about 1.55 lakh post offices, further strengthened with the
opening of Post Bank. While debit cards registered a growth of 64%
between October 2013 and October 2015, number of ATMs grew about
43% while point-of-sale machines increased nearly 28%.
117. Banking the rural sector: The National Payments Corporation of
India (NPCI) had developed the USSD technology (Unstructured
Supplementary Service Data) based service for feature phones through
which customers needed to dial *99# and enter short messages for basic
banking activities, such as balance enquiry and generating mini
statement. It enables a two-way connection between the consumer's
phone and the telecom service provider's computers. About 50 banks are
on this platform. The remitter must acquire a seven-digit Mobile Money
Identifier (MMID) and a Mobile Personal Identification Number (M-
PIN). The payee‟s details needed include his phone number and MMID,
his account number and IFS Code or just his Aadhar number
118. Managing the Que or Waiting Lines: In the 1985 paper, The
Psychology of Waiting Lines, former Harvard Business School
professor David Maister offered a few interesting clues, on behaviour of
people standing in queues, to facilitate better management of waiting
lines. The following is a list of Maister's propositions:
a) Occupied time feels shorter than unoccupied time People want to get
started Anxiety makes waits seem longer
b) Uncertain waits are longer than known, finite waits
c) Unfair waits are longer than equitable waits The more valuable the
service, the longer the customer will wait
d) Solo waits feel longer than group waits Often science discovers what
we all intuitively know. Our actions are based on this `knowledge'. In
that sense, Maister's research may appear to state the obvious. But the
point is, can we test these propositions in real life? Or do these
propositions cover all kinds of queue behaviours?
119. Proposed definition of real estate from SEBI : To amend the norms
and regulations of Real Estate Investment Trusts (REIT) , SEBI seeks to
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broaden the definition of `real estate' or `property' to include hotels,
hospitals, convention centres and all such rent-generating assets, notified
as infrastructure by the Ministry of Finance. The aim is to transparently
liberalise REIT holdings in Special Purpose Vehicles (SPVs) that are
multi-layered.
The current REIT regulations define a SPV as a company or firm
that holds not less than 80% of its assets directly in properties and does
not invest in other SPVs. SEBI‟s move is to limit REIT controlling
interest to not less than 50% in an SPV, so as to provide greater
operational flexibility . Besides, the Companies Act 2013 does allow a
company to invest through two layers of investment companies.
120. Simplifying Exports: The government plans to bring on a single
online platform about 200 agencies that issue certificates to exporters to
help them avail duty benefits at the destination or importing country.
The platform will ensure exporters are issued certificates in hours.
Depending on India's bilateral or multilateral trade agreement, there are
a host of organisations that issue certificate of origin to exporters. These
certificates establish that the goods are made locally, and are not third
country goods routed via India, to claim duty concessions from
importing countries. This is to rationalise transactions costs and boost
export by cutting down on delays. It is also expected to boost investment
in logistics and infrastructure to make India a global production hub.
121. India's cash to GDP ratio is estimated to be too high, at around
11%. But comparisons are made with countries at much higher levels of
development, with much smaller rural and unbanked populations. China
has a ratio of around 9.5%, Germany 8% and the US around 7.5%.
122. Demonetization in India: The High denomination notes banned in
1946 were reintroduced in 1954. In 1978, banknotes of Rs.1000, Rs.
5000 and Rs 10,000 were banned. New Rs. 500 notes were introduced in
1987 and Rs. 1,000 notes in 1998. In 1978 India's population was 667
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million; it is exactly double today. The Rs. 500 note has become the
denomination of choice for transactions. Between 2011 and 2016, the
number of Rs. 1,000 notes, and Rs 500 rose by 76% and 109%
respectively.
123. Under reporting and misreporting of income: In the Budget of
2016, Government had distinguished between „under reporting‟ of
income with a penalty of 50%, and a misreporting of income on which
200% tax was to be imposed. After demonetisation in November 2016,
if anyone deposits money in bank and pays normal tax (35%) on that for
the current year, it can only be treated as income from other sources.
“Income tax may not slap a penalty on those depositing cash in bank
account and claiming it to be current year's income as this is neither
underreporting nor misreporting.
