Union Cabinet Approvals – 21 September 2016

Prime Minister Narendra Modi lead Union Government approved various agreement and projects in different fields.

Cabinet approved merging of Rail budget with Union Budget

The Union Cabinet decided to merge the Railway budget with the General budget and agreed in-principle to advance the date of its presentation in Parliament from the usual February end.

• The decision to merge the railway budget with the general budget is significant as in recent years, particularly since coalition governments post-1996, political heavyweights have used the railway budget to hand out goodies and for their own image building.
• With the railway portfolio often held by regional biggies, the budget reflected political priorities of the incumbent. The railway bureaucracy has also dug in its heels in the past.
• The Cabinet has also decided to do away with the Plan/ Non-Plan expenditure classification in Budget 2017-18 and replace with ‘capital and receipt’.
• It is noted that the Central Statistical Organisation (CSO) will provide provisional Advance Estimates of national income or GDP by January 7, so that the data could be incorporated in preparation of the budget.

Union Cabinet approved Agreement between India and Samoa for exchange of information on Taxes

The Cabinet gave approval for signing and ratification of an agreement between India and Samoa for exchange of information to curb tax evasion.

• Samoa is a country comprising the westernmost group of the Samoan Islands, in Polynesia. Many of its islands have reef-bordered beaches and rugged, rainforested interiors with gorges and waterfalls. The islands include Upolu, home to most of Samoa’s population, and Savai’i, one of the largest islands in the South Pacific.
• The agreement will stimulate the flow of exchange of information between India and Samoa for tax purposes which will help curb tax evasion and tax avoidance.
• The Agreement enables the competent authorities of India and Samoa to provide assistance through exchange of information that is foreseeably relevant to the administration and enforcement of the domestic laws of the two countries concerning taxes covered by this Agreement.
• The information received under the Agreement shall be treated as confidential and may be disclosed only to persons or authorities (including courts or administrative bodies) concerned with assessment, collection, enforcement, prosecution or determination of appeals in relation to taxes covered under the Agreement. Information may be disclosed to any other person or entity or authority or jurisdiction with the prior written consent of the information sending country.
• The Agreement also provides for Mutual Agreement Procedure “for resolving any difference or for agreeing on procedures under the Agreement.
• The Agreement shall enter into force on the date of notification of completion of the procedures required by the respective laws of the two countries for entry into force of the Agreement 

Samoa :

• Capital: Apia
• Currency: Samoan tālā

Cabinet approves provision of submarine optical fiber cable connectivity between Chennai and Andaman & Nicobar Islands

The Union Cabinet has given its approval for provision of a direct communication link through a dedicated submarine Optical Fibre Cable (OFC) between Mainland (Chennai) and Port Blair & five other islands.

• The approval would equip Andaman & Nicobar Islands (ANI) with appropriate bandwidth and telecom connectivity for implementation of e-Governance initiatives; establishment of enterprises & e-commerce facilities.
• It will also enable the provision of adequate support to educational institutes for knowledge sharing, availability of job opportunities and fulfil the vision of Digital India.
• The approval would equip Andaman & Nicobar Islands (ANI) with appropriate bandwidth and telecom connectivity for implementation of e-Governance initiatives; establishment of enterprises & e-commerce facilities. It will also enable the provision of adequate support to educational institutes for knowledge sharing, availability of job opportunities and fulfil the vision of Digital India.
• This project is to be erected through Little Andaman, Car Nicobar, Havelock, Kamorta and Great Nicobar at a cost of Rs. 1102.38 crore including operational expenses for 5 years and is likely to be completed by December 2018.

Cabinet gives ex-post facto approval to enhancement of Pension for Freedom Fighters

The Union Cabinet has given its ex-post facto approval to enhancement of Pension for Freedom Fighters and for the spouses, eligible daughters and dependent parents of deceased Freedom Fighters, under the Swatantrata Sainik Samman Pension Scheme (SSSPS), 1980.

• The revised scale of pension has taken effect from 15.O8.2016. Further, the revised total amount of pension will be taken as basic pension for the respective categories of Freedom Fighter pensioners for calculating Dearness Relief.

The revised particulars as follows,

• During the Silver Jubilee year of Independence a Central Scheme for grant of pension to freedom fighters and their eligible dependents (Where freedom fighters have already expired) was introduced by Government of India with effect from 15.08.1972.  In 1980, the Scheme was liberalized and renamed as Swatantrata Sainik Samman Pension Scheme,1980 (the Scheme) and made effective from 01.08.1980.
• The existing Dearness Relief system based on All India Consumer Price Index for Industrial workers, which was so far applicable to freedom fighter pensioners on annual basis, is being discontinued and replaced by the Dearness Allowance system applicable to Central Government employees twice a year. This will be termed as “Dearness Relief”, the appropriate term in case of pensioners. 

Cabinet approves enactment of Admiralty Bill 2016

The Union Cabinet has given its approval to the proposal of Ministry of Shipping to enact Admiralty (Jurisdiction and Settlement of Maritime Claims) Bill 2016 and to repeal five archaic admiralty statutes.

• The Bill confers admiralty jurisdiction on High Courts located in coastal states of India and this jurisdiction extends upto territorial waters.
• The jurisdiction is extendable, by a Central Government notification, upto exclusive economic zone or any other maritime zone of India or islands constituting part of the territory of India.
• It applies to every vessel irrespective of place of residence or domicile of owner.
• Inland vessels and vessels under construction are excluded from its application but the Central Government is empowered to make it applicable to these vessels also by a notification if necessary.
• In respect of aspects on which provisions are not laid down in the Bill, the Civil Procedure Code, 1908 is applicable. 

Cabinet Committee gives approval to wind up Hindustan Diamond Company

The Cabinet Committee on Economic Affairs has approved shutting down of Hindustan Diamond Company Pvt Ltd (HDCPL). This company is a joint venture between the Centre and De Beers Centenary Mauritius Ltd (DBCML) which supplies rough diamonds to the processing industry.

• The HDCPL was incorporated under the Companies Act, 1956 in 1978. The objective of formation of the Company was to supply rough diamonds to diamond processing industry in India, particularly to small and medium diamond jewellery exporters.
• It is noted that the Special Notified Zone (SNZ) at Bharat Diamond Bourse, Mumbai, set up in 2015, is also enabling smaller Indian players have direct access for supply of rough diamonds.
• The winding up of HDCPL is not likely to affect supply of rough diamonds to Indian diamantaires as Indian diamond industry has grown in these years and several Indian players are sight holders with top diamond producers now.
• At present viewing operations are being carried out in the SNZ at Mumbai wherein Foreign Mining Companies (FMCs) only display their rough diamond lots to the Indian manufacturers and then take them back.