Note4Students
From UPSC perspective, the following things are important :
Prelims level: 10th Schedule
Mains level: Paper 2- Role of Opposition in democracy
Context
Role of Opposition in indispensable in the democracy.
Reasons for adopting parliamentary democracy
- The Indian Constitution adopted the parliamentary system and not the presidential system.
- B.R. Ambedkar provided the rationale for this: “A democratic executive must satisfy two conditions –
- (1) It must be a stable executive and
- (2) it must be a responsible executive.
- Unfortunately it has not been possible so far to devise a system which can ensure both in equal degree.
- Assessment of executive: In England, where the parliamentary system prevails, the assessment of responsibility of the executive is both daily and periodic.
- Daily assessment: The daily assessment is done by members of Parliament, through questions, resolutions, no-confidence motions, adjournment motions and debates on addresses.
- Periodic assessment: Periodic assessment is done by the electorate at the time of the election.
- The daily assessment of responsibility which is not available under the American system it is felt far more effective than the periodic assessment and far more necessary in India.
Role of Opposition in democracy
- Democracy is the basic feature of the Constitution.
- The presence of a vigilant Opposition is necessary not just for a vibrant democracy but for its very survival.
- When the Opposition criticises the government or carries on an agitation to arouse public opinion against a party’s misdeeds, it is performing a duty that is assigned by the Constitution.
- Without an effective Opposition, democracy will become dull and legislature will become submissive.
Significance of anti-defection law
- Encouraging defections from the parties in power in States will sound the death knell for democracy.
- The Tenth Schedule has failed to serve its purpose.
- The Supreme Court, in Kihoto Hollohan v. Zachillhu (1992), while upholding the 52nd Amendment said that: “On the one hand there is the real and imminent threat to the very fabric of Indian democracy posed by certain levels of political behaviour conspicuous by their utter and total disregard of well recognised political proprieties and morality… On the other hand, there are… certain side-effects which might affect and hurt even honest dissenters and conscientious objectors.”
- In upholding the law, the court held: “But a political party functions on the strength of shared beliefs… Any freedom of its members to vote as they please independently of the political party’s declared policies will not only embarrass its public image and popularity but also undermine public confidence in it.”
- What is whip? The whip system is part of the established machinery of political organisation in the House and does not infringe on a member’s rights or privilege in any way.
- Some political thinkers have recognised as an additional device the ‘theory of recall,’ so that a member whose personal behaviour falls below standards expected of his constituents goes back and seek their approval.
- This power is particularly apt when a member shows disloyalty to his party but declines to resign from his seat and to fight an immediate by-election.
- The anti-defection law was supposed to be the justification underlying the power of recall.
Way forward
- Political parties, the judiciary and civil society must take steps to ensure that democracy does not fail.
- The Opposition must be tolerated because if it is left for the party in power to decide what is healthy and unhealthy criticism, then every criticism of the latter will be treated as unhealthy.
- while the Opposition must be credible and strong, it is for the Opposition to make itself credible and strong. It must feel the pulse of the people.
- Unless it makes itself respectable, it cannot demand any respect. This is the biggest challenge facing the nation today.
Conclusion
The Opposition must also work constructively. Our constitutional goal was to establish a sovereign, democratic republic.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: GFCF
Mains level: Paper 3- Long term growth through public capital expenditure
Context
The Finance Minister, Nirmala Sitharaman, said recently that India’s long-term growth prospects are embedded in public capital expenditure programmes. She added that an increase in public investment would crowd in (or pull in) private investment, thus reviving the economy.
Significance of public investment-led economic growth
- Public investment-led economic growth forms a credible strand of explanation for India’s post-Independence economic growth.
- Revival after Asian financial crisis: When it was faced with a slow-down after the Asian financial crisis of 1997, the government initiated public road building projects.
- In the form of the Golden Quadrilateral and the Pradhan Mantri Gram Sadak Yojana, these initiatives sowed the seeds of economic revival, culminating in an investment and export-led boom in the 2000s; GDP grew at 8%-9% annually.
- In comparison, the investment record during the 2010s has been dismal.
- However, a recent uptick is evident in the real gross fixed capital formation (GFCF) rate — the fixed investment to GDP ratio (net of inflation).
- The ratio recovered to 32.5% in 2019-20 from a low of 30.7% in 2015-16.
Analysing the Investment distribution
- As in the June edition of the Ministry of Finance’s Monthly Economic Review, the fixed investment to GDP ratio was 32% in 2021-22.
