TOPIC : GS 3 Effects of Liberalization on the Economy, Changes in Industrial Policy and their Effects on Industrial Growth.
Rewind to fast forward
What is the news?
● Taxation began with global telecom major Vodafone’s $11 billion entry into India
● It is nearing its climax 14 years on, with the company having frozen fresh investments for a few years and its Indian operations now on the brink of collapse.
● Finance Minister introduced tax law changes to scrap the retrospective provisions brought in the Union Budget 201213.
● IT demands have been made in 17 cases, including from Vodafone and Cairn, using those retroactive clauses in the IT law.
● Government took so long to undo after losing a tax pursuit against Vodafone is disappointing.
● The talk despite a resounding parliamentary majority, while promising global investors that it does not approve of such measures.
● The result of political dithering, bureaucratic bungling or illinformed legal advice, the ‘sore point for potential investors’ remained on the statute.
Case Laws
● This should now lead to a formal burial of a matter that has cost India dear.
● In Cairn’s case, the tax department began action in January 2014, but the assessment orders were passed, and its shares sold off to recover ‘retrospective’ tax dues under this regime’s watch, pending international arbitration.
● By December 2020, the Vodafone and Cairn arbitration cases had been lost and investors hoped the Government would abide by the legal process and close this chapter.
● Instead, appeals were filed, with the Government asserting as recently as that it will ‘vigorously defend’ its sovereign right to tax
● It had ‘never agreed to arbitrate a national tax dispute’.
● If that were indeed the case, the Government could have introduced these changes in the Budget instead of wasting more legal resources on filing appeals.
Way Forward
● It is quite clear the Uturn has been prompted by Cairn Energy’s relentless pursuit to enforce the arbitration award.
● It has sought to get Air India labelled as the government’s ‘alter ego’, creating fresh doubts for the airline’s potential buyers,
● The French court has permitted it to freeze Indian assets in Paris, must be significant triggers.
● Whether Cairn will back down from those claims or forfeit the interest and damages, as offered by the Government to close the chapter, will likely depend on its institutional shareholders.
● Irrespective of the outcome, global capital is unlikely to immediately forget the ‘adhoc’ approach to this critical policy issue and rush in.
● Be it fluctuating trade tariffs or shifting GST rates and rules, India needs to demonstrate greater clarity and consistency in policy across the board to fix its broken credibility
Mains Question
Explain delayed reset on retrospective tax is only the first step to regaining investor confidence?
Sources : https://www.thehindu.com/business/centre-moves-to-redact-retrospective-tax-law/article35745993.ece
PRELIMS PUNCHERS
1. Abanindranath Tagore
It was the principal artist and creator of the “Indian Society of Oriental Art”. He was also the first major exponent of Swadeshi values in Indian art, thereby finding the influential Bengal school of art, which led to the development of modern Indian painting. He was also a noted writer, particularly for children. Popularly known as ‘Aban Thakur’, his books Rajkahini, Buro Angla, Nalak, and Khirer Putul were landmarks in Bengali language children’s literature and art.
Tagore sought to modernise Mughal and Rajput styles to counter the influence of Western models of art, as taught in art schools under the British Raj. Along with other artists from the Bengal school of art, Tagore advocated in favour of a nationalistic Indian art derived from Indian art history, drawing inspiration from the Ajanta Caves. Tagore’s work was so successful that it was eventually accepted and promoted as a national Indian style within British art institutions
Sources : https://pib.gov.in/PressReleseDetailm.aspx?PRID=1698845
2. Agaléga
They are two outer islands of Mauritius located in the Indian Ocean, about 1,000 kilometres north of Mauritius island. The North Island is home to the islands’ airstrip and the capital Vingt Cinq. The islands are known for their coconuts, the production of which is their main industry, and for the Agalega day gecko. Agaléga is not the only Indian Ocean island modified for P-8 use. For instance, military facilities on India’s Andaman and Nicobar Islands in the northeastern Indian Ocean, at the junction of the Bay of Bengal and the Andaman Sea, were also enhanced to better support India’s patrol aircraft missions.
