CONTENTS
- G20 Countries and Disaster Risk Reduction
- Tax rules for online gaming
- Special Protection Group (SPG): Govt issues fresh rules for SPG
- Angel Tax
- Axolotl
- XPoSat
- ExoMars Trace Gas Orbiter (TGO)
G20 Countries and Disaster Risk Reduction
Context:
Recently, the First G20 Disaster Risk Reduction Working Group (DRR WG) meeting under India’s G20 Presidency took place, where India highlighted the importance of Disaster Risk Reduction (DRR).
Relevance:
GS II: International Relations
Dimensions of the Article:
- Need for Creating a Collective G20 Framework for Disaster Risk Reduction
- Highlights of the Meeting:
- Key strategies for reducing disaster risk include:
Need for Creating a Collective G20 Framework for Disaster Risk Reduction
- Large Exposure and Risk: The G20 nations, with a combined population of 4.7 billion, face significant exposure and risk from natural disasters. These countries have diverse geographical locations and are prone to various types of hazards such as earthquakes, floods, storms, and wildfires.
- Vulnerability of G20 Nations: In the current World Risk Index, which assesses vulnerability to natural disasters, four out of the top 10 vulnerable countries are G20 nations. This highlights the susceptibility of these countries to the impacts of disasters.
- High Economic Losses: The G20 countries collectively experience substantial economic losses due to disasters. The estimated annual average loss in these countries amounts to USD 218 billion, which is equivalent to 9% of their average annual investment in infrastructure. These losses have a significant impact on the economy, infrastructure, and livelihoods of the affected populations.
- Importance of Disaster Risk Reduction: Implementing effective disaster risk reduction measures can play a crucial role in preventing or minimizing the losses associated with natural disasters. By investing in risk reduction strategies, early warning systems, resilient infrastructure, and preparedness measures, the G20 nations can enhance their resilience and reduce the negative impacts of disasters.
Highlights of the Meeting:
During the meeting, the G20 Disaster Risk Resilience Working Group discussed important aspects of disaster risk resilience and made several key points:
- Social Protection System: Governments were urged to establish a social protection system as a preferred instrument for disaster risk financing. This system should be effective in providing support and assistance during and after disasters.
- Investment in Local Risk Resilience: There is a need for new-age Social Protection Systems that prioritize investments in local risk resilience. These investments would help mitigate, prepare for, and recover from disasters effectively.
The meeting also outlined five priorities:
- Global Early Warning Systems: The importance of achieving global coverage of Early Warning Systems was emphasized. Early warning systems play a crucial role in providing timely alerts and information to communities facing potential disasters.
- Disaster-Resilient Infrastructure: Increased commitment was called for to make infrastructure systems more disaster resilient. Strengthening infrastructure resilience can help reduce the impact of disasters and protect communities.
- Financial Frameworks for Disaster Risk Reduction (DRR): The need for stronger national financial frameworks for DRR was highlighted. These frameworks should prioritize financial resources and mechanisms to support disaster risk reduction efforts.
- National and Global Disaster Response Systems: The meeting emphasized the importance of strengthening both national and global disaster response systems. Efficient response systems are crucial in managing and addressing the impacts of disasters effectively.
- Ecosystems-based Approaches to DRR: There was a call for increased application of ecosystems-based approaches to disaster risk reduction. Such approaches recognize the value of natural ecosystems in providing resilience and reducing disaster risks.
Additionally, the G20 DRR Working Group intended to consider the mid-term review of the Sendai Framework, renew multilateral cooperation at all levels, and provide inputs for future global policies and initiatives related to disaster risk reduction.
Key strategies for reducing disaster risk include:
Reducing Vulnerability and Exposure:
- Implement measures to reduce vulnerability and exposure to risks through better economic and urban development choices, environmental protection, poverty reduction, and addressing inequality.
- Implementing Risk Management Strategies: Develop and implement risk management strategies tailored to specific hazards and regions.
- For example, effective flood risk management strategies can help in reducing and managing extreme weather conditions.
Reimagining Financing for Disaster Risk Reduction:
- Explore innovative financing tools such as creating reserve funds, dedicated lines of credit, and accessing global resources to meet the financing requirements for disaster risk reduction.
