- Government extends tax deadlines to June 30
- Tokyo Olympics moved to 2021 over virus scare
- Encourage doorstep delivery: Centre
- U.S. could become virus epicentre: WHO
- Economic package soon, says FM
- RBI advances variable rate term repo auction
Focus: GS-III Indian Economy
Why in news?
- Deadlines for filing income tax and GST returns have been extended to June 30, as part of a slew of relaxations of financial year-end compliance announced by Finance Minister Nirmala Sitharaman on 24th March 2020.
- The changes had been prompted by the shutdown of large parts of the country in a bid to control the spread of the COVID-19 viral infection, so that taxpayers were not forced to endanger their health in a bid to meet compliance requirements.
What are the other Changes?
- Bank account holders would not be charged extra for using a debit card to withdraw money from the ATMs of other banks for the next three months, and charges for not meeting minimum balance requirements would also be waived.
- Bank charges for digital transactions were also being reduced.
- Income tax returns for the financial year 2018-19 can now be filed until June 30, with the interest rate on delayed payments reduced to 9% from 12%.
- The last date for linking Aadhaar with PAN has also been extended from March 31 to June 30.
- Other taxpayer compliance deadlines, including for investment in savings instruments or for roll-over benefit of capital gains, under the Income Tax Act and other laws have also been extended.
- The deadline for filing GST returns for March, April and May, as well as for opting for the composition scheme, has been extended to June 30 for smaller companies — with less than ₹5 crore aggregate annual turnover — without any interest, late fee or penalty being charged.
- For bigger companies, only interest would be charged at the reduced rate of 9%.
- The date for filing annual GST returns for 2018-19 has also been extended to the last week of June.
- Deadlines for the Vivaad se Vishwas and Sabka Vishwas schemes for defaulting taxpayers are also being extended.
- The Centre has also decided to raise the threshold of default under Section 4 of the Insolvency and Bankruptcy Code, 2016, from ₹1 lakh to ₹1 crore in order to prevent triggering of insolvency proceedings against MSMEs.
- Statutory corporate requirements are also being relaxed at this time, including filings in the MCA-21 registry, mandatory board meetings, residency requirements for independent directors and deposit reserve requirements.
What the Government had to say?
- The Government will continue to watch the situation and if it improves, there is no reason to worry.
- However, if the current situation continues beyond April 30 the Government may consider suspending Sections 7, 9, 10 of the IBC for a period of 6 months to stop companies at large from being forced into insolvency proceedings in such force majeure cases of default.
- Customs clearance operations would run around the clock, all seven days of the week, till the end of June.
- For fisheries imports, the validity of sanitary permits were being extended, while other requirements were being relaxed.
- MCA21 is an e-Governance initiative of Ministry of Company Affairs (MCA), Government of India.
- It enables an easy and secure access of the MCA services to the corporate entities, professionals and citizens of India.
- It Enables the business community to register a company and file statutory documents quickly and easily.
- It Provides easy access of public documents
- It Helps to Provide faster and effective resolution of public grievances
- It also Helps in easy registration and verification of charges
- It Ensures proactive and effective compliance with relevant laws and corporate governance
- It Also Enables the MCA employees to deliver best of breed services
Focus: GS-III Disaster Management, Prelims
Why in news?
- The 2020 Tokyo Olympics has been postponed to be held before the summer of 2021 because of the coronavirus pandemic sweeping the globe, the International Olympic Committee announced on 24th March 2020.
- The Games were scheduled for July 24-August 9, but after telephone discussions between IOC president Thomas Bach and Japanese Prime Minister Shinzo Abe, a historic joint decision was taken for the first postponement of an Olympics in peacetime.
What was said about the Postponement?
- The Olympics was postponed to safeguard the health of the athletes, everybody involved in the Olympic Games and the international community.
- The leaders agreed that the Olympic Games in Tokyo could stand as a beacon of hope to the world during these troubled times and that the Olympic flame could become the light at the end of the tunnel in which the world finds itself at present.
- The exact dates is a question for the Tokyo organising committee and an International Olympic Committee panel overseeing the preparations.
- The move would be a devastating blow for Tokyo, which had won widespread praise for its organisation, with venues finished well ahead of time and tickets massively oversubscribed.
- The Olympics, which has experienced boycotts, terrorist attacks and protests, but has been held every four years since 1948, would be the highest-profile event affected by the virus that has killed thousands and closed sports competitions worldwide.
- Training has become impossible for many athletes and exposes them to the risk of contracting or spreading the disease.
- Competitions and qualifiers have been scrapped, while international travel is severely limited.
- Tokyo was spending some $12.6 billion to host the Games, according to its latest budget, and experts believe a postponement could cost it some $6 billion in the short-term before recouping it when it eventually goes ahead.
