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Current Affairs 19 May 2023

CONTENTS

  1. Liberalised Remittance Scheme (LRS)
  2. Jallikattu
  3. RBI regulations on green deposits
  4. Global Report on Internal Replacement 2023
  5. Greenwashing TechSprint
  6. National Medical Commission (NMC)
  7. Kishtwar High Altitude National Park

Liberalised Remittance Scheme (LRS)


Context:

Amendments have been made to the rules under the Foreign Exchange Management Act by the government to include international credit card transactions outside of India within the purview of the Liberalised Remittance Scheme (LRS).

  • Consequently, international credit card spending will also be subject to a higher Tax Collected at Source rate of 20 percent, starting from July 1.

Relevance:

GS III: Indian Economy

Dimensions of the Article:

  1. Key Highlights
  2. Liberalised Remittance Scheme (LRS)
  3. Possible Impacts

Key Highlights:

Existing Mechanism:
  • Payments made using international credit cards for expenses during trips abroad were not covered under the Liberalised Remittance Scheme (LRS).
  • These expenses were excluded under Rule 7 of the Foreign Exchange Management (Current Account Transaction) Rules, 2000.
Changes Made:
  • Rule 7 has been omitted, allowing such expenses to be included under the LRS.
  • The 20% Tax Collected at Source (TCS) rule now applies to credit card transactions on international purchases, including direct bookings.
  • However, the TCS does not apply to payments for the purchase of foreign goods/services from India.
Budget 2023-24 and TCS Provisions:
  • In the Budget for 2023-24, the government made changes to the TCS limits for foreign remittances.
  • Tax Collected at Source (TCS) is a direct tax levy collected by the seller from the buyer and deposited to the government.
  • For foreign outward remittances under LRS (excluding education and medical purposes), a 20% TCS will be applicable from July 1, 2023.
  • Previously, a 5% TCS was applicable for foreign outward remittances above Rs 7 lakh, and a 5% TCS without any threshold applied to overseas tour packages.

Liberalised Remittance Scheme (LRS):

Introduction and Eligibility:
  • The Reserve Bank of India introduced the Liberalised Remittance Scheme in 2004.
  • The scheme allows resident individuals, including minors, to freely remit up to USD 2,50,000 per financial year for permissible current or capital account transactions.
  • Corporations, partnership firms, Hindu Undivided Family (HUF), trusts, etc., are not eligible for the scheme.
Remittance Limit and Frequency:
  • There are no restrictions on the frequency of remittances under LRS.
  • Once an individual has remitted up to USD 2,50,000 during the financial year, they cannot make any further remittances under the scheme.
Permissible Usage of Remitted Money:
  • Remittances can be used for various purposes, including travel expenses (personal or business), medical treatment, education, gifts and donations, maintenance of close relatives, etc.
  • Funds can be invested in shares, debt instruments, and immovable properties in overseas markets.
  • Individuals can open and maintain foreign currency accounts with banks outside India for transactions allowed under the scheme.
Prohibited Transactions:
  • Transactions specifically prohibited under Schedule-I or restricted under Schedule-II of the Foreign Exchange Management (Current Account Transactions) Rules, 2000 are not allowed.
  • Trading in foreign exchange abroad is prohibited.
  • Capital account remittances to countries identified as “non-cooperative countries and territories” by the Financial Action Task Force (FATF) are not permitted.
  • Remittances to individuals and entities identified as posing a significant risk of terrorism, as advised by the Reserve Bank, are also prohibited.
Requirements:
  • Resident individuals must provide their Permanent Account Number (PAN) for all transactions under LRS conducted through Authorized Persons.

Possible Impacts:

Tedious Task for Banks:

  • Banks will face a challenging task of monitoring and keeping track of each transaction to ensure compliance with the 20% Tax Collected at Source (TCS) rule.

Transactions Outside TCS Purview:

  • Transactions for education and medical expenses, among others, remain exempt from the higher 20% TCS, creating complexity in tracking and applying the tax.

