DAILY CURRENT AFFAIRS

19-June-2023

Daily Current Affairs For UPSC ,Daily Current affairs of The hIndu and Indian Express.

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1. China’s ‘developmental’ security approach.

Topic: GS3 – Development.

Context:

- - Chinese authorities have been cracking down on U.S.-based companies and domestic firms dealing with overseas clients.
  - The actions appear to be motivated by China’s response to U.S.-led efforts to constrain China’s tech advancement.

More about the news:

- - Chinese authorities have raided the offices of consultancy firms and detained employees, citing national security concerns.
  - China’s emphasis on balancing development with security has led to a securitization of non-traditional security issues, including cybersecurity and data/information security.
  - Recent amendments to counter-espionage laws and the Comprehensive National Security concept reflect the permeation of national security in governance and developmental strategies in China.
  - Chinese authorities suspect foreign businesses of engaging in espionage and extracting sensitive data under the guise of free exchange of information.
  - China is facing a regulatory dilemma as development requires a business-friendly environment, while security concerns warrant restrictive measures.
  - The crackdowns may have a negative impact on foreign business sentiment in the long run.
  - From India’s perspective, China’s discourse presents a contradiction as it emphasizes the need to balance development with security while urging India to prioritize economics and development over security issues.

Source: The Hindu, June 19, 2023 – page 10

2. Net direct tax collection rises 11.2% to ₹3.8 lakh crore: Finance Ministry

Topic: GS3 – Indian economy.

Context:

- - Net direct tax collections have increased by 11.2% in the first two-and-a-half months of the financial year 2023-24.

More about the news:

- - Advance tax inflows for the first quarter of 2023-24 have grown by 13.7%.
  - The gross direct tax Collection has crossed ₹4.19 lakh crore, showing a growth of 12.7% compared to the corresponding period last year.

Reasons for increase in tax collections (Direct and Indirect taxes) in India:

- - Economic growth: There has been overall economic growth in India, contributing to higher direct tax collections.
  - Improved tax compliance: Efforts by the government to enhance tax compliance, such as stricter enforcement, effective tax administration, and measures to curb tax evasion, have lead to higher tax collections.
  - Expansion of the tax base: The government’s efforts to widen the tax base by bringing more individuals and businesses into the tax net has contributed to increased tax collections. Steps like mandatory linking of Aadhaar (unique identification number) with tax filings and increased scrutiny of high-value transactions aim to identify potential taxpayers and reduce tax evasion.
  - Better data analytics and information sharing: The use of advanced data analytics tools and improved information sharing among government agencies can help identify non-compliant taxpayers and prevent tax evasion. This can lead to higher tax collections.
  - The economic recovery: The Indian economy has been recovering strongly in recent months, with GDP growth picking up to 8.7% in the third quarter of 2022. This has led to an increase in incomes, which has boosted tax collections.
  - The implementation of new tax reforms: The government has implemented a number of new tax reforms in recent years, such as the Goods and Services Tax (GST) and the Income Tax Act, 2016. These reforms have made the tax system more efficient and transparent, which has helped to increase compliance and collections.
  - The digitization of the tax system: The government has been making significant investments in the digitization of the tax system. This has made it easier for taxpayers to file their returns and pay their taxes, which has also helped to boost collections.

Challenges that still exist for tax collection:

While there have been increases in direct tax collections in India, several challenges still exist that can hinder further progress. Some of these challenges include:

- - Tax evasion and avoidance: Tax evasion and avoidance continue to be significant challenges in India. Some individuals and businesses employ various strategies to evade taxes or reduce their tax liabilities through illicit means.
  - Informal economy: A significant portion of economic activities in India operates in the informal sector, where transactions often go unreported. This informal economy poses challenges in capturing taxable income and expanding the tax base.
  - Complex tax laws: India’s tax laws can be complex and challenging to interpret, leading to confusion and potential errors in tax compliance.
  - Tax administration inefficiencies: Inefficiencies in tax administration, such as delays in processing tax returns, issuing refunds, and resolving disputes, can create frustrations for taxpayers and impact compliance.
  - Tax litigation and dispute resolution: The high volume of tax litigation and prolonged dispute resolution processes in India contribute to uncertainty and administrative burdens for taxpayers.
  - Taxation of agriculture income and wealth: Agriculture income is generally exempt from income tax in India. However, concerns exist about potential misuse of this exemption, leading to underreporting of income and tax evasion.