International Olympic Committee (IOC)
The International Olympic Committee (IOC) is a non-governmental international organisation which came into existence in 1894.
- The IOC has the aim of ensuring the regular holding of the Olympic Games and fostering Olympism and the Olympic movement. Olympism, is a philosophy of life, exalting and combining, in a balanced whole, the qualities of body, will and mind.
- Blending sport with culture and education, Olympism seeks to create a way of life based on the joy found in effort, the educational value of good example and respect for universal fundamental ethical principles.
- The goal of the Olympic movement is to contribute to building a peaceful and better world by educating youth through sport practiced without discrimination of any kind and in the Olympic spirit, which requires mutual understanding with a spirit of friendship, solidarity and fair-play.
- The Olympic Summer Games take place during the first year of the Olympiad (period of four years) which they are to celebrate.
- They are the exclusive property of the IOC, which entrusts their organisation to a host city seven years in advance.
- The programme of the Games must include at least 15 of the total number of Olympic sports (sports governed by recognized International Federations and admitted to the Olympic programme by decision of the IOC at least seven year before the Games).
Focus: GS-III Indian Economy
Why in news?
- The Home Ministry on 24th March 2020, issued a set of guidelines to be followed by the States to contain COVID-19.
- It asked all “enforcement authorities to note that these strict restrictions fundamentally relate to the movement of people, but not to that of essential goods”.
What the Health Ministry said?
- The Health Ministry said all commercial and private establishments shall be closed, except for shops, including ration shops dealing in food, groceries, fruits and vegetables, milk, meat, fish and fodder.”
- “However, district authorities may encourage and facilitate home delivery to minimise the movement of individuals outside their homes,” it said.
- The Ministry said “delivery of all essential goods, including food, pharmaceuticals and medical equipment through e-commerce” would be allowed.
- “Hospitals and all related medical establishments, including manufacturing and distribution units such as dispensaries, chemist and medical equipment shops, laboratories, clinics, nursing homes and ambulances will continue to remain functional,” the Ministry said.
- “All persons who have arrived in India after February 15, 2020, and all such persons who have been directed by health care personnel to remain under strict home/institutional quarantine for a period as decided by local health authorities, failing which they will be liable to legal action under Section 188 of the IPC,” the Ministry said.
- The National Disaster Management Authority issued an order asking the States to act against any person violating the containment measures under provisions of Sections 51 to 60 of the Disaster Management Act, 2005, besides legal action under Section 188 of the IPC, punishable by up to two years in jail and a fine.
- Offices of the Government of India, its autonomous subordinate offices and public corporations shall remain closed.
- But the offices of defence, Central armed police forces, treasury, public utilities (including petroleum, CNG, LPG, PNG), disaster management, power generation and transmission units, India Post, the National Informatics Centre and early warning agencies would be exempted.
- In case of funerals, a congregation of not more than 20 persons will be permitted.
National Disaster Management Authority
- National Disaster Management Authority, abbreviated as NDMA, is an apex Body of Government of India, with a mandate to lay down policies for disaster management.
- The phrase disaster management is to be understood to mean ‘a continuous and integrated process of planning, organising, coordinating and implementing measures, which are necessary or expedient for prevention of danger or threat of any disaster, mitigation or reduction of risk of any disaster or severity of its consequences, capacity building, preparedness to deal with any disaster, prompt response, assessing the severity or magnitude of effects of any disaster, evacuation, rescue, relief, rehabilitation and reconstruction’.
- NDMA was established through the Disaster Management Act enacted by the Government of India on 23 December 2005.
- Hence, NDMA is a Statutory body.
- NDMA is responsible for framing policies, laying down guidelines and best-practices for coordinating with the State Disaster Management Authorities (SDMAs) to ensure a holistic and distributed approach to disaster management.
- It is headed by the Prime Minister of India and can have up to nine other members. Since 2014, there have been four other members.
- The tenure of the members of the NDMA shall be five years.
Disaster Management Act, 2005
- The Disaster Management Act, 2005, (23 December 2005) received the assent of The President of India on 9 January 2006.
- The Act extends to the whole of India.
- The Act provides for “the effective management of disasters and for matters connected there with or incidental thereto.”
- The Act calls for the establishment of National Disaster Management Authority (NDMA).
- The Act under Section 8 enjoins the Central Government to Constitute a National Executive Committee (NEC).
- All State Governments are mandated under Section 14 of the act to establish a State Disaster Management Authority (SDMA).
- The Chairperson of District Disaster Management Authority (DDMA) will be the Collector or District Magistrate or Deputy Commissioner of the district.
- The Section 44–45 of the Act provides for constituting a National Disaster Response Force “for the purpose of specialist response to a threatening disaster situation or disaster” under a Director General to be appointed by the Central Government.
