India at a Glance

India at a Glance

Introduction

The civilization of India is one of the oldest civilizations in the World, spanning more than 4000 years and witnessing the rise and fall of several Empires, and projecting a unique assimilation of various cultures and heritage. The Country has always been portrayed as a land of spiritual integrity with professors of Philosophy, who have engineered the magnanimity of its nationalism. One of the oldest scriptures in the World, the four-volume Vedas that many regard as the repository of national thoughts, which have anticipated some of the modern scientific discoveries, has been created in the orb of this myth oriented Country. This strong affinity with religion and mythology has been reflected time and again through various art forms and performing arts, which are symbolical of the composite culture of India. Unity in diversity is another facet of the Country’s inherent nationalism, which had been fused by the feeling of national fervour incited by various foreign invasions that ever made its way to the Indian shores. Religious tolerance and cultural amalgamation have given shape to a uniquely secular Nation, which has created an impressive status of itself in the global arena.

Country Name

Republic of India; Bharat Ganrajya

Government Type

Sovereign Socialist Democratic Republic with a Parliamentary system of Government.

Capital

New Delhi

Administrative Divisions

28 States and 7 Union Territories.

Independence

15th August 1947 (From the British Colonial Rule)

Constitution

The Constitution of India came into force on 26th January 1950.

Executive Branch

The President of India is the Head of the State, while the Prime Minister is the Head of the Government, and runs office with the support of the Council of Ministers who form the Cabinet Ministry.

Legislative Branch

The Indian Legislature comprises of the Lok Sabha (House of the People) and the Rajya Sabha (Council of States) forming both the Houses of the Parliament.

Legal System

The Constitution of India is the fountain source of the legal system in the Country.

Judicial Branch

The Supreme Court of India is the apex body of the Indian legal system, followed by other High Courts and subordinate Courts.

Flag Description

The National Flag is a horizontal tricolour of deep saffron (kesaria) at the top, white in the middle, and dark green at the bottom in equal proportion. At the centre of the white band is a navy blue wheel, which is a representation of the Ashoka Chakra at Sarnath.

Location

The Indian peninsula is separated from mainland Asia by the Himalayas. The Country is surrounded by the Bay of Bengal in the east, the Arabian Sea in the west, and the Indian Ocean to the south.

Geographic Coordinates

Lying entirely in the Northern Hemisphere, the Country extends between 8° 4′ and 37° 6′ latitudes north of the Equator, and 68°7′ and 97°25′ longitudes east of it.

Bordering Countries

Afghanistan and Pakistan to the north-west; China, Bhutan and Nepal to the north; Myanmar to the east; and Bangladesh to the east of West Bengal. Sri Lanka is separated from India by a narrow channel of sea, formed by Palk Strait and the Gulf of Mannar.

Indian Standard Time

GMT + 05:30

Area

3.3 Million sq km

Climate

The climate of India can broadly be classified as a tropical monsoon one. But, in spite of much of the northern part of India lying beyond the tropical zone, the entire country has a tropical climate marked by relatively high temperatures and dry winters. There are four seasons – winter (December-February), (ii) summer (March-June), (iii) south-west monsoon season (June-September), and (iv) post monsoon season (October- November).

Coastline

  7,516.6 km encompassing the mainland, Lakshadweep Islands, and the Andaman & Nicobar Islands.

Terrain

The mainland comprises of four regions, namely the great mountain zone, plains of the Ganga and the Indus, the desert region, and the southern peninsula.

Environment – Current Issues

Air pollution control, energy conservation, solid waste management, oil and gas conservation, forest conservation, etc.

Natural Resources

Coal, iron ore, manganese ore, mica, bauxite, petroleum, titanium ore, chromite, natural gas, magnesite, limestone, arable land, dolomite, barytes, kaolin, gypsum, apatite, phosphorite, steatite, fluorite, etc.

Population

Current Population of India in 2011	1,210,193,422 (1.21 billion)
Total Male Population in India	623,700,000 (623.7 million)
Total Female Population in India	586,500,000 (586.5 million)
Sex Ratio	940 females per 1,000 males
Age structure
0 to 25 years	50% of India’s current population
Currently, there are about 51 births in India in a minute.
India’s Population in 2001	1.02 billion
Population of India in 1947	350 million

Current Population of India 2011
Rank	State or union territory	Population (2011 Census)	Density (per km²)	Sex ratio
01	Uttar Pradesh	199,581,477	828	908
02	Maharashtra	112,372,972	365	946
03	Bihar	103,804,637	1102	916
04	West Bengal	91,347,736	1029	947
05	Andhra Pradesh	84,665,533	308	992
06	Madhya Pradesh	72,597,565	236	930
07	Tamil Nadu	72,138,958	555	995
08	Rajasthan	68,621,012	201	926
09	Karnataka	61,130,704	319	968
10	Gujarat	60,383,628	308	918
11	Odisha	41,947,358	269	978
12	Kerala	33,387,677	859	1,084
13	Jharkhand	32,966,238	414	947
14	Assam	31,169,272	397	954
15	Punjab	27,704,236	550	893
16	Haryana	25,353,081	573	877
17	Chhattisgarh	25,540,196	189	991
18	Jammu and Kashmir	12,548,926	56	883
19	Uttarakhand	10,116,752	189	963
20	Himachal Pradesh	6,856,509	123	974
21	Tripura	3,671,032	350	961
22	Meghalaya	2,964,007	132	986
23	Manipur	2,721,756	122	987
24	Nagaland	1,980,602	119	931
25	Goa	1,457,723	394	968
26	Arunachal Pradesh	1,382,611	17	920
27	Mizoram	1,091,014	52	975
28	Sikkim	607,688	86	889
UT1	Delhi	16,753,235	9,340	866
UT2	Puducherry	1,244,464	2,598	1,038
UT3	Chandigarh	1,054,686	9,252	818
UT4	Andaman and Nicobar Islands	379,944	46	878
UT5	Dadra and Nagar Haveli	342,853	698	775
UT6	Daman and Diu	242,911	2,169	618
UT7	Lakshadweep	64,429	2,013	946
Total	India	1,210,193,422	382	940

Population

1,189,172,906 (July 2011 est.)

