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SABLA

Sabla scheme likely to be launched on November 14 .2010

The Rajiv Gandhi Scheme for Empowerment of Adolescent Girls - Sabla - is likely to be launched in 200 select districts on November 14, celebrated as Children's Day in the country.

The Scheme is aimed at addressing the multi-dimensional problems of adolescent girls between 11 and 18 years and would be implemented through the platform of Integrated Child Development Scheme (ICDS) projects and anganwadi centres. Over one crore girls are expected to benefit from the scheme annually.

Upgrading skills

The girls would be empowered by improvement in their nutritional and health status and upgrading home, life and vocational skills. It also aims at equipping the girls on family welfare, health, hygiene and information and guidance on existing public services, along with mainstreaming out of school girls into formal or non-formal education.

Nutrition would be provided to all girls of 11 to 15 years who are out of school and those of 15 to 18 years. The scheme is expected to tackle the inter-generational cycle of malnutrition, effectively, to prepare young girls for future motherhood. It would eventually result in the reduction of high levels of anaemia, maternal mortality rate and child marriages.

Launch on pilot-basis

The Centre is in the process of identifying the 200 select districts where the scheme would be launched on a pilot basis. The government has allocated Rs. 1,000 crore for the purpose for the current financial year. Sabla would be a Centrally-sponsored scheme except for the nutrition component for which the State would have to shell out 50 per cent of the cost. As per the estimates, the cost of nutrition would be Rs. 5 per day per girl.

Health problems

Adolescent girls in general, and those out of school in particular, have considerable unmet needs in terms of health including reproductive health, education, nutrition and skill development. Given the high levels of under-nutrition and anaemia in adolescent girls and women, compounded by early marriage, early child bearing and inadequate spacing between births, adolescent girls perpetuate an inter-generational cycle of under-nutrition, gender discrimination and poverty.

Direct Taxes Code Bill, 2010 (DTC 2010)

The Finance Minister tabled the Direct Taxes Code Bill, 2010 (DTC 2010) in the Parliament on 30 August 2010 which is proposed to come into force on 1 April 2012. Some of the salient features are outlined below:

General

The Code proposes that every person shall be liable to pay income-tax in respect of the total income for the financial year. The concepts of “previous year” and “assessment year” are proposed to be done away with.Rates of tax as applicable to the persons are proposed under a schedule; for companies, individuals etc the maximum rate of tax is proposed at 30%. Additionally a domestic company would be required to pay a dividend distribution tax (DDT) of 15% on dividends declared, distributed or paid. Minimum Alternate tax (MAT) of 20% would be applicable on a company in case the tax based on the book profits is higher than the tax based on the profits as per the normal tax computation. A foreign company is required to pay an additional branch profits tax of 15% in respect of the branch profits.
Levy of surcharge and education cess is proposed to be done away with.
Residence

In the case of a company, it is proposed that the company shall be resident in India if it is an Indian company or if the place of effective management (POEM) is in India. POEM has been defined to mean the place where the board of directors or executive directors make their decisions or the place where such executive directors or officers of the company perform their functions and the board of directors routinely approves the commercial and strategic decisions taken by such executive directors or officers.
In all cases, other than an individual, the persons would be a resident in India, if the place of control and management of the affairs, at any time of the year is situated wholly, or partly, in India.
Source rules

Additional source rules for income arising to a non- resident are proposed to be introduced as income deemed to accrue in India; for e.g. insurance premium including reinsurance covering any risk in India, from the transfer of any share or interest in a foreign company, where the fair market value of the assets in India
owned by the company represent at least 50% of the fair market value of all the assets owned by the company etc.

Computation of total income

Income has been proposed to be classified as income from ordinary sources and income from special sources; Income from ordinary sources would comprise of income from employment, house property, business, capital gains and residuary sources. Income from special sources would refer to specified income of non –residents, winning from racehorses, lottery etc. However where the income of a non resident is attributable to a PE, then the same would not be considered as income from special sources.

