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  • GST reforms and compensation issue

    The GST compensation issue raises the need for reform in the system. The article discusses this issue and suggests reform.

    Background

    • Three years ago, the Centre and the States of the Union of India struck a grand bargain resulting in GST.
    • The States gave up their right to collect sales tax and sundry taxes, and the Centre gave up excise and services tax. 

    Issue of compensation

    • Consent of the states was secured by a promise of reimbursing any shortfall in tax revenues for a period of five years.
    • This reimbursement was to be funded by a special cess called the GST compensation cess. 
    • The promised reimbursement was to fill the gap for an assured 14% year on year tax growth for five years.

    Why is the Centre denying GST compensation

    • As the economy battles a pandemic and recession, the tax collection has dropped significantly.
    • At the same time, expenditure needs are sharply higher at the State level.
    • Using an equivalent of the Force Majeure clause in commercial contracts, the Centre is abdicating its responsibility of making up for the shortfall in 14% growth in GST revenues to the states.

    Why Central government is wrong in denying the compensation

    •  1) The States do not have recourse to multiple options that the Centre has.[like sovereign bond or a loan against public sector unit shares from the Reserve Bank of India]
    • 2) The Centre can get loans at lower rates of borrowing from the markets as compared to the States.
    • 3) In terms of aggregate public sector borrowing, it does not matter for the debt markets, nor the rating agencies, whether it is the States or the Centre that is increasing their indebtedness.
    • 4) Fighting this recession through increased fiscal stimulus is basically the job of macroeconomic stabilisation, which is the Centre’s domain.
    • 5) Using the alibi of the COVID-19 pandemic causes a serious dent in the trust built up between the Centre and States.
    • It will weaken the foundation of cooperative federalism.

    Reforms needed

    • GST is a destination-based consumption tax, which must include all goods and services with very few exceptions.
    • That widening of the tax base itself will allow us to go back to the original recommendation of a standard rate of 12%, to be fixed for at least a five-year period.
    • Some extra elbow room for the States’ revenue autonomy could be allowed by States non VATable surcharges on a small list of “sin” goods.
    • In the long term there are many changes in consumption patterns, production configurations and locations, which cannot be anticipated and hence a static concept of Revenue Neutral Rate cannot be reference.
    • The commitment to a low and stable rate is a must.
    • We must recognise the increasing importance of the third tier of government. 
    • After 28 years of the 73rd and 74th Amendments, the local governments do not have the promised transfer of funds, functions and functionaries.
    • Of the 12% GST, 10% should be equally shared between the States and the Centre, and 2% must be earmarked exclusively for the urban and rural local bodies.
    • Fresh approach also calls for an overhaul of the interstate GST and the administration of the e-way bill.

    Consider the question “Discuss the issue related to GST compensation to the States by the Central government. Suggest the measures changes in the GST regime to deal with flaws.”

    Conclusion

    GST is a crucial and long-term structural reform which can address the fiscal needs of the future, strike the right and desired balance to achieve co-operative federalism and also lead to enhanced economic growth. The current design and implementation has failed to deliver on that promise. A new grand bargain is needed.

  • [Burning Issue] Fiscal Council in India: Certain solution in uncertain times

    The impact of COVID-19 on the economy is devastating and the government is forced to opt to borrow for spending more in order to support vulnerable households and engineer economic recovery due to the after-effects of COVID-19 pandemic on the economy.

    The BI highlights the need for bipartisan, independent Fiscal Council to report and analyse FRBM discrepancies and inaccurate fiscal projections.

    COVID Times: Fiscal situation and its unpredictability

    • The fiscal deficit of the Centre in 2019-20 as estimated by the Controller General of Accounts (CGA) was 4.6%, 0.8 percentage point higher than the revised estimate.
    • For 2020-21, even without any additional fiscal stimulus, the deficit is estimated at about 7% of GDP as against 3.5% estimated in the Budget due to a sharp decline in revenues.
    • The consolidated deficit of the Union and States could be as high as 12% of GDP and the overall debt could go up to 85%.

    What is the Fiscal Council?

    • A Fiscal Council is an independent fiscal institution (IFI) with a mandate to promote stable and sustainable public finances.
    • They aim to provide nonpartisan oversight of fiscal performance and/or advice and guidance — from either a positive or normative perspective — on key aspects of fiscal policy.
    • These institutions assist in calibrating sustainable fiscal policy by making an objective and scientific analysis.

