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Weeks before it was informed that its registration under the Foreign Contribution (Regulation) Act (FCRA) had been suspended, the Centre for Policy Research (CPR) received a show cause notice from the Income Tax Department, asking why the registration granting it tax exemptions should not be cancelled.
The CPR, one of the leading public policy think tanks, said it had been “intimated” by the Ministry of Home Affairs that its registration under the FCRA had been “suspended for a period of 180 days”.
The CPR had been granted tax exemption status until 2027 under Section 12A of the Income Tax Act. That status has now been questioned by the I-T officials, who collected huge amounts of documents and data during a survey on September 7, 2022 and followed it up by dispatching over a dozen summons to its staff — from its senior researchers to the office peon.
The I-T Department challenged the tax exemptions with a 33-page show cause notice, sent on December 22, 2022 alleging that the CPR was in violation of being involved in activities which were “not in accordance with the objects and the conditions subject to which it was registered.
The I-T Department included in the show cause notice several observations and allegations not directly related to its operations as an entity.
For instance, there is a list of 19 persons, described as “non-filers” – mostly members of its staff who have either not filed or filed their I-T returns irregularly.
The office peon has been included in the list of “non-filers” and the CPR asked to explain how the Rs 2.49 crore given to these individuals collectively (mostly remunerations paid between 2017 and 2021) were payments related to the objectives of the CPR.
Express Investigation
In chase for growth and carbon targets, questions swirl over forests on paper (Page no. 9)
(GS Paper 3, Environment)
Since 1981, the country’s population has nearly doubled, its livestock numbers have increased by more than a quarter and at least 25,000 sq km of forest land have either been diverted or encroached.
India ranked third globally in average net forest gain during 2010-2020, but questions are being raised on its forest data by independent experts, and even the United Nations Framework Convention on Climate Change (UNFCCC), for mixing plantations with natural forests.
Multiple studies have shown that plantations are less efficient than natural forests in storing carbon and supporting biodiversity.
Since 1981, the country’s population has nearly doubled, its livestock numbers have increased by more than a quarter and at least 25,000 sq km of forest land have either been diverted or encroached. In that period, India has also recorded, on paper, a net forest cover gain of over 73,000 sq km – one and half times the size of Punjab.
This haphazard exercise of raising plantations and random green patches to compensate for forests that are hacked down as a matter of policy cannot work.
Yet, successive governments claim that manmade plantations can indeed offset biodiverse forests lost to development projects,” Bittu Sahgal, who served in multiple expert panels of the Environment ministry.
Asked on the absence of data on the loss of natural forests and the incremental role of plantations behind the stability in India’s forest cover, Anoop Singh, Director General of Forest Survey of India, declined comment, saying he was not authorised to speak to the media.
It is quite apparent that plantations are replacing natural forests within the overall stability of our forest cover. We can quantify this specific matrix.
But more than interpreting the data, it is a matter of the government’s policy on how we approach the issue to find a balance between conservation and development,” he said.
Since the Forest Conservation Act was enacted in 1980, at least 10,000 sq km of forests have been lost to diversion for development projects.
The case for open, verifiable forest cover data (Page no. 9)
(GS Paper 3, Environment)
India is one of the few countries to have a scientific system of periodic forest cover assessment that provides “valuable inputs for planning, policy formulation and evidence-based decision-making”.
Since 19.53% in the early 1980s, India’s forest cover has increased to 21.71% in 2021. Adding to this a notional 2.91% tree cover estimated in 2021, the country’s total green cover now stands at 24.62%, on paper.
While the Forest Survey of India (FSI) started publishing its biennial State of Forest reports in 1987, it has been mapping India’s forest cover since the early 1980s.
India counts all plots of 1 hectare or above, with at least 10% tree canopy density , irrespective of land use or ownership, within forest cover.
This disregards the United Nation’s benchmark that does not include areas predominantly under agricultural and urban land use in forests.
All land areas with tree canopy density of 40% and above are considered dense forests and those between 10-40% are open forests. Since 2003, a new category — very dense forest — was assigned to land with 70% or more canopy density.
All land areas with tree canopy density of 40% and above are considered dense forests and those between 10-40% are open forests. Since 2003, a new category — very dense forest — was assigned to land with 70% or more canopy density.
Since 2001, isolated or small patches of trees — less than 1 hectare and not counted as forest — are assessed for determining a notional area under tree cover by putting together the crowns of individual patches and trees.
The National Remote Sensing Agency (NRSA) under the Department of Space estimated India’s forest cover using satellite imagery for periods 1971-1975 and 1980-1982 to report a loss of 2.79% — from 16.89% to 14.10% — in just seven years.
While reliable data on encroachment is unavailable, government records show that 42,380 sq km — nearly the size of Haryana— of forest land was diverted for non-forest use between 1951 and 1980.
Govt. and Politics
For faster extradition of fugitive economic offenders, India underlines multilateral action (Page no. 10)
(GS Paper 2, International Relations)
Union Minister of State for Personnel Jitendra Singh emphasised on multilateral action rather than bilateral coordination for streamlining of the judicial processes and timely disposal of cases against fugitive economic offenders, during the inaugural G20 anti-corruption working group meeting in Gurgaon.
