14-December-2024-Daily-Current-Affairs

SWITZERLAND SUSPENDS MOST-FAVOURED-NATION CLAUSE IN TAX TREATY WITH INDIA

TOPIC: (GS3) INDIAN ECONOMY: THE HINDU

Switzerland recently decided to suspend the Most-Favoured-Nation (MFN) clause under the Double Taxation Avoidance Agreement (DTAA) with India, effective January 1, 2025. This move could lead to increased tax liabilities for Indian companies in Switzerland and affect Swiss investments in India.

Key Highlights

• Reason for Suspension: Switzerland cited a lack of reciprocity in India’s application of the MFN clause under the DTAA. The Indian Supreme Court ruled in 2023 that the MFN clause is not automatically applicable and requires notification under the Income-Tax Act.
• Impact on Swiss Companies: Swiss firms like Nestlé may face higher taxes on dividends. Starting January 1, 2025, dividend tax rates for Swiss entities will increase from 5% to 10%, as per the original DTAA terms.
• Effect on Indian Companies: Indian companies operating in Switzerland could face higher withholding taxes, impacting their profitability.
• EFTA Investment Risk: The suspension poses a risk to the $100 billion investment plan by EFTA members (Iceland, Liechtenstein, Norway, and Switzerland) in India, agreed upon earlier this year.

Expert Opinions

• Tax Experts’ View: The Swiss decision highlights concern over unequal treatment compared to other countries with more favourable tax treaties.
• Legal and Policy Implications: The Indian Supreme Court’s interpretation of the MFN clause emphasizes stricter adherence to treaty terms and reciprocity. This decision reflects India’s broader strategy to protect domestic tax revenues.
• Global Taxation Trends: Countries are asserting stricter interpretations of international tax agreements. This trend underscores the need for clear, mutually agreed treaty provisions to ensure fairness and stability.

Most-Favoured-Nation (MFN) Clause: Key Points

Why It Exists:

• The MFN clause ensures that countries grant each other the best possible trade terms available.
• It aims to prevent discrimination and ensure equal treatment by guaranteeing that if a country gives preferential trade terms to one nation, it must extend the same terms to all other nations with an MFN agreement.

Who Controls It:

• The MFN clause is usually governed and enforced by international trade organizations like the World Trade Organization (WTO).
• Individual countries also include MFN provisions in their trade agreements with each other to ensure equal treatment in trade relations.

Functions:

• The MFN clause helps promote fair trade by ensuring non-discriminatory practices between countries.
• It works to lower trade barriers (like tariffs and taxes) and enhance trade equality, creating a level playing field in international commerce.

Conclusion

Switzerland’s suspension of the MFN clause under the India-Switzerland DTAA signals shifting dynamics in global taxation policies. While it reflects the importance of reciprocity, it may affect bilateral investments and underscores the need for aligning treaty interpretations to maintain equitable international tax frameworks.

WOUNDING THE SPIRIT OF THE INDIAN CONSTITUTION

TOPIC: (GS2) INDIAN POLITY: THE HINDU

recent remarks by Justice Shekhar Kumar Yadav of the Allahabad High Court have raised serious concerns about judicial impartiality and constitutional propriety. His incendiary speech, has been widely criticized for undermining the spirit and principles of the Constitution.

The Incident and Public Reaction

• The Judge’s Remarks: Justice Yadav’s speech included divisive and inflammatory comments, targeting specific groups. These remarks have been interpreted as dog whistles encouraging impunity for mob violence.
• Reactions from Institutions and Citizens: The Supreme Court demanded a report on the incident, while citizens and activists called for accountability.
• Collective Outrage: The comments have been widely condemned as an attack on the core values of the Constitution, impacting all citizens, not just specific communities.

Implications of Divisive Judicial Speech

• Erosion of Constitutional Values: Statements that promote bigotry weaken the secular and democratic fabric of India. They harm the collective dignity of citizens.
• Triggering Social Disharmony: Incendiary rhetoric from a judicial figure can incite violence and embolden fringe elements. It creates fear and insecurity among marginalized communities.

The Role of Judicial Accountability

• Judiciary as Guardian of the Constitution: Judges are expected to uphold constitutional values and set an example of impartiality. Justice Yadav’s remarks highlight the need for stronger mechanisms to ensure judicial accountability.
• Need for Collective Action: Courts must take decisive action to condemn such behaviour to restore public confidence. Citizens, too, must actively uphold constitutional values through peaceful and collective action.

