From UPSC perspective, the following things are important :
Prelims level: About Employment Linked Incentives (ELI)
Why in the news?
The introduction of the new ELI scheme for corporates by the Narendra Modi government acknowledges the disconnect between GDP growth and job creation.
About Employment Linked Incentives (ELI)
The ELI scheme aims to encourage companies to hire more employees by providing financial incentives for each new hire.
Target Sectors: The scheme is expected to focus on labour-intensive sectors such as toys, textiles, apparel, furniture, tourism, and logistics, which have significant potential for job creation.
Incentives Offered: Financial incentives may include tax relief and wage subsidies for new jobs created, along with non-financial incentives like reduced regulatory burdens and support for skill development programs.
Government’s Failure of Initiatives
Previous Economic Strategies: Over the past decade, the Indian government relied on traditional economic models, such as the trickle-down approach and production-linked incentives (PLI), which did not yield the expected job growth.
Initiatives like “Make in India” and corporate tax cuts aimed to stimulate investment but failed to translate into significant employment opportunities.
Jobless Growth: Despite policies designed to boost production, employment growth has been stagnant, with a study indicating a negligible employment growth rate of just 0.01%.
Issue of Job and Ideas Deficit
Jobs Deficit: The lack of job creation has prompted proposals like reserving jobs for locals, reflecting political pressures in a democracy where job scarcity is prevalent.
Ideas Deficit: Economists often suggest reforms in labour, education, and business practices as solutions to job creation, but these are complex and difficult to implement.
Unemployment Trends: The unemployment rate has shown fluctuations, with a reported decline from 6.0% in 2017-18 to 3.2% in 2022-23.
What can be done?
Policy Shift: The ELI scheme represents a significant policy shift towards prioritizing job creation over mere economic output. By encouraging firms to hire rather than invest solely in automation, it aims to address the capital-labour imbalance in the economy.
Support for MSMEs: Special focus on micro, small, and medium enterprises (MSMEs) is crucial, as they employ a substantial portion of the workforce.
Alignment of Goals: Need to Collaborate among various ministries, particularly finance, skill development, and labour, is essential to ensure that skill development aligns with industry needs, enhancing employability and job creation
From UPSC perspective, the following things are important :
Prelims level: Lightning strikes in India
Mains level: NDMA Guidelines for Lightning
Why in the news?
In July, the Odisha government approved a proposal to plant 1.9 million palm trees to mitigate deaths caused by lightning strikes, which were declared a state-specific disaster in 2015.
How many people have lost their lives to lightning in Odisha?
Over the last 11 years, a total of 3,790 people have lost their lives due to lightning strikes in Odisha.
In the previous three fiscal years, 791 fatalities were reported, indicating an increasing frequency of lightning strikes.
On September 2, 2023, Odisha recorded 61,000 lightning strikes in a two-hour period, resulting in the deaths of at least 12 people.
Why are Lightning strikes of particular concern in Odisha?
Odisha is located in a tropical zone and experiences a hot, dry climate that creates ideal conditions for lightning strikes.
The state has the highest number of cloud-to-ground lightning strikes in eastern and central India. The Annual Lightning Report 2023-2024 indicates a significant concentration of lightning activity in this region.
Research indicates that climate change exacerbates lightning activity, with a 10% increase in lightning occurrences for every degree Celsius of warming. This is particularly relevant in Odisha, where climatic factors contribute to frequent lightning events.
With 96% of lightning strikes occurring in rural areas, the most affected populations include farmers and daily wage earners who work outdoors, making them particularly vulnerable during peak agricultural seasons.
How can Odisha defend Itself against lightning strikes?
Planting Palm Trees: The Odisha government has approved a proposal to plant 19 lakh palm trees as a natural defense against lightning strikes. Palm trees are considered effective conductors of lightning due to their height and moisture content, which can absorb lightning and mitigate its impact on the ground.
Financial Commitment: The state has allocated Rs 7 crore for the palm tree plantation initiative and has banned the felling of existing palm trees to enhance this strategy.
Public Awareness and Early Warning Systems: While the state has implemented early warning systems to forecast lightning strikes, experts emphasize the need for widespread public education on safety measures during lightning events.
Concerns: Experts have raised concerns about the effectiveness of palm trees as a long-term solution, noting that it takes 15 to 20 years for them to reach a height where they can effectively mitigate lightning strikes.
NDMA Guidelines for Lightning
Preparation and Awareness: The Local government should educate the communities about lightning safety and the risks associated with thunderstorms.
Seek Shelter: During a thunderstorm, individuals should seek shelter in a fully enclosed building or a hard-topped metal vehicle. Open vehicles and structures such as metal sheds or under-construction buildings are unsafe.
Avoid Trees: Taking shelter under trees is discouraged, as they can attract lightning. If in a wooded area, find the shortest trees for shelter.
Crouching Position: If no shelter is available, crouch down with heels touching and head between the knees to minimize height and reduce risk.
30-30 Rule: After seeing lightning, start counting to 30. If you hear thunder before reaching 30, go indoors. This rule helps assess the distance of the storm.
Way forward:
Installation of Lightning Rods and Conductors: The government should invest in the widespread installation of lightning rods and conductors in rural and vulnerable areas. These devices can provide immediate protection to critical infrastructure, homes, and open fields where farmers and workers are most at risk.
Advanced Early Warning Systems: Need to enhance the existing early warning systems with more accurate, real-time data and ensure these warnings are disseminated quickly through multiple channels, including mobile alerts, community announcements, and local radio.
Main PYQ:
Q Explain the mechanism and occurrence of cloudburst in the context of the Indian subcontinent. Discuss two recent examples. (2022)
From UPSC perspective, the following things are important :
Mains level: The idea of Constitutional Democracy
Why in the news?
The government’s recent decision to lift the ban on government employees participating in RSS activities threatens to undermine the remnants of a free and fair bureaucracy.
Whether or not civil servants are banned from joining RSS
Lifting the Ban: The Central government has lifted a 58-year ban on government servants joining the Rashtriya Swayamsevak Sangh (RSS). This ban was originally imposed in 1966 due to concerns about the organization’s political activities.
Government Justification: The government stated that the activities of the RSS are no longer deemed incompatible with civil service conduct rules, suggesting that the organization has been wrongly categorized as a banned entity.
Judicial Commentary: The Madhya Pradesh High Court remarked that it took nearly five decades for the government to recognize its mistake in banning civil servants from joining the RSS, indicating a shift in perception regarding the organization.
Political Reactions: The decision has sparked controversy, with opposition parties criticizing it as a threat to India’s secular fabric and accusing the government of politicizing the civil service. Critics argue that the RSS’s ideology conflicts with the principles of a secular state.
Support from RSS: The RSS welcomed the decision, asserting that it strengthens India’s democratic system and has historically contributed to national unity and social service.