- However, there is need for caution in reading the most recent data, as they are subject to revision.
- Moreover, the budgetary definition of investment refers to financial investments (which include purchase of existing financial assets, or loans offered to States) and not just capital formation representing an expansion of the productive potential.
- The National Accounts Statistics provides disaggregation of gross capital formation (GCF) by sectors, type of assets and modes of financing; over 90% of GCF consists of fixed investments.
- No change in investment distribution: The investment distribution has hardly changed over the last decade, with the public sector’s share remaining 20%.
- Fall in share of agriculture and industry: Between 2014-15 and 2019-20, the shares of agriculture and industry in fixed capital formation/GDP fell from 7.7% and 33.7% to 6.4% and 32.5%, respectively.
- Services’ share rose to 52.3% in 2019-20 compared to 49% in 2014-15.
- The rise in the services sector is almost entirely on transport and communications.
- The share of transport has doubled from 6.1% to 12.9% during the same period.
- Within transportation, it is mostly roads.
- Decline in the share of investment: Its share in the investment ratio (column 2.1) fell from 19.2% in 2011-12 to 16.5% in 2019-20.
- This indicates that ‘Make in India’ failed to take off, import dependence went up, and India became deindustrialised.
- Import dependence on China is alarming for critical materials such as fertilizers, bulk drugs (active pharmaceutical ingredients or APIs) and capital goods.
- Instead of boosting investment and domestic technological capabilities, the ‘Make in India’ campaign frittered away time and resources to raise India’s rank in the World Bank’s Ease of Doing Business Index.
- Decline in foreign capital in GFC: The contribution of foreign capital to financing GCF fell to 2.5% in 2019-20 from 3.8% in 2014-15 (or 11.1% in 2011-12).
- With declining investment share, industrial output growth rate fell from 13.1% in 2015-16 to a negative 2.4% in 2019-20, as per the National Accounts Statistics.
Way forward
- Need for balance: As roads and communications are classic public goods, investment in them is welcome.
- However, for healthy domestic output growth, there is a need for balance between “directly productive investments” (in farms and factories) and infrastructure investments.
- And this balance was missed.
- The recent upturn in the aggregate fixed capital formation to GDP ratio is positive, though the rate is still lower than its mark in the early 2010s.
Conclusion
The claim that the investment revival is public sector driven is not borne out by facts. The budgetary figures refer to financial investment, not estimates of capital formation, indicating expansion of the economy’s productive capacity.
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Back2Basics: Gross fixes capital formation
- Gross fixed capital formation (GFCF), also called “investment”, is defined as the acquisition of produced assets (including purchases of second-hand assets), including the production of such assets by producers for their own use, minus disposals.
- The relevant assets relate to assets that are intended for use in the production of other goods and services for a period of more than a year.
- The term “produced assets” means that only those assets that come into existence as a result of a production process are included.
- It therefore does not include, for example, the purchase of land and natural resources.
- This indicator is available in different measures: GFCF at current prices and current PPPs in US dollars, and annual growth rates of GFCF at constant prices, as well as quarterly data for percentage change over previous period and percentage change over same period last year.
- The indicator at current prices and current PPPs is less suited for comparisons over time, as developments are not only caused by real growth, but also by changes in prices and PPPs.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 2- India-US relations
Context
The possibility of India’s continuing rise over this century seems to be on a stronger wicket today than it did a decade ago, marred as the early 2010s were by political instability and economic turmoil.
Historical background of dominance of world economy by the East
- Prior to the era of colonial exploitation followed by self-inflicted stagnation due to communist economic policies adopted across the region, the ancient civilisations of India and China dominated the world economy
- There existed a deep history of scientific innovation and technological prowess, which spread by osmosis and intercourse from the East to the West.
- The West, led principally by Great Britain, then stole a march over Asia with the advent of the Industrial Revolution.
- Emergence of the US: A pyrrhic victory for Britain in the Second World War marked the formal transfer of the Western bloc’s leadership to the US.
Geopolitics in 2020s
- Emergence of China: China is now home to a manufacturing-led and technology-driven economy, competing head-on with the US in areas like biotech, robotics, artificial intelligence, and advanced materials.
- India, which faced an economic setback when the liberalisation process largely came to a halt between 2004-2014, is back on its feet, with consistent commitment and concerted policy action focused on building domestic capabilities in critical technologies as well as in key manufacturing industries and pursuing important structural economic reforms.
- Common threat of China: From seeing non-democratic China as a benign partner, the US now sees it as a threat, the present preoccupations in Europe notwithstanding.
