Anayoottu Ritual of Kerala

Anayoottu, an annual ritual at the Sree Vadakkunnathan Temple, Thrissur was recently held.

Why in news?

There is a history behind this annual ritual at the temple.

Kerala’s elephant pooram was selected, along with other cultural forms of the country, for display at the opening ceremony of the Asian Games held in Delhi in 1982.

Elephants were transported all throughout the country to New Delhi.

What is Anayoottu?

The Aanayoottu (gaja pooja/ feeding of elephants) is a festival held in the precincts of the Vadakkunnathan temple in City of Thrissur, in Kerala.

The festival falls on the first day of the month of Karkkidakam (timed against the Malayalam calendar), which coincides with the month of July.

It involves a number of unadorned elephants being positioned amid a multitude of people for being worshipped and fed.

Crowds throng the temple to feed the elephants.

Mythology behind

It is believed that offering poojas and delicious feed to the elephants is a way to satisfy Lord Ganesha—the god of wealth and of the fulfillment of wishes.

The Vadakkunnathan temple, which is considered to be one of the oldest Shiva temples in southern India, has hosted the Aanayottoo event for the past few years.

GST Slab Changes

Customers will have to pay a 5% Goods and Services Tax (GST) on pre-packed, labelled food items such as atta, paneer and curd, besides hospital rooms with rents above ₹5,000.

What is GST?

GST launched in India on 1 July 2017 is a comprehensive indirect tax for the entire country.

It is charged at the time of supply and depends on the destination of consumption.

For instance, if a good is manufactured in state A but consumed in state B, then the revenue generated through GST collection is credited to the state of consumption (state B) and not to the state of production (state A).

GST, being a consumption-based tax, resulted in loss of revenue for manufacturing-heavy states.

What are GST Slabs?

In India, almost 500+ services and over 1300 products fall under the 4 major GST slabs.

There are five broad tax rates of zero, 5%, 12%, 18% and 28%, plus a cess levied over and above the 28% on some ‘sin’ goods.

The GST Council periodically revises the items under each slab rate to adjust them according to industry demands and market trends.

The updated structure ensures that the essential items fall under lower tax brackets, while luxury products and services entail higher GST rates.

The 28% rate is levied on demerit goods such as tobacco products, automobiles, and aerated drinks, along with an additional GST compensation cess.

Why rationalize GST slabs?

From businesses’ viewpoint, there are just too many tax rate slabs, compounded by aberrations in the duty structure through their supply chains with some inputs taxed more than the final product.

These are far too many rates and do not necessarily constitute a Good and Simple Tax.

Multiple rate changes since the introduction of the GST regime in July 2017 have brought the effective GST rate to 11.6% from the original revenue-neutral rate of 15.5%.

Merging the 12% and 18% GST rates into any tax rate lower than 18% may result in revenue loss.

How is the Vice-President of India elected?

A major political party has declared that West Bengal Governor Jagdeep Dhankhar would be the candidate for the post of Vice-President.

About Vice President of India

The VP is the deputy to the head of state of the Republic of India, the President of India.

His/her office is the second-highest constitutional office after the president and ranks second in the order of precedence and first in the line of succession to the presidency.

The vice president is also a member of the Parliament as the ex officio Chairman of the Rajya Sabha.

Qualifications

As in the case of the president, to be qualified to be elected as vice president, a person must:

Be a citizen of India

Be at least 35 years of age

Not hold any office of profit

Unlike in the case of the president, where a person must be qualified for election as a member of the Lok Sabha, the vice president must be qualified for election as a member of the Rajya Sabha.

This difference is because the vice president is to act as the ex officio Chairman of the Rajya Sabha.

Roles and responsibilities

When a bill is introduced in the Rajya Sabha, the vice president decides whether it is a money bill or not.

If he is of the opinion that a bill introduced in the Rajya Sabha is a money bill, he shall refer it to the Speaker of the Lok Sabha.

The vice president also acts as the chancellor of the central universities of India.

