CFA Franc to be replaced by New Currency in West Africa ECOWAS Economic Community

CFA stands for “Financial Community of Africa” or “African Financial Community” and CFA Franc currency is issued by BCEAO (Central Bank of West African States).

History – CFA Franc was introduced to the French colonies in West Africa in 1945.

The new shared currency is envisaged to be created by 2020 for the 15 country ECOWAS bloc. The name of the new future currency is yet to be determined. Continue reading

Concept of Green Bonds in India

Green bond is an emerging concept in this contemporary world towards Green Economy. Basically green bonds are to finance environmentally friendly businesses and assets. These green bonds have seen extensive participation from Corporates, Financial institutions including sovereign and municipal bodies. Green bonds have grown exponentially and now pegged at over $180 billion.

Issuance of first green bond was done by World Bank and European Investment Bank in 2007. The green bond market is mostly supported by market driven state policies. There has been a rapid growth in issuance of green bonds in India and China which has made the Asian market emerge as a forerunner in this field.

India’s first infrastructure green bond was issued by Yes Bank in February 2015. The first Green Masala bond that means rupee denominated bond, with the IFC (International Finance Corporation), a private arm of World Bank, raised an off-shore rupee bond on London stock exchange. These bonds are used to raise capital, attract foreign investments, and induce momentum in the market. Along with this it will also increase the financial assistance to sun rise sectors like solar energy, wind energy etc.

A recent report by Climate Bond Initiative reveals that 62% of green bonds are processed towards renewable energy projects followed by low carbon transport sector and low carbon buildings each getting 17.5% and 14% respectively. Only 2.2% is processed for Water Management and waste management, this should be addressed by further developments in the field of Research and Development.

Regulatory frameworks should work towards maintaining policy-making more clear on what is “Green”. SEBI (Security and Exchange board of India) and RBI (Reserve Bank of India) passed initial regulatory reforms as national level guidelines.

A very next version of Green bond economy is Blue bond economy which focused on financing water infrastructure, where India is yet to enter. This will address the financial gap in India’s water sector.
Recently Prime Minister of India announced municipal bond for water supply in Pune and Hyderabad under Smart City initiative. In future this may transform into Green Muni (municipal) bond by including corporate sector.

To conclude, India’s green bond has witnessed many milestones but its full potential remains untapped. By making further developments in policy frameworks and bringing in regulatory reforms this untapped potential can reach its fullest.

Challenges before Antonio Guterres the new United Nations Secretary General

Portugal’s former Prime Minister Antonio Guterres has been picked as United Nations General Secretary. The major challenges before him is, Syrian conflict, African war, Refugee crisis in European nations, North Koreas nuclear power and last but not the least, Americas president elect Donald Trump.

Donald Trump mocked United Nations as “A club for people to get together, talk and have good time” when a resolution against Israeli settlements in occupied Palestine’s territory passed 14-0 in the 15 member (5 permanent [USA, UK, Russia, France, China]) +10 non-permanent members]) United Nations Security Council. And he also said, “As to the United Nation, things will be different from January 20th, by mentioning his succession after Obama.

USA is the biggest monetary contributor to UN as 28% of its annual peacekeeping budget comes from USA. In his 100 day action plan for America, Trump vowed to cancel billions of payments to the UN Climate programme and named climate change programmes as “Hoax invented by the Chinese”. His statement jeopardized environmental activists around the world.

Now the important challenge before Guterres after Trump is to reform UN. Peacekeeping force of UN has been severely tainted by several allegations and abuses. Recently Kenyan force commander was made the scapegoat in the midst of failure of UN civilian leadership in south Sudan and so East-African nations were left humiliated. In Liberia, downsizing of peacekeeping force staffs made a biased result. UN has to reform the selection procedure by adding accountability and integrity to its special representatives.

Guterres should pacify the US as early as possible by making initiatives and engagements with Washington. Along with this he can make use of friendly relationship between Trump and Putin through Russia’s foreign minister Sergey Lavrov who was a former Russian ambassador to the UN. Obviously the job of Antonio Guterres is more difficult than his forerunner Ban-ki-Moon. Let’s wait and watch diplomacy game between Trump and Antonio Guterres.

Removing the power of money from electoral politics

Prime minister of India on the eve of New Year, in his much anticipated speech, described demonetization as an attack on Black money, Counterfeit notes and nudge towards cashless society. He called demonetization as a “Historic rite of purification”. Along with this he reiterated simultaneous elections in state and central assembly so that time and money would be saved in huge numbers. But the questions “Is the purification only for ordinary citizens and public officials” and not for political parties.