- India, which for a time welcomed Chinese involvement in its economy, has also recalibrated after the 2020 Galwan face-off.
- Unlike India and the US, which are both well-established republics with deep democratic cultures, China is “a party with a state attached to it”.
- Concerns for India: Being inextricably linked by geography, Beijing’s ambition to dominate its periphery and proximate region is of particular concern to India.
What this mean for India-US relations?
- Natural allies: Given this background, India and the US are natural allies to confront the challenges posed by an expansionist and aggressive China in the Indo-Pacific and beyond.
- New areas of cooperation: There are clear signals of unprecedented cooperation between the two countries in areas like national security, defence production and most prominently, new-age information technology and internet industries where American financial firms and blue-chip corporates are contributing growth capital as well as know-how.
- Closer cooperation in scientific research and critical emerging technologies is imperative.
- Reducing India’s dependence for defence equipment: In particular, as some American lawmakers highlighted when providing India with exemption under CAATSA that the American defence industry should contribute to reducing India’s dependence on Russian armaments and equipment.
- Technology cooperation: Connected to the expansion of defence-industrial ties is the broadening of technology collaboration in areas like artificial intelligence, drones, advanced materials, space technology, semiconductors, and biotech in India, beyond the consumer tech and software sectors.
Conclusion
Demographic and economic trends firmly position India as a global force that will have the weight to stride alongside America and China, who would constitute the other two geopolitical — and ideological — poles over the 21st century.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Bank merger and nationalization
Mains level: Debate over banks privatization
Last week, on July 19 was the 53rd anniversary of then Prime Minister Indira Gandhi nationalizing 14 banks.
Bank Nationalization: A Backgrounder
- In 1955 Imperial Bank of India was nationalized as RBI with State Bank of India to act as the principal agent for extensive banking facilities on a large scale, especially in rural and semi-urban areas.
- The other banks of the princely states were acquired by SBI much earlier.
- However, the nationalization of banks in 1969 and later in 1980 was of a completely different scale.
- In 1969, the move covered 14 (followed by six in 1980) of the largest private sector banks—putting 85% of the deposit base into the hands of the government.
- This brought 80% of the banking segment in India under Government ownership.
Why Nationalization of Banks?
- After independence, the Government of India (GOI) adopted planned economic development for the country.
- Nationalization was in accordance with the national policy of adopting the socialistic pattern of society.
- The actual course came at the end of a troubled decade when India had suffered many economic as well as political shocks.
Other reasons
- Social welfare
- Controlling private monopolies
- Expansion of banking to rural areas
- Reducing regional imbalance to curb the urban-rural divide
- Priority Sector Lending
- Mobilization of savings
Immediate causes
- There were two wars with China in 1962 and Pakistan in 1965 that put immense pressure on public finances.
- Banks were failing largely due to speculative financial activities when Indira Gandhi became the prime minister in 1967.
- Two successive years of drought had not only led to food shortages but also compromised national security because of the dependence on American food shipments.
- Subsequently, a three-year plan holiday affected aggregate demand as public investment was reduced.
- Agriculture needed a capital infusion, with the initiation of the Green Revolution in India which aimed to make the country self-sufficient in food security.
- The collapse of banks was causing distress among people, who were losing their hard-earned money in the absence of a strong government support and legislative protection to their money.
Post-nationalization challenges
- Having ownership and operational control of the banks was a challenging task for the government.
- The banks were constantly challenged on their profitability parameters—particularly RRBs which had both geographical and portfolio concentration risks.
Establishing regional balance
- The objective of social control was about making banking sector accessible in areas where these services were not accessible.
- The state established 196 Regional Rural Banks (RRBs) between two nationalizations.
- While nationalization, branch licensing policy and priority sector lending targets helped the banks to go to rural areas and certain sectors, it did not achieve regional balance.
- Of the 20 banks that were nationalized, seven were concentrated in south India, six in west India, four in north India and three in east India.
- The expanded rural branch network followed the extant regional concentration, bringing more intensive banking in southern and western regions.
How was regional balance achieved then?
- This skew was partially set right by two initiatives. The first was an institutional intervention of opening 196 RRBs which had focused area of operation.
- The RRBs contributed significantly to reduce the regional imbalance with their expanding branch network in the 1980s.
- RRBs also had a greater proportion of their loans flowing to priority sector in general and agriculture in particular.
- The second was the policy on lead bank scheme where one bank was assigned as a lead for each district.