Way Forward

• Reaffirming Constitutional Integrity: The Constitution belongs to all citizens, and its interpretation must prioritize inclusivity and justice.

• The judiciary must adopt a zero-tolerance approach toward divisive conduct by its members.

• Civil Disobedience as a Tool: Inspired by leaders like Gandhi and Ambedkar, peaceful resistance remains a powerful way to counter violations of constitutional values.

Conclusion

The incident serves as a wake-up call to protect the integrity of India’s democratic framework. Citizens, the judiciary, and lawmakers must work together to safeguard the principles of justice, liberty, and equality. Upholding the Constitution is not just a duty but a collective responsibility to ensure a fair and harmonious society.

SUPREME COURT’S RENEWED FOCUS ON MANIPUR

TOPIC: (GS2) INDIAN POLITY: THE HINDU

The Supreme Court of India has taken proactive steps to monitor the situation in Manipur following a prolonged period of ethnic violence. The Court’s intervention ensure accountability and restore normalcy in the region.

Court’s Key Actions

• Demand for Transparency: The Supreme Court directed the Manipur government to provide detailed reports on the destruction of properties and instances of encroachment linked to the violence.
• Justice Gita Mittal Committee: The tenure of the Justice Gita Mittal-led Committee was extended to oversee investigations into violence-related incidents. The Committee also monitors relief efforts and humanitarian assistance in the state.
• Supervisory Role: Ideally, these responsibilities would have been handled by the executive authorities, but the judiciary stepped in due to a lack of accountability and effective governance.

Reasons for Judicial Intervention

• Ineffectiveness of Government: The state government failed to bridge the ethnic divide and ensure law and order.
• Rise of Armed Non-State Actors: Armed groups, often equipped with sophisticated weapons stolen from state armories, have exacerbated violence.
• Political Division: Political representatives, even within the same parties, are divided along ethnic lines, leading to a lack of consensus on resolving issues.

Challenges and Way Forward

• Secrecy vs. Transparency: The government has sought to limit the Committee’s findings under the guise of “national security.” The Supreme Court must ensure transparency to promote accountability and justice.
• Conflict Resolution Mechanisms: Global approaches like “truth and reconciliation” can inspire solutions in Manipur. Such mechanisms prioritize accountability, healing, and bridging divides.
• Push for Accountability: The findings of the Justice Mittal Committee could be pivotal in addressing grievances and restoring peace.

Conclusion

The Supreme Court’s renewed focus is a positive development, but without substantial action to address the root causes of violence, its efforts may fall short. A transparent and accountable approach, combined with effective conflict resolution measures, is essential to achieve lasting peace in Manipur.

TRUMP’S RETURN AND THE OUTLOOK FOR SOUTH ASIA

TOPIC: (GS2) INTERNATIONAL RELATIONS: THE HINDU

Donald Trump’s potential return as U.S. President in 2025 is expected to reshape U.S.-South Asia relations, strengthening ties with India while posing new challenges for regional stability. South Asian countries must adapt to these shifts amidst global power realignments.

Implications of Donald Trump’s Presidency for South Asia

Continuity in South Asia Relations

• Donald Trump’s presidency, beginning in January 2025, has sparked mixed reactions globally.
• His leadership style, centered on strategic power politics, may bring both opportunities and challenges for South Asia.
• While his return may signal continuity in U.S. engagement with the region, his policies could redefine its strategic landscape.

Key Drivers of U.S.-India Relations

• Strengthened Bilateral Ties: India and the U.S. have grown closer since the early 2000s, with India recognized as a net-security provider in 2009. The Biden administration enhanced India’s strategic role through the Indo-Pacific strategy, primarily to counter China.
• Regional Cooperation: U.S. disengagement from Pakistan post-Afghanistan exit reduced traditional tensions in India-U.S. ties.

Trump’s Potential Policy Approach

• Focus on Burden Sharing: Trump’s policies are likely to stress burden-sharing, reciprocity, and confronting China. A reduced focus on democracy and human rights may ease U.S.-India tensions.
• Backing Regional Leadership: The U.S. may support India’s leadership in South Asia with development and defence cooperation.

South Asia Under Trump 2.0

• Enhanced U.S. Engagement: Increased capacity-building and development aid may benefit Sri Lanka, Myanmar, and Afghanistan’s Taliban government. However, reduced U.S. assistance could challenge Bangladesh during political transitions.
• Impact of U.S.-China Rivalry: Trump’s hardline stance on China could limit South Asia’s ability to balance global powers. Greater U.S. demands for reciprocity could complicate partnerships in the region.
• Crisis Resolution Impact: Trump’s potential success in resolving the Russia-Ukraine war could stabilize food and fuel prices in South Asia.

