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Insights Daily Current Events, 29 January 2015

Insights Daily Current Events, 29 January 2015

MoU between India and Oman

The Union Cabinet, chaired by the Prime Minister, has given its approval to enter into a Memorandum of Understanding (MoU) for strengthening cooperation in the field of tourism, between the Ministry of Tourism, Government of India and the Ministry of Tourism, Government of the Sultanate of Oman


  • To expand bilateral cooperation in the tourism sector.
  • To exchange information and data related to tourism.
  • To encourage cooperation between tourism stakeholders including hotels and tour operators.
  • To establish exchange programme for cooperation in Human Resource Development.
  • To invest in the tourism and hospitality sectors,
  • To exchange visits of tour operators / media /opinion makers for promotion of two way tourism.
  • To exchange experiences in the areas of promotion, marketing, destination development and management.
  • To participate in travel fairs /exhibitions in each other`s country and,
  • to promote safe, honourable and sustainable tourism.


India and Oman:

  • India and Oman have enjoyed a strong historical and long economic and political relationship. The Sultanate of Oman is a strategic partner for India in the Gulf region and an important interlocutor in the bilateral, Arab Gulf Cooperation Council, the Arab League and the Indian Ocean Rim Association contexts.
  • In recent years Oman has emerged as an important tourism source market for India in the West Asian region. During 2013, India received 62,252 visitors from Oman. Similarly India has emerged as one of the important source market for Oman in the field of tourism. Considering the mutual benefits, both India and Oman would like to create an institutional mechanism for enhancing cooperation in this sector.
  • The signing of the MoU will further strengthen and further develop the established relationship between the Ministry of Tourism, Government of the Republic of India and the Ministry of Tourism, Government of Oman for strengthening cooperation in the field of tourism on reciprocal basis.

Sources: PIB, MHA.


Beating Retreat Ceremony

Beating Retreat ceremony will be held on 29th January.

What is it?

The Beating Retreat ceremony officially denotes the end of Republic Day festivities. It is conducted on the evening of 29 January, the third day after the Republic Day. It is performed by the bands of the three wings of the military, the Indian Army, Indian Navy and Indian Air Force.

  • ‘Beating the Retreat’ has emerged as an event of national pride when the Colours and Standards are paraded.
  • The ceremony traces its origins to the early 1950s when Major Roberts of the Indian Army indigenously developed the unique ceremony of display by the massed bands.
  • ‘Beating Retreat’ marks a centuries old military tradition, when the troops ceased fighting, sheathed their arms and withdrew from the battlefield and returned to the camps at sunset at the sounding of the Retreat.
  • Colours and Standards are cased and flags lowered. The ceremony creates nostalgia for the times gone by.


Sources: PIB, Wiki.


Now, German help for smart cities

After United States Trade and Development Agency (USTDA) took the lead, now the German government has agreed to support the development of three smart cities.
USTDA recently signed agreements to provide technical and financial assistance to develop Allahabad, Ajmer and Vishakhapatnam as smart cities.

  • A six-member joint committee will be set up in three months to identify the cities and draw up a plan. The committee will have two representatives of the Urban Development Ministry, one from the Housing and Urban Poverty Alleviation Ministry and three from the Government of Germany.

What are Smart Cities?

A ‘smart city’ is an urban region that is highly advanced in terms of overall infrastructure, sustainable real estate, communications and market viability. It is a city where information technology is the principal infrastructure and the basis for providing essential services to residents.

  • There are many technological platforms involved, including but not limited to automated sensor networks and data centres.
  • In a smart city, economic development and activity is sustainable and rationally incremental by virtue of being based on success-oriented market drivers such as supply and demand. They benefit everybody, including citizens, businesses, the government and the environment.


The concept of smart cities originated at the time when the entire world was facing one of the worst economic crises. In 2008, IBM began work on a ‘smarter cities’ concept as part of its Smarter Planet initiative. By the beginning of 2009, the concept had captivated the imagination of various nations across the globe.

  • Countries like South Korea, UAE and China began to invest heavily into their research and formation.

Are they necessary?