The idea of Constitutional Democracy
Constitutional democracy is a system of government that combines the principles of democracy with a constitution that limits the powers of the state and protects the rights of citizens.
The people are the ultimate source of power, and the government derives its authority from their consent. The constitution places restrictions on the government’s actions and establishes the structure of the government.
There is a separation of powers between the legislature, executive, and judiciary, with each acting as a check on the others. The rule of law applies equally to all citizens and the government itself.
Minority rights are protected, and the will of the majority is balanced against the rights of individuals and minority groups. Constitutional democracy guarantees some rights to everyone, irrespective of their status as a minority or majority.
The origins of constitutional democracy can be traced back to Enlightenment ideas of natural rights, social contract theory, and the separation of powers. The United States Constitution, adopted in 1787, was a pioneering example of a written constitution establishing a federal system of government with a separation of powers
RSS Ideology vs Constitutional Democracy
Conflict of Ideologies: The lifting of the ban raises questions about the relationship between the RSS’s ideology and the constitutional framework of India. The RSS promotes a vision of a Hindu nation, which may conflict with the secular and pluralistic ideals enshrined in the Constitution.
Constitutional Morality: The Constitution aims to create a society that respects diverse religions and cultures, contrasting with the RSS’s focus on a singular religious identity. This juxtaposition presents challenges to the commitment of civil servants to uphold constitutional values.
Historical background of the Constitution: The Constitution was designed to restructure Indian society post-independence, ensuring inclusivity and rejecting the idea of a state aligned with a single religious community. The RSS’s ideology, which criticizes the post-1947 restructuring, poses a fundamental challenge to this vision.
Democratic Challenges: The existence of non-democratic and exclusionary ideas within a democratic framework complicates governance. The rise of Hindutva politics, which emphasizes majoritarianism and exclusion, threatens the principles of constitutional democracy.
Need for Reinforcement: To counter the influence of ideologies that contradict constitutional morality, there is a pressing need to reinvigorate the commitment to constitutional democracy among civil servants and the broader public.
Conclusion: To uphold constitutional democracy, it is crucial to reinforce the commitment to secularism, inclusivity, and the rule of law among civil servants and the broader public amidst ideological challenges.
Mains PYQ:
Q To enhance the quality of democracy in India the Election Commission of India has proposed electoral reforms in 2016. What are the suggested reforms and how far are they significant to make democracy successful? (2017)
From UPSC perspective, the following things are important :
Prelims level: Ecologically Sensitive Areas (ESAs)
Mains level: Reason behind the designation of Western Ghat as an ESA
Why in the news?
On Friday, the Central government released the sixth draft notification, designating 56,825.7 square kilometre of the Western Ghats as an ecologically sensitive area (ESA) across the states of Gujarat, Maharashtra, Goa, Karnataka, Kerala, and Tamil Nadu.
Recommendations of the Gadgil and Kasturirangan Committees
Gadgil Committee: Recommended that 75% of the Western Ghats (129,037 sq km) be designated as ecologically sensitive areas (ESAs) with restrictions on development activities.
Kasturirangan Committee: Notified only 37% of the Western Ghats as ESAs, reducing the extent compared to the Gadgil report. It split the region into cultural (human settlements) and natural (non-human settlements) zones.
Ecologically Sensitive Areas (ESAs)
ESAs are regions recognized for their environmental significance, where human activities are regulated to protect biodiversity, ecosystems, and natural habitats. These areas are often home to endemic species of plants and animals and are crucial for maintaining ecological balance.
The Environment (Protection) Act of 1986 allows the Central Government to restrict industrial activities in these sensitive areas to safeguard their ecological integrity. Although the term “Eco-Sensitive Zones” is not explicitly mentioned in the Act, provisions exist to prohibit or regulate activities based on biodiversity and environmental considerations.
The reason behind it:
Biodiversity Hotspot: The Western Ghats is recognized as one of the world’s eight “hottest hotspots” of biological diversity and a UNESCO World Heritage Site. It is home to numerous endemic species and globally threatened flora and fauna, making its protection crucial for conserving biodiversity.
Recent Natural Disasters: The draft notification follows severe landslides in Wayanad, Kerala, which resulted in significant loss of life and property. These events underscored the vulnerability of the region to ecological disasters, highlighting the need for protective measures to prevent further environmental degradation
Opposition from States
State governments, including Kerala, have opposed the proposals in the draft notifications for declaring ESAs along the Western Ghats.
The Kerala government want to reduce the ESA to 9,993.7 sq km from the Kasturirangan committee’s recommendation of 13,108 sq km.
The then Kerala government led by Oommen Chandy opposed the Gadgil report and appointed another panel to come up with an independent report.
New Panel Formed by the Government
In April 2022, the Centre formed another panel to “re-examine suggestions by these six state governments while keeping in view the conservation aspects of the disaster-prone pristine ecosystem, as well as rights, privileges, needs and developmental aspirations of the region”.
The Centre and expert panel held 10 meetings with states having Western Ghats to discuss the fifth draft notification at various forums.
The sixth draft notification, issued on Friday, declared 56,825.7 sq km of the Western Ghats as ESAs in the states of Gujarat, Maharashtra, Goa, Karnataka, Kerala and Tamil Nadu
Way forward:
Integrated Management Plans: The Government should develop and implement integrated management plans that balance ecological conservation with the developmental needs of the region.
Enhanced Monitoring and Enforcement: There is a need to strengthen the regulatory framework by enhancing monitoring mechanisms and enforcing existing environmental laws more stringently.
Mains PYQ:
Q Differentiate the causes of landslides in the Himalayan region and Western Ghats. (2021)
From UPSC perspective, the following things are important :
Prelims level: Axiom-4 Mission
Why in the News?
ISRO has announced the names of Indian astronauts for the upcoming Axiom-4 (Ax-4) manned mission to the International Space Station (ISS).
Indian Crew in Ax-4:
The National Mission Assignment Board has recommended two Gaganyatris (astronauts) as prime and backup Mission Pilot for this mission:
Prime Mission Pilot: Group Captain Shubhanshu Shukla
Backup Mission Pilot: Group Captain Prasanth Balakrishnan Nair
Note: Shukla will be the second Indian to go to space. So far, Wing Commander (Retired) Rakesh Sharma is the only Indian to go to space in 1984.
Objectives:
The recommended Gaganyatris will commence their training for the mission from the 1st week of August 2024. During the mission, the Gaganyatri will:
Undertake selected scientific research.
Conduct technology demonstration experiments on board the ISS.
Engage in space outreach activities.
About Axiom-4 Mission
Axiom Mission 4 (Ax-4) is a private spaceflight organized by Axiom Space.
It aims to transport a crew to the International Space Station (ISS) for a 14-day mission.
