Daily Current Affairs for 7th JUne 2021

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Performance Grading Index

Why in News

Union Education Ministry released the Performance Grading Index (PGI) 2019-20 for States and Union Territories of India.


  • It has put Delhi, Gujarat, Haryana, Rajasthan, Puducherry, Dadra and Nagar Haveli in the A+ category.
  • The Union Territory of Chandigarh and the states of Punjab, Tamil Nadu and Kerala topped the index, occupy the highest grade (Grade A++) for 2019-20.
  • Most of the States/UTs have improved their grade in PGI 2019-20 compared to the earlier years.
  • Andaman & Nicobar Islands, Arunachal Pradesh, Manipur, Puducherry, Punjab and Tamil Nadu have improved overall PGI score by 10%, i.e., 100 or more points.
  • Andaman & Nicobar Islands, Lakshadweep and Punjab have shown improvement by 10% (8 points) or more in the PGI domain.
  • Thirteen States and UTs have shown improvement by 10% (15 points) or more in the PGI domain: Infrastructure and Facilities.
  • Andaman & Nicobar Islands and Odisha have shown improvement by 20% or more.
  • Arunachal Pradesh, Manipur and Odisha have shown more than 10% improvement in the PGI domain: Equity.
  • Nineteen States and UTs have shown improvement by 10% (36 points) or more in the PGI domain: Governance Process. Andaman & Nicobar Islands, Andhra Pradesh, Arunachal Pradesh, Manipur, Punjab, Rajasthan and West Bengal have shown improvement by at least 20% (72 points or more).

About Performance Grading Index (PGI)

  • Performance Grading Index (PGI) is a tool to provide insights on status of school education in States and UTs including key levers that drive their performance and critical areas.
  • This tool grade all States and UTs on their performance across 70 indicators on school education.
  • The indicators have been grouped into 2 Categories – Outcomes and Governance & Management with 4 Domains under the first category and 1 under the second.
  • Objective of the index: To encourage States & UTs to adopt best practices like online recruitment and transfer of teachers, electronic attendance of students & teachers
  • Grading system assists the States & UTs to identify gaps and design appropriate interventions to bridge them.
  • Grading done on an annual basis.

Significance of PGI

  • It will propel the states and UTs towards undertaking multi-pronged interventions that will bring about the much-desired optimal education outcomes.
  • It helps the states and UTs to pinpoint the gaps and accordingly prioritize areas for intervention to ensure that the school education system is robust at every level.
  • It will act as a good source of information for best practices followed by states and UTs which can be shared.
  • It will allow all states and UTs to occupy the highest level i.e., Grade I, at the same time, which is a sign of a fully developed nation.
  • Grading also allows all states and UTs to be construed as star performers and be at Grade I, which is the ultimate goal of the PGI.
  • Main purposes of the PGI are to make the states and UTs aware of the areas where there is scope for improvement and strive to reach the maximum possible score and be in the highest grade/level.


G7 Corporate Tax Deal

Why in News

Advanced economies making up the G7 grouping have reached a “historic” deal on taxing multinational companies.

Key Points

  • Recently, the G-7 Finance Ministerial Meeting was held at London at which Ministers are agreed to counter tax avoidance through measures to make companies pay in the countries where they do business.
  • Ministers also agreed to ratify a global minimum corporate tax rate to counter the possibility of countries undercutting each other to attract investments.
  • The involves the US, the UK, Germany, France, Canada, Italy and Japan, is likely to be put before a G20 meeting in July.

Decisions taken at the meeting

  • The first decision that has been ratified is to force multinationals to pay taxes where they operate.
  • The second decision in the agreement commits states to a global minimum corporate tax rate of 15% to avoid countries undercutting each other.
  • The agreement will now be discussed in detail at a meeting of G20 financial ministers and central bank governors in July.

Reason behind minimum Corporate Tax

  • The decision to diminishing the corporate tax to 15% follows from a declaration of war on low-tax jurisdictions around the globe announced by US Treasury Secretary.
  • In April, the US Treasury Secretary urged the world’s 20 advanced nations to move in the direction of adopting a minimum global corporate income tax in April.
  • In a virtual speech to the Chicago Council on Global Affairs, it was announced that the move to put a minimum rate in place attempted to reverse a “30-year race to the bottom” in which countries have resorted to slashing corporate tax rates to attract multinational corporations.
  • The proposal also has some degree of support from the IMF.
  • Apart from low-tax jurisdictions, the proposal for a minimum corporate tax addresses the low effective rates of tax shelled out by some of the world’s biggest corporations, including digital giants such as Apple, Alphabet and Facebook.


  • Reducing Corporate tax is a challenge to get all major nations on the same page, especially since this impinges on the right of the sovereign to decide a nation’s tax policy.
  • A global minimum rate would essentially take away a tool that countries use to push policies that suit them. For instance, in the backdrop of the pandemic, IMF and World Bank data suggest that developing countries with less ability to offer mega stimulus packages may experience a longer economic hangover than developed nations.
  • A lower tax rate is a tool they can use to alternatively push economic activity.
  • A global minimum tax rate will do little to tackle tax evasion.