There is a Memorandum of Understanding between the governments of Mauritius and India to develop the Agaléga islands and resolve infrastructural problems faced by Agaleans. Also see India–Mauritius Military cooperation. Local residents have expressed concern about employment, culture, and sovereignty regarding India’s military build-up on the island.
Sources : https://www.thehindu.com/news/international/no-plan-to-house-indian-military-base-on-agalega-island-mauritius/article35755505.ece
3. Gol Gumbaz
Gol Gumbaz is the tomb of king Mohammed Adil Shah, Adil Shahi Dynasty. Construction of the tomb, located in Bijapur , Karnataka, India, was started in 1626 and was completed in 1656. The name is based on “Gol Gumbadh” derived from “Gola Gummata” meaning “circular dome”. It follows the style of culture and Indo-Islamic architecture . Even a slight whisper by someone standing in its gallery can be heard everywhere else in the gallery, and if somebody claps, the sound of it echoes several times.
At each of the four corners of the cube, is a dome-capped octagonal tower seven stories high with a staircase inside. The upper floor of each tower opens on to a round gallery which surrounds the dome. The dome is one of the largest domes constructed before the modern era.
Sources : https://www.thehindu.com/news/national/karnataka/damage-to-historic-monument-gol-gumbaz/article35745973.ece
4. Pulikkali
It is a recreational folk art from the state of Kerala, India. It is performed by trained artists to entertain people on the occasion of Onam, an annual harvest festival, celebrated mainly in the Indian state of Kerala. On the fourth day of Onam celebrations (Nalaam Onam), performers painted like tigers and hunters in bright yellow, red, and black shake their bellies and dance to the beats of instruments like Udukku and Thakil.
Literal meaning of Pulikkali is the ‘play of the tigers’ hence the performance revolve around the theme of tiger hunting. The folk art is mainly practiced in Thrissur district of Kerala. Best place to watch the show is at Thrissur on the fourth day of Onam, where Pulikkali troupes from all over the district assemble to display their skills. The festival attracts thousands of people to the Thrissur city. Pulikkali is also performed during various other festive seasons.
Sources : https://www.thehindu.com/news/national/kerala/no-surrender-for-thrissur-tigers/article32517800.ece
PRELIMS PUNCHERS
1. Consider the following statement with regard to Abanindranath Tagore
a. He is creator of the “Indian Society of Oriental Art”
b. He was also a noted writer, particularly for children called known as ‘Aban Thakur’
Select the correct statement using code given below.
(a). 1only (b) 2 only
(c).Both (d). None of above
Answer : C
It was the principal artist and creator of the “Indian Society of Oriental Art”. He was also the first major exponent of Swadeshi values in Indian art, thereby finding the influential Bengal school of art, which led to the development of modern Indian painting. He was also a noted writer, particularly for children. Popularly known as ‘Aban Thakur’, his books Rajkahini, Buro Angla, Nalak, and Khirer Putul were landmarks in Bengali language children’s literature and art.
Tagore sought to modernise Mughal and Rajput styles to counter the influence of Western models of art, as taught in art schools under the British Raj. Along with other artists from the Bengal school of art, Tagore advocated in favour of a nationalistic Indian art derived from Indian art history, drawing inspiration from the Ajanta Caves. Tagore’s work was so successful that it was eventually accepted and promoted as a national Indian style within British art institutions
2. Pulikkali is the folk art of
a. Kerala
b. Tamil Nadu
c. Andhra Pradesh
d . Telangana
Answer : A
It is a recreational folk art from the state of Kerala, India. It is performed by trained artists to entertain people on the occasion of Onam, an annual harvest festival, celebrated mainly in the Indian state of Kerala. On the fourth day of Onam celebrations (Nalaam Onam), performers painted like tigers and hunters in bright yellow, red, and black shake their bellies and dance to the beats of instruments like Udukku and Thakil.
Literal meaning of Pulikkali is the ‘play of the tigers’ hence the performance revolve around the theme of tiger hunting. The folk art is mainly practiced in Thrissur district of Kerala. Best place to watch the show is at Thrissur on the fourth day of Onam, where Pulikkali troupes from all over the district assemble to display their skills. The festival attracts thousands of people to the Thrissur city. Pulikkali is also performed during various other festive seasons.