This will be Axiom Space’s fourth mission to the ISS, following their previous missions (Ax-1, Ax-2, and Ax-3).
The mission will launch from the Kennedy Space Center in Florida using SpaceX’s Falcon 9 rocket.
The spacecraft for this mission is a SpaceX Crew Dragon, known for its advanced technology and safety features.
This mission is organized in collaboration with NASA, highlighting a strong partnership between private space companies and government space agencies to further space exploration and research.
Crew:
Peggy Whitson: A veteran astronaut with extensive experience, having completed multiple missions to the ISS.
Sławosz Uznanski: A Polish astronaut joining the mission, marking a significant milestone for Poland in space exploration.
Tibor Kapu: A Hungarian astronaut, adding to the diversity of the mission crew.
Group Captain Shubhanshu Shukla: An Indian astronaut, making headlines as part of this international crew.
Back2Basics: International Space Station (ISS)
The ISS, orbiting 430 kilometers above Earth, completes 16 orbits daily, witnessing 16 sunrises and sunsets.
The ISS orbits Earth every 90 minutes at 8 km per second.
Spanning 109 meters, it’s almost as long as an American football field.
The ISS includes 6 sleeping areas, 2 bathrooms, a gym, and a panoramic view bay window.
Its solar array wingspan is 109 meters, and the station houses about 13 km of electrical wiring.
The ISS’s journey began on November 20, 1998, with Russia’s Zarya Control Module.
The US added the Unity Node 1 module on December 4, 1998, marking the start of a functional space lab.
The station evolved into its current form after 42 assembly flights.
PYQ:
[2019] What is India’s plan to have its own space station and how will it benefit our space programme?
From UPSC perspective, the following things are important :
Prelims level: Features of the Pradhan Mantri Surakshit Matritva Abhiyan (PMSMA)
Why in the News?
An Extended Pradhan Mantri Surakshit Matritva Abhiyan (E-PMSMA) strategy was launched to ensure quality Antenatal Care (ANC) for pregnant women.
The strategy focuses on individual tracking of high-risk pregnancies (HRP) and provision of additionalPMSMA sessions beyond the 9th of every month.
AboutHigh-Risk Pregnancy:
A high-risk pregnancy involves greater risk of health complications for the mother, the foetus, or both, due to pre-existing medical conditions, conditions that develop during pregnancy, or foetal issues.
Common Factors:
Maternal Health Conditions: Pre-existing diabetes, hypertension, HIV, kidney disease, or conditions arising during pregnancy like gestational diabetes and preeclampsia.
Obstetric Factors: Previous caesarean section, history of preterm labor, multiple pregnancies, and congenital malformations.
About Pradhan Mantri Surakshit Matritva Abhiyan (PMSMA)
Details
About
An initiative to provide quality antenatal care (ANC) to all pregnant women.
Launch
October 2016
Target Group
All pregnant women, especially those in their second and third trimesters.
Frequency
Services provided on the 9th of every month at government health facilities.
Objective
Ensure safe motherhood by providing comprehensive and quality antenatal care universally.
Key Functions
General Check-Up: Physical and clinical examinations by medical professionals.
Laboratory Investigations: Routine blood tests, urine tests, and other necessary laboratory investigations.
Ultrasound: Ultrasound examination to monitor foetal growth and development.
Counseling: Nutritional and lifestyle counseling to ensure a healthy pregnancy.
High-Risk Identification: Screening and identification of high-risk pregnancies and appropriate referrals for specialized care.
Key Features
Free of Cost: All services under PMSMA are provided free of cost.
Fixed Day ANC Services: Antenatal care services are provided on a fixed day every month.
Lab Investigations: Basic investigations like Hb, urine albumin, RBS, malaria test, VDRL test, blood grouping, CBC, ESR, and USG.
Public-Private Partnership: Encourages participation of private sector healthcare providers in providing ANC services.
Incentives: Incentives for healthcare providers who participate in the program.
Categorization of Pregnant Women
Green Sticker – for women with no risk factor detected
Red Sticker – for women with high risk pregnancy
BlueSticker – for women with Pregnancy Induced Hypertension
YellowSticker – pregnancy with co-morbid conditions such as diabetes, hypothyroidism, STIs
Benefits
Improved Maternal Health: Regular and comprehensive ANC helps in early detection and management of complications, improving maternal health outcomes.
Reduced Mortality Rates: Timely and quality care reduces maternal and infant mortality rates.
Health Education: Provides health education and counseling to pregnant women, promoting better health practices.
High-Risk Management: Identifies and manages high-risk pregnancies effectively, ensuring specialized care for those who need it.
PYQ:
[2024] With reference to the ‘Pradhan Mantri Surakshit Matritva Abhiyan’, consider the following statements:
1. This scheme guarantees a minimum package of antenatal care services to women in their second and third trimesters of pregnancy and six months post-delivery health care service in any government health facility.
2. Under this scheme, private sector health care providers of certain specialities can volunteer to provide services at nearby government health facilities.
Which of the statements given above is/are correct?
From UPSC perspective, the following things are important :
Prelims level: Schemes mentioned in the newscard
Mains level: NA
Why in the News?
For better implementation and efficient monitoring, all schemes implemented by the Ministry for the betterment of children have been consolidated into 3 verticals:
These verticals aim to improve nutrition and health indicators, ensure safety and empowerment of women, and provide protection and welfare for children in difficult circumstances.
The Anganwadi Services Scheme, POSHAN Abhiyaan, and Scheme for Adolescent Girls have been reorganized into three primary sub-verticals:
Nutrition Support: For POSHAN and Adolescent Girls.
Early Childhood Care and Education: Targeting children aged 3-6 years.
Anganwadi Infrastructure: Upgrading and modernizing Saksham Anganwadis.
Key Features:
Fortified rice supplied to Anganwadi Centres to meet micronutrient requirements and control anemia among children.
Emphasis on the use of millets for Hot Cooked Meals at least once a week and Take Home Ration (THR) at Anganwadi centers.
[2] Mission Shakti
Sambal: Focuses on the safety and security of women.
Includes schemes like One Stop Centres (OSC), Women Helpline (181-WHL), and Beti Bachao Beti Padhao (BBBP).
Samarthya: Aims at the empowerment of women.
Encompasses schemes like Pradhan Mantri Matru Vandana Yojana (PMMVY), Ujjwala, Swadhar Greh (renamed as Shakti Sadan), Working Women Hostel (renamed as Sakhi Niwas), National Hub for Empowerment of Women (NHEW), and National Creche Scheme (renamed as Palna).
[3] Mission Vatsalya
Objective: To provide better outreach and protection for children in need of care in a mission mode.
Goals:
Support and sustain children in difficult circumstances.
Develop context-based solutions for the holistic development of children from varied backgrounds.