- The lead bank was responsible for the growth and penetration of banking in districts and had to achieve it in coordination with other banks and the state machinery.
- A “district credit” plan (euphemism for a banking plan), dovetailed with the government schemes, was to be prepared and monitored by the lead bank.
- Regional Rural Banks
- RRBs are a shade better when it comes to rural lending.
- While they have deployed 72% of the rural and semi-urban deposits as credit in those areas, the figure for urban understandably is very low, and most of these funds have gone into investments.
- Small Finance Banks
- The new small finance banks (SFBs) give an entirely different picture—a large number of them are MFIs that converted into banks.
- These institutions are trying to collect deposits from the middle and upper middle class and deploy those resources towards the poor.
- From a paradigm point of view, possibly SFBs are the most interesting institutions that have turned the tables and are trying to achieve from the private sector the objectives set out in the bank nationalization.
Public versus Private Banks
- A look at the broad performance ratios for 2017-18 shows that private sector banks score better on efficiency and profitability parameters.
- They have better return on assets, return on equity, net interest margin and a higher proportion of low-cost deposits.
- On the other hand, public sector banks (PSBs) have a better impact on priority sector lending achievement, and paid higher wages.
- Of the new Pradhan Mantri Jan Dhan Yojana accounts 77% were opened by state-owned banks, 20% by RRBs, and a mere 3.4% accounts were opened by private banks.
- From this perspective bank nationalization was indeed a good move at that time.
What benefits do we reap today?
- Banking under government ownership gave the public implicit faith and immense confidence about the sustainability of the banks.
- Banks were no longer confined to only metropolitan or cosmopolitan in India. In fact, the Indian banking system has reached even to the remote corners of the country.
- The present government has reached out to people through banks.
- Assistance for constructing toilets under Swachh Bharat programme, DBT, Crop insurance schemes etc was given through banks.
- The dispensing of Mudra loans to about 20 crore individuals, benefits under PM Kisan scheme for providing cash assistance to close to 15 crore farmers annually are only possible through this banks.
- Thus banks became the government’s dispenser of goodies due to the decision which was taken 50 years ago.
What about Financial Inclusion?
- The All India Debt and Investment Survey reports indicate that the formal sector has been losing ground to the informal sector in the rural indebtedness pie since 2001 onwards.
- This is worrying and indicates that the inclusion agenda is far from achieved.
- Some examples in the public sector banking system—particularly SBI—have shown that it is possible to achieve the double bottom line of being in the commercial market while continuing to achieve significant targets in inclusion, sectoral, spatial and geographical.
Way Forward
- From the larger perspective of efficiency and better utilization of capital, it may be a good idea to move state-owned banks towards more market-based framework.
- However, that call should be taken to achieve the residual task of inclusion.
- Making state-owned banks more autonomous and accountable to the market may be the first significant step that can be taken for now.
Also read:
[Burning Issue] Privatization of PSBs
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not much
Mains level: Paper 3- AI governance
Context
Artificial intelligence (AI) is more present in our lives than ever. From predicting what we want to see as we scroll through social media to helping us understand weather patterns to manage agriculture, AI is ubiquitous.
Issues with AI and it why it matters to India
- Bias and discrimination: The data used to feed into AI often aren’t representative of the diversity of our societies, producing outcomes that can be said to be biased or discriminatory.
- Errors in facial recognition: There are problems emerging in facial recognition technologies, which are used to access our phones, bank accounts and apartments, and are increasingly employed by law-enforcement authorities, in identifying women and darker-skinned people.
- For three such programs released by major technology companies, the error rate was 1% for light-skinned men, but 19% for dark-skinned men, and up to 35% for dark-skinned women.
- Biases in facial recognition technologies have led to wrongful arrests.
- Indeed, if the business model of how these technologies are developed does not change to place human interests first, inequalities will grow to a magnitude never before experienced in history; access to the raw material that is data is key.
- These issues are of particular importance to India, which is one of the world’s largest markets for AI-related technologies, valued at over $7.8 billion in 2021.
- The National Strategy on Artificial Intelligence released by NITI Aayog in 2018 highlights the massive potential of AI in solving complex social challenges faced by Indian citizens across areas such as agriculture, health, and education, in addition to the significant economic returns that AI-related technologies are already creating.
UNESCO agreement
- To ensure that the full potential of these technologies is reached, the right incentives for ethical AI governance need to be established in national and sub-national policy.
