Topic 1: The Chola Sengol Tradition
Context: The New Parliament to house Sceptre (Sengol) that ssymbolised transfer of Power on 1947.
Historical Significance of the Sengol:
- The sceptre is a historical symbol of Independence as it signifies the transfer of power from the British to the Indians.
- Sengol’s origin can be traced back to the Chola dynasty of South India, one of the longest-ruling dynasties in the world.
- During Chola’s rule the power was transferred in the presence of a priest, and it was sanctified with Sengol that would remind the king to rule with justice.
- The Sengol in Tamil Nadu state is also taken as a mark of heritage and tradition, serving as an integral part of various cultural events, festivals, and significant ceremonies.
The Transfer of Power Ceremony of 1947:
- Lord Mountbatten, the last Viceroy of India, asked Nehru about “the ceremony that should be followed to symbolise the transfer of power from British to Indian hands”.
- C Rajagopalachari, the last Governor-General of India, told Nehru about a ceremony performed during the Chola dynasty, in which the transfer of power from one king to the other was sanctified and blessed by high priests.
- “The symbol (for the transfer of power) used was the handover of the ‘Sengol’ from one King to his successor.
- Rajagopalachari was tasked with the responsibility of arranging a sceptre. He reached out to Thiruvaduthurai Atheenam, a well-known mutt in Tamil Nadu’s Tanjore district, and its leader commissioned the manufacturing of the Sengol to Chennai-based “Vummidi Bangaru Chetty” jewellers.
- The Sengol was constructed by two men Vummidi Ethirajulu and Vummidi Sudhakar.
- During the ceremony, which took place on August 14, 1947, a priest gave the sceptre to Lord Mountbatten and then took it back. It was then “taken in procession to Pt Jawaharlal Nehru’s house, where it was handed over to him.
- A special song known as Kolaru Padhigam which was composed by the 7th century Tamil saint Tirugnana Sambandar was rendered during the event.
- The cermony was also attended by Rajendra Prasad, the first President of India.
Source: The Hindu
Topic 2 : Forum for India-Pacific Islands Co-operation (FIPIC)
Context: Prime Minister Narendra Modi recently attended a meeting of 14 Pacific Ocean Island nations in Papua New Guinea
What is FIPIC?
- The Forum for India–Pacific Islands Cooperation (FIPIC) was launched during PM Modi’s visit to Fiji in November 2014.
- FIPIC includes 14 island countries i.e., Cook Islands, Fiji, Kiribati, Marshall Islands, Micronesia, Nauru, Niue, Palau, Papua New Guinea, Samoa, Solomon Islands, Tonga, Tuvalu, and Vanuatu – that are located in the Pacific Ocean, to the northeast of Australia.
What was the idea behind FIPIC?
- Despite their relatively small size and considerable distance from India, many of these islands have large exclusive economic zones (EEZs).
- India’s larger focus is on the Indian Ocean where it has sought to play a major role and protect its strategic and commercial interests.
- Therefore, the FIPIC initiative marks a serious effort to expand India’s engagement in the Pacific region as well.
The FIPIC Summit:
- The first FIPIC summit was held in 2014, at Suva, Fiji’s capital city where India announced various development assistance initiatives and other cooperation projects.
- The second summit was held in Jaipur in 2015 where India called for a “dedicated seat for Small Island Developing States in an expanded and reformed UN Security Council in both categories”.
- In 2019, India allocated $12 million grant, $1 million to each Pacific Small Island Developing States (PSIDS) towards implementation of high-impact developmental projects in the area of their choice.
Source: The Indian Express
Topic 3: Legal dimension of the Narco Tests
Context: The protesting wrestlers have agreed to take the narco analysis test, provided it is monitored by the Supreme Court.
What is a narco test?
- In a ‘narco’ or narco analysis test, a drug called sodium pentothal is injected into the body of the accused, which transports them to a hypnotic or sedated state in which their imagination is neutralised.
- In this hypnotic state, the accused is understood as being incapable of lying and is expected to divulge information that is true.
- Narco analysis tests were notably used in:
- The 2002 Gujarat riots case
- The Abdul Karim Telgi fake stamp paper scam
- The Nithari killings case in 2007
- The 26/11 Mumbai terror attack case on captured terrorist Ajmal Kasab.
- However, in 2010 the Supreme Court ruled on the legality and admissibility of narco tests.
Supreme Court Observation on Narco tests:
- In the 2010 Supreme Court in the “Selvi & Ors Vs State of Karnataka” held that no lie detector tests should be administered ‘except on the basis of consent of the accused’.
