Indian Current Affairs: 23.03.2011

Politics & the Nation

Billionaire investor Warren Buffett said he is looking forward to using the enormous cash pile of flagship firm Berkshire Hathaway to acquire companies in India, which he described as a large, and not an emerging, market.
The Omaha, Nebraska-based Berkshire has made two large acquisitions in the past one year, buying chemicals additive firm Lubrizol for about $9 billion a few days ago and railroad firm Burlington Northern Santa Fe for about $26.5 billion last year. The cash pile on its books is estimated at $38.2 billion.
Buffett will also use the India visit to join his billionaire friend and Microsoft founder Bill Gates on a mission to push wealthy Indians to pledge money for a global philanthropic drive called the ‘Giving Pledge’.
Buffett begins his maiden India trip with a visit to metal-cutting tools maker TaeguTec India Pvt Ltd—his only investment in the country till date—on Wednesday. His other major India connection is the recent tie-up with Bajaj Allianz to sell auto insurance policies.
On Thursday, after wrapping up his Bangalore visit, Buffett will fly to Delhi, where he will hold a joint press conference with Gates and then speak with some leading Later, in the afternoon, he is expected to meet Prime Minister Manmohan Singh.

The Enforcement Directorate has found Pune-based stud farm owner Hasan Ali Khan has links with middle level politicians and bureaucrats. Some of these politicians are believed to be from as far as Bihar.
Khan, accused of stashing away black money worth $8 billion in Swiss banks, is being interrogated by ED under the Prevention of Money Laundering Act, or PMLA, and Foreign Exchange Management Act, or Fema. His custodial remand, which came to an end on Monday, was extended by three days by the Supreme Court.

Finance & Economy

A country does not export its taxes and, hence, exports would be zero-rated under GST. This means the final product or service will be spared tax, and taxes paid on all inputs refunded.
The above explanation may sound a little confusing to the uninitiated in taxation. Let’s try a bit. Suppose there is a series of transactions before a commodity is exported. Under GST, at every stage of this series, tax has to be levied, duly deducting whatever tax is paid on the purchase value. When the commodity is finally exported, there is no tax on the sale; but the exporter would have paid taxes on his purchases. When we say exports are zero rated, what it means is that the exporter has to be refunded the tax paid by him on his purchases which were exported out of the country.

According to NSO estimates, upto 79% cost of healthcare in rural areas is due to the cost of medicines and this situation is further compounded by the fact that 78% of the total expenditure on the healthcare is out of pocket with 65% of the Indian population, as per WHO estimates, not having access to modern health care.
Various state governments spend only between 8% and 30% of health expenditure on drugs, thereby leaving patients with little choice but to buy expensive drugs from the market.

State governments will enjoy virtual veto power on matters concerning the proposed goods and services tax, with the Centre ceding ground to opposition-ruled states on the Constitutional Amendment Bill in an attempt to build consensus in Parliament. The legislation stipulates that every decision of the goods and services council, a joint decision making body of states and Centre, must be supported by all the members present, giving every state the power to block a proposal.
The government will need the support of a large opposition party or block to garner two-thirds majority in Parliament, needed for making constitutional changes. The new tax regime also needs to be ratified by at least 15 state assemblies. Nine states, mostly ones ruled by main opposition party BJP, have opposed the constitutional amendments citing loss of fiscal autonomy.
The finance ministry seems to have bent backwards to get states to support the legislation that will help it roll out the proposed goods and services tax. The Centre’s position seems to have taken opposition-ruled states by surprise.
The Constitution (One Hundred and Fifteenth Amendment) Bill, 2011 will give the states the power to tax services while the Centre will get the authority to levy tax on retail trade. At present, states do not have the power to tax services while the Centre cannot impose a levy on retail sales of goods.

Indian Current Affairs