In a recent proposal, ECI (Election Commission of India) asked political parties to disclose their sources of contribution above rupees 2000. Under existing laws political parties don’t have to disclose contributions less than rupees 20000. ECI also established a team with Indian Chartered Accountant of India to create guidelines for the maintenance of political party accounts so that mandatory rules are formulated by government authenticated third party rather than inter party regulations. This will add accountability to political parties to show and maintain sources of income. Along with this, government should amend Section 29A of RPA (Representation of Peoples Act) to empower ECI to deregister political parties if they are found perpetrating violation of law. Election Commission of India disclosed that out of 1900 registered political parties, only 400 contested elections and the rest are merely used as shell parties to evade taxes. Under the existing laws, when a candidate discloses his asset and liability, Election commission does not have any power to impose the real costs if the information given by the candidate is false or misleading. By amending section 125A of RPA these loop holes will be tightened.

When Prime minister of India says it’s a “Ritual of Purification” political parties also come under cleansing.

If a vegetable vendor can do personal sacrifice to reform his mother land, why not political parties.

Current Affairs 6th January 2017 – Coal Import Overvaluation, Om Puri, Malappuram Digitisation, Aadhaar Private Usage, Sahara Expenses Inflated, Benzene Pollutant in Delhi Air

DRI Upheld Showcause Notice in Coal Import Overvaluation Case –

In 2014, Directorate of Revenue Intelligence raided over around 80 shipping companies and their laboratories across major India states which includes Maharashtra, Delhi, Gujarat, Karnataka, Odisha, West Bengal, Andhra Pradesh and Kerala. During these raids it was said that DRI seized documents which detailed the real cost of the coal imported and the amount shown to the authorities was found to be inflated.

One of these 40 companies named Knowledge Infrastructure Systems Pvt Ltd is currently under news. DRI had passed a showcause notice to Knowledge Infrastructure Systems Pvt Ltd regarding the alleged overvaluation of Indonesian coal imports, collectively pegged at Rs 29,000 crore. This showcause notice was recently upheld by adjudication authority of the Directorate of Revenue Intelligence (DRI).

DRI claimed that it had obtained two Certificates of Sampling and Analysis of Coal (COSA), which detailed different parameters of the coal imported. It is being said that the certificate of coal imported by Switzerland and certificate being provided to MAHAGENCO were different. DRI alleged that the certificates were intentionally faked for creating illegal profits. However Knowledge Infrastructure Systems brushed aside the allegations saying that the testing reports of MAHAGENCO while buying coal and test report of custom authorities while importing coal makes the DRI allegations wrong.

Om Puri passed away –

Veteran and very famous actor Mr. Om Puri passed away on early Friday morning due to a massive heart attack. He was 66 years old. Mahesh Bhatt, Prime Minister Narendra Modi and other members of Bollywood Fraternity including his friends expressed their condolences. Om Puri in his long career in Bollywood had acted in Bollywood, Hollywood and even Pakistani films.

Reality of Digitisation of Malappuram in Kerala –

Malappuram District authorities transferred Rs 5 each digitally to accounts of 27 persons in Nedumkayam, and declared it India’s ‘first cashless tribal village’. Nedumkayam’s digital interaction began and ended with that.

The declaration was made as part of ‘My Malappuram, My Digital’ project, envisaged to make Kerala’s Malappuram the first cashless district in India. Nedumkayam, with its 400-odd population of the Paniya tribe, was provided WiFi to facilitate online payment using the SBI Buddy app in smartphones, and then trained how to use it.

However it is being said that the above steps are a mere formality to showcase that something is happening but the reality is far from what is being shown. The WiFi facilities provided do not work as hardly 10 homes near the WiFi source get signals. Also as most of the people there are daily labourers so they say that digital payments and accounts won’t matter to them as they are not going to deposit there daily wages in these accounts. They say that even there women are defecating in the open so it is important for them that the government first builds toilets for them so that there women can defecate with safety and security. Drinking water facilities are grossly inadequate as they fetch water from a nearby river. The situation gets worse in rainy season as during this season people have to contend with dirty water.

