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International groupings and agreements
‘India-Israel ties can affect Al Aqsa conflict’: (The Hindu) India-Israel friendship can affect AL- Aqsa conflict Context
- India’s friendly ties with Israel could ‘interfere’ with the ongoing Israeli-Palestinians conflict over the Al Aqsa mosque in Jerusalem.
- The Palestine’s envoy to India said Israel had been trying to disturb the sanctity of the Al Aqsa mosque.
- The Judaisation process of the site which is holy to both Muslims and the Jewish is the current development.
- The Judaisation campaign of Israel received a serious blow last year when UNESCO declared Al Aqsa mosque compound to be uniquely Muslim.
- This has resulted into an infuriated Israel, which decided to go with the latest provocation
Expectation of Palestine
- The Ambassador, Adnan Abu Al Haija, termed Israel’s latest security measures in Al Aqsa compound a ‘religious war’.
- Palestine is aware of growing friendship between India and Israel and is getting wary of it.
- Palestine expects a “positive attitude” from the Indian government regarding the conflict.
- India’s friendly ties with Israel could hinder with the present situation in Jerusalem.
RCEP: Boost for India on easier visa norms: (The Hindu) Negotiations on easier visa norms Context
- India’s push for easier norms on movement of professionals across borders for short-term work in 16 Asia-Pacific nations, including itself, under a proposed mega Free Trade Agreement (FTA) is learnt to have found favour with some ASEAN-bloc members.
- The proposed FTA, officially known as the Regional Comprehensive Economic Partnership (RCEP), is being negotiated by these countries in the Asia-Pacific region.
- The RCEP technical level talks are currently being held in Hyderabad.
- A handful of ASEAN countries are also assumed to be supporting India’s proposal for an RCEP Travel Card to facilitate visa-free multiple short-term entry across the RCEP region for business and tourism purposes.
- Australia and New Zealand (who are RCEP members) are blocking the move.
- India carrying a vast pool of services professionals, including from IT/ITeS, sector, had been leading the talks on easing restrictions on temporary movement of professionals.
- Many RCEP member nations fears that it would lead to migration of professionals from India and loss of jobs for locals.
- India asserts that its demands on temporary movement of professionals and skilled workers should not be confused with permanent movement (or immigration).
- Indian information technology industry body Nasscom informed the RCEP trade negotiators that the Indian IT-ITeS sector had supported 4.54 lakh jobs in the RCEP region (excluding India).
Why India needs to be a data democracy: (Live Mint, Editorial) India towards a digital democracy Context To avoid data colonization and allow for genuine empowerment, people must control the data they generate. Introduction:
- Between 2000 and 2010, data was used largely for monetization. Many companies started realizing the economic value of data.
- Google started monetizing it, tailoring ads based on search queries.
- Over the last five years, the new thing has been the use of data in Artificial Intelligence (AI).
- Artificial Intelligence has been around as an idea for the past four decades but the availability of data, a lot of it, changed its contours.
Data in the 21st century:
- To look at how data can disrupt, one need look no further than the digital advertising business in the US and the payments business in China.
- In the US, Google and Facebook have a 71% share of total digital advertising spending.
- In 2015-16, they captured 89% of all incremental digital advertising.
- China’s mobile payments are a staggering $5.5 trillion.
- The Chinese have done good job of using QR codes for payments.
- Data combined with Artificial Intelligence creates scale and speed
Sources of data:
- Out of 5.5 billion people in the world over the age of 14, 2.5 billion have a Smartphone.
- By 2020, every person will have four personal digital devices.
- The Internet of Things will soon bring 50 billion devices online. Smart companies like Apple, Google, Siemens, Amazon etc all are moving from products and pipes to platforms.
Risks involved: There are multiple risks from data domination like:
- Violation of privacy
- Data colonization
- Data must be used only with the consent of owner.
- Individuals should be in control of their own data.
- It should be used to empower the individual, not the state, or the companies.
- There is need to have data protection laws.
- Application Programming Interfaces (APIs) that allow consent collection, storage and audits is the need of the hour.
- Users have the right to pull out their data. They can choose what they want to be part of, and what they don’t
- Prevention of data colonization
- This tilts the privacy debate in favour of the user.
- Data is empowering in the hands of people. Inventing it allows freedom and choice. This is called data democracy.
- Security of personal data must be ensured and any breach must be duly notified immediately through robust grievance mechanisms.
- If a person requires removal, alteration and correction of data, the same should be allowed.
- Any contravention by entities (Government or Private) must be duly punished with imprisonment or hefty fines.
Conclusion: Given the rising internet penetration and growing emphasis on Digital India, it is imperative to protect the sanctity of data generated by citizens. A legislative framework to address the growing concerns around data protection and privacy is the need of present day. India needs more in effective data protection laws, along with strong independent watchdog institutions to ensure that the organisation handling our data do not go astray. As India is increasingly becoming a prominent part of the global economy with ever burgeoning foreign investment, there is unprecedented thrust now to upgrade the data privacy and data protection standards in the country. Panel for action against farmers using herbicides on GM mustard: (The Hindu) The Genetic Engineering Appraisal Committee (GEAC) sub-committee has drafted several recommendations on GM mustard before it approved the crop for commercial release in May this year. These included a proposal for legal action on farmers using the glufosinate-based herbicide (Basta) on the crop unless otherwise approved by the Central Insecticides Board and Registration Committee.