Conclusion:

Trump’s presidency could strengthen U.S.-India ties while introducing new regional challenges. South Asian nations must strategically navigate these shifts to maintain stability and balance relations with the U.S., India, and China.

RAILWAYS (AMENDMENT) BILL, 2024 PASSED

TOPIC: (GS2) INDIAN POLITY: PIB

The Lok Sabha has passed the Railways (Amendment) Bill, 2024, which seeks to repeal the Indian Railway Board Act, 1905, and merge its provisions into the Railways Act, 1989. While the Bill simplifies governance, it has sparked debates over safety, autonomy, and the future direction of Indian Railways.

Key Objectives of the Bill

• The Railway Board, established in 1905, managed railway operations under the Indian Railways Act, 1890.
• Even after the enactment of the Railways Act, 1989, the 1905 Act remained in force, creating redundancy.

Purpose of the Amendment:

• The Bill repeals the outdated 1905 Act, consolidating its provisions into the 1989 Act.
• This aims to streamline legal frameworks, enhance governance, and modernize railway operations.
• The government asserts that this consolidation will simplify processes and boost efficiency.

Provisions of the Railways (Amendment) Bill, 2024

• Integration of Laws: Merges the Indian Railway Board Act, 1905, into the Railways Act, 1989.
• Authority of the Railway Board: The Railway Board assumes functions previously vested in the Central Government under the Railways Act, 1989.
• Improved Passenger Services: Focuses on increasing operational efficiency and expanding network development to benefit passengers.

Implications for Indian Railways

• Streamlined Governance: Clarifies the legal standing of the Railway Board, ensuring more efficient decision-making.
• Safety and Autonomy Concerns: Critics argue that the Bill does not adequately address critical issues like safety reforms and vacancies.
• Need for an Independent Regulator: Experts suggest that an independent regulatory body could improve accountability and attract private investment.
• Mixed Reactions: Supporters view the Bill as a step towards modernizing railways, while detractors worry about bureaucratic delays and the absence of reforms for safety and decentralization.

Potential Benefits

• Improved Governance: Streamlining legal frameworks can lead to better accountability and decision-making.
• Enhanced Efficiency: Decentralized authority for railway zones may speed up project implementation and improve resource use.
• Increased Private Investment: A transparent regulatory environment could encourage private sector participation in railway infrastructure.
• Regional Development: Projects targeting specific regions, like extending services to remote areas, could promote balanced growth.

Conclusion

The Railways (Amendment) Bill, 2024, represents a significant legislative effort to modernize Indian Railways. However, its success depends on how effectively it addresses safety, decentralization, and inclusivity concerns. For Indian Railways to evolve into a modern and efficient transport network, these challenges must be resolved through robust implementation and stakeholder engagement.

OWNERSHIP DISPUTE OVER DURGADI FORT RESOLVED

TOPIC: (GS2) INDIAN POLITY: THE HINDU

A Kalyan civil court has dismissed the claim of the Majlis-e-Mukhabarat Masajid-O-Awqaf Kalyan Trust over properties in Durgadi Fort, Maharashtra. The trust’s suit, filed in 1976, was deemed invalid as it exceeded the legal time limit for such claims.

Key Facts About Durgadi Fort

• Located in Kalyan, Maharashtra, Durgadi Fort dates back to the 16th century and was constructed by the Adil Shahi Sultanate of Bijapur.
• Spread over 70 acres, the fort housed a mosque, a temple, a prayer ground, and a well. It was historically significant for the Muslim community, especially for Eid prayers.

Transition Under the Marathas:

• In 1760, the Marathas captured the fort and renamed it Durgadi Killa, dedicating it to Goddess Durga. A temple to Goddess Durgadevi was built inside the fort near the mosque.
• After the British gained control in 1818, the fort’s importance declined, and the temple became inactive after the idol was stolen in 1876.

The Dispute Over the Fort

• Tensions between Hindu and Muslim communities over the fort’s control arose in the 1960s.
• The Muslim community claimed they had been using the site for Eid prayers for centuries, while Hindus asserted their right to worship and manage the fort.
• In 1966, the Maharashtra government attempted to take control of the land and planned to convert part of it into a public park.
• Following protests, the government allowed Muslims to continue offering Eid prayers but stated that neither community could claim sole ownership of the land.

