Economy Current Affairs

TRAI recommends Rs 3,050 crore penalty on Airtel, Vodafone & Idea

Telecom Regulator Telecom Regulatory Authority of India (TRAI) has recommended Department of Telecom (DoT) to impose combined penalty of 3,050 crore rupees on Bharti Airtel, Vodafone and Idea cellular.

It had mentioned that the penalty should be imposed on these telecom companies for allegedly denying interconnectivity to newcomer Reliance Jio.

What is the issue?

  • The Reliance Jio had alleged that due to inadequate interconnection points its subscribers were unable to make calls to other networks.
  • TRAI has found that these three companies have violated licence norms by denying adequate interconnection points to Reliance Jio Infocomm.
  • Their combined actions have stifled the competition and are seen as anti-consumer and against public interest.

Now the DoT will decide on next course of action. If DoT finds violations of norms in all circles as mentioned by TRAI, these three telcos will be imposed combined penalty of Rs 3,050 crore.

About Telecom Regulatory Authority of India (TRAI)

  • The TRAI is an independent regulator of the telecommunications business in India. It came into existence by the Act of the Parliament in 1997.
  • It was established in wake of entry of private sector in telecom industries after Government had constituted the National Telecom Policy (NTP) to attract domestic and FDI investment in the telecommunication sector.
  • Its main purpose is to deliver a fair and transparent environment for fair competition in telecom market. TRAI also fixes or revises the tariffs for telecom services in India.


Global Conference to strengthen Arbitration & Enforcement held in New Delhi

The first ever global conference to strengthen Arbitration and Enforcement in India was held in New Delhi.

The 3-day Conference was inaugurated by President Pranab Mukherjee on 21 October 2016.

Key Facts

  • The conference aims to provide impetus to commercial arbitration in country or faster and efficient dispute resolution outside the court room.
  • It was started with title ‘National Initiative On Strengthening Arbitration and Enforcement’. It was held to change the face of dispute resolution in India.
  • For the first time six leading international arbitral institutions and all major industry associations had participated in it.
  • Discussions on Indian Arbitration Act, Case Management of Arbitration, Setting up an world class autonomous arbitration institution and court support for arbitration were held.


The conference comes the backdrop of the immense losses suffered by the business enterprises and the economy at large, due to backlogs involved in dispute resolution in Indian courts. This has kept money and resources of the businesses trapped till the final resolution of the dispute is resolved. It is considered as major disincentive for foreign companies coming to invest in India and also affected ease of doing business environment of the country.


Union Government proposes 4 GST slabs

The Union Government has proposed a four-slab rate structure for the new indirect tax regime i.e. Goods & Services Tax (GST) ranging from 0 to 26 per cent.

It was proposed at the meeting of the GST Council headed by Union Finance Minister Arun Jaitley and included representatives from all states in New Delhi.

Outcomes of Meeting based on consensus

  • Compensation of states due to loss of revenue after implementation of GST from 1 April 2017.
  • Secular growth rate of 14% will be taken into consideration for calculating the revenue of each state in the first five years of implementation of the GST.
  • Base year for calculating the revenue of states will be 2015-16. States getting lower revenue will be compensated by the Centre.
  • These states will be compensated fund to be created from the Cess on top of the GST on ultra-luxury items and demerit goods.
  • The rate structure will be revenue-neutral so that there is no need to burden consumers with additional tax. It will not lead to further inflation.
  • Good items along with other 50% items of common usage to be exempted from the tax to keep the inflation under check.

Proposed Four GST slabs

  • The GST is proposed to be levied at 6% (lower rate), 12% (Standard 1 rate), 18% (Standard 2 rate) and 26% (Higher rates) on the goods and services.
  • It will be 0% on host of goods and services, including food, health and education services, and 26% on luxury items, such as fast-moving consumer goods and consumer durables.
  • On consumption of ultra-luxury items and demerit goods, such as big cars and tobacco products, cess must be imposed over and above a 26% GST rate.

What is GST Council?

As per Article 279A of the Constitution, GST Council will be a joint forum of the Centre and the States. It shall consist (i) Union Finance Minister (Chairperson).  (ii) The Union Minister of State (MoS) in-charge of Revenue of finance (Member) and (ii) The Minister In-charge of taxation or finance or any other Minister nominated by each State Government (Members).

What are the functions of GST Council?

The functions of GST Council are mention in Article 279A (4) of the Constitution. The Council will make recommendations to Union and States on important issues related to GST, like (i) Goods and services that may be subjected or exempted from GST.  (ii) Model GST Laws.  (iii) Principles that govern Place of Supply, threshold limits, GST rates.  (iv) GST rates will including the floor rates with bands and (v) Special rates for raising additional resources during natural disasters/ calamities, special provisions for certain States, etc.