Encourage innovative solutions through green field projects.
Facilitate convergent action by gap funding if required.
PYQ:
[2016] Which of the following are the objectives of ‘National Nutrition Mission’?
1. To create awareness relating to malnutrition among pregnant women and lactating mothers.
2. To reduce the incidence of anaemia among young children, adolescent girls and women.
3. To promote the consumption of millets, coarse cereals and unpolished rice.
4. To promote the consumption of poultry eggs.
Select the correct answer using the code given below:
From UPSC perspective, the following things are important :
Prelims level: Vadhavan Port
Why in the News?
The Ministry of Ports, Shipping and Waterways has approved the project proposal for setting up a Major Port at Vadhavan, Palghar District of Maharashtra.
About Vadhavan Port Project
The project involves the development of core infrastructure, terminals, and other commercial infrastructure through a public-private partnership (PPP) mode.
The shareholding for the project is divided between the Jawaharlal Nehru Port Authority (74%) and the Maharashtra Maritime Board (26%).
The project aims to create a total capacity of 298 million metric tonnes per annum (MMTPA).
The port will accommodate mainline mega vessels operating on international shipping routes connecting the Far East, Europe, the Middle East, Africa, and America.
Existing Major Ports in India
India has 12 Major Ports: Chennai, Cochin, Deendayal (Kandla), Jawaharlal Nehru (Nhava Sheva), Kolkata, Mormugao, Mumbai, New Mangalore, Paradip, V.O. Chidambaranar (Tuticorin), Visakhapatnam, and Kamarajar Port Limited.
Private Sector participation is allowed in Major Ports for specific projects/berths/terminals through concession agreements for a specific period via open competitive bidding on revenue share/royalty between the Concessionaire and the Major Port Authority.
After the expiry of the concession period, the asset is handed over to the Port Authority.
Significance of Major Ports
Major ports play a critical role in facilitating international trade and commerce.
They serve as gateways for the import and export of goods, significantly contributing to the country’s economy.
Ports generate substantial revenue for the government through customs duties, port fees, and other related charges.
Ports facilitate international collaboration and partnerships, enhancing diplomatic and trade relations with other countries.
PYQ:
[2016] Recently, which of the following States has explored the possibility of constructing an artificial inland port to be connected to sea by a long navigational channel?
From UPSC perspective, the following things are important :
Prelims level: Bordering countries of Vietnam
Mains level: Importance of Vietnam for India
Why in the news?
During his welcome of Vietnamese Prime Minister Pham Minh Chinh, Prime Minister Narendra Modi emphasized the significance of freedom of navigation while subtly referencing China.
Evolution of Bilateral Relations to Strategic Partnership
Early Relations: Cultural and economic links between India and Vietnam date back to the 2nd century, with significant support from India during Vietnam’s struggles against colonialism and foreign intervention, particularly during the Vietnam War.
Formal Diplomatic Relations: Official diplomatic relations were established in 1992, marking the beginning of extensive economic ties, including cooperation in oil exploration, agriculture, and manufacturing.
Upgrade to Strategic Partnership (2007): The relationship was elevated to a “Strategic Partnership” during Vietnamese Prime Minister Nguyen Tan Dung’s visit to India in July 2007. This marked a significant step in formalizing cooperation across various sectors, particularly in defence and security.
Comprehensive Strategic Partnership (2016): During Indian Prime Minister Narendra Modi’s visit to Vietnam in September 2016, the partnership was further upgraded to a “Comprehensive Strategic Partnership.” This upgrade emphasized enhanced cooperation in defence, trade, and cultural exchanges, as well as a shared commitment to regional security.
Vietnam’s Remarkable Strides under Communist Party of Vietnam (CPV) Leadership
Economic Development: Under the CPV’s leadership, Vietnam has experienced significant economic growth and development, embracing a foreign policy of independence and multilateralism.
This approach has positioned Vietnam as a reliable partner in the region, fostering deeper economic ties with countries like India.
Strategic Investments: Vietnam has actively sought to attract Indian investments in various sectors, including renewable energy, pharmaceuticals, and technology.
The Vietnamese government has expressed gratitude for India’s support during the COVID-19 pandemic, particularly in vaccine distribution, which has further solidified ties between the two nations.
Building Bridges in Strategic Relationship through Foreign Policy
Shared Vision for the Indo-Pacific: Both Prime Ministers emphasized their commitment to a free, open, and rules-based Indo-Pacific.
Indian PM’s assertion that India supports development, not expansionism, reflects a mutual stance against aggressive territorial claims, particularly in the South China Sea, where both nations advocate for adherence to international law.
Collective Approach to Conflicts: The leaders highlighted the importance of a collective approach to resolving regional conflicts, including those in Myanmar and West Asia.
This stance underscores their commitment to multilateralism and regional stability, with Vietnam recognizing India’s role as a stabilizing force in the Indo-Pacific.
Significance of the Visit
Strengthening Strategic Ties: Prime Minister Chinh’s visit signifies a deepening of the strategic partnership, with both sides committing to enhanced cooperation in defence, maritime security, and economic development.
The agreement on a $300 million credit line for Vietnam’s maritime capabilities is a notable outcome of the discussions.
Cultural and Economic Connectivity: The visit also marked the signing of multiple agreements across various sectors, including customs, agriculture, and traditional medicine, demonstrating a comprehensive approach to enhancing bilateral relations.
The establishment of digital payment connectivity is another step towards strengthening economic ties.
Way forward:
Strengthening Economic and Trade Ties: Both nations should focus on achieving the proposed bilateral trade target of $20 billion by expanding cooperation in key sectors such as renewable energy, technology, and agriculture.
Enhancing Defense and Security Cooperation: To address regional security challenges, particularly in the context of the South China Sea, India and Vietnam should deepen their defence and security collaboration.
From UPSC perspective, the following things are important :
Prelims level: Renewable energy
Mains level: Significance of Pumped Storage Projects
Why in the news?
The Union Budget for 2024-25 announced that “a policy will be introduced to promote pumped storage projects aimed at electricity storage and ensuring the seamless integration of the increasing share of renewable energy.
Why is renewable power generation subject to variations and weather changes?
Due to Intermittent nature: Renewable energy sources, particularly solar and wind, are inherently intermittent. Solar energy is only available during daylight hours and is affected by weather conditions such as cloud cover, while wind energy varies with wind speed and direction. This variability leads to fluctuations in power generation, making it challenging to match supply with demand consistently.
Daily and Seasonal Variations: The generation capacity of renewable sources can change significantly over short periods (hours to days) and longer periods (seasonal). For instance, solar power generation peaks during sunny days and drops to zero at night, while wind power can vary greatly depending on seasonal weather patterns.
Significance of Pumped Storage Projects
Grid Stabilization: Pumped storage projects are critical for stabilizing the power grid by addressing the variability and intermittency of renewable energy sources like solar and wind.
