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Economy:
1. LAFFER CURVE: shows the relationship between tax rates and tax revenue collected by governments. (i.e relationship between government revenue raised by taxation and all possible rates of taxation). It is used to illustrate the concept of taxable income elasticity that taxable income will change in response to changes in the rate of taxation. The Laffer curve postulates that no tax revenue will be raised at the extreme tax rates of 0% and 100%. The curve suggests that, as taxes increase from low levels, tax revenue collected by the government also increases. It also shows that tax rates increasing after a certain point would cause people not to work as hard or not at all, thereby reducing tax revenue. Eventually, if tax rates reached 100% (the far right of the curve), then all people would choose not to work because everything they earned would go to the government. 2. KELKAR TASK FORCE: on implementation of the Fiscal Responsibility and Budget Management (FRBM) Act. 3. BALTIC DRY INDEX: Not restricted to Baltic Sea countries, the index provides "an assessment of the price of moving the major raw materials by sea. Fuel (="Bunkers") is the largest voyage dependent cost and moves with the crude oil price. A shipping and trade index created by the London-based Baltic Exchange that measures changes in the cost to transport raw materials such as metals, grains and fossil fuels by sea. The Baltic Dry Index is a composite of three sub-indexes that measure different sizes of dry bulk carriers (merchant ships) - Capesize, Supramax and Panamax. Multiple geographic routes are evaluated for each index to give depth to the index's composite measurement. It is also known as the "Dry Bulk Index". The supply of cargo ships is generally both tight and inelastic so, marginal increases in demand can push the index higher quickly, and marginal demand decreases can cause the index to fall rapidly. 4. INCLUSIVE GROWTH: The inclusive growth approach takes a longer term perspective as the focus is on productive employment rather than on direct income redistribution, as a means of increasing incomes for excluded groups. Inclusive growth is, therefore, supposed to be inherently sustainable as distinct from income distribution schemes which can in the short run reduce the disparities, between the poorest and the rest. The inclusive growth as a strategy of economic development received attention owing to a rising concern that the benefits of economic growth have not been equitably shared. Growth is inclusive when it creates economic opportunities along with ensuring equal access to them. Apart from addressing the issue of inequality, the inclusive growth may also make the poverty reduction efforts more effective by explicitly creating productive economic opportunities for the poor and vulnerable sections of the society. The concept Inclusion should be seen as a process of including the excluded as agents whose participation is essential in the very design of the development process, and not simply as welfare targets of development programmes (Planning Commission, 2007). 5. CAPITAL GAIN TAX: A type of tax levied on capital gains incurred by individuals and corporations. Capital gains are the profits that an investor realizes when he or she sells the capital asset for a price that is higher than the purchase price. Capital gains taxes are only triggered when an asset is realized, not while it is held by an investor. An investor can own shares that appreciate every year, but the investor does not incur a capital gains tax on the shares until they are sold. As of 2008, equities are considered long term capital if the holding period is one year or more. Long term capital gains from equities are not taxed if shares are sold through recognized stock exchange and Securities Transaction Tax, or STT, is paid on the sale. However short term capital gain from equities held for less than one year, is taxed at 15%. This is applicable only for transactions that attract Securities Transaction Tax (STT). Many other capital investments (house, buildings, real estate, bank deposits) are considered long term if the holding period is 3 or more years. Short term capital gains are taxed just as any other income and they can be negated against short term capital loss from the same business. 6. FISCAL CONSOLIDATION: Fiscal consolidation is a policy intended to reduce deficits and the accumulation of debt, according to the Organisation for Economic Co-operation and Development. The term typically refers to a government economic policy. Elimination of debt. 7. ACCRUAL BASED FINANCIAL REPORTING IN GOVERNMENT: The relevance of accounting has to be looked at from the overall perspective of public financial management. It covers a broad spectrum of activities including budget preparation and execution, internal controls, accounting and financial reporting, internal audit, audit by the Comptroller & Auditor General of India, monitoring and reporting arrangements. Moreover, accrual accounting has to be assessed against the

Pg 6 of 11 prevalent accounting practices, for improving the effectiveness of planning, policy making and budgeting process of public resources. At the heart of the any fiscal management system is the accounting system, which maintains the basic records of government transactions. A robust, comprehensive and transparent accounting system is a must for any government. The 12th finance commission has recommended, both state and central government, to shift from cash based accounting to accrual based accounting which has been accepted by central government in principle. It is believed that accrual base accounting will improve accountability and transparency in government organization. Under the system, transactions will be recorded at the time when economic value is created, exchanged, transferred or impaired, irrespective of whether cash is actually exchanged. Since in India cash based accounting is prevalent, a set of guidelines and adequate guidance would be needed. For this The GASAB (Government Accounting Standards Advisory Board) in the office of the Comptroller & Auditor-General of India (CAG) prepared an operational framework and a detailed road map for its implementation. Furthermore an efficient accrual based accounting will need a strong information system with continuous I.T. support system. This transformation will need a good amount of initial investment and hence some states will be reluctant to chance over. Central government needs to take in confidence all states and close cooperation with finance ministers of all states will be needed. Success of any accounting system depends on efficiency of people who are making accounts. International experience showed a varied result for accrual based accounting. So we need a well-trained manpower to make accrual based accounting a success. 8. VISA ON ARRIVAL SCHEME: In order to promote tourism, Tourist Visa on Arrival (TVOA) scheme was introduced for the nationals of five countries, namely, Japan, Singapore, Finland, Luxembourg and New Zealand with effect from 01.01.2010 for one year. The Government of India has extended the Tourist Visa on Arrival (TVOA) scheme for the nationals of above mentioned five countries. Further, TVOA scheme has been introduced for the nationals of Cambodia, Laos, Vietnam and Philippines with effect from 01.01.2011; and for the nationals of Myanmar and Indonesia with effect from 28.01.2011. The TVOA is allowed for a maximum validity of 30 days with single entry facility by the Immigration Officers at Delhi, Mumbai, Chennai and Kolkata Airports. TVOA is allowed for a maximum of two times in a calendar year to a foreigner with a minimum gap of two months between each visit. TVOA shall be non-extendable and non-convertible. The foreigners of above mentioned countries may also avail of TVOA for up to 30 days for medical treatment, for casual business or to visit friends/relatives, etc. The TVOA facility is not applicable to the holders of Diplomatic/Official Passports. Further, TVOA shall not be granted to the foreigners who have permanent residence or occupation in India. Such persons can visit India on normal visa, as applicable. 9. GENERAL ANTI AVOIDANCE RULES (GAAR): it has been introduced in India due to VODAFONE case ruling in favour of this company by the Supreme Court. The new rules will come into effect from 01 April, 2012. GAAR Implications in India

Indian Government is trying to give powers to income tax authorities as implementation of GAAR provides tremendous powers to deny tax benefit to an entity if a transaction has been carried with the sole intention of tax avoidance. Due to powers in the hand of taxmen, now innocents may be harassed by them. FII & FDI money coming to India through Mauritius route will now become taxable. Increased litigations.

GAAR Worst Scenario The onus lies on the assesse to prove that there is no tax benefit and the transaction is not an avoidance transaction.