Related Topics: Money Laundering, Common Reporting Standard (CRS)
- Banking details of Indians with accounts in Switzerland will be available to tax authorities in India, as the automatic exchange of information regime kicked off between the two countries.
- The first automatic exchange of financial account information (AEOI) under the provisions common reporting standard will start from September, 2019.
What is AEOI?
- It provides for the exchange of non-resident financial account information with the tax authorities in the account holders’ country of residence.
- Participating jurisdictions that implement AEOI send and receive pre-agreed information each year, without having to send a specific request.
Why AEOI is needed?
- It will enable the discovery of formerly undetected tax evasion.
- It will enable governments to recover tax revenue lost to non-compliant taxpayers, and will further strengthen international efforts to increase transparency, cooperation, and accountability among financial institutions and tax administrations.
- It will generate secondary benefits by increasing voluntary disclosures of concealed assets and by encouraging taxpayers to report all relevant information.
What India will get under AEOI?
- The details that Switzerland would share with Indian tax authorities under the Automatic Exchange of Information (AEOI) framework would include account numbers, credit balance and all kinds of financial income for each Indian client of every Swiss financial institution.
- This would be in addition to details already being shared by Switzerland with India for nearly 100 Indian entities, including individuals and enterprises, on submission of prima facie evidence of their financial wrongdoings, under a bilateral pact for administrative assistance on tax matters.
- Under the AEOI framework, detailed financial information on all Indian residents that have an account maintained by a Swiss financial institution in 2018 will be provided for the first time to the Indian tax authorities in September 2019 and on a yearly basis thereafter.
- The information will include accounts that were closed during 2018.
- The step is likely to shed more light on the wealth, Indians have stashed away in Swiss bank accounts, for so long governed by strict local rules of secrecy.
- In 2018, data from Zurich-based Swiss National Bank (SNB) had shown that after declining for three years, money parked by Indians in Swiss Banks rose 50 per cent to CHF (Swiss Franc) 1.02 billion (Rs 7,000 crore) in 2017 over the previous year.
- According to Central Board of Direct Taxes (CBDT), this is a significant step in the government’s fight against black money and the era of “Swiss bank secrecy” will finally be over from September, 2019.
[Sources: The Hindu, Indian Express, Business Standard]
Related Topics: RBI Surplus Transfer, Bimal Jalan Committee
- RBI Central Board has decided to transfer ₹1.76 lakh crore to the Centre.
- The ₹1.76 lakh crore includes the central bank’s 2018-19 surplus of ₹1.23 lakh crore and ₹52,637 crore of excess provisions identified as per the revised Economic Capital Framework (ECF) adopted at the Board meeting.
- RBI had formed a committee chaired by former RBI Governor Bimal Jalan to review its ECF last year.
Earnings of RBI
- Open market operations, wherein a central bank purchases or sells bonds in the open market in order to regulate money supply in the economy, are a major source of income for the RBI.
- Apart from the interest received from these bonds, the RBI may also profit from favourable changes in bond prices.
- Dealings in the foreign exchange market that the RBI engages in may also contribute to the bank’s profits.
- The RBI, for instance, may buy dollars cheaply and sell them dear in the future to pocket profits.
- Unlike commercial banks, the primary mandate of the RBI is not to earn profits but to preserve the value of the rupee.
- Profit and loss are thus merely a side effect of its regular operations to shape monetary policy.
Expenditure of RBI
- RBI’s expenditure is mainly on printing of currency notes, on staff, besides commission to banks for undertaking transactions on behalf of the government and to primary dealers that include banks for underwriting some of these borrowings.
- The central bank’s total cost, which includes expenditure on printing and commissions forms, is only about 1/7th of its total net interest income.
RBI Transfers over the years
- Each year, the RBI transfers to the government any money in its balance sheet that it deems to be beyond its operational and contingency needs.
- Amount of funds transferred by the central bank to the government this year is much higher than earlier — 146.8% more than what it had paid out last year.
- Previously, the highest amount of surplus funds that the RBI had transferred to the government was ₹65,896 crore in 2014-15.
- The net surplus figures are: ₹52,683 (2013-14); ₹65,896 (2014-15); ₹65,880 (2015-16); ₹30,659 (2016-17) and ₹50,000 (2017-18)
Controversy around the Transfer
- The massive payout has raised concerns that the government may be confiscating money from the RBI to meet its urgent spending needs, thus effectively turning the central bank into a banker for the government.
- Central banks such as the RBI, however, are supposed to be independent from all forms of government influence.
- In reality, governments across the world try to influence decision-making by their respective central banks in various ways.
- Some economists argue that the government has the right to make use of funds in the custody of public institutions such as the RBI to meet its fiscal needs.
- Critics, however, argue that stripping the financial assets of regulatory institutions such as the RBI can compromise their independence.