- Financing should reflect the social benefits of investing in disaster-resilient infrastructure.
Building Resilient Infrastructure:
- Ensure that infrastructure, such as roads, railways, airports, and electricity lines, is resilient to disasters.
- Incremental funds may be required to make existing infrastructure resilient and to finance the construction of new disaster-resilient infrastructure.
Differential Strategies for Extensive and Intensive Risks:
- Develop specific strategies to address extensive risk events (frequent but moderate impacts) and intensive risk events (low frequency but high impact events).
- Targeted approaches to reducing losses from extensive risk events can have a significant impact in the short to medium-term.
Multi-Tiered and Multi-Sectoral Approach:
- View disaster risk reduction as a multi-tiered and multi-sectoral effort. Integration of efforts vertically from local to sub-national to national to global levels and horizontally across sectors enhances readiness to manage unknown risks.
Collaboration and Global Efforts:
- Recognize the interlinked and interdependent nature of the world and encourage collaboration among nations.
- The G20 can play a significant role in developing and promoting strategies for disaster risk reduction.
-Source: The Hindu
Tax Rules for online gaming
Context:
The Central Board of Direct Taxes (CBDT) has come out with guidelines for Tax Deducted at Source (TDS) for online gaming platforms.
Relevance:
GS II: Polity and Governance
Dimensions of the Article:
- TDS (Tax Deducted at Source) provision for online gaming:
- Online Gaming Market in India
TDS (Tax Deducted at Source) provision for online gaming:
- Introduction of Section 194BA: The government inserted a new section (194BA) in the Income-tax Act, 1961 through Finance Act 2023 to track the online gaming industry.
- Mandatory TDS Deduction: Online gaming platforms are required to deduct income-tax on the net winnings in a person’s user account.
- TDS Rate: TDS is applicable at a rate of 30% on the net winnings from any online gaming.
- Timing of TDS Deduction: Tax is deducted at the time of withdrawal and also at the end of the financial year.
- Example: If a user pays an entry fee of Rs. 1,000 and wins Rs. 40,000, the gaming firm deducts TDS on the net winnings of Rs. 39,000 (Rs. 40,000 – Rs. 1,000) at a rate of 30%. The user pays a tax of Rs. 11,700, and the remaining balance of Rs. 27,300 is credited into their account as income from the win.
Calculation of Net Winnings with Multiple Wallets:
- In the case of multiple user accounts, each account is considered separately for calculating net winnings.
- The deposit, withdrawal, or balance in the user account includes the aggregate of deposits, withdrawals, or balances in all user accounts.
- Transfers between user accounts maintained with the same online intermediary are not considered as withdrawals or deposits.
Guidelines for TDS:
- Exemption for Small Winnings: Online gaming platforms are not required to deduct tax at source if the net winnings of a player do not exceed Rs. 100.
- Taxation of Bonuses and Incentives: Bonuses, referral bonuses, and incentives given by online gaming companies to intermediate users are considered taxable deposits under the Income-tax Act.
These provisions aim to ensure proper taxation and reporting of income from online gaming activities and bring transparency to the industry.
Online Gaming Market in India
Types of Online Gaming:
- e-Sports: Professional players compete online individually or in teams in structured tournaments.
- Fantasy Sports: Players create teams of real sports players and earn points based on their real-life performance.
- Online Casual Games: These include both skill-based games and chance-based games. Skill-based games rely on mental or physical skills, while chance-based games involve random elements, such as rolling dice. Games involving betting of money or valuables can be considered gambling.
Market Size:
- Growth Rate: Between 2017 and 2020, the Indian online gaming industry experienced a high compound annual growth rate (CAGR) of 38%. In comparison, China had a growth rate of 8% and the US had a growth rate of 10%.
- Revenue Projections: The Indian mobile gaming industry’s revenue is expected to surpass $1.5 billion in 2022 and is estimated to reach $5 billion by 2025.
- Increasing Paying Players: According to a FICCI report, the revenue from transaction-based games increased by 26% in India. The number of paying players also rose from 80 million in 2020 to 95 million in 2021, representing a 17% increase.