Indian Economy. Nike Air Huarache Heren Planning, Growth and Employment
‘Bitcoins must be regulated’: (The Hindu) The digital currency can be a boon for the country. Context: Bitcoins can provide a superior route to encourage digital transactions, a report by PHD Chamber of Commerce and Industry said, adding it is essential to expand the regulatory framework for bitcoins to reinforce safety and security aspects. Introduction:
- Bitcoins can be a boon for the large population of the country which is still unbanked; it can provide them a superior and simple peer-to-peer digital currency trading platform through desktops and mobile devices,” the report, titled Industry Perspective on Bitcoins, said.
- It highlighted the importance of a regulatory framework and awareness programmes about benefits and dangers of bitcoins.
What is cryptocurrency?
- Bitcoins is one of the kinds of Cryptocurrency recently in news.
- Crypto currency, which planned to be brought under a regulatory regime, is a digital currency.
- It allows transacting parties to remain anonymous while confirming that the transaction is valid one.
- It is not owned or controlled by any institution including both government institutions and private institutions.
- Multiple numbers of such currencies used globally such as Bitcoin, Ethereum, and Ripple.
- Crypto-currency can also be used for a lot of legal activities depending on which retailers accept such currency.
- The market cap for all crypto-currencies has crossed $100 billion, with most of the increase coming in the past few months.
- On April 1, the total market cap was over $ 25 billion, representing a 300% rise in just 60 days.
- Crypto-currency can also be used for a lot of legal activities depending of which retailers accept such currency.
Crypto-currencies globally: A look at how crypto-currencies such as Bitcoin are regulated globally shown as below:
- In Australia, capital gain is applied while GST is not applicable.
- In United States: In New York, capital gain is applied but sales tax is not applicable.
- Japan is exempt from consumption tax but subject to capital gain tax.
- Britain is exempt from VAT but capital gains tax is applied.
- In China, taxation is not applied.
Whether cryptocurrencies should be ban or not? Advantages of such currencies:
- It will encourage the development of a supervision ecosystem.
- Promote a formal tax base.
Disadvantages of such currencies: Payments by such currencies are on a peer-to- peer basis and there is no established framework for recourse to customer problems, disputes, etc. What is Bitcoin?
- Bitcoin is a digital currency created in 2009 that uses decentralised technology for secure payments and storing money that doesn’t require banks or people’s names.
- Santoshi Nakamoto, a secretive internet user, invented bitcoin in 2008 before it went online in 2009.
- Till December 2016, there were around 16m bitcoins in circulation. In March 2017, the value of a Bitcoin stood at $1,268 for the first time.
- Bitcoins were recently in news when the two global cyber ransomware attacks –WannaCry and Petya were took place. Attackers sought about $300 in bitcoin as ransom.
- One bitcoin today is worth as much as 60 grams of gold.
Uses of Bitcoins:
- Bitcoin is used for multiple purposes including funding companies, investing cash and transferring money without fees.
- It is commonly associated with criminal activity such as drug dealing, cybercrime and money laundering,
- In 2015, RBI published a financial stability report on disruptions in financial technology. In the report, it highlighted the importance of ‘private blockchains’ which have the potential to transform how bank back-end operations functions, as well increasing the payments.
- The digital currency can be used to move money inexpensively across borders within a matter of minutes without even having a bank account.
India’s take on bitcoin:
- The recent demonetization of Rs 500 and Rs 1000 notes by the government in order to curb black money in the country also pushed people to go digital transactions and use online wallets instead of cash.
- After demonetization, India saw a rise in bitcoin demand.
Are Bitcoin legal in India?
- Even as countries like Japan and Russia move to legalise the use of Bitcoins, India, despite being at the cusp of a digital revolution is yet to officially recognise the cryptocurrency.
- Reserve Bank of India, had earlier cautioned users, holders, and traders of virtual currencies including Bitcoins.
What will be implications if Bitcoins are legalised in India?
- Bitcoins would fall under the purview of RBI’s 1934 Act.
- Bitcoin investors would be taxed.
- RBI would issue guidelines regarding investment and purchase of Bitcoins.
- If any foreign payment is made through Bitcoins, it would fall under the purview of FEMA Act.
- Returns from investment in Bitcoins would be taxed.
- The new regime may possibly bring trading under the domain of the stock market regulator, Securities and Exchange Board of India (SEBI).
- The idea is to treat such currency in a similar manner like gold sold digitally.
- It can be treated on registered exchanges in a bid to “promote” a formal tax base.
- It will keep an eye on their use for illegal activities such as money laundering, terror funding, and drug trafficking.