Energy Storage Capacity: PSPs account for over 94% of the installed global energy storage capacity, making them the most widely used technology for large-scale energy storage.
Flexible Energy Generation: These projects can provide both base load and peaking power, offering flexibility in energy generation.
Environmental Benefits: Pumped storage is a clean and environmentally friendly technology.
Economic Viability: The cost of energy from pumped storage is competitive compared to other energy storage technologies.
How do Power Managers decide which energy source to use?
Use of forecasting Techniques: Power managers utilize advanced forecasting techniques to predict renewable energy generation based on expected weather conditions. This allows them to plan the operation of different power plants in advance, ensuring a steady supply of electricity.
Demand and Supply Management: Decisions on which energy source to use are based on real-time demand and the availability of renewable energy. When there is a surplus of renewable energy (e.g., during sunny or windy periods), it may be used to pump water in pumped storage systems. Conversely, when renewable generation is low, power managers may rely on more stable sources like hydro, coal, or nuclear power to meet demand.
Where are some of the Pumped Storage Projects of India situated?
Kadamparai: Located in Tamil Nadu, this facility has a capacity of 400 MW and operates by pumping water to a higher reservoir during periods of surplus power generation.
Other Notable Projects: India has several other pumped storage projects, including those at Nagarjunasagar, Kadana, and Panchet. These facilities contribute to managing the variability of renewable energy generation in the country.
How do the reservoirs in Kadamparai, Tamil Nadu operate?
The Kadamparai pumped storage plant consists of two reservoirs at different elevations. Water is pumped from the lower reservoir to the upper reservoir when there is surplus power available, typically from solar or wind sources.
When demand rises, especially during peak evening hours, water flows from the upper reservoir to the lower reservoir, turning turbines to generate electricity. This operation allows the plant to provide power for three to four hours during peak demand periods, effectively stabilizing the grid.
The plant can switch between pumping and generating modes, allowing it to respond quickly to changes in power demand. This flexibility is crucial for integrating variable renewable energy sources into the grid.
Conclusion: The need to Develop a robust and flexible grid infrastructure that can efficiently handle the integration of renewable energy sources is crucial. Implementing smart grid technologies, including real-time monitoring, advanced forecasting techniques, and automated demand-response systems, can optimize the balance between supply and demand.
However, the seven-judge Bench, led by Chief Justice of India (CJI) D.Y. Chandrachud, emphasized that this must be grounded on “quantifiable and demonstrable data” rather than political motivations.
Why sub-classification is necessary?
Addressing Inequality Within SCs: The Supreme Court ruling emphasizes that SCs are not a homogeneous group. Instead, there are significant disparities in socio-economic and educational status among different castes within the SC category.
Sub-classification allows for the identification of those who are more disadvantaged and ensures that benefits are equitably distributed among them.
Equitable Distribution of Benefits: States have argued that despite existing reservations, certain castes remain grossly underrepresented compared to others.
Sub-classification aims to create separate quotas for these underrepresented groups within the SC quota, thereby promoting fairness and equity in the distribution of affirmative action benefits.
Legal Precedent and Historical Evidence: The majority opinion of the Supreme Court referenced historical and empirical evidence indicating that specific castes within the SCs face greater oppression and discrimination.
Judicial Oversight: The ruling stipulates that any sub-classification must be based on “quantifiable and demonstrable data” regarding levels of backwardness and representation, ensuring that the process is transparent and justifiable.
What does the creamy layer principle say?
Exclusion of the Creamy Layer: The creamy layer principle refers to the exclusion of the more affluent and advanced members within a backward class from receiving reservation benefits. This principle is currently applied to Other Backward Classes (OBCs) but has been suggested for implementation within SCs and STs as well.
Achieving True Equality: Justice B.R. Gavai, in his concurring opinion, emphasized the need for states to identify and exclude the creamy layer among SCs and STs to ensure that affirmative action benefits reach those who are genuinely disadvantaged.
Historical reason: The creamy layer principle has been upheld in various Supreme Court judgments (Indra Sawhney judgment in 1992), which have recognized that certain individuals within reserved categories may have advanced socio-economic status and should not benefit from reservations intended for the disadvantaged.
Way forward:
Data Collection and Analysis: States should prioritize the collection of comprehensive and quantifiable data on the socio-economic status of different castes within the SC and ST categories.
Policy Framework for Creamy Layer Exclusion: States should develop clear policies to identify and exclude the creamy layer within SCs and STs from reservation benefits.
From UPSC perspective, the following things are important :
Prelims level: About NDMA
Mains level: Roles and functions of NDMA
Why in the news?
Union Minister of State for Home Nityanand Rai presented the Disaster Management (Amendment) Bill, 2024 in the Lok Sabha on Thursday.
Proposed Provisions in the Bill
Creation of a Disaster Database: The Bill mandates the establishment of a comprehensive disaster database at both national and state levels, which will include disaster assessments, fund allocation details, expenditures, preparedness and mitigation plans, and a risk register based on the type and severity of risks.
Urban Disaster Management Authority: It proposes the formation of an “Urban Disaster Management Authority” for state capitals and large cities with municipal corporations, aimed at enhancing local disaster management capabilities.
Empowerment of NDMA and SDMAs: The Bill empowers the National Disaster Management Authority (NDMA) and State Disaster Management Authorities (SDMAs) to prepare disaster management plans, replacing the previous role of the National Executive Committee and State Executive Committees.
Periodic Risk Assessment: The NDMA is tasked with periodically assessing the entire range of disaster risks in the country, including emerging risks due to extreme climate events.
Statutory Status for Pre-Act Organizations: The Bill provides statutory recognition to certain pre-existing organizations, such as the National Crisis Management Committee and the High-Level Committee.
Penalties for Non-Compliance: It includes provisions allowing the Central and State governments to impose penalties for actions that hinder disaster management efforts, with fines not exceeding ₹10,000.
Substantial Questions on Excessive Powers
Concerns Over Central Authority: Opposition members, including Congress leader Manish Tewari, raised concerns that the Bill grants excessive rule-making powers to the Central government, potentially encroaching upon the legislative powers reserved for State governments.
Constitutional Validity: Questions were raised regarding the constitutional basis for the Bill, as disaster management is not explicitly mentioned in the subjects of the Concurrent List.
Multiplicity of Authorities: Critics, including Trinamool Congress member Sougata Roy, expressed concerns that the creation of multiple authorities could lead to confusion and bureaucratic inefficiencies, potentially hampering effective disaster response.
Need to aim for more clarity
Clarification of roles: The Bill aims to bring more clarity and convergence in the roles of various authorities and committees involved in disaster management, addressing the need for streamlined coordination among stakeholders.