- India has made great strides in the development of responsible and ethical AI governance, starting with NITI Aayog’s #AIForAll campaign to the many corporate strategies that have been adopted to ensure that AI is developed with common, humanistic values at its core.
- UNESCO’s recommendations: Last November 193 countries reached a groundbreaking agreement at UNESCO on how AI should be designed and used by governments and tech companies.
- UNESCO’s Recommendation on the Ethics of Artificial Intelligence took two years to put together and involved thousands of online consultations with people from a diverse range of social groups.
- It aims to fundamentally shift the balance of power between people, and the businesses and governments developing AI.
- Countries which are members of UNESCO have agreed to implement this recommendation by enacting actions to regulate the entire AI system life cycle, ranging from research, design and development to deployment and use.
- This means they must use affirmative action to make sure that women and minority groups are fairly represented on AI design teams.
- The Recommendation also underscores the importance of the proper management of data, privacy and access to information.
- It establishes the need to keep control over data in the hands of users, allowing them to access and delete information as needed.
- It also calls on member states to ensure that appropriate safeguards schemes are devised for the processing of sensitive data and effective accountability, and redress mechanisms are provided in the event of harm.
- Socio-cultural impact: The broader socio-cultural impacts of AI-related technologies are also addressed, with the Recommendation taking a strong stance that-
- 1] AI systems should not be used for social scoring or mass surveillance purposes;
- 2] That particular attention must be paid to the psychological and cognitive impact that these systems can have on children and young people;
- 3] Member states should invest in and promote not only digital, media and information literacy skills, but also socio-emotional and AI ethics skills to strengthen critical thinking and competencies in the digital era.
- In a number of countries, the principles of the Recommendation are already being used in AI regulation and policy.
- Finland provides an example of good practice of this regard, with its 2017 AI Strategy.
Conclusion
The new agreement is broad and ambitious. It is a recognition that AI-related technologies cannot continue to operate without a common rulebook. Over the coming months and years, the Recommendation will serve as a compass to guide governments and companies, to voluntarily develop and deploy AI technologies that conform with the commonly agreed principles it establishes.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: ICJ, ICC
Mains level: Rohingya Crisis
Judges at the United Nations’ highest court have dismissed preliminary objections by Myanmar to a case alleging for genocide against the Rohingya ethnic minority.
Who are the Rohingyas?
- Rohingya Muslims comprise one million out of the 53 million people that live in Myanmar, forming the world’s largest stateless population in a single country.
- Universally reviled by the country’s Buddhist majority, they have been oppressed by the government since the late 1970s when the government launched a campaign to identify ‘illegal immigrants’.
- Serious abuses were committed, forcing as many as 250,000 Rohingya refugees to flee to Bangladesh.
- The 1982 Citizenship Law in former Burma made the Rohingyas stateless people.
- They have often been called the most persecuted minority in the world.
- The 1.1 million Rohingya Muslims squeezed precariously into the northwest state of Rakhine, in mainly Buddhist Burma, bordering majority Muslim Bangladesh, are stateless and unwanted.
Why are they persecuted by Myanmar?
- To qualify for citizenship, Rohingya applicants had to renounce their identity And accept being labelled as ‘Bengalis’ on all official documents.
- They also had to prove that they could trace the presence of their family in Rakhine back three generations, something which is extremely difficult as many Rohingya lack documents or had lost them in 2012.
Why did the Rohingya Crisis happen?
- Since World War II they have been treated increasingly by Burmese authorities as illegal, interloping Bengalis, facing apartheid-like conditions that deny them free movement or state education.
- The army “clearing operations” sparked the mass exodus of Rohingyas in both October 2016.
- In August 2017, were launched after insurgents known as the Arakan Rohingya Salvation Army (ARSA) attacked several paramilitary check posts.
- Rohingya activists claim the insurgents are mainly young men who have been pushed to breaking point by relentless oppression.
Security Implications
- The Rohingya issue and its spill over impact on Myanmar`s western peripheral region and security implications figured in the discussions is not clear.
- In all probability, the import of the ferment caused by the Rohingya migration, efforts of radical Islamists to influence some of the Rohingya youth, and the Pakistan ISI’s attempts to capitalise on the situation.
- Rising anger in the Muslim world about the plight of the Rohingya has compounded fears of home-grown militancy as well as support from international jihadists.
- Illegal movement of people, combined with human trafficking and cross-border migration, can weaken Myanmar’s relations with its neighbour Bangladesh and its ASEAN partners.
What is the case against Myanmar?
- Last year, the Republic of the Gambia moved the ICJ against Myanmar over alleged violations of the Convention on the Prevention and Punishment of the Crime of Genocide.
