Kerala’s step to tax certain junk food 

Kerala’s bold step to tax certain junk food items appears to mirror the Denmark example — of food tax being considered as a ‘source of funds’ than a planned move to promote healthy living.

he bold step by Kerala in becoming the first State in the country to introduce a 14.5 per cent tax on burgers, pizzas, doughnuts, sandwiches and pasta sold through branded restaurants is one that is expected to have a positive impact on public health. But introducing additional tax on fat-rich food products is a move that has been tried out in other countries with varying degrees of success. Where Denmark has failed, will Kerala’s experimentation succeed?

The answer depends on what the objective is. Unfortunately, the rationale behind the move has not been spelt out other than it bringing in an additional Rs.10 crore of revenue to the government’s coffers.

There is a strong case to initiate steps to tackle obesity among schoolchildren and adults in Kerala. For instance, a June 2012 study (Indian Pediatrics) of 1,634 children between 6-15 years from three urban schools in Kochi found the prevalence of obesity among boys to be 3 per cent and 5.3 per cent for girls. The prevalence of being overweight was 10.2 per cent in boys and 12.1 per cent in girls. In April 2014, a study of 1,098 schoolchildren in the rural areas of Kochi found 9 per cent of girls and nearly 6 per cent boys to be overweight and 2.8 per cent girls and 3.3 per cent boys to be obese.

Upper age limit for Civil Services Exam to be axed soon

The Civil Services examination held by UPSC every year is one of the most sought after exam. Every year UPSC recieves about 11,00,000 applications but the success ratio is as low as 0.1-0.3%. While the exam requires rigorous practice and stratergy, the only good part is the relaxed age limit.

The Board might be phasing out the age limit by 6 yrs over the next 5-7 years to insulate the aspirants who are already preparing for the exam. (PTI) The Board might be phasing out the age limit by 6 yrs over the next 5-7 years to insulate the aspirants who are already preparing for the exam. (PTI)

The Civil Services examination held by UPSC every year is one of the most sought after exam. Every year UPSC recieves about 11,00,000 applications but the success ratio is as low as 0.1-0.3%. While the exam requires rigorous practice and stratergy, the only good part is the relaxed age limit. At present, anybody over 21 and below 32 years of age can sit for the exam but looks like the age criteria is going to be axed soon.

ET Now quotes Sources stating that the upper age limit might be cut down soon. While it’s 32 years now, it may get down to 26. The Board might be phasing out the age limit by 6 yrs over the next 5-7 years to insulate the aspirants who are already preparing for the exam. However, for SC/ST, there would be no reduction in the upper age limit and will remain unadhered.

ET Now Sources said that 32 yr age limit is too high to be recruited in IAS, IFS, IPS. Further adding that 32 yrs is too old to adopt and internalise the core values of a civil servant. This is probably why, this ammendment is being considered. However, the final call on this will be taken by Central Government.

The news might come out a major shocker to the lakhs of aspirants however an official statement is yet to come.

Launch of Akashvani Maitree

India state radio broadcaster's Akashvani Maitree Channel, a special Bengali channel targeted at the Bengali-speaking audience of India, Bangladesh and in other countries, was launched by President Pranab Mukherjee.

Terming the coming into being of the channel as a historic occasion, President Mukherjee said a new chapter is being added in the annals of India-Bangladesh relations.The channel and its multimedia website is a unique venture and initiative of All India Radio, not only for the Bengalis in West Bengal, Bangladesh and the adjoining areas but the entire Bengali speaking diaspora living in different countries.

Akashvani has a special place in the hearts of millions of people of the neighbouring country since 1971. He said then the precursor to Akashvani Maitree, a special service in Bangla was launched in the wake of the Bangladesh liberation movement during which the channel had played a historic role.

Sugamaya Pustakalaya – Online Library for Persons with print Disabilities

“Sugamaya Pustakalaya” is an online platform that makes accessible content available to print-disabled people. The library houses publications across diverse subjects and languages and multiple accessible formats. It has been created by Department of Empowerment of Persons with Disabilities (Divyangjan), Ministry of Social Justice and Empowerment in collaboration with member organizations of Daisy Forum of India and powered by TCS Access. Books are available in Accessible formats for people with visual impairment and other print disabilities. Over 2 lakhs books in diverse languages. Integrating libraries across India and the Globe, including the largest international library, Bookshare.

UPSC Paper 1 Subject wise- Distribution of marks 

S.No.	Areas	Current	Core information	Subject total
1	Art and culture		9	9
2	Economy	14	8	22
3	Modern History		6	6
4	Polity		5	6
5	General Science	3	2	5
6	Science &Technology	4	4	5
7	Ecology and Environment	11	4	15
8	Geography	3	5	8
9	History Medieval		1	1
10	History Ancient		1	1
11	Government Schemes/Policies	7		7
12s	Miscellaneous	13		13
	TOTAL	55	45	100

All the best

UPSC 2016 Civil Services Prelims Exam Answer Key

Paper 1

What is a 'Forensic Audit'

Forensic auditing refers to the auditing with the main aim to employ accounting techniques and methods to gather evidence to investigate the crimes on financial front such as theft, fraud etc. A forensic audit can be conducted in order to prosecute a party for fraud, embezzlement or other financial claims. In addition, an audit may be conducted to determine negligence or even to determine how much spousal or child support an individual will have to pay.

Forensic auditing is a specialization within the field of accounting, and forensic auditors often provide expert testimony during trial proceedings. Most large accounting firms have a forensic auditing department.

The audit covers a wide range of investigative activities performed by accountants. The process may also include serving as an expert witness in a fraud trial. A forensic audit could also cover situations that do not involve fraud or embezzlement, such as disputes related to a bankruptcy, business closures, and divorces.

