Current Affairs 13th July 2023 for UPSC Prelims Exam

International Monetary Fund (IMF)

Context: The International Monetary Fund (IMF) has given a final nod to a $3 billion “stand-by arrangement” for the country to support the government’s efforts to stabilise the ailing economy.

About International Monetary Fund (IMF)

Definition: The IMF was established in 1944 in the aftermath of the Great Depression of the 1930s.
- 44 founding member countries sought to build a framework for international economic cooperation.
Aim:
- Lending: The IMF provides loans—including emergency loans—to member countries experiencing actual or potential balance of payments problems.
  - The aim is to help them rebuild their international reserves, stabilize their currencies, continue paying for imports, and restore conditions for strong economic growth, while correcting underlying problems.
- Surveillance: The IMF monitors the international monetary system and global economic developments to identify risks and recommend policies for growth and financial stability.
- Capacity Development: The IMF provides technical assistance and training to governments, including central banks, finance ministries, revenue administrations, and financial sector supervisory agencies.
Governance:
- Board of Governors: The Board of Governors, the highest decision-making body of the IMF.
  - It consists of one governor and one alternate governor for each member country.
  - The governor is appointed by the member country and is usually the minister of finance or the governor of the central bank.
  - All powers of the IMF are vested in the Board of Governors.
- Executive Board: It is responsible for conducting the day-to-day business of the IMF.
  - It is composed of 24 Directors, who are elected by member countries or by groups of countries, and the Managing Director, who serves as its chairman.
Members: Its membership embraces 190 countries, with staff drawn from 150 nations.
- On 27th December 1945, India became member of the IMF.
Financing: The IMF’s resources mainly come from the money that countries pay as their capital subscription (quotas) when they become members.
- Each member of the IMF is assigned a quota, based broadly on its relative position in the world economy.
- Countries can then borrow from this pool when they fall into financial difficulty.
Stand-by Arrangement (SBA) of IMF: It provides short-term financial assistance to countries facing balance of payments problems.
- Historically, it has been the IMF lending instrument most used by advanced and emerging market countries.
Headquarters: Washington D.C, USA.

Current Affairs 12th July 2023 for UPSC Prelims Exam

UN Human Rights Council

Context: India has voted in favour of a draft resolution tabled in the UN Human Rights Council that condemns and strongly rejects recent “public and premeditated” acts of desecration of the Koran.

More on News

The UN Human Rights Council adopted the draft resolution ‘Countering religious hatred constituting incitement to discrimination, hostility or violence’.
India voted in favour of the resolution that condemns and strongly rejects the recent public and premeditated acts of desecration of the Holy Koran and underscores the need for holding the perpetrators of these acts of religious hatred to account in line with obligations of States arising from international human rights law.
Those voting in favour of the resolution included Bangladesh, China, Cuba, Malaysia, the Maldives, Pakistan, Qatar, Ukraine and UAE.
Nations voting against the resolution included Belgium, Finland, France, Germany, the U.K. and the U.S.

About UN Human Rights Council

Definition: The Human Rights Council is an intergovernmental body within the United Nations system responsible for the promotion and protection of all human rights around the globe.
- The UNHRC replaced the former United Nations Commission on Human Rights.
- The Council was created by the United Nations General Assembly in 2006 by a resolution.
Aim: It is responsible for strengthening the promotion and protection of human rights around the globe.
- It addresses situations of human rights violations and make recommendations on them.
Membership: The Council is made of 47 Member States, elected by the General Assembly of the UN through direct and secret ballot.
- The Council’s Membership is based on equitable geographical distribution. Seats are distributed as follows:
  - African States: 13 seats
  - Asia-Pacific States: 13 seats
  - Latin American and Caribbean States: 8 seats
  - Western European and other States: 7 seats
  - Eastern European States: 6 seats
- Members of the Council serve for a period of 3 years and are not eligible for immediate re-election after serving two consecutive terms.
Composition: The Bureau of the Council consists of five people – one President and four Vice-presidents – representing the five regional groups. They serve for a year, in accordance with the Council’s annual cycle.
Headquarters: Geneva, Switzerland.

James Webb Space Telescope

Context: NASA marked a year of discovery by the James Webb Space Telescope recently with a spectacular new image of sun-like stars being born.