- The Gambia urged the ICJ to direct Myanmar to stop the genocide, ensure that persons committing genocide are punished, and allow the “safe and dignified return of forcibly displaced Rohingya”.
- The Gambia and Myanmar are parties to the Genocide Convention that allows a party to move the ICJ for violations.
- Disputes between the Contracting Parties are settled according to Article 9 of the Genocide Convention.
International support for Gambia’s case
- The Netherlands and Canada are backing Gambia, saying in 2020 that the country took a laudable step towards ending impunity for those committing atrocities in Myanmar and upholding this pledge.
- Canada and the Netherlands consider it their obligation to support these efforts which are of concern to all of humanity.
What next?
- The ICJ’s ruling sets the stage for court hearings, airing evidence of atrocities against the Rohingya that human rights groups and a UN probe say amount to breaches of the 1948 Genocide Convention.
- The International Court of Justice rules on disputes between states.
- It is not linked to the International Criminal Court, also based in The Hague, which holds individuals accountable for atrocities.
- Prosecutors at the ICC are investigating crimes committed against the Rohingya who were forced to flee to Bangladesh.
- The ruling of the ICJ is binding on Myanmar, and cannot be appealed. However, no means are available to the court to enforce it.
Back2Basics:
| BASIS |
INTERNATIONAL CRIMINAL COURT (ICC) |
INTERNATIONAL COURT OF JUSTICE (ICJ) |
| Relationship with the United Nations |
Independent; UN Security Council may refer matters to it |
Primary judicial branch of the UN. |
| Members |
105 members |
193 members (all members of the United Nations). |
| Derives authority from |
The Rome Statute |
Charter of the United Nations and the Statute of the International Court of Justice. |
| Scope of work |
Criminal matters – investigating and prosecuting crimes of genocide, crimes against humanity, and war crimes |
Civil matters- settling legal disputes between the member-states and giving advisory opinions on international legal issues |
| Jurisdiction |
Only the member nations of the ICC, which means around 105 countries. Can try individuals. |
All the member nations of the UN, which means 193 countries. Cannot try individuals and other private entities. |
| Composition |
1 prosecutor and 18 judges, who are elected for a 9-year term each by the member-states which make up the Assembly of State Parties with all being from different nations |
15 judges who are elected for a 9-year term each and are all from different nations. |
| Funding |
Funded by state parties to the Rome Statute and voluntary contributions from the United Nations, governments, individual corporations, etc. |
Funded by the UN. |
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: GST Slabs
Mains level: Issues with GST Rationalization
From July 18, a 5% Goods and Services Tax (GST) has been levied on several food items and grains that are sold in a pre-packed, labelled form even if they are not branded.
What is the news?
- So far, these items, which include curd, lassi, buttermilk, puffed rice, wheat, pulses, oats, maize and flour, were exempted from the GST net.
- The fresh tax levies have attracted an outcry from traders as well as consumers.
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.
How did the rate hikes come about?
- The 5% tax on unbranded packed food items was approved by the GST Council.
- Some of the other items to have lost their tax-exempt status include bank cheques, maps and atlases, hotel rooms that cost up to ₹1,000 a night, and hospital room rents of over ₹5,000 a day.
- The pre-packed items weighing over 25 kg would not attract GST.
Why such move?
- This move was part of a broader set of changes in the GST structure to do away with tax exemptions as well as concessional tax rates.
- The Centre and States had discussed the need to raise revenues from the GST, which at the time of its launch five years ago, was premised on levying a ‘revenue-neutral’ rate of 15.5%.
- All affected food items, including wheat, pulses, rice, curd and lassi, will be exempt from GST when sold loose.
What has the government said on the issue?
- FM has hit out at misconceptions about the GST levies on food items and dismissed suggestions that they were imposed unilaterally by the Centre.
- The 5% levy, she said, was critical to curb tax leakages and was not taken by ‘one member’ of the GST Council alone as all States had agreed to the move.
- When GST was rolled out, a GST rate of 5% was made applicable on branded cereals, pulses, flour.
- This was later amended to tax only such items which were sold under a registered brand or brands on which enforceable right was not foregone by the suppliers.
- This tax exemption triggered ‘rampant misuse’ by reputed manufacturers and brand owners leading to a gradual drop in revenues.
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From UPSC perspective, the following things are important :
Prelims level: PHEIC, Monkeypox
Mains level: Rise in zoonotic diseases
The World Health Organization’s Director-General has declared monkeypox a public health emergency of international concern (PHEIC) July 23, 2022.