Age structure

0-14 years: 29.7% (male 187,450,635/female 165,415,758)
15-64 years: 64.9% (male 398,757,331/female 372,719,379)
65 years and over: 5.5% (male 30,831,190/female 33,998,613) (2011 est.)

Median age

total: 26.2 years
male: 25.6 years
female: 26.9 years (2011 est.)

Population growth rate

1.344% (2011 est.)

Birth rate

20.97 births/1,000 population (2011 est.)

Death rate

7.48 deaths/1,000 population (July 2011 est.)

Net migration rate

-0.05 migrant(s)/1,000 population (2011 est.)

Urbanization

urban population: 30% of total population (2010)
rate of urbanization: 2.4% annual rate of change (2010-15 est.)

Sex ratio

at birth: 1.12 male(s)/female
under 15 years: 1.13 male(s)/female
15-64 years: 1.07 male(s)/female
65 years and over: 0.91 male(s)/female
total population: 1.08 male(s)/female (2011 est.)

Infant mortality rate

total: 47.57 deaths/1,000 live births
male: 46.18 deaths/1,000 live births
female: 49.14 deaths/1,000 live births (2011 est.)

Life expectancy at birth

total population: 66.8 years
male: 65.77 years
female: 67.95 years (2011 est.)

Total fertility rate

2.62 children born/woman (2011 est.)

HIV/AIDS – adult prevalence rate

0.3% (2009 est.)

HIV/AIDS – people living with HIV/AIDS

2.4 million (2009 est.)

HIV/AIDS – deaths

170,000 (2009 est.)

Major infectious diseases

Degree of risk: high
Food or waterborne diseases: bacterial diarrhea, hepatitis A and E, and typhoid fever
Vectorborne diseases: chikungunya, dengue fever, Japanese encephalitis, and malaria
Animal contact disease: rabies
Water contact disease: leptospirosis
Note: highly pathogenic H5N1 avian influenza has been identified in this country; it poses a negligible risk with extremely rare cases possible among US citizens who have close contact with birds (2009)

Ethnic groups

Indo-Aryan 72%, Dravidian 25%, Mongoloid and other 3% (2000)

Religions

Hindu 80.5%, Muslim 13.4%, Christian 2.3%, Sikh 1.9%, other 1.8%, unspecified 0.1% (2001 census)

Languages

Hindi 41%, Bengali 8.1%, Telugu 7.2%, Marathi 7%, Tamil 5.9%, Urdu 5%, Gujarati 4.5%, Kannada 3.7%, Malayalam 3.2%, Oriya 3.2%, Punjabi 2.8%, Assamese 1.3%, Maithili 1.2%, other 5.9%
Note: English enjoys the status of subsidiary official language but is the most important language for national, political, and commercial communication; Hindi is the most widely spoken language and primary tongue of 41% of the people; there are 14 other official languages: Bengali, Telugu, Marathi, Tamil, Urdu,Gujarati, Malayalam, Kannada, Oriya, Punjabi, Assamese, Kashmiri, Sindhi, and Sanskrit; Hindustani is a popular variant of Hindi/Urdu spoken widely throughout northern India but is not an official language (2001 census)

Literacy

Definition: age 15 and over can read and write
Total population: 61%
Male: 73.4%
Female: 47.8% (2001 census)

School life expectancy (primary to tertiary education)

Total: 10 years
Male: 11 years
Female: 10 years (2007)

Education expenditures

3.1% of GDP (2006)

National Days

26th January (Republic Day)
15th August (Independence Day)
2nd October (Gandhi Jayanti; Mahatma Gandhi’s Birthday)