Personal taxes

Changes in income slabs which will result in incremental savings in tax.
The concept of „Not ordinarily resident? is removed. The condition of 729 days has been retained to determine the taxability of overseas income of an individual
A person not entitled to HRA is allowed a deduction of rent paid upto 10% of GTI or INR 2000 per month & other conditions as may be prescribed
Exemption for medical expenses has been increased to INR 50,000.
Contribution to approved funds is deductible to the extent of INR 1 lacs.
Deduction for insurance premium (not exceed five percent. of the capital sum assured), Health Insurance covered & Tuition fees to the extent of INR 50,000.
Wealth tax to be levied at 1% for wealth in excess of INR 10 million
Capital gains

Income from all investment assets to be computed under the head „Capital gains?. Investment asset to include any capital asset which is not a business capital asset, any security held by a Foreign Institutional Investor and any undertaking or division of a business.
Distinction between short-term investment asset and long-term investment asset on the basis of the length of holding of the asset to be eliminated.
No tax on gains on transfer of shares of a company or unit of equity oriented fund that are held for more than one year and such transfer is chargeable to Securities Transaction Tax (“STT”). STT would be chargeable on transfer of equity shares of a company or a unit of an equity oriented fund.
Fifty percent of the capital gains are allowed as deduction on transfer of shares of a company or unit of equity oriented fund that are held for a period of one year or less and such transfer is chargeable to STT.
The base date for determining the cost of acquisition to be shifted from 1 April 1981 to 1 April 2000. Consequently, all unrealized capital gains on assets between 1 April 1981 and 31 March 2000 not to be liable to tax.
Cost of acquisition to be Nil, if cannot be determined or ascertained for any reason.
Capital loss to be allowed to set off only against capital gains. The capital loss can be carried forward for indefinite period.
MAT

Computation of book profits broadly similar to existing law
Credit for tax paid under DTC 2010, would be available. The credit would be allowed to be carried forward for 15 years.
MAT now applicable to SEZ developers and units in an SEZ
Tax incentives

The DTC 2010 provides for expenditure based incentives wherein capital expenditure incurred by the specified business would be allowed as a deduction. Specified businesses, amongst others would include generation,

transmission or distribution of power, developing or operating and maintaining any infrastructure facility, operating a maintaining a hospital in a specified area, SEZ developers and units established in an SEZ, exploration and production of mineral oil or natural gas, setting up and operating a cold chain facility, developing and building a housing project under a scheme of slum redevelopment etc.

Grandfathering provisions for SEZ developers and SEZ Units

Grandfathering of profit linked incentives under the Income-tax act, 1961 to continue for SEZ developers notified on or before 31 March 2012. In case of SEZ units, the deduction would be permissible for units commencing operations on or before 31 March 2014

Anti- abuse provisions General anti-avoidance rules

The characteristics of the originally proposed rules have been retained. Additionally it is proposed that an arrangement would be presumed for obtaining a tax benefit would include reduction in tax base including increase in losses. The provisions would be applicable as per the guidelines to be framed by the Central Government. Further the definition of lacking commercial substance has been amended to clarify that obtaining tax benefit cannot be the only criteria for applicability of GAAR.

Controlled foreign company (CFC) rules:

As indicated in the revised discussion draft, CFC rules have been incorporated to provide for the taxation of income attributable to a CFC to be taxed in the hands of the resident. A foreign company would be considered as a CFC which

for the purposes of tax is a resident of a country or territory with a lower rate of tax
the shares of the company are not traded on any stock exchange
one or more persons individually or collectively exercise control over the company
it is not engaged in any active trade or business
the specified income exceed INR 2.5 million.
Rules pertaining to the computation of the income attributable to the CFC which would be required to be added to the income of the resident have been provided.

Tax treaty provisions

It has been proposed to revert to the provisions under the existing law, wherein the provisions of the Code shall apply in relation to an assessee to whom the agreement applies, to the extent they are more beneficial. However, the provisions relating to GAAR, CFC and Branch profit tax would continue to apply irrespective of the beneficial provisions of the tax treaty provisions. It has also been proposed that a person shall be entitled to claim relief under the provisions of the agreement on production of a certificate in the prescribed form, from the tax authorities of the country that such person is a resident of the country.

A resident in India would be entitled to claim credit of taxes paid or deducted at source in the country in accordance with the provisions of the tax treaty against the income tax payable in respect of the income for the financial year. Where tax has been paid or deducted in a country with which there exists no agreement credit can be claimed only at the lower of the rate of tax under the DTC 2010 and the tax rate levied in the other country. However, the credit cannot exceed the tax payable under the DTC 2010.

Special Economic Zones (SEZs)

India was one of the first in Asia to recognize the effectiveness of the Export Processing Zone (EPZ) model in promoting exports, with Asia's first EPZ set up in Kandla in 1965. With a view to overcome the shortcomings experienced on account of the multiplicity of controls and clearances; absence of world-class infrastructure, and an unstable fiscal regime and with a view to attract larger foreign investments in India, the Special Economic Zones (SEZs) Policy was announced in April 2000.