What is PHEIC?
Definition: Under the International Health Regulations (IHR), a public health emergency is defined as “an extraordinary event which is determined, as provided in these Regulations: to constitute a public health risk to other States through the international spread of disease; and to potentially require a coordinated international response”.
What criteria does the WHO follow to declare PHEIC?
- PHEIC is declared in the event of some “serious public health events” that may endanger international public health.
- The responsibility of declaring an event as an emergency lies with the Director-General of the WHO and requires the convening of a committee of members.
Implications of a PHEIC being declared
The PHEIC is the highest level of alert the global health body can issue.
- There are some implications of declaring a PHEIC for the host country.
- Only polio and SARS-CoV-2 were ongoing PHEIC prior to monkeypox.
- Declaring a PHEIC may lead to restrictions on travel and trade.
Back2Basics: Monkeypox
- The monkeypox virus is an orthopoxvirus, which is a genus of viruses that also includes the variola virus, which causes smallpox, and vaccinia virus, which was used in the smallpox vaccine.
- It causes symptoms similar to smallpox, although they are less severe.
- While vaccination eradicated smallpox worldwide in 1980, monkeypox continues to occur in a swathe of countries in Central and West Africa, and has on occasion showed up elsewhere.
- According to the WHO, two distinct clade are identified: the West African clade and the Congo Basin clade, also known as the Central African clade.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Anushilan Samiti
Mains level: Not Much
Union Education and Skill Development Minister has urged NCERT and the Education fraternity to include enough information about Anushilan Samiti, especially in the upcoming National Curriculum Framework
Anushilan Samiti
- Anushilan Samiti was an Indian fitness club, which was actually used as an underground society for anti-British revolutionaries.
- It was founded by Satish Chandra Pramatha Mitra, Aurobindo Ghose and Sarala Devi.
- In the first quarter of the 20th century it supported revolutionary violence as the means for ending British rule in India.
- The organisation arose from a conglomeration of local youth groups and gyms (akhara) in Bengal in 1902.
- It had two prominent, somewhat independent, arms in East and West Bengal, Dhaka Anushilan Samiti (centred in Dhaka), and the Jugantar group (centred in Calcutta).
- It challenged British rule in India by engaging in militant nationalism, including bombings, assassinations, and politically motivated violence.
Revolutionary activities
- The Samiti collaborated with other revolutionary organisations in India and abroad.
- It was led by the nationalists Aurobindo Ghosh and his brother Barindra Ghosh, influenced by philosophies like Italian Nationalism, and the Pan-Asianism of Kakuzo Okakura.
- The Samiti was involved in a number of noted incidents of revolutionary attacks against British interests and administration in India, including early attempts to assassinate British Raj officials.
- These were followed by the 1912 attempt on the life of the Viceroy of India, and the Seditious conspiracy during World War I, led by Rash Behari Bose and Jatindranath Mukherjee respectively.
Defiance from militant nationalism
- The organisation moved away from its philosophy of violence in the 1920s due to the influence of the Indian National Congress and the Gandhian non-violent movement.
- A section of the group, notably those associated with Sachindranath Sanyal, remained active in the revolutionary movement, founding the Hindustan Republican Association in north India.
- A number of Congress leaders from Bengal, especially Subhash Chandra Bose, were accused by the British Government of having links with the organisation during this time.
- The Samiti’s violent and radical philosophy revived in the 1930s, when it was involved in the Kakori conspiracy, the Chittagong armoury raid, and other actions against the administration in British-occupied India.
Other personalities associated with Anushilan Samiti
- Legends like, Deshabandhu Chittaranjan Das, Surendranath Tagore, Jatindranath Banerjee, Bagha Jatin were associated with Anushilan Samiti.
- Dr Hedgewar who established the Rashtriya Swayamsevak Sangh (RSS) was also an alumnus of the Samity.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: ESA in Western Ghats
Mains level: Issues with ESA
The Union Environment Ministry’s latest draft notification on Ecologically Sensitive Areas (ESA) in the Western Ghats is facing stiff opposition in Karnataka.
What is the news?
- The MoEFCC had issued a draft notification that demarcated large parts of Karnataka, Tamil Nadu, Gujarat and Maharashtra as eco-sensitive areas.
- Among these states, Karnataka contains the largest geographical share of the notified areas in the Western Ghats, at 20,668 sq km.