- Those who volunteer must have access to a lawyer and have the physical, emotional, and legal implications of the test explained to them by the police and the lawyer.
- The court emphasised that the ‘Guidelines for the Administration of Polygraph Test on an Accused’, published by the National Human Rights Commission in 2000, must be strictly followed.
- The apex court took into consideration the international norms on human rights, the right to a fair trial, and the right against self-incrimination under Article 20(3) of the Constitution.
- The court observed that a forcible intrusion into a person’s mental processes is also an affront to human dignity and liberty, often with grave consequences.
- Relying on its 2010 ruling, a Supreme Court has rejected the demand for a narco test on many occasions.
What is the evidentiary value of such tests?
The results of narco-analysis tests are not considered “confessions” since those in a drugged-induced state cannot exercise their choice in answering questions put to them.
The Supreme Court, through its 2010 ruling, clarified that “any information or material that is subsequently discovered with the help of voluntary administered test results can be admitted, in accordance with Section 27 of the Evidence Act, 1872.
Source: The Indian Express
Topic 4: Relationship between Ease of Doing Business Ranking and the state of an economy
Backdrop:
- In 2018, India had shot up among the top 50 in the World Bank’s Ease of Doing Business (EoDB) rankings.
- On paper this was hailed as a great achievement and it also burnished the reform credentials of the incumbent government.
- However, India was in the middle of a massive growth deceleration in 2018.
- The economy, especially the Medium, Small and Micro Enterprises (MSMEs), were struggling to grow.
- All this was happening in the backdrop of Demonetisation and introduction of the Goods and Services Tax (GST).
- Data would later reveal that unemployment was at a 45-year high.
- Moreover, the economy was to continue its slide, with India’s GDP growth rate slowing down from over 8% in 2016-17 to less than 4% in 2019-20.
The EoDB ranking and the Economy:
- The conventional wisdom regarding the EoDB rankings and the economic performance of countries was that improvements in Doing Business impacted positively on the GDP.
- However, after the 2018, incident it could be argued that the rankings did not capture the broader reality of an economy.
- For example, India’s rankings were based on data from just Mumbai and Delhi.
- According to a report improvement in Doing Business scores have at least a temporary negative impact on GDP and find little evidence for a positive effect in the following years.
Source: The Indian Express
Topic 5: Fresh Tax troubles for Foreign Portfolio Investors (FPIs)
Context: Income tax department has disallowed the setting-off of derivative market gain against equity capital losses in some cases.
Details:
- Local tax laws permit FPIs to set off losses made in one transaction against gains made in another to reduce their tax burden.
- However, this adjustment requires that such a set-off is allowed only when both transactions fall under the same income category.
- For many years, FPIs have been offsetting gains made on the derivatives market with losses made on listed shares.
- However, in some recent assessments, the tax department has taken the stance that such adjustments cannot be allowed since the nature of income is different.
- The divergence arises due to the distinction made in the nature of income, where derivatives’ profit or loss is considered business income or loss and can only be offset against business gains or losses, while cash market trading income or loss is categorized as capital gain or loss.
Different Norms for Resident Indian and FPIs
- Now, resident Indians file any stock market gains under the head of capital gains during tax filings, while income from the derivatives market is filed under business income. Hence, they are not eligible to claim any adjustments between equity market gains and derivative market profits.
- In contrast, both stock market gains and derivative market profits are considered capital gains for FPIs. Even in tax filings, they file both gains under capital gains. Hence, FPIs have been able to claim such a set-off.
- Such adjustment helped FPIs who used substantial derivative exposure as hedge against cash market trades.
What will change for FPIs now?
- Without any relief, FPIs will be forced to pay up to 40% tax on derivative gains they made. The capital losses, however, can be carried forward to the next financial year.
- This interpretation may adversely impact the hedging strategies of foreign funds, which take exposure to derivatives as a risk management practice. Some of them typically take exposure to derivatives to offset equity risks.
- However, Tax experts say there have been numerous judgements by tax tribunals that have upheld such adjustments between income made in equity and derivative markets as valid.
- According to Section 70(4) of the Income Tax Act, a taxpayer is entitled to set off any loss against income made from any other source provided they fall under the same head in terms of tax code.
- According to the experts the stance being taken by the income tax department is a major concern for foreign funds, especially the ones who are active in the derivative market segment.
- Besides in derivative trades made for hedging, there is a high possibility of derivative gain and equity loss. Such funds would directly be impacted.
Source: Live Mint