Issues:
- Regulatory Oversight: The online gaming industry lacks consistent regulatory oversight, leading to challenges in creating a standardized framework.
- State Subject: Online gaming falls under the jurisdiction of individual states, resulting in regulatory inconsistencies across different regions of the country.
- Societal Concerns: There are concerns about the impact of online gaming, particularly related to addiction and the potential for financial losses leading to severe consequences like suicides.
-Source: The Hindu
Special Protection Group (SPG): Govt Issues Fresh Rules for SPG
Context:
A new set of rules has been issued for the Special Protection Group (SPG) by the Ministry of Home Affairs under the Special Protection Group Act, 1988.
Relevance:
GS II: Polity and Governance
Dimensions of the Article:
About Special Protection Group:
SPG Act 1988
About Special Protection Group:
- The Special Protection Group (SPG) is an elite force dedicated to the security and protection of the country’s Prime Minister, former Prime Ministers, and their immediate family.
- The force is currently 3,000 strong (from CRPF, BSF and other Central and State forces) and it was started in 1985 in the wake of the killing of PM Indira Gandhi in 1984.
- Specialized Training: The members of the SPG undergo rigorous training in physical efficiency, marksmanship, combat techniques, and proximate protection tactics. This extensive training equips them with the necessary skills to handle security challenges effectively.
- Collaborative Approach: The SPG collaborates with various central and state agencies to ensure comprehensive and foolproof security. This coordination helps in leveraging the expertise and resources of multiple agencies to create a robust security apparatus.
- Distinct Attire: SPG Special Agents assigned to the Prime Minister’s security wear distinctive black Western-style formal business suits or safari suits on occasions. Their attire, coupled with sunglasses, gives them a professional and discreet appearance.
- High-Tech Communication: SPG personnel use two-way encrypted communication earpieces, allowing them to maintain secure and real-time communication during operations. This enhances their coordination and situational awareness.
- Enhanced Equipment: The SPG includes special operations commandos equipped with state-of-the-art assault rifles, bulletproof vests, gloves, elbow/knee pads, and dark-visor sunglasses with built-in communication earpieces. These advanced tools and equipment enable them to respond effectively in high-risk situations.
SPG Act 1988:
- Purpose: The Act was enacted to provide security to the Prime Minister of India (both in India and abroad), as well as the Prime Minister’s immediate family members. It also includes the provision of security to former Prime Ministers and their immediate family members residing with them at their official residence.
- Duration of Security: Former Prime Ministers and their immediate family members receive SPG security for a period of 1 year from the date they cease to hold office. After this period, the provision of SPG security is based on the level of threat, as determined by the central government. The threat must emanate from a military or terrorist organization and be of a grave and continuing nature.
SPG (Amendment) Act 2019:
- Restructuring of Security Coverage: The amendment restricted SPG security to the Prime Minister, former Prime Ministers, and their immediate family members residing with them at their official residence. The coverage was no longer extended to other family members.
- Duration of Security for Former Prime Ministers: The amendment increased the period of SPG security for former Prime Ministers and their immediate family members residing with them at their official residence from 1 year to 5 years.
- Withdrawal of Security: When security is withdrawn from a former Prime Minister, it is also automatically withdrawn from the members of their immediate family.
New Rules for the SPG:
- Appointment of Officers: Officers of the All India Services are appointed to the SPG on deputation by the central government, on the same terms and conditions applicable to officers of corresponding ranks in the central government.
- Tenure and Approval: Members of the SPG (except All India Services) are appointed on deputation for an initial period of 6 years. The appointment for a second tenure may be done with prior approval from the central government, based on recorded reasons.
- Leadership and Administration: The SPG is headquartered in New Delhi and is led by an officer of not less than the rank of an Additional Director-General belonging to the Indian Police Service. The director of the SPG holds the responsibility for the implementation of duties assigned under the Act and has the general superintendence, direction, command, control, supervision, training, discipline, and administration of the SPG.
-Source: India Today
Angel Tax
Context:
Investors from 21 countries including the US, the UK, France, Australia, Japan have been exempted from the levy of angel tax for investment in unlisted Indian startups. Countries like Singapore, Netherlands and Mauritius, which constitute the major chunk of foreign direct investment in India, have not been included in the exemption list.