  • Across the world, the stride of migration from rural to urban areas is increasing. By 2050, about 70 per cent of the population will be living in cities.
  • The idea will work as millions of poor are migrating to cities for job opportunities and better standard of living. Existing cities are unable to bear any extra load of migrants.
  • Urbanisation in India has for the longest time been viewed as a by-product of failed regional planning. Though it is inevitable, and will only change when the benefits of urbanisation overtake the costs involved, it is an opportunity for achieving faster growth.
  • With increasing urbanisation and the load on rural land, the government has now realised the need for cities that can cope with the challenges of urban living and also be magnets for investment.


The concept is not without challenges, especially in India. Some of the Major challenges are:

  • The success of such a city depends on residents, entrepreneurs and visitors becoming actively involved in energy saving and implementation of new technologies.
  • There are many ways to make residential, commercial and public spaces sustainable by ways of technology, but a high percentage of the total energy use is still in the hands of end users and their behaviour.
  • There is the time factor — such cities can potentially take anything between 20 and 30 years to build.
  • Land acquisition will also obviously be the biggest hurdle while setting up smart cities.


  • Smart cities can be developed over a minimum area of 500 acres and will require at least Rs 6,000 crore of investment for basic and back-end infrastructure. Experts say it can generate employment for at least 200,000 people per city.
  • 10 such new cities can bring in about Rs 9 lakh crore investment (including investments by users) and usher in unprecedented economic growth.
  • The smart cities will result in new orders for city planning, engineering, designing, and construction companies.
  • The project will also generate huge interest among the global players who might want to partner such projects. One sector where results can be made visible almost instantly is urban development, where both public and private sectors can identify 500-5000 acres at a single location and kickstart the development process.


Sources: The Hindu, PIB, BS.


Govt won’t appeal in Vodafone case

The government has said that it will not appeal against the Bombay High Court’s ruling.
Bombay High Court had said that Vodafone was not liable to pay a tax demand of Rs. 3,200 crore in a transfer pricing case.
The Cabinet also decided not to appeal against similar verdicts in other cases against taxpayers.

Why this move?

  • This is aimed at improving the investment climate in the country.
  • It sends out the message to global investors whose confidence in India was shaken in the past.
  • This will bring greater clarity and predictability for tax payers as well as tax authorities.
  • It facilitates tax compliance and reduces litigation on similar issues.
  • The Cabinet move may remove uncertainty for foreign investors who have adopted a wait and watch policy before infusing further equity into Indian operations.


  • I-T department and Vodafone’s Indian subsidiary have been entangled in a tax dispute since 2010 when the Indian tax authorities demanded the telecom major to pay additional income tax alleging that it had undervalued its shares while transferring them to the parent company in the UK.
  • The tax authority had issued a show cause notice to Vodafone India on January 17, 2014, and later passed an order asking it to pay additional Rs 3,200 crore tax for allegedly undervaluing the shares of its Pune BPO.
  • On January 27, Vodafone moved the High Court challenging the I-T order and contended that its transaction on transfer of shares was not taxable under the Indian tax laws.
  • The Bombay High Court in its ruling had said that “the tax can be charged only on income and in the absence of any income arising, the issue of applying the measure of Arm’s Length Pricing to transactional value/consideration itself does not arise.”

Transfer pricing is the practice of setting prices (for goods and services sold) in transactions between group companies based in different countries, on an arm’s length (fair value) basis.

A transaction is generally described as being on an arm’s length basis when a buyer and a seller act independently and have no relationship with each other. The concept is used to ensure both parties in the deal are acting in their own interest and are not subject to any pressure from the other party.

Sources: The Hindu, BS, Wiki, PIB.


90% mandatory jute packaging for grain, 20% for sugar

The Cabinet Committee on Economic Affairs has approved the mandatory packaging of 90% of foodgrains produced in India as well as 20% of sugar in jute bags for the 2014-15 crop season, which started in July 2014.

  • This preserves the position as in the past and helps the jute sector.
  • Almost all the foodgrains procured by state-run Food Corporation of India is packaged in jute bags.
  • West Bengal produces 80 per cent of India’s total annual jute production of 11-12 million bales (one bale is 180 kg) and is home to almost all the country’s jute mills.