This policy intended to make SEZs an engine for economic growth supported by quality infrastructure complemented by an attractive fiscal package, both at the Centre and the State level, with the minimum possible regulations. SEZs in India functioned from 1.11.2000 to 09.02.2006 under the provisions of the Foreign Trade Policy and fiscal incentives were made effective through the provisions of relevant statutes. 

To instill confidence in investors and signal the Government's commitment to a stable SEZ policy regime and with a view to impart stability to the SEZ regime thereby generating greater economic activity and employment through the establishment of SEZs, a comprehensive draft SEZ Bill prepared after extensive discussions with the stakeholders. A number of meetings were held in various parts of the country both by the Minister for Commerce and Industry as well as senior officials for this purpose. The Special Economic Zones Act, 2005, was passed by Parliament in May, 2005 which received Presidential assent on the 23rd of June, 2005. The draft SEZ Rules were widely discussed and put on the website of the Department of Commerce offering suggestions/comments. Around 800 suggestions were received on the draft rules. After extensive consultations, the SEZ Act, 2005, supported by SEZ Rules, came into effect on 10th February, 2006, providing for drastic simplification of procedures and for single window clearance on matters relating to central as well as state governments. The main objectives of the SEZ Act are:

(a) generation of additional economic activity
(b) promotion of exports of goods and services;
(c) promotion of investment from domestic and foreign sources;
(d) creation of employment opportunities;
(e) development of infrastructure facilities;

It is expected that this will trigger a large flow of foreign and domestic investment in SEZs, in infrastructure and productive capacity, leading to generation of additional economic activity and creation of employment opportunities.
The SEZ Act 2005 envisages key role for the State Governments in Export Promotion and creation of related infrastructure. A Single Window SEZ approval mechanism has been provided through a 19 member inter-ministerial SEZ Board of Approval (BoA). The applications duly recommended by the respective State Governments/UT Administration are considered by this BoA periodically. All decisions of the Board of approvals are with consensus.
The SEZ Rules provide for different minimum land requirement for different class of SEZs. Every SEZ is divided into a processing area where alone the SEZ units would come up and the non-processing area where the supporting infrastructure is to be created.

The SEZ Rules provide for:

• " Simplified procedures for development, operation, and maintenance of the Special Economic Zones and for setting up units and conducting business in SEZs;
• Single window clearance for setting up of an SEZ;
• Single window clearance for setting up a unit in a Special Economic Zone;
• Single Window clearance on matters relating to Central as well as State Governments;
• Simplified compliance procedures and documentation with an emphasis on self certification

Approval mechanism and Administrative set up of SEZs

Approval mechanismThe developer submits the proposal for establishment of SEZ to the concerned State Government. The State Government has to forward the proposal with its recommendation within 45 days from the date of receipt of such proposal to the Board of Approval. The applicant also has the option to submit the proposal directly to the Board of Approval.

The Board of Approval has been constituted by the Central Government in exercise of the powers conferred under the SEZ Act. All the decisions are taken in the Board of Approval by consensus. The Board of Approval has 19 Members. Its constitution is as follows:

(1)
Secretary, Department of Commerce
Chairman

(2)
Member, CBEC
Member

(3)
Member, IT, CBDT
Member

(4)
Joint Secretary (Banking Division), Department of Economic Affairs, Ministry of Finance

(5)
Joint Secretary (SEZ), Department of Commerce
Member

(6)
Joint Secretary, DIPP
Member

(7)
Joint Secretary, Ministry of Science and Technology
Member

(8)
Joint Secretary, Ministry of Small Scale Industries and Agro and Rural Industries
Member

(9)
Joint Secretary, Ministry of Home Affairs
Member

(10)
Joint Secretary, Ministry of Defence
Member

(11)
Joint Secretary, Ministry of Environment and Forests
Member

(12)
Joint Secretary, Ministry of Law and Justice
Member

(13)
Joint Secretary, Ministry of Overseas Indian Affairs
Member

(14)
Joint Secretary, Ministry of Urban Development
Member

(15)
A nominee of the State Government concerned
Member

(16)
Director General of Foreign Trade or his nominee
Member

(17)
Development Commissioner concerned
Member

(18)
A professor in the Indian Institute of Management or the Indian Institute of Foreign Trade
Member

(19)
Director or Deputy Sectary, Ministry of Commerce and Industry, Department of Commerce
Member Secretary