Enhanced Local Management: By empowering local authorities through the establishment of Urban Disaster Management Authorities, the Bill seeks to ensure that disaster management plans are more relevant and tailored to specific regional challenges.
Alignment with Development Plans: The Bill emphasizes the need to mainstream disaster management into development plans, aligning with recommendations from the Fifteenth Finance Commission and ensuring that disaster risk reduction is integrated into broader governance frameworks.
Way forward:
Strengthening Collaboration with State Governments: To address concerns about excessive central authority and potential overlaps with state powers, it is crucial to establish a framework for ongoing collaboration between the Central and State Disaster Management Authorities.
Implementing a Comprehensive Training and Capacity-Building Program: The successful implementation of the proposed Urban Disaster Management Authorities and the broader disaster management framework will depend on the capacity of local officials and stakeholders.
Mains PYQ:
Q Discuss the recent measures initiated in disaster management by the Government of India departing from the earlier reactive approach. (2020)
From UPSC perspective, the following things are important :
Prelims level: FCI, Open Market Sale Scheme
Why in the News?
The Union Food and Consumer Affairs Minister announced that States can now directly purchase rice from the Food Corporation of India (FCI) under the Open Market Sale Scheme (Domestic) without participating in e-auctions.
Key Announcements:
Direct Rice Purchase of Rice by the States:
States can procure rice directly from FCI at ₹2,800 per quintal (excluding transportation cost), down from the earlier rate of ₹2,900 per quintal.
From UPSC perspective, the following things are important :
Prelims level: SGB Scheme
Why in the News?
Recent reports suggest that the government might reduce or discontinue the Sovereign Gold Bond (SGB) scheme due to its high cost.
Decline in Popularity of SGB:
This speculation follows the Union budget’s decision to slash customs duties on gold and silver from 15% to 6%.
The reduction in customs duties is expected to decrease demand for SGBs, which has already led to a 2-5% drop in their prices on the National Stock Exchange (NSE).
About Sovereign Gold Bonds (SGBs)
Details
Launch
2015
Nature
Government securities denominated in grams of gold.
Issued by RBI.
Objective
Reduce dependence on gold imports and shift savings from physical gold to paper form.
Eligibility
Resident in India, including individuals, HUFs, trusts, universities, and charitable institutions.
Denomination and Tenor
Denominated in multiples of grams of gold, with a basic unit of 1 gram.
Tenor of 8 years with an exit option from the 5th year on interest payment dates.
Investment Limits
Minimum: 1 gram of gold.
Maximum: 4 kg for individuals and HUFs,
20 kg for trusts and similar entities per fiscal year.
Benefits
Quantity of gold protected, receiving market price at redemption.
Eliminates storage risks and costs.
Assured market value at maturity and periodic interest.
Free from making charges and purity issues.
Held in RBI books or demat form, eliminating scrip loss risk.
Add-ons
Can be used as collateral for loans.
Loan-to-value (LTV) ratio set equal to ordinary gold loans.
PYQ:
[2016] What is/are the purpose/purposes of Government’s ‘Sovereign Gold Bond Scheme’ and ‘Gold Monetization Scheme’?
To bring the idle gold lying with Indian households into the economy
To promote FDI in the gold and jewellery sector
To reduce India’s dependence on gold imports
Select the correct answer using the codes given below:
From UPSC perspective, the following things are important :
Prelims level: SAI, BCCI
Why in the News?
The Health Ministry has requested the Sports Authority of India (SAI) and the Board of Control for Cricket in India (BCCI) to implement measures to prevent surrogate advertisements of tobacco and alcoholrelated products by sportspersons.
AboutSports Authority of India (SAI)
Details
Establishment
Founded in 1984 by the Ministry of Youth Affairs and Sports, Government of India
Headquarters
Jawaharlal Nehru Stadium Complex, New Delhi, India
Objectives
Promote sports and physical education
Develop sports infrastructure
Identify and nurture sports talent
Conduct coaching and training programs
Key Programs
National Sports Talent Contest Scheme (NSTC)
Special Area Games (SAG)
SAI Training Centres (STC)
Centres of Excellence (COE)
National Sports Academies (NSA)
Major Facilities
Jawaharlal Nehru Stadium, New Delhi
Indira Gandhi Stadium Complex, New Delhi
Major Dhyan Chand National Stadium, New Delhi
Netaji Subhas National Institute of Sports (NSNIS), Patiala
Notable Initiatives
Khelo India Program
Target Olympic Podium Scheme (TOPS)
Mission Olympic Cell (MOC)
About Board of Control for Cricket in India (BCCI)
Details
Establishment
Founded in December 1928
Headquarters
Cricket Centre, Wankhede Stadium, Mumbai, India
Objectives
Promote and develop cricket in India
Organize domestic and international cricket matches
Identify and nurture cricket talent
Maintain cricket infrastructure and facilities
Key Responsibilities
Selection of national cricket teams (men’s, women’s, and junior)
Organization of domestic cricket tournaments
Administration of Indian Premier League (IPL)
Conducting training and coaching programs
Major Tournaments
Indian Premier League (IPL)
Ranji Trophy
Vijay Hazare Trophy
Syed Mushtaq Ali Trophy
Duleep Trophy
Irani Cup
Funding and Support
Funded through sponsorships, broadcasting rights, and match revenues
Provides financial assistance and contracts to cricketers
Reforms
Justice Lodha Committee: Result of the report submitted by the Justice Mukul Mudgal Committee after an investigation into the 2013 IPL betting scandal.
PYQ:
[2021] Consider the following statements in respect of the ICC World Test Championship:
1. The finalists were decided by the number of matches they won.
2. New Zealand was ranked ahead of England because it won more matches than England.
The swimming events in the ongoing Paris Olympics were postponeddue to concerns about the water quality of the River Seine.
Issues with River Seine’s Water Quality:
Old Sewage System: Paris’ aged sewage system combines rainwater and wastewater in the same pipes, leading to overflow during heavy rains.
Untreated Sewage Discharge: Overflowing pipes cause untreated sewage to be discharged directly into the Seine instead of being treated.
Wildlife Contamination: Heavy rains wash wildlife, such as rodents, into the river, adding to the contamination.
E. coli Threat: The River often has high levels of E. coli bacteria, which can cause severe gastrointestinal and urinary tract infections.
Exceeding Safe Levels: Following heavy rains, E. coli levels in the Seine frequently exceed the safe threshold of 900 colony-forming units (cfu) per 100 ml of water.
Long-term Pollution: The Seine has been historically polluted, with a swimming ban in place since 1923 due to health risks.
Health Risks: High contamination levels pose significant health risks to swimmers, including infections and illnesses.