The Process
The investigation process follows a similar path as a regular audit of financial statements. The steps can include planning, review and a report. If the investigation was undertaken to discover the presence of fraud, evidence is presented to uncover or disprove the fraud and determine the amount of the damages suffered. The findings are presented to the client — and possibly the court should the case go that far.

During the planning stage, the forensic auditing team establishes objectives, such as identifying if fraud has been committed, how long it has been going on, the parties involved, quantifying the financial loss and providing fraud prevention measures. While gathering evidence, the team collects evidence in the proper manner in order for it to be used in a court case. There are various techniques used to gather evidence. A report is produced for the client with the findings. Lastly, those involved in the forensic audit may be asked to present their findings to the court.

Types of Fraud
Forensic audits uncover several types of fraud. The most common involves theft, including cash, inventory and fraudulent payments. Another type of fraud is corruption, such as a conflict of interest, bribery and extortion. The last major category is financial statement fraud. This relates to misstatements of the financials of a company.

GST Bill passed by Rajya Sabha

Goods and Services bill has been passed by Rajya Sabha recently. An integrated national market will create economic efficiency in the sense that Adam Smith wrote about a few centuries ago. Supply chains will be streamlined. Smooth movement of trucks across state borders will reduce the need to maintain large piles of inventory. Small companies will become more competitive. Tax evasion will come down as companies will need bills to claim tax credits. The ease of doing business will improve.

While it is difficult to quantify the impact on various sectors until the government announces the final GST rate, analysts and economists are assuming a standard rate of 17-18%.

If that happens, then companies in the manufacturing sector are expected to benefit, while those in the services sector stand to lose. Like all indirect taxes, the GST too is regressive. It is levied at a flat rate on all consumers, irrespective of their income. One of the goals of a good tax system is to depend less on such regressive taxes. So, the GST rate should be kept low.

Of course, some of the immediate problem of regressivity will be ironed out since the prices of goods are likely to come down while the prices of services are likely to go up. The consumption baskets of the poor are skewed towards goods rather than services. So, there will be an initial positive redistributive effect as the new tax system kicks in.

The GST seems to be on its way to finally becoming a reality. 

Sector-wise  likely impact on various sectors and stocks

1) Automobiles: The auto sector is likely to emerge as a winner from GST implementation, provided the rate is below the total tax incidence for the sector (>27%). GST is expected to lead to lower prices for the end user and thus boost demand. Companies to benefit include Maruti Suzuki India Ltd and Mahindra and Mahindra Ltd. Both stocks have outperformed the market so far this fiscal year. Analysts believe some impact of GST could well be priced in at current levels.

2) Multiplexes: Multiplex companies pay around 25% of the average revenue per user (average ticket price + food and beverage spends, or F&B per head) as taxes, according to Kotak Institutional Equities. This is in three broad areas—(a) entertainment tax on net ticket sales, (b) Value-added tax (VAT) on F&B, and (c) service tax on input costs for which there is no set-off available. No wonder, GST is expected to reduce the tax burden and improve the Ebitda (earnings before interest, taxes, depreciation and amortization) margin. Stocks of PVR Ltd and Inox Leisure Ltd have increased 50% and 30%, respectively, so far in FY17, suggesting the shares are factoring in most of the positives. Of course, there are other factors that are driving these shares.

3) FMCG: If the GST rate is less than or equal to 18%, then it should be positive for most consumer goods companies, point out analysts at Citigroup. Of course, much depends on which exemptions are retained and which of the current excise benefits are “grandfathered”. In addition, there will be gains from warehouse rationalization and a better competitive position vis-à-vis unorganized firms. But gains aren’t expected to be massive and will occur gradually; as such, stocks may not react dramatically just because the GST bill is passed.

If cigarettes attract a higher tax incidence under the GST regime, then it will have an adverse impact on companies such as ITC Ltd.

4) Logistics: Supply chain management is expected to get a boost and transit time will reduce. Further, interstate trade barriers would reduce and eventually result in better interstate commerce. Consolidation of warehousing facilities is expected. Stocks that may benefit include Container Corp. of India Ltd and Transport Corp. of India Ltd. Citi’s analysts point out that the better operating environment could lead Gateway Distriparks Ltd to enter the domestic business.

5) Cement: The anticipated 18% GST rate is far lower than what cement companies are paying currently, and analysts expect cement makers to pass on the benefits to consumers as demand continues to remain weak. Whether this alone will help revive demand is another matter altogether.

6) Retail: The opportunity to set off input tax credit on rent is expected to aid margin expansion. But retail companies are facing other problems. Shoppers Stop Ltd’s stock has underperformed the benchmark Sensex this year, as underlying demand remains weak and like-to-like sales growth has been lacklustre.

The losers

As mentioned earlier, services-related sectors are expected to be negatively impacted, as they may have to shell out higher taxes than what they are currently paying. Service tax rate is currently at about 15%.

1) Telecom: The moderate rise in tax outgo could hit demand and revenues. But there would be a simultaneous set-off of taxes (Cenvat, or central VAT) paid on certain capex inputs. So, the impact would be marginal. But telcos have bigger problems. Data volumes are slowing and the Reliance Jio Infocomm Ltd launch can worsen matters.

2) Consumer staples and discretionary: Many consumer staples currently have low indirect tax. Hence, GST will be negative for companies in food processing, bakery, edible oil, dairy segments and personal care items. Quick service restaurants too will be adversely impacted. Kotak Institutional Equities sees some impact on Britannia Industries Ltd and ITC.