Cabinet okays amendments to tax avoidance pacts with Israel, Vietnam
NEW DELHI, OCTOBER 7: The Union Cabinet on Wednesday gave its nod for the introduction of a ‘limitation of benefit’ clause in the double taxation avoidance convention (DTAC) with Israel. The ‘LOB’ Article is an anti-abuse provision aimed at preventing misuse of the convention.
The protocol that received the Cabinet’s nod also provides for exchange of information on tax matters, including bank information.
The Cabinet also gave its nod for a protocol to amend the existing double taxation avoidance agreement (DTAA) with Vietnam, which also provides for exchange of information on tax matters, including bank information and information without domestic tax interest.
Neeranchal project
The World Bank-assisted ‘National Watershed Management Project’, or ‘Neeranchal’, also received approval for implementation by the Cabinet.
The project aims to fulfil the watershed component of the Pradhan Mantri Krishi Sinchai Yojana (PMSKY) to reduce surface runoff of rainwater, increase groundwater levels and better water availability in rain-fed areas.
The cost of the project is estimated at ₹2,142.30 crore, of which the Centre will be pitching in with ₹889 crore, while ₹182 crore will be provided by the respective State governments. The remaining 50 per cent of the project cost will be financed by a World Bank loan.
It will be implemented across nine States – Andhra Pradesh, Telangana, Madhya Pradesh, Maharashtra, Gujarat, Odisha, Chhattisgarh, Jharkhand and Rajasthan.
“These States have been picked since irrigation coverage is quite poor and this project will help increase water levels to benefit farmers. Of these, Jharkhand has the lowest irrigation coverage at just 5.6 per cent,” Nitin Gadkari, Union Minister for Shipping, Road Transport and Highways, told reporters.
According to the Department of Land Resources, irrigation coverage across Maharashtra is estimated 15 per cent and 24 per cent in AP, while in MP and Gujarat it is about 32 and 34 per cent, respectively.
Stating that small check dams could help improve agricultural output, Gadkari said “If irrigation increases, then agricultural production rises 2.5 times. It costs between ₹2,000-2,500 crore to build a large dam but check dams cost ₹200-300 crore to construct and water will reach as many people.”
The Cabinet also approved the setting up of three new All India Institutes of Medical Sciences (AIIMS) at Nagpur (Maharashtra), Mangalagiri (Andhra Pradesh) and Kalyani (West Bengal).
The new establishments, as announced by Finance Minister Arun Jaitley during the 2015-16 Budget, are being introduced under the Pradhan Mantri Swasthya Suraksha Yojana (PMSSY) at a cost of ₹4,949 crore.
While the Mangalagiri facility has an allotted sum of ₹1,618 crore, the institutions in Nagpur and Kalyani will be set up at a cost of ₹1,577 crore and ₹1,754 crore, respectively.
Skill development
The Cabinet also approved the introduction of a new service called the Indian skill development service.