    Important tasks of these IFIs: 

    1. Independent analysis, review and monitoring and evaluating of government’s fiscal policies and programmes
    2. Developing or reviewing macroeconomic and/or budgetary projections
    3. Costing of budget and policy proposals and programmes
    4. Presenting policymakers with alternative policy options

    Voices for a Fiscal Council

    • The 13th Finance Commission recommended that a committee be appointed by the Ministry of Finance which should eventually transform itself into a Fiscal Council.
    • The FC expected it to conduct an annual independent public review of FRBM compliance, including a review of the fiscal impact of policy decisions.
    • The FRBM Review Committee too made a similar recommendation underlining the need for an independent review by the Finance Ministry appointing the Council.

    Tap to read more about the FRBM Act:

    Explained: Fiscal Responsibility and Budget Management (FRBM) Act

    Why need a fiscal council?

    (1) Burgeoning deficits

    • For the current year, even without any additional fiscal stimulus, the deficit is estimated at about 7% of GDP as against 3.5% estimated in the Budget due to a sharp decline in revenues.
    • The consolidated deficit of the Union and States could be as high as 12% of GDP and the overall debt could go up to 85%.
    • Thus, it is necessary that the government must return to a credible fiscal consolidation path once the crisis gets over.

    (2) Transparency issues

    • Besides large deficits and debt, there are questions of comprehensiveness, transparency and accountability in the Budgets.
    • The practice of repeated postponement of targets, timely non-settlement of bill payments and off Budget financing to show lower deficits has been common.
    • The report of the CAG of India in 2018 has highlighted various advances done to keep the liabilities hidden.

    (3) Fiscal discipline

    • Many economists have faulted the government’s fiscal stance, arguing that this is no time for restraint; the government should spend more to stimulate the economy by borrowing as may be necessary.
    • In 2017, the N.K. Singh committee on the review of fiscal rules set up by the finance ministry suggested the creation of an independent fiscal council that would provide forecasts and advise the government on whether conditions exist for deviation from the mandated fiscal rules.
    • Also in 2018, the D.K. Srivastava committee on fiscal statistics established by the National Statistical Commission (NSC) also suggested the establishment of a fiscal council.

    Fiscal Council can be a game-changer. How?

    • Watchdog of public finance: An unbiased fiscal scrutiny will help raise the level of debate and brings in greater transparency and accountability.
    • Highlights populist measures: Accurate costing of various policies and programmes can help to promote transparency over the political cycle to discourage populist shifts in fiscal policy and improve accountability.
    • Public awareness: Scientific estimates of the cost of programmes and assessment of forecasts could help in raising public awareness about their fiscal implications and make people understand the budget.
    • Rule of law maintenance: The Council will work as a conscience keeper in monitoring rule-based policies, and in raising awareness and the level of debate within and outside Parliament.

    Challenges meddling between

    1) Lack of Political Will

    • Back in 2003 when FRBM was enshrined into law, it was thought of as the magic cure for fiscal ills.
    • The FRBM enjoins the government to conform to pre-set fiscal targets, and in the event of failure to do so, to explain the reasons for deviation
    • The government is also required to submit to Parliament a ‘Fiscal Policy Strategy Statement’ (FPSS) to demonstrate the credibility of its fiscal stance
    • However, there is a lack of in-depth discussion in Parliament on fiscal stance and the submission of the FPSS often passes off without even much notice.

    2) Adding up more to the accountability of the Govt.

    • Fiscal council will give macroeconomic forecasts which the Finance Ministry is expected to use for the budget, and if the Ministry decides to differ from those estimates, it is required to explain why it has differed.
    • Besides, forcing the Finance Ministry to use someone else’s estimates will dilute its accountability.
    • If the estimates go wrong, the Finance Ministry will simply shift the blame to the fiscal council.

    3) Fiscal Bias

    • Governments that are unsure of being re-elected may ignore the long-term consequences of fiscal deficits and use generous fiscal policy to increase their chances of re-election.
    • This may be possible because voters tend to see the short term benefits they can gain from a reduction in taxes and an increase in public spending but are not always fully aware of the possible long-term costs of this.
    • This may explain why unsustainable deficits are not systematically punished by voters

    4) Duplication of Work

    • As of now, both the Central Statistics Office (CSO) and RBI give forecasts of growth and other macroeconomic variables, questions will be raised about the need for Fiscal Council’s projections
    • Another argument made in support of a fiscal council is that it will act as watchdog & prevent the government from gaming the fiscal rules through creative accounting.
    • However, there is already an institutional mechanism in form of CAG to do the job of auditing & fiscal watchdog of government spending.