Relevance:
GS III: Indian Economy
Dimensions of the Article:
- Categories of Exempted Investors from Angel Tax
- Concerns Regarding the Exemptions and Expert Opinions
- What is angel tax? Which startups were excluded from its levy?
Categories of Exempted Investors from Angel Tax:
- Registered Category-I FPIs: Entities registered with Sebi as Category-I Foreign Portfolio Investors.
- Endowment Funds: Funds established for the purpose of supporting institutions or organizations.
- Pension Funds: Funds created to provide retirement benefits to employees.
- Broad-based Pooled Investment Vehicles: Investment vehicles or funds with more than 50 investors.
- Residents of Specified Nations: Individuals or entities from 21 specified nations, including the US, UK, Australia, Germany, Spain, Austria, Canada, Czech Republic, Belgium, Denmark, Finland, Israel, Italy, Iceland, Japan, Korea, Russia, Norway, New Zealand, and Sweden.
Concerns Regarding the Exemptions and Expert Opinions:
Impact on Startups:
- The exclusion of Mauritius, Singapore, and the Netherlands is seen as an effort to prevent investments from tax havens.
- However, experts believe that this may affect fundraising for startups as these countries are major sources of investment for them.
Exclusion of Key Jurisdictions:
- Bhavin Shah from PwC India points out that the exemption for broad-based funds is provided for 21 countries but excludes significant jurisdictions like Singapore, Mauritius, and the UAE.
- These countries contribute over 50% of foreign direct investment (FDI) in India, and their exclusion keeps PE/VC funds and startups on edge regarding the angel tax issue.
Limited Applicability to Startups:
- The exemption for angel tax applies to less than 2% of startups registered with the Department for Promotion of Industry and Internal Trade (DPIIT) due to stringent conditions that need to be fulfilled over a seven-year period.
- This limited applicability hampers the intended benefits for startups.
Implementation Gap:
- Experts emphasize the need to bridge the gap between policy intent and implementation.
- While the government consults with the industry to formulate policies, swift action is required to align implementation with the objectives, enabling Indian entrepreneurs to seize the available opportunities.
Attracting FDI:
- The explicit mention of countries with robust regulatory frameworks in the exemption list is seen as a strategy to attract more foreign direct investment (FDI) to India.
- The government aims to prevent the circulation of unaccounted money while encouraging investments from regulated entities in countries with effective regulatory systems.
Absence of Mentioned Countries:
- Rakesh Nangia, Chairman of Nangia Andersen India, notes that countries such as Singapore, Ireland, the Netherlands, and Mauritius, which channelize a majority of FDI into India, are surprisingly not included in the notification.
- This omission raises questions about the rationale behind the selection of countries mentioned in the exemption list.
What is angel tax? Which startups were excluded from its levy?
Angel tax refers to a provision under Section 56(2)(viib) of the Income-tax Act in India. It was introduced in 2012 to discourage the generation and use of unaccounted money through the issuance of shares at a value higher than the fair market value of a closely held company’s shares. Here are some key points about angel tax and the exclusion of startups:
Purpose of Angel Tax:
- The provision aims to prevent the circulation of unaccounted money by taxing the excess
- premium received by a start-up when it issues shares to investors.
Amendment in Finance Act, 2023:
- The Finance Act, 2023, made amendments to the angel tax provision.
- It expanded the scope to include foreign investors as well, meaning that funding received by start-ups from foreign investors would also be taxable.
Tax Implication:
- According to the provision, if an unlisted company, such as a start-up, receives equity investment that exceeds the face value of its shares, the excess amount is considered as income for the start-up.
- This income is subjected to income tax under the category of “Income from other Sources” for the relevant financial year.
Exemption for DPIIT-Recognized Startups:
- Startups recognized by the Department for Promotion of Industry and Internal Trade (DPIIT) were exempted from the angel tax levy.
- These startups were excluded from the tax liability, alleviating the burden on them.