Way Forward:

- - Strengthen tax administration: Enhance the capacity and efficiency of tax authorities through training programs, modernization of processes, and adoption of technology-driven solutions. This can help streamline tax collection, improve compliance, and reduce administrative burdens.
  - Simplify tax laws: Simplify tax laws and regulations to make them more transparent and easily understandable. This can reduce ambiguity, enhance compliance, and minimize disputes.
  - Promote digitalization: Continue to promote digitalization of tax processes, such as online filing and payment systems, to simplify tax compliance and minimize human errors.
  - Target tax evasion: Implement stricter measures to detect and penalize tax evasion – conducting data-driven analysis, and improving information sharing among different government agencies. This can help identify non-compliant taxpayers and discourage tax evasion practices.
  - Enhance taxpayer education and awareness: Conduct awareness campaigns and provide educational resources to educate taxpayers about their rights, obligations, and benefits of tax compliance. This can foster a culture of voluntary compliance and encourage individuals and businesses to fulfill their tax responsibilities.
  - Expand the tax base: Explore strategies to bring more individuals and businesses into the tax net, including improved identification of potential taxpayers, targeted outreach programs, and incentivizing voluntary tax registration.
  - Expedite dispute resolution: Strengthen dispute resolution mechanisms, such as tax tribunals and alternative dispute resolution methods, to expedite the resolution of tax-related disputes. This can reduce litigation backlogs, enhance taxpayer confidence, and ensure timely resolution of tax-related matters.
  - International cooperation: Enhance cooperation with other countries to combat tax evasion and promote information exchange. This can help in tracking offshore assets and income of Indian taxpayers and ensure that they fulfill their tax obligations.
  - Continual evaluation and reform: Regularly evaluate the effectiveness of tax policies, procedures, and enforcement mechanisms and make necessary reforms based on the evolving economic and social dynamics. This can ensure that the tax system remains relevant, fair, and conducive to economic growth.

Steps taken by Indian government in this regard:

- - Tax reforms: The introduction of the Goods and Services Tax (GST) in July 2017 aimed to streamline indirect taxation and reduce tax evasion. It replaced multiple indirect taxes with a unified tax system, improving tax compliance and increasing tax revenues.
  - Income tax return simplification: The government has focused on simplifying the income tax return filing process by introducing online platforms, pre-filled tax forms, and reducing the number of mandatory fields.
  - Faceless assessment and appeals: The government has introduced the concept of faceless assessment and faceless appeals to reduce discretionary powers, minimize corruption, and ensure fair and transparent tax assessments and appeals.
  - Use of technology: Initiatives like the Centralized Processing Center (CPC), e-assessment, and electronic verification codes (EVCs) have streamlined tax processes, reduced manual intervention, and enhanced efficiency.

- - Anti-tax evasion measures: The government has implemented measures to curb tax evasion, such as mandatory linking of Aadhaar (unique identification number) with tax filings, stricter reporting requirements for high-value transactions, and increased scrutiny of tax evasion cases.
  - International tax cooperation: The government has actively participated in international efforts to combat tax evasion and promote tax transparency. India has entered into bilateral and multilateral agreements for exchange of tax-related information and has joined initiatives like the Base Erosion and Profit Shifting (BEPS) framework.
  - Launch of the Vivad se Vishwas Scheme: The Vivad se Vishwas Scheme is a scheme that allows taxpayers to settle their outstanding tax liabilities with the government at a discounted rate. This scheme has been successful in encouraging taxpayers to come forward and settle their dues.

Conclusion:

These steps demonstrate the Indian government’s commitment to enhancing direct tax collections, improving tax administration, and promoting tax compliance. Continued efforts in these areas, along with ongoing reforms, are essential to further strengthen the tax system and ensure sustainable revenue generation for the country’s development.

Source: The Hindu, June 19, 2023 – page 12

3. Corporate Ministry to consult practitioners on MCA-21 glitches

Topic: GS3 – Indian economy.