About River Seine
Details
Country
France
Length
777 km
Major Cities Along Course
Paris, Troyes, Melun, Rouen, Le Havre
Major Tributaries
Aube, Marne, Yonne, Oise, Eure
Population in Basin
About 17 million people, including the Paris metropolitan area
Navigability
Navigable for about 560 kilometers from the estuary to Burgundy
Estuary Location
Empties into the English Channel at Le Havre and Honfleur
Estuary Type
Tidal estuary with significant tidal influence up to Rouen
Historical Significance
Central to Paris, with landmarks like Notre-Dame Cathedral, Eiffel Tower, and the Louvre along its banks
UNESCO Status
Banks of the Seine in Paris are listed as a UNESCO World Heritage Site
Economic Importance
Major waterway for commercial shipping and tourism; key ports include Paris, Rouen, and Le Havre
Recreational Activities
Popular for river cruises, boating, fishing, and walking along its banks
PYQ:
[2020] Consider the following pairs?
River: Flows into
Mekong: Andaman sea
Thames: Irish Sea
Volga: Caspian Sea
Zambezi: Indian Ocean
Which of the pairs above is/are correctly matched?
From UPSC perspective, the following things are important :
Prelims level: Rashtriya Gokul Mission and its Components
Why in the News?
The Department of Animal Husbandry and Dairying is implementing the Rashtriya Gokul Mission.
The mission aims to develop and conserve indigenous bovine breeds, genetically upgrade the bovine population, and enhance milk production and productivity.
AboutRashtriya Gokul Mission:
Details
About
Initiated in December 2014.
Announced under the National Programme for Bovine Breeding and Dairy Development during the 12th Five Year Plan.
Continued under Rashtriya Pashudhan Vikas Yojana (2021-2026) with a budget of Rs. 2400 crore.
Nodal Ministry
Ministry of Fisheries, Animal Husbandry, and Dairying
Objectives
Enhance productivity of bovines and increase sustainable milk production using advanced technologies.
Propagate the use of high genetic merit bulls for breeding.
Expand artificial insemination coverage by strengthening the breeding network and delivering services at farmers’ doorsteps.
Promote scientific and holistic conservation of indigenous cattle and buffalo rearing.
Significance
Increased productivity, benefiting all cattle and buffaloes in India, with a focus on small and marginal farmers.
Empowers women, who perform over 70% of livestock farming tasks.
Components
Availability of High Genetic Merit Germplasm
Extension of Artificial Insemination Network
Development and Conservation of Indigenous Breeds
Skill Development
Farmers’ Awareness
Research, Development, and Innovation in Bovine Breeding
Implementing Agency
State Implementing Agency (SIA) viz. Livestock Development Boards
Significant Initiatives
Gopal Ratna Awards: For farmers maintaining the best herd of Indigenous Breed and practicing best management practices.
Kamdhenu Awards: For best-managed Indigenous herd by Institutions/Trusts/ NGOs/ Gaushalas or best-managed Breeders’ societies.
Gokul Grams: Integrated cattle development centers focusing on promoting indigenous cattle rearing and conservation in a scientific manner.
National Kamdhenu Breeding Centre (NKBC): Centre of Excellence for the holistic and scientific development and conservation of Indigenous Breeds.
E-Pashu Haat: Web portal providing information on pet cattle and facilitating trading of bovine animals.
Nakul Prajnan Bazaar: E-market portal connecting breeders and farmers for quality, disease-free bovine germplasm.
Pashu Sanjivni: Animal wellness program providing animal health cards and unique identification, uploading data on the National Database.
Advanced Reproductive Technology (ART): Includes Assisted Reproductive Technique- IVF/Multiple Ovulation Embryo Transfer (MOET) and sex-sorted semen technique.
National Bovine Genomic Center for Indigenous Breeds (NBGC-IB): To be established for selecting breeding bulls of high genetic merit at a young age using highly precise gene-based technology.
Key Initiatives for Artificial Insemination:
Multi-Purpose Artificial Insemination Technicians in Rural India (MAITRI): This initiative provides trained manpower for delivering quality artificial insemination services at farmers’ doorsteps.
Nationwide Artificial Insemination Programme: This programme extends artificial insemination coverage among bovines using semen from high genetic merit bulls of indigenous breeds.
Induction of High Genetic Merit Bulls: This program produces bulls with known genetic potential through progeny testing and pedigree selection, supplying these bulls to semen stations for quality semen dose production.
Strengthening of Semen Stations: Efforts are made to improve the quality of semen production by formulating minimum standard protocols and establishing a Central Monitoring Unit for evaluation and grading of semen stations.
Breed Purity Tests: To protect indigenous breeds from indiscriminate breeding, breed purity tests are conducted for all imported germplasm.
Guidelines for Import and Export of Bovine Germplasm: The Department has formulated guidelines to regulate the import of germplasm and prevent the ingress of exotic diseases, ensuring the safety and purity of bovine genetics within the country.
PYQ:
[2012] Consider the following crops of India:
Cowpea
Green gram
Pigeon pea
Which of the above is/are used as pulse, fodder and green manure?
(a) 1 and 2 only
(b) 2 only
(c) 1 and 3 only
(d) 1, 2 and 3
[2015] Livestock rearing has a big potential for providing non-farm employment and income in rural areas. Discuss suggesting suitable measures to promote this sector in India.
From UPSC perspective, the following things are important :
Prelims level: Udham Singh
Why in the News?
On July 31, 1940, Indian revolutionary leader Udham Singh was executed at the Pentonville prison in London for killing Michael O’Dwyer, the former lieutenant governor of Punjab.
Singh was born in Sunam in Punjab’s Sangrur district in 1899.
Political Activism
Became associated with the Ghadar Party while in the US, which was founded by Sohan Singh Bhakna in 1913 and headquartered in California.
Purpose and Actions
In 1934, Singh travelled to London to assassinate Michael O’Dwyer, the former Lieutenant Governor of Punjab during the 1919 Jallianwala Bagh massacre.
Reason for Targeting O’Dwyer
O’Dwyer had ordered Brigadier Reginald Dyer to Amritsar before the massacre, fearing a second Indian mutiny due to Hindu-Muslim unity and demonstrations.
Assassination of O’Dwyer
On March 13, 1940, Singh shot O’Dwyer at a meeting in Caxton Hall, London.
Arrest and Execution
Arrested immediately, held in Brixton prison, sentenced to death, and hanged on July 31, 1940, at Pentonville Prison.
Legacy and Recognition
Regarded as a hero for avenging the Jallianwala Bagh massacre.
Gandhi termed it an “act of insanity”.
He symbolized Hindu-Sikh-Muslim unity by adopting the name ‘RamMohamed Singh Azad’ during his trial.
Posthumous Honors
His remains were returned to India in 1974 and cremated in his village in Sunam.
His statue was installed at Jallianwala Bagh in 2018;
Udham Singh Nagar district in Uttarakhand is named after him.