Administrative set up

The functioning of the SEZs is governed by a three tier administrative set up. The Board of Approval is the apex body and is headed by the Secretary, Department of Commerce. The Approval Committee at the Zone level deals with approval of units in the SEZs and other related issues. Each Zone is headed by a Development Commissioner, who is ex-officio chairperson of the Approval Committee.
Once an SEZ has been approved by the Board of Approval and Central Government has notified the area of the SEZ, units are allowed to be set up in the SEZ. All the proposals for setting up of units in the SEZ are approved at the Zone level by the Approval Committee consisting of Development Commissioner, Customs Authorities and representatives of State Government. All post approval clearances including grant of importer-exporter code number, change in the name of the company or implementing agency, broad banding diversification, etc. are given at the Zone level by the Development Commissioner. The performance of the SEZ units are periodically monitored by the Approval Committee and units are liable for penal action under the provision of Foreign Trade (Development and Regulation) Act, in case of violation of the conditions of the approval.

First time in India Rupee 150 coin

First Rupee 150 coin issued by India
India’s highest denomination commemorative coin released on 9th may 2010 at New Delhi by Finance Minister Shri Pranab Mukherjee to mark 150th birth centenary of Nobel Prize winner Gurudev Rabindra Nath Tagore. There were two coins with denominations of rupees 5 and rupees 150 in a beautiful presentation set.

also released 75 & 100 rupees coin.

Trade and Industry Objective Questions

1. Recently, Ministry of Human Resource Development developed a new index termed as ‘Educational Development Index’ (EDI) related to primary and upper primary education.
The state at the top of this index is—
(A) Delhi
(B) Kerala
(C) Tamil Nadu
(D) Andhra Pradesh
Ans : (B)
2. India’s mobile market has been ranked at the……largest market of the world.
(A) Second
(B) Third
(C) Fourth
(D) Fifth
Ans : (B)
3. In 2010-11, contribution of service sector in country’s GDP is estimated at about—
(A) 48•6%
(B) 50•6%
(C) 57•3%
(D) 52•6%
Ans : (C)
4. Hutch-Essar has recently been acquired by—
(A) Bharti Airtel
(B) Vodafone
(C) Reliance
(D) Tata Mobile
Ans : (B)
5. In 2010-11 budget, the allocation for National Ganga River Basin Authority has been—
(A) Rs. 100 crore
(B) Rs. 200 crore
(C) Rs. 400 crore
(D) Rs. 500 crore
Ans : (D)
6. The tax-GDP ratio in 2010-11 is estimated at—
(A) 10•12%
(B) 10•38%
(C) 12•3%
(D) 11•98%
Ans : (B)
7. In 2011-12, the maximum limit of custom duty is proposed as—
(A) 11%
(B) 10%
(C) 9%
(D) 8%
Ans : (B)
8. In Human Development Report 2010, India has HDI ranking at—
(A) 126th
(B) 119th
(C) 127th
(D) 129th
Ans : (B)
9. As per the latest available data, in September 2010, India’s total external debt stood at—
(A) $ 122•610 billion
(B) $ 192•610 billion
(C) $ 295•8 billion
(D) $ 233•610 billion
Ans : (C)
10. In New Direct Tax Code for senior citizens, income tax exemption slab has been raised to—
(A) Rs. 2•00 lakh
(B) Rs. 2•00 lakh
(C) Rs. 2•50 lakh
(D) Rs. 3•00 lakh
Ans : (C)
11. Now the latest CRR as declared by RBI w.e.f. April 24, 2010 is—
(A) 6•0%
(B) 5•5%
(C) 5•75%
(D) 6•5%
Ans : (A)
12. As per revised estimates for 2010-11 released by CSO, the growth rate for Indian economy has been estimated to be—
(A) 9•5%
(B) 8•6%
(C) 9•8%
(D) 6•7%
Ans : (B)
13. US-based “Novelis” has recently been acquired by—
(A) Tata Group
(B) Birla Group
(C) Reliance Group
(D) Jointly by Tata and Birla Group
Ans : (B)
14. When was RBI nationalised ?
(A) 1st April, 1935
(B) 1st January, 1949
(C) 1st January, 1935
(D) 1st July, 1969
Ans : (B)
15. According to the latest data published in World Trade Statistics of WTO. India’s share in world trade of goods and services in 2006 was—
(A) 1•0%
(B) 1•1%
(C) 1•2%
(D) 1•5%
Ans : (C)
16. As per quick estimates for the year 2010-11, Indian economy’s GDP at factor cost (at current prices) stood at—
(A) Rs. 3790063 crore
(B) Rs. 4713000 crore
(C) Rs. 4879232 crore
(D) Rs. 6426277 crore
Ans : (C)
17. What is the theme of World Development Report 2010 ?
(A) Poverty and Next Generation
(B) The Real Wealth of Nations : Path Ways to Human Development
(C) Incidence of Rural Poverty
(D) Development and the Next Generation
Ans : (B)
18. How many banks are there in public sector at present ?
(A) 28
(B) 27
(C) 19
(D) 20
Ans : (B)
19. What is the national minimum wage rate fixed under minimum wage legislation on November 2009 ?
(A) Rs. 56
(B) Rs. 60
(C) Rs. 100
(D) Rs. 76
Ans : (C)
20. For attaining 9% growth rate during 11th plan, investment level has been estimated to be—
(A) 31•4% of GDP
(B) 34•8% of GDP
(C) 38•7% of GDP
(D) 36•7% of GDP
Ans : (D)