Economic Survey: Quick Summary & Highlights

Economic Survey 2011-12: Quick Summary & Highlights

Economic Survey is an annual commentary on the state of the economy of India which is put together by
Finance Ministry of India. It is a document which presents economic development during the course of the
year.
The draft of the survey is prepared by Department of Economic Affairs and cleared by
Chief economic Advisor and the secretary Economic Affairs.
The final version is vetted by Finance secretary and Finance Minister.
Economic survey is presented every year shortly before presenting the Union Budget of Govt. of India.
Economic Survey 2011-12 was presented by finance minister Pranab Mukherjee in Parliament on March
15, 2012. Here is a quick summary for all aspirants of all examinations.
Important Figures:
India's Economic Growth
6.9 per cent in the Fiscal 2011-12
7.6 percent (plus or minus 0.25 percent) in 2012-13
8.6 percent in 2013-14.
Growth in Agriculture
2.5 % in Fiscal year 2011-12.
Share of Agriculture, allied activities in GDP
13.9 % in FY 12
Production of food grains
250.42 million tones (FY 12)
Food grains stocks
55.2 million tonnes
Growth in Service Industry
9.4 %, in FY 12 (and its share in GDP stands at 59%).
Industrial Growth
To be 4-5% in FY 13
Central spending on social services
18.5% in FY 12 (It was 13.4% FY 07)
Coverage of MGNREGA
5.49 Crore household (by 2011-12)
Gross capital formation in Q3 of FY 12 as a ratio of GDP
30% (it was 32% in FY 11)
Balance of Payments
USD 32.8 Billion in first half of FY 12 (It was USD 29.6 Billion in FY 11)
India's Forex Reserves
USD 293 Billion, it was USD 305 Billion in March 2011 & USD 279 Billion in March 2010
Inflation
Expected to moderate at 6.5-7% by March end
Employment in Industry
21.9% in 2009-10 (in comparison to 16.2% in 1999-2000). Growth mainly due to construction
sector.
Growth in Basic goods and non-durables
6.1%
Gross Capital Formation in industry
48.3% of overall GCF moderated in FY 11
Decline in Manufacturing GCF growth rate
7% in FY 11 Vs 42% in FY 10
Share of services in GDP
56.3% in FY 12 (it was 55.1% in FY 11)
Share of Financial & non-financial services, IT, Telecom, Real Estate in Total FDI inflows
41.9 % (during April 2000-December 2011)
Growth in trade, hotels and restaurants
11.2%
Growth in FDI inflows in FY 12 (April-Dec)
36.8 % (stands at USD 9.3 billion)
Growth in India's Exports (April 2011 - Jan 2012)
23.5% (stands at USD 242.8 Billion)
Growth in India's Imports (April 2011 - Jan 2012)
29.4% (stands at USD 391.5 Billion)
India's Largest Trading Partner
United Arab Emirates (followed by China)
Growth in India's Service Exports
17.1 & in H1 of FY 12 (It was 38.4 % @ USD 132.9 Billion in FY 11)
Top performing Sectors in Export
Petroleum and oil products, gems and jewellery, engineering, cotton fabrics, electronics,
readymade garments, drugs
Top performing Sectors in Import
POL (petroleum, oil and lubricant), gold and silver.
External Debt Stock
USD 326 Billion
Net capital flows
USD 41.1 billion
Share of Net Capital Flows in GDP
4.5% (in the H1 of FY 12)
External commercial borrowing
USD 10.6 billion (in H1 of FY 12)
Trade Deficit as part of GDP
More than 8%
Current Account Deficit as part of GDP
3% (these two figures hint imbalance that is growing)
Fall in Rupee against dollar
12.4 % (From 44.97 per USD in March 2011 to 51.34 per USD in January 2012)
Total Investment in SEZ
Rs. 2,49,630.80 crore (31 Dec. 2011)
Number of Approved SEZ
583 (out of them 380 notified)
Growth in Priority Sector Landing
19%
Share of Computerised banks among all banks
96%
Capital infused in public sector banks in 2012
Rs. 12,000 Crore
Growth in bank credit extended by Scheduled Commercial Banks
17%
Survey notes:

• Survey is optimistic about the fiscal consolidation and says that fiscal consolidation is likely to getback on track from 2012-13, when savings and capital formation will also begin to improve.
• High priority to Sustainable development and climate. Incorporates a new chapter this year.
• Global economic environment turns adverse since September 2011 due to Euro-zone crisis.
• Indian Economy slows down due to global as well as domestic factors.
• Recovery is slow , reason for slow recovery is decline in overall investment rate.
• Global economy seems to remain fragile.
• G-20 should make more efforts for global financial stability.
• India gets more closely integrated with the world economy
• India's foreign trade performance remained key driver of growth.
• Share of trade to GDP (of goods and services) in world tripled in 20 years (1990-2010).
• Inflation expected to moderate.
• Gap between WPI and CPI inflation narrows.
• Consumption pattern main driver of food price inflation. Milk, eggs/meat/fish, gram & edible oils responsible.
• Monetary market remained orderly. RBI addressed the liquidity concerns of markets
• There are threats from asset price bubbles in real estate and stock markets
• Oild prices threat inflationary pressures.
• India has high level of food stocks , which shall help maintain overall price stability
• Industrial growth less than recent past and far below potential.
• Industrial sector expected to rebound during next financial year with inflation easing, moderation in commodities prices in international market and revival of manufacturing performance
• Contraction in production in the mining sector, particularly in coal and natural gas segments, improvement in electicity.
• Moderation in growth in other segments of IIP, Negative growth in capital goods and intermediates
• segment, Moderation in rate of growth of credit in infrastructure and manufacturing sectors.
• Services sector proves saviour during global crisis and hero of Economic Growth. It has slight moderation though, due to the steep fall in growth of public administration and defence services reflecting fiscal consolidation.
• India's Software service exports steady and face threat from Eurozone.
• Negative growth in Coal, Natural Gas, Fertilizers, handling of Export Cargo at airports and number of cell phone connections
• Low growth in steel.
• Credit growth to infrastructure sector turned negative
• There has been reduction in credit flow in power and telecom sectors.
• Foreign funding to remain sluggish. Equity and currency markets remained under pressure.
• Indian Banks have Robust fundamentals.
• Banking may become a risky business, thanks to global integration.
• Credit Disbursement to agro sector exceeded target by 19 %, 12.7 Million new farmers got farm credits.
• Self Help Group- bank linkage programme gets thumping success.
• Climate change, food security, water security, energy security and managing urbanization are main challenges.