Increased Cost of Foreign Travel:

  • Foreign travel expenses will become 20% more expensive due to the blocked amount that will be refunded through the income tax process.

Refunds and Income Tax Filing:

  • Taxpayers will have the option to claim the 20% TCS back while filing their Income Tax Returns (ITR). However, this process adds an additional step and time before the amount is refunded.

Widening Pricing Gap:

  • The introduction of a 5% TCS on LRS remittances in 2020 already caused a significant loss of business for domestic travel and tour agents.
  • Global Travel Agents (GTAs) that evade TCS compliance can offer better pricing on their platforms, creating a pricing gap.
  • The four-fold increase in the tax rate further widens the pricing gap, making upfront costs for travelers even higher when booking with domestic travel agents.

-Source: Indian Express


Jallikattu


Context:

The Supreme Court on Thursday termed jallikattu a “type of bovine sport” existing in Tamil Nadu for at least a century, and did not interfere with the State legislature’s finding that the bull-taming event is part of the cultural heritage and tradition of the people.

Relevance:

GS I: Art and Culture

Dimensions of the Article:

  1. What is Jallikattu?
  2. Why is Jallikattu important in Tamil culture?
  3. Why has Jallikattu been the subject of legal battles?

What is Jallikattu?

  • The bull-taming sport is popular in Madurai, Tiruchirappalli, Theni, Pudukkottai and Dindigul districts — known as the Jallikattu belt.
  • Jallikattu is celebrated in the second week of January, during the Tamil harvest festival, Pongal.
  • A tradition over 2,000 years old, Jallikattu is a competitive sport as well as an event to honour bull owners who rear them for mating.
  • It is a violent sport in which contestants try to tame a bull for a prize; if they fail, the bull owner wins the prize.
  • In an age when the farm sector is largely mechanised, there are no major monetary benefits for bull owners in breeding Jallikattu bulls other than the prizes they get during the Jallikattu events.
    • Traditionally, these used to be a dhoti, a towel, betel leaves, bananas and a cash prize of Rs 101.
    • Over the last two decades, the prizes have included grinders, a fridge and small furniture.

Why is Jallikattu important in Tamil culture?

  • Jallikattu is considered a traditional way for the peasant community to preserve their pure-breed native bulls.
  • At a time when cattle breeding is often an artificial process, conservationists and peasants argue that Jallikattu is a way to protect these male animals which are otherwise used only for meat if not for ploughing.
  • Kangayam, Pulikulam, Umbalachery, Barugur and Malai Maadu are among the popular native cattle breeds used for Jallikattu.
  • The owners of these premium breeds command respect locally.

Why has Jallikattu been the subject of legal battles?

  • In India, legal battles surrounding animal rights issues emerged in the early 1990s.
  • A notification from the Environment Ministry in 1991 banned the training and exhibition of bears, monkeys, tigers, panthers and dogs, which was challenged by the Indian Circus Organisation in the Delhi High Court.
    • In 1998, dogs were excluded from the notification.
  • Jallikattu first came under legal scrutiny in 2007 when the Animal Welfare Board of India and the animal rights group PETA moved petitions in the Supreme Court against Jallikattu as well as bullock cart races.
  • The Tamil Nadu government, however, worked its way out of the ban by passing a law in 2009, which was signed by the Governor.
  • In 2011, the UPA regime at the Centre added bulls to the list of animals whose training and exhibition is prohibited.
  • In May 2014, days before the BJP was elected to power, the Supreme Court banned the bull-taming sport, ruling on a petition that cited the 2011 notification.

-Source: The Hindu


RBI Regulations On Green Deposits


Context:

Reserve Bank of India (RBI) came up with a regulatory framework for banks to accept green deposits from customers. Under the new framework, banks that accept green deposits will have to disclose more information on how they invest these deposits.