Conclusion: Bitcoins have potential to fight counterfeiting in developing countries like India, but not if transaction fees are higher than the living wages. So there is need to transfer money quickly from one address to another with bare minimum fees. CAC adopts Codex norms for three spices: (The Hindu) CAC adopts universal standards for three spices Context: The Codex Alimentarius Commission (CAC) adopted three Codex standards for black, white and green pepper, cumin and thyme paving the way for a universal agreement on identifying quality spices in various countries. Introduction:
- The CAC cleared these standards at its session held in Geneva.
- The number of spices and culinary herbs is very large –although only 109 spices are notified in the International organisation for Standardisation (ISO) list.
- India, which is a major producer and exporter of these spices, played a key role in pushing the entry of these commodities to have Codex standards.
- It was in 2013 that the need for Codex standards for spices and herbs became a matter of concern.
- Spices Board of India submitted to CAC a proposal for such an exclusive committee for spices and culinary herbs.
Meaning of Codex Alimentarius:
- The Codex Alimentarius or “Food Code” is a collection of standards, guidelines and codes of practice adopted by the Codex Alimentarius Commission (CAC).
- It will pave the way for a universal agreement on identifying quality spices in various countries.
- The adoption of Codex standards for the three spices will help to evolve a common standardisation process for their global trade and availability.
- With the adoption of Codex standards, member-nations would now have reference points and benchmarks to align their national standards for spices with Codex.
- It will bring harmony to the global spice trade and ensure availability of high quality, clean, and safe spices to the world.
Status in India:
- The CAC move is considered a crucial endorsement of the India’s initiatives to usher in a common standard across the globe for spices trade.
- The adoption of Codex standards by CAC must be read in the context of the efforts put in by New Delhi in arriving at a common code for spices trade.
- India conducted three sessions of Codex Committee on Spices and Culinary Herbs (CCSCH) at Kochi (2014), Goa (2015) and Chennai (2017).
- The Chennai session especially succeeded in achieving this consensus.
- Subsequently, these drafts were placed before the CAC and the member-nations adopted them by consensus.
Codex Alimentarius Commission (CAC):
- The codex Alimentarius Commision (CAC) is an intergovernmental body with over 180 countries, within a framework of the Joint Food Standard Programme established by the Food and Agriculture Organization of the United Nations (FAO) and the World Health Organization (WHO).
- The purpose of CAC is to protect the health of consumers and ensuring fair practices in the food trade.
- The Commission also promotes coordination of all food standards work undertaken by international governmental and non-governmental organizations.
Conclusion: It may be a small initiative considering the number of commodities waiting in the ranks for the standardization process. But still it is very heartening that spices have made a definitive entry into the league of commodities having Codex standards, and India played a key role in achieving this objective. ‘GST, note ban to boost economy’: (The Hindu) Fitch rating for Indian debt instruments Context: Economic activity is expected to rebound due to a supportive monetary policy, the effect of the Goods and Services Tax, and the eventual formalization of the economy due to demonetization, according to a report by Fitch Ratings. Introduction: The withdrawal of cash due to demonetization had temporarily hurt economic growth in India, report said The report highlighted the following points:
- Demonetization could help boost government revenue by moving economic activity from the informal to the formal sector, but the withdrawal of 86% of the value of currency in circulation last November created a cash crunch, temporarily hurting economic activity.
- The Goods and Services, applicable from 1 July 2017, will facilitate trade within India and lower transaction costs.
- The report expects growth to pick up soon, helped by the supportive monetary policy of the previous two years- which was facilitated by a surge in bank liquidity due to demonetization-and stepped-up structural reforms.
- The report highlighted the uncertainty over the government committing to reducing its debt and detrimental effect of farm loan waiver’s on state finances.
- “An official committee reviewing the Fiscal Responsibility and Budget Management Act recommended lower government debt to 60% of GDP, but it remains uncertain whether the government will commit to this target,” the report highlighted
- Farm loan waiver scheme rolled out across an increasing number of Indian States could significantly affect the state government finances and undermine efforts to bring general government debt.
- The Reserve Bank of India (RBI) will announce monetary policy very shorty.
- India’s annual retail inflation eased to 1.54 per cent in June, its slowest pace in more than five years, but is expected to begin rising again through to mid-2018.
- With inflation currently well below its target, the central bank is expected to cut borrowing costs by 25 basis points at its next meeting. It last cut rates, by the same amount, to 6.25 per cent in October 2016
- Having changed its monetary policy stance to neutral from accommodative at the start of the year, the Reserve Bank of India softened its position on policy in June in view of the sharp drop in retail inflation.
- Movements in both the Consumer Price Index for all items (CPI) and Wholesale Price Index (WPI) show declines much below the average inflation target of 4%.
- Low inflation with uncertainty about major output gains over the average growth rate in recent quarters will give relatively low nominal gross domestic product. This could result in lower tax revenues unless one expects sharp growth in the tax base to compensate for the revenue shortfall.
- Fitch Ratings Inc. is one of the “big three credit rating agencies”, the other two being Moody’s and Standard and poor’s.
- It is one of the tree nationally recognized statistical rating organizations (NRSRO) designated by the U.S.