Recommendations: Inflation & Monetary Policy:

• Progressive deregulation of interest rates on savings accounts . Deregulation of interest rates on savings accounts to help raise financial savings and improve transmission of monetary policy.
• Domestic financial markets, especially corporate bond markets need deepening.
• There should be more efforts to attract dedicated infrastructure funds.
• There should be renewed focus on supply side measures essential for price stability
• There should be substantial Monetary policy challenge to rein-in inflation.
• There is a need to examine linkages between policy rate changes and inflation.
• There are threats from asset price bubbles in real estate and stock markets. To address them, RBI should further sharpen monetary policy.

Recommendations: Agriculture

• Government should take measures for guiding farmers on fertilizers, insecticide, alternate cropping patterns, for price stability in food items.
• There should be regular imports of agriculture commodities in smaller quantities for price control.
• There should be special markets for special crops.
• Mandi Governance needs to be improved; interstate trade in agro commodities should be promoted.
• Perishable food items should be taken out of ambit of the APMC Act
• Survey thumbs up the FDI in multi brand retain , says it will fill infrastructure gap during harvest period
• Modern store facilities need to created for food grains.
• There should be adequate investment in R&D in Agriculture.

Recommendations: Industry , Infrastructure & Exports
Business sentiments should be boosted. There should be encouragement to investments and
identify and wipe-out bottlenecks.
Land acquisition and infrastructure issued should be dealt on priority basis.
Real estate ownership of dwellings and business services segment are worrisome segments.
There should be further diversification of India's export basket.
The procedural delays and red tape should be addresses to facilitate trade.
Infrastructural bottlenecks need to be removed
There is a need to attract large scale investment into infrastructure, looking at investment
requirement at USD 1 trillion during Twelfth Plan.
PPP has been a successful model, should be promoted in Infra segment.
Sustainable levels of external debt should be maintained.
Government should take innovative steps to bring corporate bond market at the centre stage.
Government should promote the infrastructure financing and financing of unorganized micro/small
business sectors.
Recommendations: Climate Change

• Low carbon growth should be central element of 12th Five Year plan.
• India's per capita CO2 emissions much lower than those of developed countries, world needs more sensitivity from developed countries to carbon emissions.

Vodafone Essar Case

 [Economy] Vodafone Essar Case: Capital Gains Tax Meaning, Reasons, Timeline, Implications explained

Two types of Taxes:

Indirect Taxes:

is paid by rich and poor alike, on the purchase of goods and services. Sale tax, excise duty, custom duty, entertainment tax and examples of indirect tax.

Direct Taxes: 

Is paid by middle class and rich men on their income and property. Income taxes, corporate tax, Wealth tax, capital gains tax, are examples of direct tax. Direct taxes collected by the income tax department

What is capital gains tax?

First, What is capital?

·        Capital is something that generates income for you. It can be a building, it can be a rickshaw, it can be a truck, it can be printing press machinery

·        When you sell these capital assets, and IF you make profit (gain), then you have to pay tax. This tax is known as capital gains tax.

a

There are two types of capital gains tax.

• Short-term capital gains tax, if you owned that asset for less than 36 months, before selling it.
• Long-term capital gains tax, if you owned that asset for more than 36 months before selling it

Do Shares of a company also come under Capital Gains tax?
Yes Shares of a company also come under Capital Gains Tax. And there is different ‘time-frame’ for them. 

• Short-term capital gains tax, if you owned those shares for less than 12 months, before selling it
• Long-term capital gains tax, if you owned those shares for more than 12 months before selling it.

Who pays the Capital Gains Tax?

Who is to pay CGT? The seller or the buyer?

• Suppose I own a shopping mall building worth Rs.1 crore and
• I sell it to you for Rs.2 crores, and thus I made the profit (Gains) of Rs. 1 crore and I have to pay Rs.10 lakh to the government as capital gains tax. Now the convention is that I (the seller) don't actually pay Rs.10 lakh by myself
• Instead of that, you just give me only Rs.1 crore 90 lakhs. And keep aside 10 lakh rupees.
• Then, you (the buyer) will pay the 10 lakh rupee to the Government on my behalf. (Thus you purchased the mall for Rs.2 crore).
• This is the concept of Tax Deduction @Source (TDS)

So in the case of Vodafone: indeed Hutchison was the seller so he has to pay the Capital gains tax but he doesn’t ‘actually’ pay it. It is for the Vodafone (buyer) to deduct that tax money from his payment and give the tax to Indian Government.That’s why IT Department harasses Vodafone and not the Hutch.
Now coming to the Vodafone Essar case

Players in the Vodafone Case

Vodafone	UK based Telecom company.
Hutch	Hong-Kong based company.
Hutchison Essar Ltd. (HEL)	India based company
CGP Investments Holdings Ltd	Cayman Island based company, has 67% stakes in Hutch-Essar India. CGP itself is owned by Hutch, Hong Kong.
Income Tax dept.	India based *insert whatever word you want*
Innocent Bystanders	You and I, because we’ve to prepare such topics for competitive exams.

    Timeline of Events

December 2006: Hong Kong

Hutchison Telecommunication International Ltd (HTIL) Boss: My Indian arm “Hutchison Essar Limited (HEL)” is not making good money. I want to quit from India.

(To his Secretary ) as you know, I own CGP Investments Holdings Ltd, located in Cayman. And CGP holds 67% in HEL (India). So, just make an announcement that I want to sell CGP and start talking with prospective buyers.
Secretary: but why all this complex procedure?
HTIL boss: oh come on man, don’t you know that Cayman Island is a Tax Haven. They don’t have Capital Gains Tax! Better we sell via Cayman route and we’ll save a truckload of ca$h in tax.