Aadhaar Information in private hands might not be a good idea says SC –

Supreme Court has opined that handling of Aadhaar biometric details by private players doesn’t seems a wise idea. In Supreme Court an urgent hearing regarding the Constitutional validity of Aadhaar was filed saying that if it is not stopped then India will transform in a surveillance State but Supreme Court has denied any urgent hearing. The court said that the interim orders regarding the usage of Aadhaar are already in place and there is no urgent need to temper with them. Important issues on a case by case basis will be taken up in due course of time.

The apex court had earlier permitted voluntary use of Aadhaar cards in social welfare schemes such as LPG subsidy, PDS, MGNREGA, pension schemes and provident fund, besides ambitious flagship programmes like the ‘Pradhan Mantri Jan Dhan Yojna’ of the NDA government.

A Supreme Court Constitutional bench has previously ruled on Aadhaar that it’s usage is purely voluntary and no one will be denied any benefits of government schemes on basis of not having access to Aadhaar. However the passage of Aadhaar Bill Targeting of Subsidies has changed the ground equation. Any change by Supreme Court has to be done by a larger Constitutional bench of the Supreme Court. Also whether the Right to Privacy is a fundamental right or not is still left to be decided.

Sahara India ITSC issue –

Yesterday we provided a brief overview of Sahara diaries case. A new revelation made shows that the expenses which Sahara India has filed with Income Tax Settlement Commission are over 100 times higher than the amount of expenses that Sahara India filed with the Registrar of Companies. This overvaluation of expense has led Sahara India to avoid a tax amount of ₹ 1771 crore in the period of 2008-09 to 2014-15. It is said that Income Tax authorities have the discretion of deciding the expenses of the tax payer.

Presence of Benzene in Delhi’s Air –

The level of Benzene in Delhi’s Air is extraordinarily high specially due to current low temperature of Delhi. It is said that in coming days with temperatures falling further south, the concentration of Benzene carcinogen is set to increase further. The minimum prescribed standard of Benzene in air is said to be 5 µg/m3 but in some areas of Delhi it is being found in excess of 35 µg/m3. The average concentration of Benzene in Gurgaon was 0.22 µg/m3 and that in Rohtak was 0.18 µg/m3. It is being said that Benzene is more dangerous in smaller concentrations than higher concentrations.

Despite of the ill effects of Benzene, it is not included in the National Air Quality Index but the authorities are still aware of the ill effects of the benzene carcinogen. Benzene is known to cause myloid leukaemia which is a sort of blood cancer. Benzene is said to settle down more in areas which have cold temperatures.

What is National Air Quality Index ?? 

National air quality index (AQI) is a number used by Indian Government to communicate to the public how polluted the air currently is or how polluted it is forecast to become.

In India, There are six AQI categories, namely Good, Satisfactory, Moderately polluted, Poor, Very Poor, and Severe.  The proposed AQI will consider eight pollutants (PM10, PM2.5, NO2, SO2, CO, O3, NH3, and Pb) for which short-term (up to 24-hourly averaging period) National Ambient Air Quality Standards are prescribed.

Digital Economy in India – Achievements, Comparison and Limitations

In the aftermath of demonetization, Government of India started encouraging citizens to go for cashless transactions by announcing incentives to encourage digital payments. This will provide various potential benefits to citizens like reduction in transaction costs, increased access to financial services and for the government it will reduce leakage and improve public service delivery. Capturing these benefits requires systematic evidence driven approach. Continue reading

Dual faces of China when it comes to deter global terrorism

On 30th December, China blocked India’s proposal of banning Jaish-e-Mohammed (JeM) chief Masood Azar by using its Veto power in United Nations Security Council. Along with this, China’s decision on blocking India’s membership in Nuclear Suppliers Group, rumblings over South China Sea raises question on stability of bilateral relationship between India and China. Continue reading

Income Tax Settlement Commission grants immunity to Sahara India

Income Tax Settlement Commission has granted immunity to Sahara India over Sahara diaries case in which it was alleged that a diary was recovered during raid of November 2014 which was said to have proof of alleged pay-offs of bribes to politicians. The 50 page order of Income Tax Settlement Commission clearly shows that the application of Sahara India was first rejected by ITSC but later on 5th September, the case was re-admitted and a final order was passed on 10th November 2016 granting immunity to Sahara India from prosecution and penalty. Final page of the order states that only Rs 137.58 crore — which was seized during the raids — will now be taxed, which too can be paid by the company in 12 instalments. Continue reading