ESA in Western Ghats
- In 2013, the Kasturirangan committee had submitted a report which recommended that 37% of the Western Ghats, covering an area of 59,940 sq km be classified as ESA.
- On the basis of this, several drafts were introduced which were subsequently rejected by the surrounding states, including Karnataka.
What is ESA?
- Eco-Sensitive Zones (ESZs) or Ecologically Fragile Areas (EFAs) are areas notified by the MoEFCC around Protected Areas, National Parks and Wildlife Sanctuaries.
- The purpose of declaring ESZs is to create some kind of “shock absorbers” to the protected areas by regulating and managing the activities around such areas.
- They also act as a transition zone from areas of high protection to areas involving lesser protection.
How are they demarcated?
- The Environment (Protection) Act, 1986 does NOT mention the word “Eco-Sensitive Zones”.
- However, Section 3(2)(v) of the Act, says that Central Government can restrict areas in which any industries, operations or processes or class of industries, operations or processes shall be carried out or shall not, subject to certain safeguards.
- Besides Rule 5(1) of the Environment (Protection) Rules, 1986 states that central government can prohibit or restrict the location of industries and carrying on certain operations or processes on the basis of certain considerations.
- The same criteria have been used by the government to declare No Development Zones (NDZs).
Defining its boundaries
- An ESZ could go up to 10 kilometres around a protected area as provided in the Wildlife Conservation Strategy, 2002.
- Moreover, in the case where sensitive corridors, connectivity and ecologically important patches, crucial for landscape linkage, are beyond 10 km width, these should be included in the ESZs.
- Further, even in the context of a particular Protected Area, the distribution of an area of ESZ and the extent of regulation may not be uniform all around and it could be of variable width and extent.
Activities Permitted and Prohibited
- Permitted: Ongoing agricultural or horticultural practices, rainwater harvesting, organic farming, use of renewable energy sources, and adoption of green technology for all activities.
- Prohibited: Commercial mining, saw mills, industries causing pollution (air, water, soil, noise etc.), the establishment of major hydroelectric projects (HEP), commercial use of wood, Tourism activities like hot-air balloons over the National Park, discharge of effluents or any solid waste or production of hazardous substances.
- Under regulation: Felling of trees, the establishment of hotels and resorts, commercial use of natural water, erection of electrical cables, drastic change of agriculture system, e.g. adoption of heavy technology, pesticides etc, widening of roads.
What does the new draft notification for the Western Ghats say?
- The draft notification demarcates 46,832 sq km in the five states Gujarat, Maharashtra, Karnataka, Goa and Tamil Nadu as ESA in the Western Ghats.
- Kerala is excluded from the draft notification and it had earlier undertaken the exercise of demarcating ESA in the state by physical verification.
- Among the five states, 20,668 sq km of the ESA lies in Karnataka, 1,461 sq km in Goa, 17,340 sq km in Maharashtra, 6,914 sq km in Tamil Nadu and 449 sq km in Gujarat.
- According to the notification, the concerned state governments are responsible for monitoring and enforcing the provisions of the notification.
What are the curbs that the state governments will have to implement?
- The draft notification states there shall be a complete ban on mining, quarrying and sand mining in the ESA.
- All existing mines are to be phased out within five years from the date of issue of the final notification or on the expiry of the existing mining lease.
- It also bars setting up of new thermal power projects and expansion of existing plants in the sensitive area, and the banning of all new ‘Red’ category industries.
- The construction of new townships and area development projects will also be prohibited in the areas.
- ‘Orange’ category industries, with a pollution index score of 41-59, such as jute processing and ‘White’ industries that are considered non-polluting will also be allowed with strict compliance.
What were the suggestions by the Kasturirangan panel?
- The panel, formed in 2012, was tasked with the mandate of taking a “holistic view of the issue, and to bring synergy”.
- It aimed to protecting the environment and biodiversity, while maintaining the needs and aspirations of the local and indigenous people, of sustainable development and environmental integrity of the region.
- The report had recommended a blanket ban on mining, quarrying, red category industries and thermal power projects.
- It also stated that the impact study of infrastructural projects on the forest and wildlife should be conducted before permission is given.
What is Karnataka’s stand on the matter?
- The Karnataka government has been firm in rejecting the implementation of the guidelines.
- It has staunchly opposed to the Kasturirangan committee report on Western Ghats.
- It urged that declaring Western Ghats as ESA would adversely affect the livelihood of people in the region.
- Environmental experts consider the state government’s decision to be disastrous for the biodiversity of the Western Ghats.
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