February 2007, London

Vodafone (UK) Boss: (To his Netherland subsidiary manager) Take these suitcase full of 11 billion US Dollars, go to Cayman Island, buy that CGP holdings Ltd. From HTIL (Hong Kong) and give me “miss call” when the deal is finished.

March 2007, Mumbai 

Income Tax Commissioner’s Office.

Minister (on Phone): Mast bakraa haath mein aayaa hai (मस्त बकरा हाथ मे आया है!). Send a notice to Vodaphone, ask them to pay Rs. 12000 crores under capital gains tax because they purchased an Indian Company HEL (Hutch Essar Ltd) for 11 billion dollars!
IT Commissioner: Sir, may I humbly point it out that It is a common practice among multinational companies (MNCs) to establish such SPV (Special purpose vehicles/ flimsy companies) in Tax havens of Mauritius / Cayman Island.
And then those flimsy companies (SPV) like CEG hold shares in an Indian company (HEL).
When the MNC wishes to sell or acquire an Indian company, they don't directly come and buy in India, they simply purchase or sell the shares of these flimsy companies in Cayman's Island because the transfer of shares of an SPV outside India, is not taxable in India. And Cayman Island itself has very negligible tax rates. It is a win win situation for them.
And This is not the first case, there have been truckload of merger and acquisitions like this, in past and we've never sent any notice to such companies. This matter is outside my Jurisdiction sir.
Minister: Betaa, don’t give me this “GYAN” (ज्ञान), get me some “CASH” ! I've to give Rs.71,000 crores in debt-waiver scheme to farmers in 2008 to win the General elections.

• We are giving billions of rupees in subsidies on diesel, LPG, Kerosene, Fertilizers.
• We've to pay crores of rupees to Government employees under 6th Pay Commission.
• We're running Development schemes like MNREGA (Rs.40,000 crores a year), and in future we are thinking of starting Food security Act (2 lakh crores a year). Where is the money to pay for all this?
• I've to give crores to that loss-making Air India.
• I've to pay Rs.28000 crores Common Wealth games arrangement.
• All these things requires huge huge huge cash, man. Money doesn't fall from sky. We cannot tax the aam-aadmi beyond a level and
• We couldn't get decent money from sale of 2G spectrum, or coal mines auction
• Reliance isn't paying much from KG Basin gas exploration.
• Don't you understand? We've to find new 'sources' of income. Vodafone is a good "bakraa". Let's rip him apart.
• Then we use it to create bogus Developmental schemes, siphon off the money and use it to fight election. This shall help us get absolute majority in Bihar and Uttar Pradesh because Public of UP and Bihar is so Gullible they will vote for anyone who tells them ki “hum aap ke liye Delhi se paisa bhejte hai!(हम आपके लिए दिल्ली से पैसा भेजते है!)

IT Commissioner: as you wish. I’ve sent the notice to HEL (India).
Minister: Mogembo khush hua. (मोगेम्बो खुश हुआ)
HEL(India) Boss: (To IT Commissioner) Why the hell are you sending notice to me? I am not a party to any of this! Don’t you see I’m getting ‘sold’ here. Ask the buyer Vodafone of UK or the seller Hutch of Hongkong about your Capital gains tax!

In the mean time

Vodafone International boss: (To HEL Boss): I’ve purchased majority shares of your company. You shall take my name like an obedient wife. From this day on, you shall be known as VEL (Vodafone Essar Limited) and not HEL (Hutchison Essar limited).

HEL boss: as you wish my lord. Mr. HEL transforms into Mr.VEL.
IT Commissioner: caught you now! Mr.VEL, you're the Indian agent of Vodafone, now you pay the capital gains tax or I'll start your ragging worst than that in B.J.Medical College, Ahmedabad.
Vodafone files appeals in Bombay highcourt and supreme-court, stay orders here and there, sometimes victory sometimes defeat
Fast-forward to

Sept 2010

Bombay HC: Yes IT Department is right. Mr. Vodafone you’ve to pay the Capital Gains Tax.

Mr.Vodafone: I’ll go to supreme court.
Leftist Media: Shame shame. You’re going to Supreme Court!! We are going to report this as in such a tone as if you’re the main culprit here and doing something immoral.
Mr.Vodafone: When the kinds of Shibu Soren, Sanjay Dutt and Vikas Yadav can goto Supreme court, why can’t I? Saving tax is a legal activity. I’ve done nothing wrong. I’m the innocent bystander here. You don’t have the guts to cover blackmoney issue until Anna Hazare and Baba Ramdev raised it, but just because I’m a rich MNC company I must be the bad guy, right? All you mediawalla want, is money to keep your mouth shut.

Aug-Oct 2011

Location: Supreme Court, Delhi 

IT Commissioner: Your Honor, this Mr.Vodafone here, has purchased ownership of an Indian mobile company called HEL (Hutch Essar Limited) for USD 11 billion and now he is not giving me Rs.12,000 crores as Capital Gains tax.
Mr.Vodafone: Get your facts right Commissioner Gordon. Please see this diagram again.

