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Paper: General Studies 2

Topic: Important aspects of governance, transparency and accountability

Why in the news?

  • The office of Lokpal is not yet fully functional because the anti-corruption ombudsman is still waiting for the Centre’s approval on notifying the “format” for receiving a complaint.
  • The format for receiving a complaint, the basic prerequisite, has been sent to the government by the Lokpal, headed by Justice Pinaki Chandra Ghose, to be notified as per the requirement under the Lokpal and Lokayuktas Act, 2013. 

What is the Lokpal?

  • The anti-corruption ombudsman at the Centre is called the Lokpal under the Lokpal and Lokayuktas act, 2013. 
  • It consists of a maximum of eight members along with a Chairman. Justice Pinaki Chandra Ghosh is the first Chairman of the Lokpal under the Act in the country.
  • Out of the maximum eight members, half should  be judicial members. Minimum fifty per cent of the Members will be from SC / ST / OBC / Minorities and women. The judicial member of the Lokpal should be either a former Judge of the Supreme Court or a former Chief Justice of a High Court. The non-judicial member should be an eminent person with impeccable integrity and outstanding ability, having special knowledge and expertise of minimum 25 years in the matters relating to anti-corruption policy, public administration, vigilance, finance including insurance and banking, law and management.
  • The Lokpal has jurisdiction to inquire into allegations of corruption against anyone who is or has been Prime Minister, or a Minister in the Union government, or a Member of Parliament, as well as officials of the Union Government under Groups A, B, C and D; it can also investigate corruption complaints against chairpersons, members, officers and directors of any board, corporation, society, trust or autonomous body either established by an Act of Parliament or wholly or partly funded by the Union or State government ; it also covers any society or trust or body that receives foreign contribution above Rs 10 lakh.
  • Under the Act, the Inquiry Wing will have to complete its preliminary inquiry and submit a report to the Lokpal within 60 days. The Lokpal bench then shall consider the preliminary inquiry report and, after giving an opportunity to the public servant accused of corruption for his defence, decide whether it should proceed with the investigation. A bench of at least three members will consider the report and may grant sanction to the Prosecution Wing to proceed against the public servant based on the agency’s chargesheet.


Telecom Dispute Settlement Appellate Tribunal (TDSAT)

Paper: General Studies 2

Topic: Statutory, regulatory and various quasi-judicial bodies

Why in the news?

The Supreme Court on Tuesday dismissed an appeal by the Department of Telecommunications (DoT) against a Telecom Dispute Settlement Appellate Tribunal (TDSAT) order which held that liabilities of past dues related to spectrum usage charges (SUC) rested only with Reliance Communications (RCom)

What is the TDSAT?

  • In order to bring in functional clarity and strengthen the regulatory framework and the dispute settlement mechanism in the telecommunication sector, the TRAI Act of 1997 was amended in the year 2000 and TDSAT was set up to adjudicate disputes and dispose off appeals with a view to protect the interests of service providers and consumers of the telecom sector and to promote and ensure orderly growth of the telecom sector. 
  • In January 2004, the Government included broadcasting and cable services also within the purview of TRAI Act. After coming into force of the relevant provisions of the Finance Act 2017, the jurisdiction of TDSAT stands extended to matters that lay before the Cyber Appellate Tribunal and also the Airport Economic Regulatory Authority Appellate Tribunal.
  • The Tribunal consists of a Chairperson and two Members appointed by the Central Government. The Chairperson should be or should have been a Judge of the Supreme Court or the Chief Justice of a High Court. A Member should have held the post of Secretary to the Government of India or any equivalent post in the Central Government or the State Government for a period of not less than two years or a person who is well versed in the field of technology, telecommunication, industry, commerce or administration.
  • The Tribunal exercises jurisdiction over Telecom, Broadcasting, IT and Airport tariff matters under the TRAI Act, 1997 (as amended), the Information Technology Act, 2008 and the Airport Economic Regulatory Authority of India Act, 2008. 
  • The Tribunal exercises original as well as appellate jurisdiction in regard to Telecom, Broadcasting and Airport tariff matters. In regard to Cyber matters the Tribunal exercises only the appellate jurisdiction.
  • The Tribunal is not bound by the procedure laid down by the Code of Civil Procedure, 1908; It has the power to regulate its own procedure; It is to be guided by the principles of natural justice;


Organization of Petroleum Exporting Countries (OPEC)

Paper: General Studies 2

Topic: Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests

Why in the news?

OPEC members won the support of other major oil producing nations to extend a production cut for another nine months in a bid to increase prices at the time of reducing demand.

What is OPEC?