PYQ:
[2014] The Ghadr (Ghadar) was a:
(a) Revolutionary association of Indians with headquarters at San Francisco.
(b) Nationalist organization operating from Singapore
(c) Militant organization with headquarters at Berlin
(d) Communist movement for India’s freedom with head-quarters at Tashkent
From UPSC perspective, the following things are important :
Prelims level: Endogenous Retroviruses and their significance in human evolution
Why in the News?
Research suggests that around 8% of the human genome is composed of Endogenous Retroviruses (ERVs) often referred to as ‘zombie’ regions.
Retroviruses and Human Genome Integration
Most viruses can’t affect the human genome, but retroviruses are an exception.
Retroviruses can integrate and reshape the genomes of their hosts.
They have an RNA genome and can reverse-transcribe it to DNA, inserting it into the host’s genome.
This process is facilitated by the enzyme reverse transcriptase.
Discovered by Howard Temin and David Baltimore in 1971, this enzyme converts the virus’s RNA into a corresponding DNA sequence.
Historical Discoveries:
Viral causes of cancer were known even before the mechanism was understood.
In 1908, Oluf Bang and Vilhelm Ellermann discovered the viral cause of chicken leukosis.
In 1957, Ludwik Gross isolated a leukaemia-causing virus in mice.
What are Endogenous Retroviruses (ERVs)?
ERVs are remnants of ancient viral infections that have integrated into the genome of the host species.
When these retroviruses infect germ cells (sperm or egg cells), their genetic material can be passed down to the next generation, becoming a permanent part of the host’s DNA.
Zombie Regions:
They refer to inactive viral sequences within the genomethat no longer produce functional viruses but remain as embedded genetic fossils.
These regions are a result of retrovirus integration that has lost its ability to replicate and produce proteins, yet they persist in the host’s DNA.
Evolutionary Significance of ERVs:
In the life cycle of a retrovirus, reverse-transcribed DNA is integrated into the host’s DNA with the help of integrase.
The viral DNA, called a provirus, hijacks human cells, turning them into virus-making factories.
Over tens of thousands of years, many retroviruses have left genomic elementsin human genome, contributing to evolutionary processes.
Example:
Syncytins are genes thought to have descended from ERVs and are crucial for placental development. These genes originally came from viruses and were acquired during mammalian evolution.
Their Contribution to Human Biology
ERVs are highly expressed in the placenta and may influence conditions like preeclampsia.
Researchers found that a particular RNA derived from an ERV is dysregulated in early-onset preeclampsia, suggesting it could be used as a biomarker for the condition.
ERVs play a role in cell-type differentiationduringembryo development.
A protein called MERVL-gag is derived from an ERV. This transition is crucial for producing pluripotent stem cells capable of forming different cell types.
Researchers also found that a human ERV element LTR10affects tumour formation in colorectal cancer.
PYQ:
[2021] Consider the following statements :
1. Adenoviruses have single-stranded DNA genomes whereas retroviruses have double-stranded DNA genomes.
2. Common cold is sometime caused by an adenovirus whereas AIDS is caused by a retrovirus.
Which of the statements given above is/are correct?
From UPSC perspective, the following things are important :
Prelims level: Indexation, Capital Gains Tax Regime.
Mains level: Significance of indexation
Why in the news?
Finance Minister Nirmala Sitharaman’s decision to eliminate indexation for calculating long-term capital gains (LTCG) tax in the Union Budget has received a lukewarm response from stakeholders.
Changes in the LTCG Regime
The new LTCG regime removes the indexation benefit for property, gold, and other unlisted assets.
The LTCG tax rate is reduced from 20% to 12.5%.
For assets purchased before 2001, the fair market value as of April 1, 2001, is considered the cost of acquisition.
What is long-term capital gains (LTCG) tax?
LTCG refers to the profit realized from the sale of an asset that has been held for more than one year. This includes various types of assets such as stocks, bonds, real estate, and mutual funds.
If an asset is sold before this holding period, the gains are classified as short-term capital gains (STCG) and are taxed at different rates.
Why has the Union Finance Minister done away with indexation for computing long-term capital gains (LTCG) tax?
Simplification of Tax Computation: The Finance Minister proposed the change to “ease computation of capital gains for the taxpayer and tax administration.” The intention is to simplify the tax process.
Uniform Tax Rate: Long-term gains on all financial and non-financial assets would now be taxed at a flat rate of 12.5%, replacing the previous tiered structure.
High real estate return: The Income Tax department believes that the real estate returns (12-16% per annum) are higher than indexation for inflation (4-5%). Thus, it predicts “substantial tax savings” for a “vast majority” of taxpayers under the new system.
What is indexation?
Indexation is a mechanism used to adjust the original purchase price of an asset to account for inflation. It helps in calculating the real gains and prevents inflation from inflating the tax liability. The adjusted purchase price is called the indexed cost of acquisition.
How does Indexation help in Tax Savings?
Adjusts the purchase price for inflation: Indexation increases the original purchase price of an asset to account for inflation between the time of purchase and sale. This results in a lower taxable capital gain.
Reduces the taxable capital gains: By revising the purchase price upwards using the Cost Inflation Index, indexation reduces the difference between the sale price and purchase price. This lowers the taxable capital gains amount.
Leads to lower tax liability: With a reduced taxable capital gain, the tax payable on it also decreases. For example, on a ₹48 lakh gain from selling a house, indexation can bring down the taxable gain to ₹28.6 lakh, saving ₹4,264 in tax (assuming 20% LTCG rate).
What has been the feedback from corporates and industry regarding the move?
Concerns Over Increased Tax Liability: Many stakeholders expressed apprehension that the removal of indexation would lead to higher tax obligations for ordinary investors, particularly in the real estate sector.
There are fears that this might encourage the undervaluation of properties to reduce capital gains tax and potentially increase black money transactions in real estate.
Mixed Reactions from Realty Players: While some real estate developers and consultants indicated that the removal of indexation might not significantly impact demand and prices, especially for primary home buyers, they noted that high-end properties could see a drop in demand.
Some developers viewed the changes positively and said that the lowered tax rate (from 20% to 12.5%) could make real estate a more attractive long-term investment.
Government Justifications and Clarifications: The government has argued that the new tax regime simplifies the capital gains tax structure and is beneficial for most taxpayers.
Way forward:
Transitional Provisions: Govt. should implement transitional provisions for existing investments to ease the shift from the old system to the new one.
Strengthen the monitoring system: Need to strengthen monitoring mechanisms to prevent the undervaluation of properties and reduce black money transactions.
Mains PYQ:
Q Comment on the important changes introduced in respect of the Long-term Capital Gains Tax (LCGT) and Dividend Distribution Tax (DDT) in the Union Budget for 2018-2019. (UPSC IAS/2018)