To know more about RBI Surplus Transfer:
Stripping the financial assets of regulatory institutions such as the RBI and SEBI can compromise their independence. Do you agree?[Sources: The Hindu, Indian Express]
Related Topics: Sustainable Democracy, Election Commission of India (ECI)
- ECI is scheduled to host the 4th General Assembly of Association of World Election Bodies (A-WEB) at Bengaluru.
- Over 120 Participants from more than 50 countries across the globe will join the AWEB events scheduled in Bengaluru from 02nd to 04th September, 2019.
What is A-WEB?
- It is the largest association of Election Management Bodies (EMBs) worldwide.
- It was established on October 14, 2013 in Song-do, South Korea.
- The permanent secretariat of A-WEB is located at Seoul.
- The vision of A-WEB is to foster efficiency and effectiveness in conducting free, fair, transparent and participative elections worldwide.
- It aims to achieve sustainable democracy around the world.
- Its activities are guided by its mission to identify latest trends, challenges and developments in democratic electoral management and electoral processes.
- It also facilitates appropriate exchange of experience and expertise among members with the objective of strengthening electoral democracy worldwide.
ECI and A-WEB
- Election Commission of India has been very closely associated with the process of formation of A-WEB since 2011-12.
- ECI has been its Executive Board Member since AWEB’s inception in October 2013 for two consecutive terms (2013-15 and 2015-17).
- At the last A-WEB General Assembly held in Bucharest on 31st August, 2017, Romania took over as Chair and ECI was unanimously elected as Vice-Chair of A-WEB 2017-19.
- India is all set to take over as Chair for the 2019-21 term.
Related Topics: Government Schemes and Initiatives, Digital India
The Ministry of Electronics and Information Technology (MeitY) and Google signed a statement of intent to roll-out ‘Build for Digital India’ Programme.
To offer a platform to engineering students to develop market-ready, technology-based solutions that address key social problems.
- As part of the programme, engineering students across the country will be invited to apply and join in a learning journey that will help them transform their bright ideas into real-world solutions.
- Applicants will take part in online and offline learning opportunities on key technologies such as machine learning, cloud and android.
- These will be offered through Google’s Developer Student Club network and other Google Developer networks.
- Google will also offer mentorship sessions in product design, strategy and technology to the most promising products and prototypes.
The programme will invite bright ideas and solutions from students to focus on areas of healthcare, agriculture, education, smart cities and infrastructure, women safety, smart mobility and transportation, environment, accessibility and disability and digital literacy.
- The programme will provide great exposure to students in dealing with real world problems and develop deeper understanding of how newer technologies can be used to solve them.
- This initiative will not only motivate the college students across India to innovate but will also produce some good technology solutions for some major social challenges of India.
FACTS OF THE DAY
INDIA’S FIRST GARBAGE CAFÉ
In a unique initiative, the Ambikapur municipal corporation of Chhattisgarh will open a first-of-its-kind ‘Garbage Cafe’. In this unique Cafe’ poor people and rag pickers will get free food in exchange for one kilogram of plastic, while breakfast will be provided if half a kilogram of plastic is brought to the cafe. The collected plastic waste would further be turned into granules and will then be used in the construction of roads in the city. Ambikapur is Chhattisgarh’s first dustbin-free city. The city has been hailed as the second cleanest city in the country in Swachhata rankings.
NATIONAL NUTRITION MONTH (POSHAN MAAH)
The entire month of September will be celebrated as the Rashtriya Poshan Maah. It is aimed at making people aware of the importance of nutrition & giving individual access to government services to support supplement nutrition for their children & pregnant women /lactating mothers. This year, the theme is Complementary Feeding. Prime Minister’s Overreaching Scheme for Holistic Nourishment – POSHAN Abhiyaan is a multi- ministerial convergence mission with the vision to address malnutrition with a targeted approach by 2022.
President Jokowi has officially announced that East Kalimantan (on Borneo island) will become Indonesia’s new capital. Indonesia’s current capital, Jakarta, is home to more than 10 million people – and has some of the world’s worst air pollution and traffic congestion. East Kalimantan has a low risk of natural disasters and the location is also strategic as it is in the center of Indonesia, and close to developed cities.
NEHRU TROPHY BOAT RACE
Nadubhagam chundan (snakeboat) rowed by the Pallathuruthy Boat Club lifted the 67th edition of the Nehru Trophy Boat Race held on Punnamada Lake in Kerala. The Nehru Trophy is the first race of the inaugural edition of the Champions Boat League (CBL). Hosted by Kerala Tourism, CBL is the country’s first-ever boat-race on the lines of IPL. There will be 12 races in the CBL beginning with the Nehru Trophy and concluding with President’s Trophy Boat Race in Kollam on November 23.