More details:

  • The Cabinet has also said that if the jute mills were not able to provide bags according to the requirement despite making a full advance indent, then a relaxation of 10 per cent can be granted by the Department of Food in consultation with the textiles ministry.
    This relaxation can be further extended up to 30 per cent in the event of any disruption in supply from jute mills.
  • Sugar meant for export and bulk packaging in excess of 100 kg have also been exempted from this order.
  • The CCEA okayed a financial support of Rs 55 crore for the Jute Corporation of India (JCI) in order to offset the losses it suffered on account of undertaking minimum support price (MSP) operations.

Jute Corporation of India is the price-support agency of the Centre for jute to protect the interest of growers. It procures raw jute under the MSP fixed from time to time; it also stabilises the raw jute market for the benefit of jute farmers and the jute economy as a whole.

Sources: The Hindu, PIB, BS.


SC cracks down on search engines

The Supreme Court has directed search engines like Google India to strictly comply with the laws and block advertisements on sex determination.

  • In an interim order, a Supreme Court bench has ordered the three search engines – Google, Yahoo and Microsoft — to “forthwith” withdraw online advertisements, currently being hosted or published, on pre-natal sex determination facilities, clinics or centres in violation of Section 22 of the Pre-Conception and Pre-Natal Diagnostic Techniques (Prohibition of Sex Selection) or PC-PNDT Act, 1994.
  • The hearing was based on a PIL filed in 2008 highlighting the use of Internet and popular search engines to promote sex determination technologies in violation of the 1994 Act.
  • Some argue that such blocking on search engine would amount to a gag on free speech and expression on the Internet.


The Pre-conception & Pre-natal Diagnostics Techniques (PC & PNDT) Act, 1994 was enacted in response to the decline in Sex ratio in India, which deteriorated from 972 in 1901 to 927 in 1991.

  • The main purpose of enacting the act is to ban the use of sex selection techniques before or after conception and prevent the misuse of prenatal diagnostic technique for sex selective abortion.
  • Female infanticide had been prohibited through legislation in pre-independence period and certain provisions were included in the Indian Penal code, 1860 for punishing causing miscarriages and other such offences.
  • But with the advent of diagnostic technology to detect the sex of the foetus very early on in pregnancy, a need was felt for a specific law to prevent the misuse of technology which could lead to female foeticide.
  • Offences under this act include conducting or helping in the conduct of prenatal diagnostic technique in the unregistered units, sex selection on a man or woman, conducting PND test for any purpose other than the one mentioned in the act, sale, distribution, supply, renting etc. of any ultra sound machine or any other equipment capable of detecting sex of the foetus.


Main provisions in the act are:

  • The Act provides for the prohibition of sex selection, before or after conception.
  • It regulates the use of pre-natal diagnostic techniques, like ultrasound and amniocentesis by allowing them their use only to detect :
  1. genetic abnormalities
  2. metabolic disorders
  3. chromosomal abnormalities
  4. certain congenital malformations
  5. haemoglobinopathies
  6. Sex linked disorders.
  • No laboratory or centre or clinic will conduct any test including ultrasonography for the purpose of determining the sex of the foetus.
  • No person, including the one who is conducting the procedure as per the law, will communicate the sex of the foetus to the pregnant woman or her relatives by words, signs or any other method.
  • Any person who puts an advertisement for pre-natal and pre-conception sex determination facilities in the form of a notice, circular, label, wrapper or any document, or advertises through interior or other media in electronic or print form or engages in any visible representation made by means of hoarding, wall painting, signal, light, sound, smoke or gas, can be imprisoned for up to three years and fined Rs. 10,000.
  • The Act mandates compulsory registration of all diagnostic laboratories, all genetic counselling centres, genetic laboratories, genetic clinics and ultrasound clinics.

Pre-Natal Diagnostic Techniques (Regulation and Prevention of Misuse) Act, 1994 (PNDT), was amended in 2003 to The Pre-Conception and Pre-Natal Diagnostic Techniques (Prohibition Of Sex Selection) Act (PCPNDT Act) to improve the regulation of the technology used in sex selection. The Act was amended to bring the technique of pre conception sex selection and ultrasound technique within the ambit of the act. The amendment also empowered the central supervisory board and state level supervisory board was constituted.

In 1988, the State of Maharashtra became the first in the country to ban pre-natal sex determination through enacting the Maharashtra Regulation of Pre-natal Diagnostic Techniques Act.

Sources: The Hindu, PIB, Wiki.