Legal Battle:

• In 1976, the Majlis-e-Mushawarat trust filed a suit claiming ownership, eight years after losing possession in 1968.
• The court ruled that the suit was barred by the statute of limitations, as it was filed beyond the legal deadline.
• In 2023, the court affirmed that the land belonged to the Maharashtra government.

Conclusion

The Durgadi Fort case highlights the challenges of balancing historical claims with legal frameworks. While the court ruled on ownership, it refrained from commenting on the religious significance of the structures. The decision underscores the importance of adhering to legal timelines in ownership disputes.

STEPS TAKEN BY THE GOVERNMENT TO REDUCE OUT-OF-POCKET HEALTH EXPENDITURE (OOPE)

TOPIC: (GS2) INDIAN POLITY: PIB

India is reducing OOPE by increasing healthcare budgets, launching programs like Ayushman Bharat, and improving infrastructure to provide affordable healthcare.

Decline in OOPE

• OOPE as a share of Total Health Expenditure (THE) dropped from 48.8% in 2017-18 to 39.4% in 2021-22.
• Yearly figures:
  • 48.2% (2018-19)
  • 47.1% (2019-20)
  • 44.4% (2020-21)

Budget Allocation

• Health budget rose by 85% from 2017-18 to 2024-25.
• ₹70,051 crore allocated by the 15th Finance Commission to improve healthcare through local bodies.
• States urged to increase health budgets by at least 10% annually.

Key Programs

• National Health Mission (NHM): Supports states in providing affordable healthcare, focusing on rural and underserved areas.
• PM-Ayushman Bharat Health Infrastructure Mission (PM-ABHIM): ₹64,180 crore allocated to strengthen healthcare systems and improve disease response.
• Ayushman Aarogya Mandirs (AAMs): 1,75,418 centers set up to offer preventive, curative, and rehabilitative healthcare.
• Ayushman Bharat – PM-JAY: Provides ₹5 lakh health insurance per family annually to 55 crore beneficiaries. Recently extended to senior citizens aged 70+ regardless of income.

Other Initiatives

• Free medicines and diagnostic services to reduce personal expenses.
• Affordable generic medicines under PMBJP and low-cost drugs via AMRIT Pharmacies.

Conclusion

These measures aim to improve access to affordable healthcare, reduce financial stress, and ensure better health outcomes for all.

THE KNOTTY PROMISE OF SECTION 69

TOPIC: (GS2) INDIAN POLITY: INDIAN EXPRESS

The Bharatiya Nyaya Sanhita (BNS) introduces Section 69, which criminalizes sexual relations based on deceitful means, including false marriage promises. This section raises concerns over gender bias, evidence issues, and implications for consensual relationships.

Key Highlights

• A case under Section 69 was filed by a 25-year-old woman from Jharkhand, accusing a man of engaging in a sexual relationship on a false promise of marriage.
• Section 69 prescribes penalties of up to 10 years imprisonment and fines for such offenses.

• Earlier cases were dealt with under Sections 376(2)(n) and 90 of the IPC, addressing repeated sexual acts and consent obtained through false pretences.
• The new law specifically includes “deceitful means” and “inducement” to clarify these ambiguities.

Legal Challenges

• Some courts dismissed cases, citing mutual understanding in long-term relationships.
• Others ruled that false promises with no intent to marry could amount to criminal acts.
• Potential misuse of the law in consensual relationships that later fail.

Gender Bias and Criticism

• Critics argue Section 69 reinforces the idea that women lack decision-making power in sexual relationships.
• The law penalizes men but doesn’t address deceit in cases involving other genders.
• Public petitions demand its repeal, citing discriminatory provisions and neglect of mutual consent.

Statistical Insights

NCRB Data (2016-2022):

• 40% of rape cases involved false marriage promises or similar claims.
• Average conviction rate for all rape cases during this period was 29.71%.

Concerns from Parliamentary Reports

• Highlighted challenges in proving the intent behind marriage promises.
• Warned against vague definitions that could lead to inconsistent enforcement.
• Raised concerns over privacy and individual autonomy.

Support for Section 69

• Proponents argue it closes legal gaps by recognizing psychological and emotional manipulation.
• The law aims to protect women in patriarchal societies where marriage is often linked to social identity.

Conclusion

Section 69 addresses serious gaps in the legal framework but raises significant concerns about privacy, fairness, and potential misuse. Balancing legal safeguards with individual rights remains a challenge.