National Executive Committee (NEC)
- The NEC is composed of Secretary level officers of the Government of India in the Ministries of home, agriculture, atomic energy, defence, drinking water supply, environment and forests, finance (expenditure), health, power, rural development, science and technology, space, telecommunication, urban development, and water resources, with the Home secretary serving as the Chairperson, ex officio.
- The Chief of the Integrated Defence Staff of the Chiefs of Staff Committee, is an ex officio member of the NEC.
- The NEC under section of the Act is responsible for the preparation of the National Disaster Management Plan for the whole country and to ensure that it is “reviewed and updated annually”.
Focus: GS-III Disaster Management
Why in news?
- The World Health Organisation said on 24th March 2020, that the U.S. could become the global epicentre of the COVID-19 pandemic.
- WHO spokeswoman Margaret Harris said there had been a “very large acceleration” in infections in the U.S.
Current Scenario of Epicenter
- Britain joined the ranks of countries in lockdown to try to hold back the virus, and data showed business activity collapsing from Australia and Japan and Western Europe at a record pace in March, with the U.S. showing expected to be just as dire.
- But amid the gathering gloom, the Chinese province of Hubei, where the virus was first identified in December, said it would lift travel restrictions on people leaving the region as the epidemic eases there.
- Of the top 10 countries by case numbers, Italy has reported the highest fatality rate, at around 10%, which at least partly reflects its older population. The fatality rate globally is around 4.3%, though national figures can vary widely according to how much testing is done.
Situation in the U.S.
- Some U.S. state and local officials have decried a lack of coordinated federal action, saying that having localities act on their own has put them in competition for supplies.
- “America will again and soon be open for business,” Mr. Trump told a White House news conference on 23rd March.
Focus: GS-III Indian Economy
Why in news?
- An economic package to deal with COVID-19 situation will be announced soon, Finance Minister Nirmala Sitharaman promised on 24th March 2020, afternoon, adding that the government and regulators are constantly monitoring the state of the economy, markets and rupee depreciation.
- She still offered little clarity on the composition of an economic task force announced by the PM in mid-March, and explained the delay in announcing an economic package by saying extensive consultations were needed, and till 24th March 2020, Parliament was in session and the Finance Bill had to be cleared.
- The Centre, the Reserve Bank and the regulators have been jointly monitoring the volatility in the stock markets thrice daily.
- “Every attention is being given to the economy.
- The Prime Minister himself is closely monitoring the situation. A multi-layered composition of the task force is already working.”
- The economic task force announced in the PM’s address to the nation on March 19 has still not been constituted, with the Finance Ministry saying the PM’s Office or the Cabinet Secretariat would be responsible for issuing an order to create it.
What the Finance Ministry said?
- The Finance Ministry is working intensively on all these suggestions which are coming in from the various sub groups within the multi-layered task force that exists.
- So the work of the task force which is multi-layered is already almost nearing a conclusion.
- So the task force and the task force based report and the action following the task force’s report are almost at its peak.
Focus: GS-III Indian Economy
Why in news?
The Reserve Bank of India (RBI) has decided to advance the first of the two variable rate term repo auctions to March 26 from March 30.
- On a review of the rapidly evolving financial conditions and taking into account the impact of disruptions caused by COVID-19, it has been decided to advance the first auction scheduled for March 30, 2020 to March 26, 2020.
- As a special case, standalone primary dealers (SPDs) were also allowed to participate in these auctions along with other eligible participants.
- It has been decided to temporarily enhance liquidity available to SPDs under the Reserve Bank’s Standing Liquidity Facility (SLF) from ₹2,800 crore to ₹10,000 crore with immediate effect, in order to facilitate year-end liquidity management by SPDs.
- This enhanced facility will be available till April 17, 2020, the RBI said.
What is Repo?
- A repurchase agreement (repo) is a form of short-term borrowing for dealers in government securities.
- In the case of a repo, a dealer sells government securities to investors, usually on an overnight basis, and buys them back the following day at a slightly higher price.
- That small difference in price is the implicit overnight interest rate. Repos are typically used to raise short-term capital.
- They are also a common tool of central bank open market operations.
- For the party selling the security and agreeing to repurchase it in the future, it is a repo; for the party on the other end of the transaction, buying the security and agreeing to sell in the future, it is a reverse repurchase agreement.
An auction conducted by the central bank of a country (RBI in Indian context) to inject cash into banking system. Central Bank(RBI) lends money to commercial banks. Commercial banks deposit government and listed corporate bonds as collateral.
Reverse Repo Auction
An auction conducted by the central bank of a country to remove excess cash from the banking system. Here central bank issues sovereign bonds to absorb the excess liquidity. Commercial banks can buy these bonds because they will get some interest on their excess deposits.