January 2012

Landmark Judgment of Supreme court

Saare sabuto aur gawaaho ko madde nazar rakhte hue, ye adalat iss natije par pahuchi hai ki (सारे सबूतों और गवाहों को मद्देनजर रखते हुए, ये अदालत इस नतीजे पर पहुची है की)

• Indian authorities do not have jurisdiction on an overseas transaction.
• Certainly and stability form the basic foundation of any fiscal system. Tax policy certainty is crucial for taxpayers (including foreign investors) to make rational economic choices in the most efficient manner
• This offshore transaction evidences participative investment in India and not a sham.
• The demand of nearly 12,000 crore by way of capital gains tax, in my view, would amount to imposing capital punishment for capital investment since it lacks authority of law and therefore stands squashed.

Location: Finance minister’s Office, Delhi

There is pindrop silence in the office. Babus are not even playing that "Solitaire/Hearts" card-game in their Windows 98 computers. 

Some of them are busy in toilet, actually leaking information about 'possible future-moves of their minister' to their journalist friends in TimesNow, via SMS from their Antique Nokia-1100 mobile phones.
Minister (entering the Office) : Itnaa Sannaataa kyo hai bhai? (इतना सन्नाटा क्यों है भाई?)
IT Commissioner: Because We have suffered a humiliating defeat in Supreme court, in that Vodafone case.
Minister: You mean as humiliating as Team India’s defeat in Austrialian test-matches?
IT Commissioner: Well, not *that* humiliating, but still very humiliating.
Minister: I cannot let this matter go. Rs. 12000 crores is not a small amount! I've Gujarat Assembly elections ahead, I need the ca$h! Gang up the best tax-lawyers, study the judgement and File a review petition in Supreme Court again!

March 2012

Supreme court rejects the review petition.

Those Best Tax-lawyers demand lakhs of rupees as consultation fees from Government of India.
IT Commissioner (to self): Khaayaa piyaa kucchh nahi, glass fodaa…. (खाया पिया कुछ नहि, ग्लास फोड़ा..)

Budget 2012

Minister (announcing in Parliament): I propose an amendments in the Income Tax Act with retrospective effect from 1962 so that all persons, whether residents or non-residents, having business connection in India, will have to deduct tax at source and pay it to the government 

even if the deal is executed on a foreign soil!
With this ‘move’, I’m trying to get around the court’s decision which said that

the government cannot tax a deal between two foreign entities, even if the transaction includes an Indian asset.

     Our party has ‘history’ of trying to outsmart judiciary, whether it was Shah Bano case or 42^ndConstitutional amendment or….
Random MP: (putting his i-pad aside) What does this “retrospective effect” mean?
Peon: Retrospective effect means if Government passes such law in 2012, still the past deals between companies made in 2007 can be taxed. Only Civil laws can be made with retrospective effect. But criminal laws cannot be made with retrospective effect.
Random MP: Elaborate
Peon: Criminal law cannot be made with retrospective effect, meaning if in 2012, Government passes a law that mobile phone thieves will get life time imprisonment, then only those thieves who’re caught in 2012, after the commencement of that law, will be jailed for lifetime.
But, If a thief stole the mobile phone in 2007, he cannot be given lifetime imprisonment, he has to be tried under the punishment provision that were in effect during that time. On same logic, people are still languishing in jail under TADA and POTA cases, even though those acts are scrapped now.
Random MP:That means I must hurry and do as much corruption as I can, before that Lokpal thing comes in effect, Whaat an idea Sir-ji.

mrunal-exam.blogspot.in

Basic terms of Economics

Basic terms of Economics

 Absolute advantage - The ability to produce something with fewer resources than other producers would use to produce the same thing  

Alternatives - Options among which to make choices.  

Balance of trade - The part of a nation's balance of payments that deals with merchandise (or visible) imports or exports.  

Bank, commercial - A financial institution accepts checking deposits, holds savings, sells traveler's checks and performs other financial services.  

Barter - The direct trading of goods and services without the use of money.  

Benefit - The gain received from voluntary exchange.  

Bond - A certificate reflecting a firm's promise to pay the holder a periodic interest payment until the date of maturity and a fixed sum of money on the designated maturity date.  

Business (firm) - Private profit-seeking organizations that use resources to produce goods and services. 

Capital - All buildings, equipment and human skills used to produce goods and services.  

Capital resources - Goods made by people and used to produce other goods and services. Examples include buildings, equipment, and machinery.  

Change in demand - see Demand decrease and Demand increase.   

Change in supply - see Supply decrease and Supply increase. 

Choice - What someone must make when faced with two or more alternative uses of a resource (also called economic choice).  

Circular flow of goods and services (or Circular flow of economic activity) - A model of an economy showing the interactions between households and business firms as they exchange goods and services and resources in markets.  

Collateral - Anything of value that is acceptable to a lender to guarantee repayment of a loan.  

Command economy - A mode of economic organization in which the key economic functions--what, how, and for whom--are principally determined by government directive.  Sometimes called a "centrally planned economy."  

Comparative advantage - The principle of comparative advantage states that a country will specialize in the production of goods in which it has a lower opportunity cost than other countries.  

Competition - The effort of two or more parties acting independently to secure the business of a third party by offering the most favorable terms.  

Complements - Products that are used with one another such as hamburger and hamburger buns  

Consumers - People whose wants are satisfied by consuming a good or a service.  

Consumption - In macroeconomics, the total spending, by individuals or a nation, on consumer goods during a given period.  Strictly speaking, consumption should apply only to those goods totally used, enjoyed, or "eaten up" within that period.  In practice, consumption expenditures include all consumer goods bought, many of which last well beyond the period in question --e.g., furniture, clothing, and automobiles.  

Consumer spending - The purchase of consumer goods and services.  