Election procedure

Article 66 of the Constitution of India states the manner of election of the vice president.

The vice president is elected indirectly by members of an electoral college consisting of the members of both Houses of Parliament and NOT the members of state legislative assembly.

The election is held as per the system of proportional representation using single transferable votes.

The voting is conducted by Election Commission of India via secret ballot.

The Electoral College for the poll will comprise 233 Rajya Sabha members, 12 nominated Rajya Sabha members and 543 Lok Sabha members.

The Lok Sabha Secretary-General would be appointed the Returning Officer.

Political parties CANNOT issue any whip to their MPs in the matter of voting in the Vice-Presidential election.

Removal

The Constitution states that the vice president can be removed by a resolution of the Rajya Sabha passed by an Effective majority (majority of all the then members) and agreed by the Lok Sabha with a simple majority( Article 67(b)).

But no such resolution may be moved unless at least 14 days’ notice in advance has been given.

Notably, the Constitution does not list grounds for removal.

No Vice President has ever faced removal or the deputy chairman in the Rajya Sabha cannot be challenged in any court of law per Article 122.

Key terminologies in news: Yield Inversion, Soft-Landing and Reverse Currency Wars

(1) Bond Yield Inversion

What is Bond Yeild?

Bonds are essentially an instrument through which governments (and also corporations) raise money from people.

Typically government bond yields are a good way to understand the risk-free interest rate in that economy.

This 2019 piece provides an introduction to government bonds and explains how yields are calculated.

What is Yield Curve?

The yield curve is the graphical representation of yields from bonds (with an equal credit rating) over different time horizons.

In other words, if one was to take the US government bonds of different tenures and plot them according to the yields they provide, one would get the yield curve.

Inversion of bond yield

However, there are times when this bond yield curve becomes inverted.

For instance, bonds with a tenure of 2 years end up paying out higher yields (returns/ interest rate) than bonds with a 10 year tenure.

Such an inversion of the yield curve essentially suggests that investors expect future growth to be weak.

Here’s how to make sense of this?

When investors feel buoyant about the economy they pull the money out from long-term bonds and put it in short-term riskier assets such as stock markets.

In the bond market, the prices of long-term bonds fall, and their yield (effective interest rate) rises.

This happens because bond prices and bond yields are inversely related.

However, when investors suspect that the economy is heading for trouble, they pull out money from short-term risky assets (such as stock markets) and put them in long-term bonds.

This causes the prices of the long-term bonds to rise and their yields to fall.

Why use inversion curve?

Over the years, inversion of the bond yield curve has become a strong predictor of recessions. Of course, for it to be taken seriously, such an inversion has to last for several months.

Over the past few weeks, such inversion is happening repeatedly in the US, suggesting to many that a recession is in the offing.

In the current instance, the US Fed (their central bank) has been raising short-term interest rates, which further bumps up the short-end of the yield curve while dampening economic activity.

(2)  Soft-Landing

The process of monetary tightening that the US is currently unveiling involves not just reducing the money supply but also increasing the cost of money (that is, the interest rate).

US is doing this to contain soaring inflation.

Ideally, the US Fed or any central bank doing this would like to bring about monetary tightening in such a manner that slows down the economy but doesn’t lead to a recession.

When a central bank is successful in slowing down the economy without bringing about a recession, it is called a soft-landing — that is, no one gets hurt.

But when the actions of the central bank bring about a recession, it is called hard-landing.

(3) Reverse Currency War

A flip side of the US Fed’s action of aggressively raising interest rates is that more and more investors are rushing to invest money in the US.

This, in turn, has made the dollar become stronger than all the other currencies. That’s because the dollar is more in demand than yen, euro, yuan etc.

On the face of it, this should make all other countries happier because a relative weakness of their local currency against the dollar makes their exports more competitive.

For instance, a Chinese or an Indian exporter gets a massive boost.

In fact, in the past the US has often accused other countries of manipulating their currency (and keeping its weaker against the dollar) just to enjoy a trade surplus against the US.

This used to be called the currency war.