In perspective of India

  • In a bid to revive investment activity, Finance Minister on September 21, 2019 announced a sharp cut in corporate taxes for domestic companies to 22% and for new domestic manufacturing companies to 15%.
  • The Taxation Laws (Amendment) Act, 2019 resulted in the insertion of a section (115BAA) to the Income-Tax Act, 1961 to provide for the concessional tax rate of 22% for existing domestic companies subject to certain conditions including that they do not avail of any specified incentive or deductions.
  • Existing domestic companies opting for the concessional taxation regime will not be required to pay any Minimum Alternate Tax.
  • The cuts effectively brought India’s headline corporate tax rate broadly at par with the average 23% rate in Asian countries.
  • China and South Korea have a tax rate of 25% each, while Malaysia is at 24%, Vietnam at 20%, Thailand at 20% and Singapore at 17%. The effective tax rate, inclusive of surcharge and cess, for Indian domestic companies is around 25.17%.
  • The average corporate tax rate stands at around 29% for existing companies that are claiming some benefit or the other.
  • India is Proactively engaging with foreign governments with a view to facilitating and enhancing exchange of information under Double Taxation Avoidance Agreements, Tax Information Exchange Agreements and Multilateral Conventions to plug loopholes.
  • Besides, “effective enforcement actions” including expeditious investigation in foreign assets cases have been launched, including searches, enquiries, levy of taxes, penalties, etc and filing of prosecution complaints, wherever applicable.

Fugitive Economic Offenders & Assets

Why in News

India has made it clear that the world is presently combatting another serious emerging challenge of Fugitive Economic Offenders and Assets which flee across national jurisdictions.

Key Points

  • Addressing the United Nations General Assembly (UNGA) Special Session on Challenges and Measures to fight Corruption, the Union Ministry called for a strong and aligned international cooperation on the return of persons and assets sought for such offences, consistent with international obligations and domestic legal systems.
  • The Minister conveyed India’s appreciation to all the countries who are taking this fight ahead in the right direction by intensifying efforts, sustaining political commitment and decisive action, at all levels, against preventing and combating corruption by way of endorsing the United Nations Political declaration.
  • India provides Mutual Legal Assistance to widest possible extent and it has strengthened its domestic law and widened the scope for International Co-operation with Contracting States and International organizations.
  • In the days gone by, to tide over this crisis, India has coordinated with experts from myriad sectors and according priority to expert and scientific advice for sustainable COVID-19 management.
  • The country is also implementing the five-fold strategy of Testing, Tracing, Treatment, Covid-appropriate behaviour, and Vaccination which can help in curbing the spread of the Pandemic.
  • India has a zero-tolerance policy towards corruption and the moto of the Government of India, given by the Prime Minister, is ‘minimum government, maximum governance with emphasis on transparency and citizen centricity.
  • With an aim of decentralizing decision-making and bridging communities with local governments across cities and towns, innovative solutions are being implemented using digital tools in all sectors affecting the livelihoods of citizens.
  • India is already on a digital-first trajectory with one of the highest volumes of digital transactions in the world. The programmatic use of technology has helped in increasing the speed and the plugging of leakages in delivering benefits to the citizens of India.
  • With the linking of biometric ID cards with bank accounts and mobile phones, the system has provided a safety net to millions of citizens in need of immediate monetary aid through ubiquitous direct transfer of benefits.

Fugitive Economic Offenders Act 2018

  • Under Fugitive Economic Offenders (FEO) Act, 2018, the Fugitive Economic Offenders (FEO) defined as “any individual against whom a warrant for arrest in relation to a scheduled offence has been issued by any court in India, who:
  • Has left India so as to avoid criminal prosecution; or
  • Being abroad, refuses to return to India to face criminal prosecution.
  • The FEO Act aims “to provide for measures to deter fugitive economic offenders from evading the process of law in India by staying outside the jurisdiction of Indian courts, to preserve the sanctity of the rule of law in India and for matters connected therewith or incidental thereto”.
  • It replaced the Fugitive Economic Offenders Ordinance, 2018, which was promulgated on April 21, 2018.

Need of Fugitive Economic Offenders Act 2018

  • Economic offences relate to fraud, counterfeiting, money-laundering, tax evasion, etc.
  • Among the laws available for prosecuting these offences are the Prevention of Money-Laundering Act (PMLA), 2002; the Benami Properties Transactions Act, 1988; and the Companies Act, 2013.
  • Sections of the Indian Penal Code, 1860 and the Code of Criminal Procedure, 1973, also cover offences such as forgery and cheating.
  • In 2017, Finance Ministry released a draft Bill to address cases of high-value economic offenders fleeing the country to avoid prosecution.
  • It observed that existing civil and criminal laws didn’t contain specific provisions to deal with such offenders, and that a new legal framework was needed to prosecute them.
  • The ministry also argued that procedures under these laws were time-consuming, led to roadblocks in investigation and impacted the financial health of banks.
  • India’s Fugitive Economic Offenders Act 2018 law empowers authorities for non-conviction-based attachment and confiscation of proceeds of crime and properties and assets of a ‘fugitive economic offender’ –against whom a warrant for arrest in relation to a Scheduled Offence has been issued by any court in India and who has left the country to avoid criminal prosecution or judicial processes.


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