Objective of Exemption:
- The exemption for DPIIT-recognized startups was introduced to support and encourage the growth of innovative and technology-driven enterprises.
- It aimed to facilitate a favorable environment for startups by removing the tax implications associated with angel tax.
-Source: The Hindu
Axolotl
Context:
The Axolotl, a species of salamander( (lizard-like amphibians) possesses an extraordinary ability to regenerate lost body parts, inspiring researchers to delve into the secrets of this unique regenerative power.
Relevance:
GS III: Species in News
About Axolotl:
- Axolotl is an amphibian species that spends its entire life underwater.
- They can only be found in one location, Lake Xochimilco near Mexico City, which supplies water to millions of residents and is a UNESCO World Heritage site.
- Similar to humans, axolotls possess two copies of every gene inherited from both parents.
Prey:
- Axolotls feed on a variety of organisms, including mollusks, worms, insect larvae, crustaceans, and some fish.
- Special Feature:
- These creatures have fascinated scientists due to their remarkable abilities.
- They can regenerate lost body parts and retain larval features throughout their lives, a trait known as neoteny.
- Axolotls’ regenerative capabilities and resistance to cancerous tissues are of particular interest to cancer researchers.
Threat:
- Axolotl populations have experienced significant decline.
- The decline is attributed to habitat loss caused by urbanization in Mexico City, water pollution, and the presence of invasive fish species.
- Invasive fish species like carp and tilapia compete with axolotls for food and prey on them.
Protection Status:
- The International Union for the Conservation of Nature and Natural Resources (IUCN) has classified axolotls as a critically endangered species since 2006.
- Conservation efforts are crucial to prevent their extinction in the wild.
-Source: Down To Earth
XPoSat
Context:
The Indian Space Research Organisation is collaborating with the Raman Research Institute (RRI), Bengaluru to build the X-Ray Polarimeter Satellite (XPoSat) that is scheduled to be launched later this year.
Relevance:
GS III: Science and Technology
Dimensions of the Article:
- XPoSat Mission
- Witnessing X-Rays in Space
XPoSat Mission:
- XPoSat is a mission aimed at studying various dynamics of bright astronomical X-ray sources in extreme conditions.
- It is India’s first polarimetry mission and the world’s second, with NASA’s IXPE being the other major mission in this field.
Witnessing X-Rays in Space:
- X-rays in space have higher energy and shorter wavelengths, ranging from 0.03 to 3 nanometers.
- The physical temperature of an object determines the wavelength of the X-ray radiation it emits.
- Objects emitting X-rays in space, such as pulsars, galactic supernova remnants, and black holes, have temperatures in the millions of degrees Celsius.
- X-rays, like other forms of light, consist of moving electric and magnetic waves.
- Normally, the peaks and valleys of these waves move in random directions, but polarized light has more organized waves with vibrations in the same direction.
-Source: Indian Express
ExoMars Trace Gas Orbiter (TGO)
Context:
The European Space Agency’s ExoMars Trace Gas Orbiter (TGO) recently flashed an encoded message to Earth from its orbit around Mars.
Relevance:
GS III: Science and Technology
ExoMars Trace Gas Orbiter (TGO):
- TGO is a joint mission between the European Space Agency (ESA) and Roscosmos, the Russian space agency.
- The mission aims to study methane and other atmospheric gases in the Martian atmosphere, which are present in small concentrations.
- TGO also has the capability to search for water buried beneath shallow layers of Martian soil.
- It serves as a technology testing platform for future missions.
- Launched in March 2016, it entered Mars orbit on October 19, 2016.
- TGO carried the Schiaparelli lander, which unfortunately crashed during landing.
- The spacecraft is a box-shaped structure measuring 3.2 meters by 2 meters by 2 meters.
- It is equipped with antennas for communication with Earth and with spacecraft on the Martian surface.
- TGO is powered by solar arrays and has backup batteries for eclipse periods.
- It carries several instruments including,
- NOMAD(Nadir and Occultation for MArs Discovery);
- ACS (Atmospheric Chemistry Suite);
- CaSSIS (Colour and Stereo Surface Imaging System);
- FREND (Fine Resolution Epithermal Neutron Detector);
-Source: India Today