INDIAN ECONOMY

Indian Rupee has got its symbol as . This symbol has been designed by—
(A) D. Kumar Raju
(B) Udai D. Raj
(C) D. Udai Kumar
(D) D. Udai Reddy
Ans : (C)
2. Primary gold is a gold of—
(A) 20 carat
(B) 22 carat
(C) 23 carat
(D) 24 carat
Ans : (D)
3. First share market in India was established in—
(A) Delhi
(B) Kolkata
(C) Chennai
(D) Mumbai
Ans : (D)
4. ‘Aam Admi Bima Yojana’ is an insurance scheme for rural landless households executed by the nodal agency—
(A) National Insurance Co.
(B) State Government
(C) LIC
(D) Central Government
Ans : (B)
5. Revenue Deficit as a per cent of GDP in Budget 2011-12 has been estimated at—
(A) 4•2%
(B) 6•8%
(C) 6•0%
(D) 4•6%
Ans : (D)
6. GST would be introduced from—
(A) January 1, 2012
(B) August 1, 2011
(C) April 1, 2012
(D) August 15, 2011
Ans : (C)
7. The rate of Minimum Alternate Tax (MAT) proposed in the budget 2011-12 is—
(A) 15%
(B) 18•5%
(C) 20%
(D) 22%
Ans : (B)
8. Which of the following is not a financial regulator ?
(A) IRDA
(B) AMFI
(C) PFRDA
(D) SEBI
Ans : (B)
9. Inflation in India is measured on which of the following indexes/indicators ?
(A) Cost of Living Index
(B) Consumer Price Index
(C) Wholesale Price Index
(D) Gross Domestic Product
Ans : (C)
10. As per 13th Finance Commission Recommendations during 2010-15, transfers to the states from the central tax pool are expected to be—
(A) Rs. 44000 crore
(B) Rs. 164832 crore
(C) Rs. 318581 crore
(D) Rs. 107552 crore
Ans : (C)
11. From which of the following taxes, the Central Government will get the maximum revenue in 2011-12 ?
(A) Custom Duties
(B) Income Tax
(C) Excise Duties
(D) Corporation Tax
Ans : (D)
12. How many economists shared Nobel Prize in Economics for the year 2010 ?
(A) 01
(B) 02
(C) 03
(D) 04
Ans : (C)
13. The target for exports in 2013-14 has been fixed at—
(A) $ 300 billion
(B) $ 275 billion
(C) $ 250 billion
(D) $ 450 billion
Ans : (D)
14. Global Hunger Index released by IFPRI in October 2010 places India at—
(A) 58th rank
(B) 64th rank
(C) 67th rank
(D) 74th rank
Ans : (C)
15. When was the first EPZ set-up in Kandla ?
(A) 1965
(B) 1970
(C) 1975
(D) 1995
Ans : (A)
16. For rural development allocation Union Budget 2011-12 is—
(A) Rs. 16,000 crore
(B) Rs. 46,000 crore
(C) Rs. 56,000 crore
(D) Rs. 87,800 crore
Ans : (D)
17. What is true for the service tax in Union Budget 2011-12 ?
(A) It is raised from 10 to 12%
(B) It is left unchanged at 11%
(C) It is left unchanged at 10%
(D) It is reduced from 14% to 12%
Ans : (C)
18. Which part of Indian rupee has been allotted in public expenditure for repaying interest on loans in 2011-12 budget proposals ?
(A) 18 Paise
(B) 21 Paise
(C) 22 Paise
(D) 23 Paise
Ans : (A)
19. In Forbes-2000 list of the year 2010 how many Indian companies got the place ?
(A) 16
(B) 56
(C) 37
(D) 27
Ans : (B)
20. As per the latest data available (for the year 2009). Infant Mortality Rate (per thousand live births) in India is—
(A) 72
(B) 68
(C) 60
(D) 50
Ans : (D)