Relevance:

GS III: Indian Economy

Dimensions of the Article:

  1. What are green deposits?
  2. Regulatory Framework for Green Deposits by RBI
  3. Potential Benefits for Depositors/Investors
  4. Limitations and Challenges:

What are green deposits?

  • Green deposits are not very different from the regular deposits that banks accept from their customers.
  • The only major difference is that banks promise to earmark the money that they receive as green deposits towards environment-friendly projects.
  • For example, a bank may promise that green deposits will be used towards financing renewable energy projects that fight climate change.
  • A bank may also avoid using green deposits to invest in fossil fuel projects that are considered harmful to the climate.
  • A green deposit is just one product in a wide array of other financial products such as green bonds, green shares, etc., that help investors put money into environmentally sustainable projects.

Regulatory Framework for Green Deposits by RBI

Conditions for Accepting Green Deposits:

  • Banks must establish approved rules or policies for investing green deposits.
  • These rules must be publicly available on the banks’ websites.

Transparency Requirements:

  • Banks need to disclose information about the amount of green deposits received.
  • Banks must provide details on how the deposits are allocated to different green projects.
  • Banks should report on the environmental impact of their investments.
  • Claims made by banks regarding project investments and sustainability credentials must be verified by a third-party.

Sustainable Sectors Eligible for Green Deposits:

  • RBI has identified sectors that qualify for green deposits.
  • Eligible sectors include renewable energy, waste management, clean transportation, energy efficiency, and afforestation.

Prohibited Investments:

  • Banks are not allowed to invest green deposits in projects related to fossil fuels, nuclear power, tobacco, gambling, palm oil, and hydropower generation.

Objective of the Rules:

  • Prevent greenwashing, which involves misleading claims about environmental impact.
  • Ensure that banks do not exaggerate the positive effects of green deposits.
  • Avoid investments that are not truly environmentally friendly but marketed as such for higher returns.

Potential Benefits for Depositors/Investors:

  • Depositors who care about the environment may find satisfaction in investing their money in environmentally sustainable projects.
  • Green deposits can align with the values and beliefs of individuals who prioritize environmental sustainability.
  • Investing in green projects can be seen as a way to contribute to environmental preservation and positive change.

Limitations and Challenges:

  • The range of projects available for investment through green deposits is limited by design. This restricts the investment options for depositors.
  • Critics argue that green investment products may primarily serve as a way to make investors feel good, without necessarily providing significant environmental benefits.
  • Assessing the true environmental sustainability of a project can be complex, as it involves considering various second-order effects that may not be immediately apparent.
  • It can be difficult for depositors/investors to determine if a project is genuinely environmentally sustainable, given the complexities and potential greenwashing in the industry.

-Source: The Hindu


Global Report on Internal Replacement 2023


Context:

The number of internally displaced people (IDPs) around the world reached 71 million as of the end of 2022, according to the recently published Global Report on Internal Replacement 2023.

Relevance:

GS II: International relations

Dimensions of the Article:

  1. Global Report on Internal Displacement 2023
  2. Highlights of the 2023 Global Report on Internal Displacement
  3. Recommendations from the Global Report on Internal Displacement

Global Report on Internal Displacement 2023:

  • The Global Report on Internal Displacement is an important publication that sheds light on the complex issue of internal displacement worldwide.
  • Released by the Internal Displacement Monitoring Centre (IDMC), which is a part of the Norwegian Refugee Council, this report provides valuable insights into the challenges faced by individuals who are forced to move within their own country’s borders.
  • Internal displacement refers to the displacement of people due to various factors such as conflict, violence, natural disasters, or human rights violations.
  • Unlike refugees who cross international borders, internally displaced persons (IDPs) remain within their home country, often seeking safety in different regions or areas.
  • The Global Report on Internal Displacement aims to raise awareness about the scale and impact of internal displacement, as well as to provide a comprehensive analysis of the trends and patterns associated with this phenomenon.
  • By examining the causes, consequences, and dynamics of internal displacement, the report offers a deeper understanding of the issue and helps shape effective policies and interventions.

