Daily Prelims Notes 27 August 2020

August 27, 2020
Posted by: OptimizeIAS Team
Category: DPN

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Table Of Contents

1. GST Council and Compensation cess

Subject: Economy

Context:

The Goods and Services Tax (GST) Council met to discuss on compensating states for revenue shortfall.

Concept:

GST Council

Goods & Services Tax Council is a constitutional body for making recommendations to the Union and State Government on issues related to Goods and Service Tax.
As per Article 279A (1) of the amended Constitution, the GST Council has to be constituted by the President within 60 days of the commencement of Article 279A.
As per Article 279A of the amended Constitution, the GST Council which will be a joint forum of the Centre and the States, shall consist of the following members: –
- the Union Finance Minister………………………………………………………. Chairperson;
- the Union Minister of State in charge of Revenue or Finance…………….. Member;
- the Minister in charge of Finance or Taxation or any other Minister nominated by each State Government……………………………….. Members.
As per Article 279A (4), the Council will make recommendations to the Union and the States on important issues related to GST, like the goods and services that may be subjected or exempted from GST, model GST Laws, principles that govern Place of Supply, threshold limits, GST rates including the floor rates with bands, special rates for raising additional resources during natural calamities/disasters, special provisions for certain States, etc.

Compensation Cess

Compensation cess was introduced as relief for States for the loss of revenues arising from the implementation of GST.
States, in lieu of giving up their powers to collect taxes on goods and services after local levies were subsumed under the GST, were guaranteed a 14 per cent tax revenue growth in the first five years after GST implementation by the Central government.
States’ tax revenue as of FY16 is considered as the base year for the calculation of this 14 per cent growth.
Any shortfall against it is supposed to be compensated by the Centre using the funds specifically collected as compensation cess.
Compensation cess is levied on five products considered to be ‘sin’ or luxury goods like SUV, pan masala, cigrattes.
The collected compensation cess flows into the Consolidated Fund of India, and then transferred to the Public Account of India, where a GST compensation cess account has been created.
States are compensated bi-monthly from the accumulated funds in this account.

2. Breach of privilege

Subject: Polity

Context:

Rajya Sabha Chairman wrote to chairpersons of the House panels to “impress upon” members of the committees not to divulge any “information to the media” about proceedings of the committees.

Concept:

Parliamentary privilege refers to rights and immunities enjoyed by Parliament as an institution and MPs in their individual capacity, without which they cannot discharge their functions as entrusted upon them by the Constitution
According to the Constitution, the powers, privileges and immunities of Parliament and MP’s are to be defined by Parliament (Article 105). No law has so far been enacted in this respect.
In the absence of any such law, it continues to be governed by British Parliamentary conventions.
A breach of privilege is a violation of any of the privileges of MPs/Parliament. Among other things, any action ‘casting reflections’ on MPs, parliament or its committees; could be considered breach of privilege.
A notice is moved in the form of a motion by any member of either House against those being held guilty of breach of privilege
The Speaker/Chairperson can decide on the privilege motion himself or herself or refer it to the privileges committee of Parliament.
If the Speaker/Chair gives consent under Rule 222, the member concerned is given an opportunity to make a short statement.

3. RBI’s contingency fund

Subject: Economy

Context:

The Reserve Bank of India (RBI) has retained Rs 73,615 crore within the RBI by transferring it to the Contingency Fund (CF) of the central bank, thus leading to a sharp fall in the transfer of surplus to the government in the current year.

Concept:

This is a specific provision meant for meeting unexpected and unforeseen contingencies, including depreciation in the value of securities, risks arising out of monetary/exchange rate policy operations, systemic risks and any risk arising on account of the special responsibilities enjoined upon the Reserve Bank.

4. Food Safety and Standards (Packaging and Labelling) First Amendment Regulations 2020

Subject: Schemes

Context:

The Food Safety and Standards Authority of India (FSSAI) has notified new regulations that will make mandatory the display of the calorie count of food products on menu cards for restaurant chains and online food aggregators by 2022

Concept:

Food service establishments (restaurants) having central licences or outlets at 10 or more locations will need to display the “calorific value in kcal per serving and serving size” of food items on menu cards, booklets or boards.
Even e-commerce food business operators will need to get their restaurant partners to display calorie information of food products on their digital platforms
Consultation with industry stakeholders on the Food Safety and Standards (Packaging and Labelling) First Amendment Regulations 2020 were on for the past two years.
FSSAI believe this will empower consumers in making the right food choices. Compliance with these regulations before January 1, 2022, will be voluntary.

5. Protected Special Agriculture Zone

Subject: Environment

Context:

The Tamilnadu government has notified rules for Tamil Nadu Protected Agricultural Zone Development Act which came into force on February 21. The rules are aimed at protecting the farmer interest along the Cauvery delta.

What does the rule provide for?

It provides for constituting a seven member technical committee that would assist the authority to recommend to the government whether to omit or include industries under the Second Schedule provided in the Act within the Zone.
The committee would be headed by the Agriculture Production Commissioner and the Secretary to the Government in the Agriculture Department would be ex-officio chairperson.

Background:

Tamil Nadu Legislative Assembly passed the Protected Agricultural Zone Development Bill, 2020 in February.
The new Act declared the Cauvery delta region a Protected Special Agriculture Zone (PSAZ).
It proposed to protect agriculture and prohibit Petroleum, Chemical and Petrochemical Investment Regions (PCPIRs) and hydrocarbon projects in the delta region

Which regions are included in PSAZ?

The proposed PSAZ comprises Thanjavur, Tiruvarur and Nagapattinam districts and some blocks in Cuddalore and Pudukkottai districts.
It, however, excluded Tiruchirappalli, Ariyalur and Karur districts and other parts of Cuddalore and Pudukottai, though they also fall in the delta zone.
Farmers in these parts cultivate rice as their primary crop and pulses such as blackgram and greengram as their secondary crop. They also cultivate seasonal vegetables and fruits.

Need for legislation?

In August 2018, the Central government approved unconventional hydrocarbons policy that permitted exploration and exploitation of unconventional hydrocarbons such as shale oil/gas, coal bed methane (CBM), etc.
This was a major concern in the Cauvery delta, a sight for gas exploration activities since 1985 that has adversely affecting farming and livelihood. Several farmer associations condemned the Union government order and staged protests.

What it intends to achieve?

It establishes an authority to filter projects that can be permitted in agricultural lands.
A report by the UN claims industrial development would eat into 3.3 million hectares of prime agricultural land by 2030 across the world.
In India, a TERI study says India lost 2.5 per cent of its GDP in the year 2014-15 to land degradation.
With climate change and development taking a toll on agriculture, policy decisions like PAZ become inevitable.