Corporation - A legal entity owned by stockholders whose liability is limited to the value of their stock.  

Costs - See Opportunity Cost  

Costs of production - All resources used in producing goods and services, for which owners receive payments.  

Craftsperson - A worker who completes all steps in the production of a good or service.  

Credit - (1) In monetary theory, the use of someone else's funds in exchange for a promise to pay (usually with interest) at a later date.  The major examples are short-term loans from a bank, credit extended by suppliers, and commercial paper.  (2) In balance-of-payments accounting, an item such as exports that earns a country foreign currency.  

Criteria - Standards or measures of value that people use to evaluate what is most important. 

Decision making - Choosing from alternatives the one with the greatest benefit net of costs.  

Deflation - A sustained and continuous decrease in the general price level.  

Demand - A schedule of how much consumers are willing and able to buy at all possible prices during some time period.  

Demand decrease - A decrease in the quantity demanded at every price; a shift to the left of the demand curve.  

Demand increase -  An increase in the quantity demanded at every price; a shift to the right of the demand curve.  

Determinants of demand - Factors that influence consumer purchases of goods, services, or resources.  

Determinants of supply - Factors that influence producer decisions about goods, services, or resources.  

Distribution - The manner in which total output and income is distributed among individuals or factors (e.g., the distribution of income between labor and capital).  

Division of labor -  The process whereby workers perform only a single or a very few steps of a major production task (as when working on an assembly line.)  

Durables - Consumer goods expected to last longer than three years.

Earn - Receive payment (income) for productive efforts.  

Economic growth - An increase in the total output of a nation over time.  Economic growth is usually measured as the annual rate of increase in a nation's real GDP.  

Economic system - The collection of institutions, laws, activities, controlling values, and human motivations that collectively provide a framework for economic decision making.  

Economic wants - Desires that can be satisfied by consuming a good or a service.  Some economic wants range from things needed for survival to things that are nice to have.  

Employment - See Full employment  

Entrepreneur - One who organizes, manages, and assumes the risks of a business or enterprise.  

Entrepreneurship - The human resource that assumes the risk of organizing other productive resources to produce goods and services.  

Equilibrium price - The market clearing price at which the quantity demanded by buyers equals the quantity supplied by sellers.  

Exchange - Trading goods and services with others  for other goods and services or for money (also called trade).  When people exchange voluntarily, they expect to be better off as a result.  

Exchange rates - The rate, or price, at which one country's currency is exchanged for the currency of another country.  

Excise Tax - Taxes imposed on specific goods and services, such as cigarettes and gasoline.  

Exports - Goods or services produced in one nation but sold to buyers in another nation. 

Factors of production -  Resources used by businesses to produce goods and services.  

Federal Reserve System - The central bank and monetary authority of the United States.  

Final goods - Products that end up in the hands of consumers.  

Fiscal policy - A government's program with respect to (1) the purchase of goods and services and spending on transfer payments, and (2) the amount and type of taxes.  

Functions of money - The roles played by money in an economy.  These roles include medium of exchange, standard of value, and store of value.  

Full employment - A  term that is used in many senses.  Historically, it was taken to be that level of employment at which no (or minimal) involuntary unemployment exists.  Today economists rely upon the concept of the natural rate of unemployment to indicate the highest sustainable level of employment over the long run. 

Goods - Objects that can satisfy people's wants.  

Government - National, state and local agencies that use tax revenues to provide goods and services for their citizens.  

Gross domestic product (GDP) - The value, expressed in dollars, of all final goods and services produced in a year.  

Gross domestic product (GDP), real - GDP corrected for inflation

Households - Individuals and family units which, as consumers, buy goods and services from firms and, as resource owners, sell or rent productive resources to business firms.  

Human capital - The health, strength, education, training, and skills which people bring to their jobs.  

Human resources - The quantity and quality of human effort directed toward producing goods and services (also called labor). 

Incentives - Factors that motivate and influence the behavior of households and businesses.  Prices, profits, and losses act as incentives for participants to take action in a market economy.  

Imports - Goods or services bought from sellers in another nation.  

Income - The payments made for the use of borrowed or loaned money.  

Increase in productivity - When the same amount of an output can be produced with fewer inputs; more output can be produced with the same amount of inputs; or a combination of the two.  

Inflation - A sustained and continuous increase in the general price level.  

Interdependence - Dependence on others for goods and services; occurs as a result of specialization.  

Interest rates - The price paid for borrowing money for a period of time, usually expressed as a percentage of the principal per year.  

Investment in capital goods - Occurs when savings are used to increase the economy's productive capacity by financing the construction of new factories, machines, means of communication, and the like.  

Investment - The purchase of a security, such as a stock or bond.  

Investment in capital resources - Business purchases of new plant and equipment.  

Investment in human capital - An action taken to increase the productivity of workers.  These actions can include improving skills and abilities, education, health, or mobility of workers.

Labor force - That group of people 16 years of age and older who are either employed or unemployed. 

Labor market - A setting in which workers sell their human resources and employers buy human resources.  

Labor union - A group of employees who join together to improve their terms of employment.  

Land - Natural resources or gifts of nature that are used to produce goods and services.  

Law of demand - The principle that price and quantity demanded are inversely related.  

Law of supply - The principle that price and quantity supplied are directly related.  

Loss - Business situation in which total cost of production exceeds total revenue; negative profit. 

Market - A setting where buyers and sellers establish prices for identical or very similar products, and exchange goods and/or services.  