Context:

- - The Corporate Affairs Ministry’s portal MCA-21 is experiencing glitches, causing difficulties in various tasks such as registering new firms and filing routine reports.
  - The Ministry has decided to hold stakeholder consultations to address the challenges faced by industry due to the issues with the MCA-21 Version-3 portal.

What is MCA-21?

- - MCA-21 stands for Ministry of Corporate Affairs-21. It is an e-governance initiative launched by the Government of India to provide online services related to corporate affairs and compliance.
  - MCA-21 aims to facilitate easy and efficient access to various services, including company registration, filing of annual returns and financial statements, incorporation of new companies, and other corporate transactions.
  - The MCA-21 portal serves as a platform where individuals, companies, professionals, and other stakeholders can interact with the Ministry of Corporate Affairs and access services and information.
  - It has transformed the traditional paper-based processes into online procedures, making it more convenient and streamlined for businesses and professionals to comply with corporate regulations.
  - The MCA-21 system plays a crucial role in maintaining transparency, improving corporate governance, and ensuring compliance with statutory requirements in India.
  - It enables companies to file their financial statements, annual reports, and other documents electronically, thereby reducing paperwork and enhancing efficiency in the corporate ecosystem.

Source: The Hindu, June 19, 2023 – page 12

4. The remarkable endurance of the Y chromosome, ‘master of maleness’

Topic: GS3 – Science.

About Y chromosome:

- - The Y chromosome is the sex chromosome responsible for determining biological male sex in humans.
  - It emerged around 200-300 million years ago and carries the sex-determining region Y (SRY) gene.
  - The Y chromosome has a unique genetic journey, with a small number of genes and an abundance of repetitive sequences.
  - It has been extensively studied for understanding human migration, evolution, paternity, and genetic diversity.
  - Contrary to initial assumptions, the Y chromosome possesses vital genes related to biological functions, including those linked to aging and lifespan regulation.
  - The absence of a second Y chromosome in males is believed to contribute to the shorter lifespan compared to females.
  - Men can lose the Y chromosome (LoY) with age, which is associated with a higher frequency of certain medical conditions and a shorter lifespan.
  - Recent studies in fruit flies suggest that longevity is attributed to the phenotypic sex of the animal rather than the presence of a Y chromosome.
  - LoY in humans is associated with medical conditions such as cardiomyopathy and heart failure.
  - Some species, like rodents, have naturally lost their Y chromosome, providing insights into sex-chromosome turnover.

Source: The Hindu, June 19, 2023 – page 20

5. Gita Press, Gorakhpur, awarded Gandhi Peace Prize for 2021

Topic: GS3 – Awards.

Context:

- - The Gandhi Peace Prize for 2021 will be awarded to Gita Press, Gorakhpur, a prominent publisher of religious texts such as the Bhagavad Gita, Ramayana, and Upanishads.

About Gandhi Peace Prize:

- - The Gandhi Peace Prize is an international award given by the Government of India to individuals and organizations that have made notable contributions to promoting peace, harmony, and non-violence.
  - The prize was established in 1995 on the occasion of the 125th birth anniversary of Mahatma Gandhi, the renowned leader of India’s independence movement.
  - The selection of the recipients is made by a jury consisting of the Prime Minister of India, the Leader of the Opposition in the Lok Sabha (the lower house of the Indian Parliament), the Chief Justice of India, and two eminent persons chosen by the President of India.
  - The award includes a cash prize, a citation, and a plaque. Over the years, the prize has been presented to individuals, organizations, or movements from various countries for their efforts in promoting peace, non-violence, and social upliftment.
  - Some of the notable recipients of the Gandhi Peace Prize include Nelson Mandela, the former President of South Africa, Archbishop Desmond Tutu, the spiritual leader of South Africa, and organizations like the Ramakrishna Mission and the Bharatiya Vidya Bhavan.
  - The Gandhi Peace Prize aims to recognize and honor the contributions of individuals and organizations towards the ideals that Mahatma Gandhi espoused during his lifetime, such as non-violence, truth, social justice, and harmony among different communities. It serves as a tribute to Gandhi’s philosophy and legacy, emphasizing the importance of peace and non-violence in today’s world.