About James Webb Space Telescope

Definition: The James Webb Space Telescope is NASA’s largest and most powerful space science telescope.
- It is a premier observatory with a large infrared telescope that has an approximately 6.5-meter primary mirror.
- It is named after a former NASA administrator, James Webb (one of the architects of the Apollo Moon landings).
- It is the successor to the Hubble telescope.
Objective: The space telescope is designed to study the earliest stars in the universe and other cosmic mysteries.
- It will study every phase in the history of our Universe, ranging from the first luminous glows after the Big Bang, to the formation of solar systems capable of supporting life on planets like Earth, to the evolution of our own Solar System.
- This will help researchers gauge whether these worlds are in any way habitable.

GSTN under PMLA

Context: The Congress has alleged that the Narendra Modi government has unleashed “tax terrorism” by surreptitiously bringing the Goods and Services Tax Network (GSTN) under the Prevention of Money Laundering Act (PMLA).

What is Goods and Services Tax Network (GSTN)?

Goods and Services Tax Network (GSTN) is a nonprofit non-government company.
It provides IT infrastructure and services to the Central and State Governments, taxpayers and other stakeholders for implementation of the Goods and Services Tax (GST) in India.
Goods and Services Tax Network (GSTN) has built Indirect Taxation platform for GST to help taxpayers in India to prepare, file returns, make payments of indirect tax liabilities and do other compliances.
GSTN makes available standard software for enterprises and small traders to store their accounts such that straight away they can be uploaded as their monthly returns on the GSTN website.

About Prevention of Money Laundering Act, 2002 (PMLA)

Definition: It is an Act to prevent money laundering and to provide for the confiscation of property derived from or involved in money laundering.
Aim: The Act was formulated for the following objectives:
- Prevent money-laundering.
- Combat/prevent channelising of money into illegal activities and economic crimes.
- Provide for the confiscation of property derived from, or involved/used in, money laundering.
- Provide for matters connected and incidental to the acts of money laundering.
Enforcing Authority: The Enforcement Directorate (ED) in the Department of Revenue, Ministry of Finance, is responsible for investigating the offences of money laundering under the PMLA.
Financial Intelligence Unit: Financial Intelligence Unit – India (FIU-IND), under the Department of Revenue is the central national agency responsible for receiving, processing, analysing, and disseminating information relating to suspect financial transactions.
Actions that can be initiated against the person involved in money laundering:
- Seizure/freezing of property and records and attachment of property obtained with the proceeds of crime.
- Any person who commits the offence of money laundering shall be punishable with –
  - Rigorous imprisonment for a minimum term of three years and this may extend up to seven years.
  - Fine (without any limit).

Why GSTN under the Prevention of Money Laundering Act?

Process: The Centre has notified that the GSTN will come under the purview of the Prevention of Money Laundering Act (PMLA). This is seen to give more teeth to the Enforcement Directorate (ED), which handles PMLA cases.
- The changes have been made for provisions under Section 66 of the PMLA, which provides for the disclosure of information.
- This means the information stored in the GST Network has to be shared with the ED and the FIU.
Need: Many cases of claiming fake input tax credit (ITC) have been reported since the implementation of the goods and services tax (GST).
- In such cases, individuals or businesses generate fake GST invoices or the invoices that are raised without supplying any actual goods or services or without payment of GST.
- These fake GST invoices are then used to avail undue input tax credit and avoid paying GST by payment of tax liability using undue input tax credit.
- It is to be noted that in the two-month-long drive against fake registrations, which began on May 16 2023, over 69,600 suspected GST identification numbers (GSTINs) were identified for physical verification by field tax officials.
  - Of this, over 59,000 GSTINs have been verified, and over 17,000 were found to be non-existent.
Potential Outcome: Now that GSTN has been brought under PMLA, it will help the ED to zero in on violators who evade taxes by generating fake GST invoices and using other means within the GST network.
- ED will be able to make use of the crucial information with the GSTN to track and monitor transactions and investigate cases more efficiently.
- This move will not only facilitate in recovering the tax quickly from the fraudsters in terms of identifying the money trail but also facilitate in easy prosecution.