Market economy - An economic system where most goods and services are exchanged through transactions by private households and businesses.  Prices are determined by buyers and sellers making exchanges in private markets.  

Medium of exchange - One of the functions of money whereby people exchange goods and services for money and in turn use money to obtain other goods and services.  

Mixed economy - The dominant form of economic organization in noncommunist countries.  Mixed economies rely primarily on the price system for their economic organization but use a variety of government interventions (such as taxes, spending, and regulation) to handle macroeconomic instability and market failures.  

Monetary policy - The objectives of the central bank in exercising its control over money, interest rates, and credit conditions.  The instruments of monetary policy are primarily open-market operations, reserve requirements, and the discount rate.  

Money - Anything that is generally accepted as a medium of exchange with which to buy goods and services, a good that can be used to buy all other goods and services, that serves as a standard of value, and has a store of value.  

Money market - A term denoting the set of institutions that handle the purchase or sale of short-term credit instruments like Treasury bills and commercial paper. 

National debt - The net accumulation of federal budget deficits.  

National income - The amount of aggregate income earned by suppliers of resources employed to produce GNP; net national product plus government subsidies minus indirect business taxes.  

Natural resources - "Gifts of nature" that are used to produce goods and services.  They include land, trees, fish, petroleum and mineral deposits, the fertility of soil, climatic conditions for growing crops, and so on.  

Non-durables - Consumer goods expected to last less than three years.  

Non-price determinants of supply - The factors that influence the amount a producer will supply of a product at each possible price.  The non-price determinants of supply are the factors that can change the entire supply schedule and curve.  

Normal profit - The minimum payment an entrepreneur expects to receive to induce the entrepreneur to perform entrepreneurial functions.  

Normative economics - Normative economics considers "what ought to be"--value judgments, or goals, of public policy.  Positive economics, by contrast, is the analysis of facts and behavior in an economy, or "the way things are.

 Opportunity cost - The next best alternative that must be given up when a choice is made. 

Physical capital - Manufactured items used to produce goods and services.  

Price - The money value of a unit of a good, service, or resource  

Prices - The amounts that people pay for units of particular goods or services.  

Private goods - A commodity that benefits the individual.  An example is bread, which, if consumed by one person, cannot be consumed by another person. (See public goods.)  

Producers - People who use resources to make goods and services (also called workers).  

Production - The making of goods available for use; total output especially of a commodity or industry.  

Productive resources - All natural resources (land), human resources (labor), and human-made resources (capital) used in the production of goods and services.  

Productivity - The ratio of output (goods and services) produced per unit of input (productive resources) over some period of time.  

Profit - The difference between total revenues and the full costs involved in producing or selling a good or service; it is a return for risk taking.  

Property tax - Taxes paid by households and businesses on land and buildings.  

Public goods - A commodity whose benefits are indivisibly spread among the entire community, whether or not particular individuals desire to consume the public good.  For example, a public-health measure that eradicates smallpox protects all, not just those paying for the vaccinations.  These goods are often provided by the government.  To be contrasted with private goods. 

Quantity demanded - The amount of a product consumers will purchase at a specific price.  

Quota - A legal limit on the quantity of a particular product that can be imported or exported.  

Quantity supplied - The amount of a product producers will produce and sell at a specific price. 

Resources - All natural, human, and human-made aids to production of goods and services (also called productive resources).  

Revenue - Payments received by businesses from selling goods and services. 

Sales tax - Taxes paid on the goods and services people buy.  

Save - Set aside earnings (income) for a future use.  

Saving - Occurs when individuals, businesses, and the economy as a whole do not consume all of current income (or output).  

Scarcity - The condition that results from the imbalance between relatively unlimited wants and the relatively limited resources available for satisfying those wants.  

Services - Activities that can satisfy people's wants.  

Shortage - The situation resulting when the quantity demanded exceeds the quantity supplied of a good or service, usually because the price is for some reason below the equilibrium price in the market.  

Specialists - People who produce a narrower range of goods and services than they consume (also called specialized workers).  

Specialization - The situation in which people produce a narrower range of goods and services than they consume.  

Spend - Use earnings (income) to buy goods and services.  

Standard of living - A minimum of necessities, comforts, or luxuries held essential to maintaining a person or group in customary or proper status or circumstances.  

Standard of value - One of the functions of money whereby the value of goods and services is expressed in money terms (prices).  

Stock - A certificate reflecting ownership of a corporation.  

Store of value - One of the functions of money allowing people to save current purchasing power to buy goods and services in a future time period.  

Substitutes - Products that can replace one another such as butter and margarine.  

Supply - A schedule of how much producers are willing and able to sell at all possible prices during some time period.  

Supply decrease - A decrease in the quantity supplied at every price; a shift to the left of the supply curve.  

Supply increase - An increase in the quantity supplied at every price; a shift to the right of the supply curve.  

Surplus - The situation resulting when the quantity supplied exceeds the quantity demanded of a good or service, usually because the price is for some reason below the equilibrium price in the market. 

Tariff - A tax on an imported good.  

Taxes - Required payments of money made to governments by households and business firms.  

Total cost - Cost of resources used in producing a product multiplied by the quantity produced.  

Total revenue - Selling price of a product multiplied by the quantity demanded.  

Trade - See Exchange. 

Trade agreement - An international agreement on conditions of trade in goods and services.  

Trade-off - Giving up some of one thing to get some of another thing.  

Traditional economy - A mode of economic organization which borrows economic decisions made at an earlier time or by an earlier generation