  • OPEC is a permanent intergovernmental organization of 14 oil-exporting developing nations that coordinates and unifies the petroleum policies of its Member Countries.
  • The current OPEC members are the following: Algeria, Angola, Ecuador, Equatorial Guinea, Gabon, Iran, Iraq, Kuwait, Libya, Nigeria, the Republic of the Congo, Saudi Arabia , United Arab Emirates, and Venezuela. 
  • OPEC member countries produce about 40 percent of the world’s crude oil. Equally important to global prices, OPEC’s oil exports represent about 60 percent of the total petroleum traded internationally.
  • According to current estimates, 81.89% of the world’s proven oil reserves are located in OPEC Member Countries, with the bulk of OPEC oil reserves in the Middle East, amounting to 65.36% of the OPEC total.


Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting

Paper: General Studies 3

Topic: mobilization of resources

Why in the news?

  • India has ratified the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (MLI). 
  • On 25th June, 2019, India has deposited the Instrument of Ratification to OECD, Paris alongwith its Final Position in terms of Covered Tax Agreements (CTAs), Reservations, Options and Notifications under the MLI, as a result of which MLI will enter into force for India on 01st October, 2019 and its provisions will have effect on India’s DTAAs from FY 2020-21 onwards.

What is the MLI?

  • The Multilateral Convention/MLI is an outcome of the OECD / G20 Project to tackle Base Erosion and Profit Shifting (the “BEPS Project”) i.e. tax planning strategies that exploit gaps and mismatches in tax rules to artificially shift profits to low or no-tax locations where there is little or no economic activity, resulting in little or no overall corporate tax being paid. 
  • India was part of the Ad Hoc Group of more than 100 countries and jurisdictions from G20, OECD, BEPS associates and other interested countries, which worked on an equal footing on the finalization of the text of the Multilateral Convention.
  • The MLI will modify India’s tax treaties to curb revenue loss through treaty abuse and base erosion and profit shifting strategies by ensuring that profits are taxed where substantive economic activities generating the profits are carried out. 
  • The MLI will be applied alongside existing tax treaties, modifying their application in order to implement the BEPS measures. Out of 93 CTAs notified by India, 22 countries have already ratified the MLI as on date and the Double Taxation Avoidance Agreement (DTAA) with these countries will be modified by MLI.


What is Base Erosion and Profit Shifting?

Base erosion and profit shifting (BEPS) refers to tax planning strategies that exploit gaps and mismatches in tax rules to make profits ‘disappear’ for tax purposes or to shift profits to locations where there is little or no real activity but the taxes are low, resulting in little or no overall corporate tax being paid.

What is a Double Taxation Avoidance Agreement (DTAA)?

  • A DTAA is a tax treaty signed between two or more countries. Its key objective is that tax-payers in these countries can avoid being taxed twice for the same income. A DTAA applies in cases where a tax-payer resides in one country and earns income in another.
  • DTAAs can either be comprehensive to cover all sources of income or be limited to certain areas such as taxing of income from shipping, air transport, inheritance, etc. India has DTAAs with more than eighty countries, of which comprehensive agreements include those with Australia, Canada, Germany, Mauritius, Singapore, UAE, the UK and US.
  • DTAAs are intended to make a country an attractive investment destination by providing relief on dual taxation. Such relief is provided by exempting income earned abroad from tax in the resident country or providing credit to the extent taxes have already been paid abroad. DTAAs also provide for concessional rates of tax in some cases.
  • For instance, interest on NRI bank deposits attract 30 per cent TDS (tax deduction at source) here. But under the DTAAs that India has signed with several countries, tax is deducted at only 10 to 15 per cent. Many of India’s DTAAs also have lower tax rates for royalty, fee for technical services, etc.


Open Acreage Licensing Policy (OALP)

Paper: General Studies 3

Topic: Infrastructure: Energy, Ports, Roads, Airports, Railways etc.

Why in the news?

State-owned Oil India Ltd (OIL) Tuesday won 12 out of 32 oil and gas exploration blocks offered in latest auction while Vedanta Ltd walked away with 10 and Oil and Natural Gas Corp (ONGC) got eight blocks. According to the list of winners of Open Acreage Licensing Policy (OALP) Round II and III put out by the Directorate General of Hydrocarbons (DGH), Reliance Industries and its British partner BP Plc won a KG basin gas block. Indian Oil Corp (IOC) also got one block.

What is the Open Acreage Licensing Policy?

  • The OALP provides uniform licences for exploration and production of all forms of hydrocarbons, enabling contractors to explore conventional as well as unconventional oil and gas resources.
  • Fields are offered under a revenue-sharing model and throw up marketing and pricing freedom for crude oil and natural gas produced.
  • Under the OALP, once an explorer selects areas after evaluating the National Data Repository (NDR) and submits the Expression of Interest, it is to be put up for competitive bidding and the entity offering the maximum share of oil and gas to the government is awarded the block.
  • NDR has been created to provide explorers’ data on the country’s repositories, allowing them to choose fields according to their capabilities. Data received through the National Seismic Programme, an in-depth study of 26 sedimentary basins, are continuously being added to the NDR.