Highlights of the 2023 Global Report on Internal Displacement:

  • The total number of internally displaced people (IDPs) worldwide reached 71.1 million by the end of 2022, indicating a significant increase of 20% compared to the previous year.
  • Conflict and violence were major triggers for internal displacement, accounting for 28.3 million displacements globally.
  • The conflict in Ukraine alone resulted in nearly 17 million internal displacements, reflecting its severe impact on the affected population.
  • Disasters caused by natural hazards led to 32.6 million internal displacements, marking a 40% increase from 2021. This rise was largely attributed to the ongoing effects of La Niña, which persisted for the third consecutive year.
  • Weather-related events, such as floods and storms, accounted for 98% of the total disaster-induced internal displacements.
  • India recorded the fourth highest number of disaster-induced displacements, with 2.5 million people being displaced due to such events.
  • Pakistan witnessed the highest number of disaster-induced internal displacements globally in 2022, with a staggering figure of 8.16 million people being displaced within the country.

Recommendations from the Global Report on Internal Displacement:

Strengthening Multi-Faceted Approaches:

  • Conflict resolution, peacebuilding, disaster risk reduction, climate resilience, food security, and poverty reduction efforts must be enhanced.
  • A comprehensive approach is needed to address the complex challenges faced by displaced populations.

Pursuing Durable Solutions:

  • There is a growing need to identify and implement durable solutions that can effectively address the magnitude of displacement challenges.
  • This involves expanding cash assistance and livelihood programs to improve the economic security of internally displaced people (IDPs).
  • Additionally, investing in risk reduction measures that enhance the resilience of communities is crucial.

Investing in Risk Reduction Measures:

  • It is important to move beyond immediate humanitarian assistance and focus on long-term investments in anticipatory action and risk reduction measures.
  • Strengthening the resilience of displaced communities through such measures can mitigate the impacts of future crises.

Enhancing Livelihoods and Skills:

  • Developing the livelihoods and skills of IDPs is vital in facilitating durable solutions.
  • By improving their food security and promoting self-reliance at the community and national levels, IDPs can become more resilient and less dependent on external assistance.

-Source: Indian Express


Greenwashing TechSprint


Context:

The Reserve Bank of India (RBI) will be among 13 international regulators taking part in the Global Financial Innovation Network’s (GFIN) first-ever Greenwashing TechSprint.

Relevance:

GS III: Indian Economy

Dimensions of the Article:

  1. Greenwashing TechSprint
  2. What Is Greenwashing?
  3. About Global Financial Innovation Network (GFIN)

Greenwashing TechSprint:

Organizers:

  • The Greenwashing TechSprint is organized by the Global Financial Innovation Network (GFIN).
  • GFIN is a consortium of more than 80 international organizations dedicated to supporting financial innovation for the benefit of consumers.
  • The Financial Conduct Authority (FCA), a prominent regulatory body in the United Kingdom, currently chairs GFIN.

Objective:

  • The TechSprint aims to address the risks of greenwashing in financial services.
  • Greenwashing refers to the deceptive practice of presenting a false or misleading impression of environmental friendliness or sustainability.

Duration:

  • The TechSprint will begin on 5th June and run for three months.
  • It will conclude with a showcase day in September 2023, where the developed tool or solution will be presented.

Purpose:

  • The TechSprint seeks to develop an innovative tool or solution that can effectively assist regulators and the market in combatting the risks associated with greenwashing.
  • By creating such a tool, the TechSprint aims to promote transparency, integrity, and accountability in the financial services sector regarding environmental and sustainability claims.

What Is Greenwashing?