124. Land Monetisation Drive: 74 loss-making public sector companies
identified by NITI Aayog . Some of the loss-making firms such as HMT,
NTC, Hindustan Photo films and ITI hold more than 100 acres of prime
land in metro cities. NBCC has written a letter to all loss-making firms
to share details of the land bank available with them. NBCC has been
appointed as the land management agency for disposing of real estate
assets of loss making firms and it will get 0.5% of the value realised
from disposal of such land as fee, subject to a cap of Rs. 1crore.
Government had come out with guidelines on closure of sick and loss
making state run enterprises and disposal of their assets, including land.
The land management agency will determine the current land use and its
suitability for industrial, manufacturing or some other purposes, the
guidelines said.
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125. A growing trend against Globalisation in 2016: Globalisation
began in 1990s, as a process through which diverse peoples of the world
create a world spanning framework of reference for the things that shape
their life. A new problem emerging from interdependence of the world
is an asymmetry between nationally determined governance decisions
that have an international impact. The people affected by such decisions
do not have a voice in these decisions shaping their lives.
Global interdependence deepens on a continuous basis and significant
being the following:
a) the ebb and flow of jihadi terror and the war against it,
b) the tectonic changes in geopolitics that alter the balance within
and between power blocs,
c) business disruptions funded by footloose venture capital,
d) climate change and agreements to combat it,
e) bird flu and fear of ebola,
f) smart phones dreamt up in a few countries, copied in others, and
craved and used around the world,
g) films that release simultaneously in every time zone,
h) Nobel prizes that set common standards for excellence,
i) Games such as Pokémons that Go in some countries and
frustratingly hold back in others
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j) with a million other shared commercial, scientific and cultural
links.
Globalisation is the process through which diverse peoples of the world
create a world spanning framework of reference for the things that shape
their life.
The Socialists countries do not like the term „globalisation‟. Their view
hails „internationalism‟ as being part of their exclusive political
philosophy, when the labour class would rule the world eventually after
having overthrown capitalism. Under Globalisation the socialists are
finding an opposite situation, when the capitalism process of cross
border flows of trade, capital, information, knowledge, technology,
cuisine, entertainment, business practices, accounting standards, legal
principles, culture and ideas are connecting the world.
Global integration has paved the way for the dominance of today's
rich world. Globalisation is helping China, India and much of Asia catch
up with the rich nations and empower billions to realise their innate
human potential, instead of struggling not to drown in the wretchedness
of poverty and malnutrition.
1. Two common trends in world history have been:
a) The first trend has been of migration to settle in different parts of
the world in groups that defend their territory and seek to annex new
territory, in an incessant struggle for domination of one group over
another and for control of resources. This resulted in kingdoms,
conquests and journeys of discovery, elimination of peoples, slavery
and empires.
b) The second trend has been the process of identifying the unifying
features of shared humanity that transcend divisions of tribe, locality,
nation, race and colour. This second tendency has resulted in
underdeveloped colonized nations, manifesting in works of
philosophy and fiction, theology and pop music, in shared universal
rights and obligations, revealed commitment to mutual help,
advancement of knowledge and pursuit of ( based on article in ET of 02.11.2016)
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126. Value Capture Financing: is a new model for financing of
infrastructure projects, in which Government recovers some value that
public investments generate for private landowners. It is based on the
principle that government develops public infrastructure leading to rapid
economic development of private companies and private land owners.
Therefore, through additional taxes imposed on such entities, the
government should be able to get additional finances to future projects
in the same area. The target agencies that could adopt value capture
financing include state governments, central ministries of urban
development, railways, road transport, department of industrial policy
and promotion, power and shipping. India has drafted its first National
Value Capture Policy Framework in 2016. Though state governments
have been using VCF tools, there was no policy till 2016.
127. The result of Presidential Election in USA, 2016
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128. Estimated impact of Goods and Services Tax to be started latest by
September, 2016
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129. Demonetisation on 8th
November 2016
130. At a glance graphic of development indices of Uttar Pradesh
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131. Estimated tax slot on various goods and services under GST ( Yet
to be finalised as on 15th
December, 2016