There have been numerous instances of financial or banking frauds that were investigated under relevant statutory provisions that involved high net worth individuals where the proceeds of crime involved were more than $ 1 billion.
Offenders fled the country before or after detection of offence… even after initiating the process of getting information from foreign countries on assets through letters rogatory, the process of extradition was found to be highly complex and time consuming, leading to delay in investigation and trial of offences.
On a question on the efforts of the government in the extradition of such fugitives, Singh said that the spirit of the meeting group was motivated towards this direction.
Before this government came [to power] in 2014, there was no serious effort in this direction. It is only now that they [fugitive economic offenders] are being gradually brought to book. But, the procedures are tedious.
CCS clears Rs 10k cr training platforms (Page no. 11)
(GS Paper 3, Defence)
The Cabinet Committee on Security (CCS) chaired by Prime Minister Narendra Modi on Wednesday approved the acquisition of critical training platforms for the Navy and the Indian Air Force (IAF) — including three cadet training ships from the Larsen & Toubro Limited (L&T), and 70 Hindustan Aeronautics Limited (HAL)-made HTT-40 Basic Trainer Aircraft.
As per the defence ministry, the CCS accorded approval to sign a contract with L&T for the acquisition of three cadet training ships worth Rs 3,108.09 crore.
The ships will be procured under the Buy Indian-IDDM (indigenously designed, developed and manufactured) category of the defence acquisition procedure—the manual governing all defence capital procurements.
The delivery of ships is scheduled to start from 2026 and will be used in the training of officer cadets, including women, at sea after their basic training to meet the future requirements of the Indian Navy, the defence ministry said in a statement.
The ships would also provide training to cadets from friendly countries with the aim to strengthen diplomatic relations, adding that the ships can also be deployed for evacuation of people and humanitarian assistance and disaster relief (HADR) operations.
The Idea Page
Cities that withstand (Page no. 13)
(GS Paper 3, Disaster Management)
The destruction caused by earthquakes in Turkey should be alarming for us. Over the last three weeks, tremors have been felt in Meghalaya and in the region around Joshimath and Chamoli in Uttarakhand.
Moreover, geologists have warned of a probable massive earthquake in the Himalayan state. In this context, we should pay serious attention to the observations made by the Delhi High Court on February 16.
The court, while hearing a petition, asked the state government to file a status report and action plan on the structural safety of buildings in Delhi.
While the concerns of the court are pertinent and demand urgent attention, we cannot rely on the judiciary to make our cities well-prepared for an earthquake.
Neither can a state government with limited capacity audit the buildings of a city in a matter of weeks. Nearly 58 per cent of the Indian landmass is vulnerable to earthquakes and the concerns that have been raised by the court need a policy response instead.
Currently, India’s policy on earthquake preparedness operates primarily at the scale of structural details. Guided by the National Building Codes, this includes specifying dimensions of the structural members — columns, beams, etc. — and details of the reinforcements that join these elements together. While scientifically sound, this view on earthquake preparedness is myopic.
First, it ignores the buildings that were constructed before such codes were published in 1962. Such buildings form a large part of our cities.
Second, it assumes infallibility in the processes of enforcement — relying only on penalisation and illegalities. Third, it treats earthquakes as a problem of individual buildings — as if they exist and behave in complete isolation from their urban context.
The truth is that buildings exist in clusters and in the event of an earthquake, behave as a system. They collapse on nearby buildings and on the abutting streets — damaging buildings that might have otherwise survived and blocking evacuation routes.
Earthquake preparedness, therefore, needs to act at the scale of building details as well as that of cities. Moreover, we must think about it in the realm of policy and not just legal enforcement.
Economy
Axis MF front-running case: why did SEBI bar these dealers from the market?(Page no. 17)
(GS Paper 3, Economy)
The Securities and Exchange Board of India (Sebi) Tuesday barred former chief dealer of Axis Mutual Fund, Viresh Joshi, and 20 other individuals from accessing the securities markets in a case of alleged front-running of the trades of Axis Mutual Fund. In its investigation, Sebi concluded that these individuals wrongly earned Rs 30.56 crore from the front-running activities.
The surveillance system in Sebi generated certain alerts which indicated that a few suspected entities executed trades that were in the nature of front-running the trades of Axis Mutual Fund (Axis MF or Big Client) between September 1, 2021 to March 31, 2022.
These alerts also showed that not only numerous entities were suspected to be front-running the trades of Axis MF but several trading members of stock exchanges were also suspected to be involved with those suspected entities in executing these trades.
Based on these alerts, the capital market conducted an investigation and found that these suspected entities and trading members worked in close coordination with each other to allegedly front-run the trades of Axis MF during the period.
It was found that the leakage of information about the impending orders, which Axis MF was placing through diversified trading members, was possibly done at the end of the Big Client.
The investigation showed that soon after the Axis MF orders were placed, these individuals, who were connected to Viresh Joshi, the then chief dealer of Axis MF, squared off their earlier trade positions taken on the exchange platform, Sebi’s Whole Time Member S K Mohanty said in the interim order issued in the matter on February 28.