  • Greenwashing is the process of conveying a false impression or misleading information about how a company’s products are environmentally sound.
  • Greenwashing involves making an unsubstantiated claim to deceive consumers into believing that a company’s products are environmentally friendly or have a greater positive environmental impact than is true.
  • In addition, greenwashing may occur when a company attempts to emphasize sustainable aspects of a product to overshadow the company’s involvement in environmentally damaging practices.
  • Performed through the use of environmental imagery, misleading labels, and hiding tradeoffs, greenwashing is a play on the term “whitewashing,” which means using false information to intentionally hide wrongdoing, error, or an unpleasant situation in an attempt to make it seem less bad than it is.
Examples of Greenwashing
  • A classic example of greenwashing is when Volkswagen admitted to cheating emissions tests by fitting various vehicles with a “defect” device, with software that could detect when it was undergoing an emissions test and altering the performance to reduce the emissions level.
  • A plastic package containing a new shower curtain is labeled “recyclable.” It is not clear whether the package or the shower curtain is recyclable. In either case, the label is deceptive if any part of the package or its contents, other than minor components, cannot be recycled.
  • A trash bag is labeled “recyclable.” Trash bags are not ordinarily separated from other trash at the landfill or incinerator, so they are highly unlikely to be used again for any purpose. The claim is deceptive because it asserts an environmental benefit where no meaningful benefit exists.

Effects of greenwashing

  • There is a growing body of evidence that shows consumer sentiment is slanted toward being green and environmentally sustainable.
    • When a company, product or service is caught or discovered to be greenwashing, there is a general sense of distrust that occurs. Consumers will no longer trust the brand or product in question, and might also begin to question other claims.
  • Companies engaged in greenwashing – consumers will likely choose other organizations that are more ethical.
    • Greenwashing can degrade customer satisfaction, erode brand loyalty and potentially affect repeat purchases.
  • On Planet – Ultimately, the biggest effect of greenwashing is existential.
    • Each act that an organization or individual doesn’t take with real green initiatives has a potential negative effect on the planet.
    • With the effects of climate change continuing to manifest on humanity, there is no time to waste in taking steps to help improve sustainability such that humanity and Earth itself will continue to survive.

About Global Financial Innovation Network (GFIN)

The Global Financial Innovation Network (GFIN) is an international network formed in January 2019 by a group of financial regulators and related organizations. It comprises over 70 organizations dedicated to supporting financial innovation for the benefit of consumers.

Key Features of GFIN:

Facilitating Innovation and Regulatory Interaction:

  • GFIN aims to create a more efficient process for innovative firms to engage with regulators.
  • It provides a platform for these firms to navigate regulatory requirements when scaling their new ideas across different countries.

Coordination Group:

  • The GFIN is overseen by the Coordination Group, which sets the overall direction, strategy, and annual work program of the network.
  • The Financial Conduct Authority (FCA) from the United Kingdom currently chairs the Coordination Group.

Membership and Engagement:

  • Membership in the Coordination Group lasts for two years, and members meet twice a year to provide ongoing input and engagement in the network’s work-streams.

Members from India:

  • The International Financial Services Centres Authority (IFSCA), the Insurance Regulatory and Development Authority of India (IRDAI), the Pension Fund Regulatory & Development Authority (PFRDA), and the Reserve Bank of India (RBI) are the Indian members of the GFIN.

-Source: Economic Times


National Medical Commission (NMC)


Context:

Doctors will now have to get a Unique Identification Number (UID) to be able to practice medicine in the country, as per the new regulations by the National Medical Commission (NMC).

Relevance:

GS II: Polity and Governance

Dimensions of the Article:

  1. About National Medical Commission (NMC)
  2. Functions and Responsibilities

About National Medical Commission (NMC):

  • The National Medical Commission (NMC) is a regulatory body responsible for overseeing medical education and profession in India.
  • The NMC was established in 2019 under the National Medical Commission Act, replacing the erstwhile Medical Council of India (MCI).

Composition:

  • The NMC consists of a Chairperson, members, and ex-officio members appointed by the Central Government.
  • The Chairperson and members include eminent medical professionals, academicians, and experts from various fields related to medical education and practice.

