Daily News Analysis 29th October 2018

Daily News Analysis (Prelims + Mains) – 29th October 2018

Topic for Prelims

Infantry Day

• Indian Army Celebrates 72nd Infantry Day.
• Infantry celebrates 27 October each year as Infantry Day to commemorate the first Infantry action post-independence.
• In response to the threat posed to the sovereignty and territorial integrity of our Nation, on this day in 1947, the leading elements of the Indian Army from 1st Battalion of the SIKH Regiment air landed at Srinagar and gallantly fought the raiders aided by Pakistan Army.

Electoral Bond Scheme

Electoral Bond is a bearer Banking Instrument to be used for funding eligible Political parties.

An electoral bond is designed to be a bearer instrument like a Promissory Note — in effect, it will be same as a bank note that is payable to the bearer on demand and free of interest.

Electoral bond can be purchased by any citizen of India or a body incorporated in India.

The motive to bring the electoral bond is cleanse the system of political funding in the country and desire to move towards a cashless economy.

The scheme, announced during the 2017 Budget, aims to account the donations made to all major political parties.

Conditions for electoral bonds

• Electoral bonds will be issued in multiples of ₹1,000, ₹10,000, ₹1 lakh, ₹10 lakh and ₹1 crore and will be available at specified branches of State Bank of India. It can be bought by the donor with a KYC-compliant account.
• Every party that is registered under section 29A of the Representation of the Peoples Act, 1951 (43 of 1951) and has secured at least one per cent of the votes polled in the most recent Lok Sabha or State election will be allotted a verified account by the Election Commission of India. Electoral bond transactions can be made only via this account.
• The bonds will be available for purchase for a period of 10 days each in the beginning of every quarter, i.e. in January, April, July and October as specified by the Central Government.
• An additional period of 30 days shall be specified by the Central Government in the year of Lok Sabha elections.
• The electoral bonds will not have the name of the donor. The donor and the party details will be available with the bank, but the political party might not be aware of who the donor is.
• Donors can donate the bonds to any party of choice which can be later cashed in via the party’s verified account within 15 days.

Advantages of electoral bonds

• Ensures transparency by making all the donations made to a party will be accounted for in the balance sheets without exposing the donor details to the public.
• No disclosure of donor’s identity will protect donor from any kind of harassment.
• Now maximum amount of cash donation that a political party can receive be capped at ₹2,000 only and that parties be entitled to receive donations by cheque or digital mode, in addition to electoral bonds. It will helps government aim of less-cash society.
• A donor will get a deduction and the recipient, or the political party, will get tax exemption, provided returns are filed by the political party.

Disadvantages of electoral bonds

• Round Tripping from Tax Havens to political parties will increase through this electoral bond’s way.
• Increase in Lobbying of Government Policies in favor of Donors.
• RBI can be misused to malign or harass political opponents by Government.

GST Council

GST Council, constitutional body till date met 30 times, took 918 decisions since its formation.

The GST Council was constituted on 15th September 2016 under Article 279A of the Constitution.

It consists of the

• Union Finance Minister (Chairperson),
• Union Minister of State in charge of the Revenue or Finance and
• the Minister in charge of Finance or Taxation or any other Minister nominated by each State Government.
• Union Revenue Secretary is the ex-officio Secretary to the GST Council.

The working of GST Council has ushered in a New Phase of Cooperative Federalism where the Central and the State Governments work together to take collective decisions on all issues relating to Indirect Tax regime of the country.