Cyclone Shakti

The India Meteorological Department (IMD) has confirmed the formation of Cyclone "Shakti" in the northeastern part of the Arabian Sea.

• It is a tropical cyclonic storm that developed over the northeastern Arabian Sea.
• Located about 340 km west of Dwarka (Gujarat).
• The name “Shakti” has been given under the Regional Naming System of the World Meteorological Organization (WMO).

Origin:

• Formed in early October 2025 from a low-pressure area over the warm waters of the Arabian Sea.
• On 3 October, it intensified into a Cyclonic Storm (CS), and is expected to further strengthen into a Severe Cyclonic Storm (SCS) while moving west-southwest.

Characteristics:

• Strong winds, high sea waves, and the possibility of heavy rainfall in coastal regions.
• Part of the increasing trend of cyclones in the Arabian Sea due to rising sea surface temperatures.

Why does the Bay of Bengal produce more cyclones than the Arabian Sea?

• Warm water: The Bay of Bengal is semi-enclosed and retains warm water (29–30°C) throughout the year, while the Arabian Sea remains cooler.
• Moisture availability: The Bay of Bengal receives abundant moisture from rivers and monsoonal flows, whereas the Arabian Sea is influenced by dry winds from Oman and Yemen.
• External influence: Typhoons from the Pacific Ocean often enter the Bay of Bengal, creating low-pressure systems that intensify cyclones. Such external contributions are absent in the Arabian Sea.

Snow Leopard (Panthera uncia)

A new survey by the Himachal Pradesh Forest Department recorded 83 snow leopards in the state, up from 51 in 2021.

• A large, rare, and elusive wild cat species, often called the “Ghost of the Mountains” because of its camouflage and secretive nature.
• State animal of Himachal Pradesh.
• A key indicator species of the High Himalayan ecosystem.

Habitat Range:

• Found in the high mountains of Central and South Asia across 12 countries, including Afghanistan, China, India, Nepal, and Mongolia.
• In India: Western Himalayas (Jammu & Kashmir, Ladakh, Himachal Pradesh, Uttarakhand) and Eastern Himalayas (Sikkim, Arunachal Pradesh).
• IUCN Status: Vulnerable.

Characteristics:

• Physical:
  • Thick whitish-grey fur with black rosettes and spots that blend with snowy rocky terrain.
  • Strong hind legs, allowing them to leap up to 6 times their body length.
• Biological:
  • Obligate carnivore – preys on blue sheep, Himalayan ibex, marmots, pikas, rabbits, etc.
  • Due to scarce prey, they require vast home ranges (from 5 sq. miles in Nepal to 190 sq. miles in Mongolia).
• Social & Behavioral:
  • Mostly solitary and highly territorial.
  • Inhabits cold deserts and rugged slopes at altitudes between 3,000–5,500 meters.
  • Shy and nocturnal, making sightings extremely rare.

Stable Coin

India’s Finance Minister stated that countries must “be ready to engage with stablecoins” as innovations in cryptocurrency are reshaping the global monetary system, and nations that fail to adapt risk being left behind.

What is a Stablecoin?

• A stablecoin is a type of cryptocurrency designed to maintain a stable value relative to a certain underlying asset.
• These assets may be a basket of foreign currencies, precious metals, or most commonly, a fiat currency such as the U.S. Dollar.
• Unlike highly volatile cryptocurrencies like Bitcoin, stablecoins are value-stability based, making them more suitable for blockchain transactions.

Types of Stablecoins:

1. Fully Reserved Stablecoins:
   • Backed 1:1 by high-quality, liquid assets.
   • For every coin issued, an equivalent value of an asset (such as cash or government securities) is held in reserve.
   • This ensures price stability.
2. Algorithmic Stablecoins:
   • Not backed by liquid reserves but governed by smart contracts and algorithms.
   • If the price rises, new tokens are minted; if the price falls, tokens are burned.

Key Features:

• Price Stability: Low volatility, beneficial for commerce, remittances, and investors.
• Efficiency: Faster and cheaper than traditional banking transactions, especially in cross-border payments.
• Programmability: Easy integration into smart contracts and digital financial services.
• Digital Fiat: A blockchain-based digital version of fiat currency, suitable for real-time settlement.

Presumptive Taxation

NITI Aayog, in its first Tax Policy Working Paper (2025), has proposed an optional presumptive taxation regime for foreign companies to reduce disputes, simplify compliance, and bring clarity on Permanent Establishment (PE) issues.

• It is a tax system where profits are not determined through detailed accounting or transfer pricing analysis but rather as a fixed percentage of gross receipts.
• Objective: Provide certainty, reduce litigation, simplify compliance, and ensure predictable revenue.

Existing Usage in India

• Already applied in Shipping (Section 44B), Oil & Gas Services (44BB), Airlines (44BBA), and Small Businesses (44AD/44ADA).

Why Needed?

• Litigation-heavy regime: PE disputes take more than 10 years to resolve (e.g., Hyatt International, 2025).
• Ambiguity in rules: Broad interpretation of “Business Connection” and Significant Economic Presence (SEP) discourages investment.
• Retrospective taxation legacy: Vodafone-type cases harmed India’s reputation.

How the Proposed Scheme Will Work:

• Industry-specific rates: 10% for EPC, 15% for marketing, 20% for services, 30% for digital/e-commerce.
• Optional & rebuttable: Companies may opt in or file regular returns if actual profits are lower.
• Safe Harbour: Once the scheme is chosen, separate PE disputes will not arise.
• Simplified compliance: No need for audits or complex accounts, reducing administrative burden.
• Treaty compatibility: Aligned with DTAAs due to its optional nature.

Key Features of NITI Proposal:

• Codify PE and profit attribution principles in domestic law aligned with global norms.
• Sector-specific presumptive profit rates calibrated to historical margins.
• Use of Advance Pricing Agreements (APA) and Mutual Agreement Procedure (MAP) to reduce disputes.
• Special safe harbour provisions for the digital economy.
• Capacity building of tax officials and public consultation to build investor trust.

Expected Benefits:

• Reduced disputes and faster resolution.
• Greater investor confidence, attracting long-term FDI.
• Guaranteed minimum tax revenue.
• Enhanced Ease of Doing Business, aligned with Make in India.