Autonomous Boards:

  • The NMC comprises autonomous boards responsible for specific areas such as undergraduate education, postgraduate education, medical assessment and rating, ethics and medical registration, and continuing professional development.
Reforms and Objectives:
  • The NMC was established to bring about significant reforms in the medical education sector, promote transparency, improve the quality of education, and ensure the availability of competent medical professionals.
  • It aims to address challenges in medical education, bridge gaps, and align education with evolving healthcare needs.

Functions and Responsibilities:

  • Regulating Medical Education: The NMC sets standards, guidelines, and regulations for undergraduate and postgraduate medical education in India.
  • Assessing Medical Institutions: It conducts inspections and assessments of medical colleges and institutions to ensure compliance with prescribed standards.
  • Granting Recognition: The NMC grants recognition to medical qualifications and degrees obtained from Indian and foreign institutions.
  • Promoting Ethical Practices: It establishes and enforces ethical standards and guidelines for medical professionals.
  • Conducting Common Entrance Examinations: The NMC conducts a common entrance examination called the National Eligibility-cum-Entrance Test (NEET) for admission to undergraduate medical courses in India.
  • Oversight and Quality Assurance: The NMC monitors the quality of medical education, training, and research to maintain high standards in the healthcare sector.

-Source: The Hindu


Kishtwar High Altitude National Park


Context:

Recently, the research team of the Department of Wildlife Protection has confirmed the presence of snow leopard in Kishtwar  High Altitude National Park through camera trap photographs.

Relevance:

GS III: Environment and Ecology

Dimensions of the Article:

  1. About Kishtwar High Altitude National Park
  2. About Snow leopard

About Kishtwar High Altitude National Park

Kishtwar High Altitude National Park, located in the Kishtwar district of the Jammu and Kashmir union territory, was established in 1980 with the primary objective of protecting the endangered Snow Leopards. Here are some key details about the park:

Physical Features:

  • The park is located in the central crystalline belt of the great Himalayas and encompasses the sub-alpine and alpine zones.
  • It covers the catchment area of Kiber, Nanth, and Kiyar Nallas, which drain southwest into the Marwah River (locally known as Mariv Sudir), eventually joining the Chenab River.
  • The terrain is rugged and steep, characterized by narrow valleys and high ridges that open into glacial areas.

Ecological Features:

  • Kishtwar High Altitude National Park is known for its breathtaking alpine meadows, snow-capped peaks, and lush green forests.
  • The park serves as an important ecological corridor for various wildlife species.
  • It supports a diverse array of flora and fauna, including rare and endangered species.

Flora:

  • The park features a variety of temperature conifer forests, including Fir, Himalayan Yew, Deodar, Blue Pine (Kail), and Spruce.
  • In the alpine regions, extensive alpine scrub and meadows can be found.

Fauna:

  • The park is renowned as a reserve for the elusive Snow Leopard.
  • Other wildlife species that inhabit the park include Brown Bear, Himalayan Musk Deer, Hangul (Kashmir Stag), Ibex, Wild Boar, Indian Muntjac (Barking Deer), Serow (Capricornis), Himalayan Tahr, and Bharal (Blue Sheep).
  • Overall, Kishtwar High Altitude National Park is a significant conservation area, home to diverse ecosystems and rare wildlife species, with a particular focus on preserving the critically endangered Snow Leopards.

About Snow leopard

  • The snow leopard is a large cat native to the mountain ranges of Central and South Asia.
  • It is listed as Vulnerable on the IUCN Red List.
  • The snow leopard, like all big cats, is listed on Appendix I of the Convention on International Trade of Endangered Species (CITES), which makes trading of animal body parts (i.e., fur, bones and meat) illegal in CITES signatory countries.
  • Global population is estimated to number less than 10,000 mature Snow Leopards.
  • It inhabits alpine and subalpine zones at elevations from 3,000 to 4,500 m.
  • It is threatened by poaching and habitat destruction following infrastructural developments.

-Source: The Hindu


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