    Way forward

    • When the markets fail, governments have to intervene. Whenever governments seem obstructed, it is here that we need systems and institutions to ensure checks and balances.
    • In that respect, a Fiscal Council is an important institution needed to complement the rule-based fiscal policy.

    Alternatives to the situation

    • We can expect the CAG to scrutinize the budget after it is presented to Parliament for its fiscal stance and the integrity of the numbers, and give out a public report.
    • The CAG’s office will provide the secretarial and logistic support to the committee from within its resources.

    Global examples

    • The Office for Budget Responsibility (OBR) is a non-departmental public body funded by the UK Treasury, that the UK government established to provide independent economic forecasts and independent analysis of the public finances.
    • We can have a similar official watchdog at our behest!

    Conclusion

    • Of course, a fiscal council is not a ‘silver bullet’; if there is no political will, the institution would be less effective, and if there is political will, there is no need for such an institution.
    • That is also true of the FRBM Act. While we cannot state that the FRBM Act has been an unqualified success, it has also not been an abject failure either.

     

     

    References

    https://www.thehindu.com/opinion/lead/india-does-need-a-fiscal-council/article32432565.ece

    https://www.thehindu.com/opinion/lead/do-we-need-a-fiscal-council/article32046204.ece

    https://en.wikipedia.org/wiki/Fiscal_council

  • Renati Chola Era Inscription

    A rare inscription dating back to the Renati Chola era has been unearthed in a remote village of Kadapa district of Andhra Pradesh.

    Try this PYQ:

    Q.In the context of the history of India, consider the following pairs:

    Term: Description

    1. Eripatti: Land revenue from which was set apart for the maintenance of the village tank
    2. Taniyurs: Villages donated to a single Brahmin or a group of Brahmins
    3. Ghatikas: Colleges generally attached to the temples

    Which of the pairs given above is/are correctly matched?

    (a) 1 and 2

    (b) 3 only

    (c) 2 and 3

    (d) 1 and 3

    Who are the Renati Cholas?

    • The Telugu Cholas of Renadu (also called as Renati Cholas) ruled over Renadu region, the present-day Kadapa district.
    • They were originally independent, later forced to the suzerainty of the Eastern Chalukyas.
    • They had the unique honour of using the Telugu language in their inscriptions belonging to the 6th and 8th centuries.
    • The earliest of this family was Nandivarman (500 AD) who claimed descent from the family of Karikala and the Kasyapa gotra.
    • He had three sons Simhavishnu, Sundarananda and Dhananjaya, all of whom were ruling different territories simultaneously.
    • The family seems to have had its origin in Erigal in the Tunmkur district, situated in the border between Pallava and Kadamba regions.

    About the inscription

    • The inscription so found was engraved on a dolomite slab and shale.
    • The inscription was written in archaic Telugu which is readable in 25 lines — the first side with eleven lines and the remaining on the other side.
    • It was assigned to the 8th Century A.D. when the region was under the rule of Chola Maharaja of Renadu.
    • The inscription seems to throw light on the record of a gift of six Marttus (a measuring unit) of land gifted to a person Sidyamayu, one of the Brahmins serving the temple at Pidukula village.
    • It says the people who safeguard this inscription for future generations will acquire the status of conducting Aswamedha Yajna and those destroying it will incur sin equivalent to causing death in Varanasi.

  • Exercise Kavkaz 2020

    India has turned down Russia’s invitation to participate in the multilateral defence exercise Kavkaz 2020.

    Go through the list for once. UPSC may ask a match the pair type question asking exercise name and countries involved.

    https://www.civilsdaily.com/prelims-spotlight-defence-exercises/

    Exercise Kavkaz 2020

    • The Kavkaz 2020 is also referred to as Caucasus-2020.
    • The exercise is aimed at assessing the ability of the armed forces to ensure military security in Russia’s southwest, where serious terrorist threats persist and preparing for the strategic command-staff drills.
    • The main training grounds that will be involved are located in the Southern Military District.
    • The invitation for participation has been extended to at least 18 countries including China, Iran, Pakistan and Turkey apart from other Central Asian Republics part of the SCO.

    Why didn’t India participate?

    • While it is learned that China has confirmed its participation, Pakistan is also likely to send its troops for the exercise.
    • In the response communicated to Russia, New Delhi cited Covid-19 as the official reason to skip ‘Exercise Kavkaz 2020’.
    • The move comes in the backdrop of a border standoff with China in eastern Ladakh.

    Earlier instances

    • Exercise Tsentr last year had the participation of India, Pakistan and all Shanghai Cooperation Organisation (SCO) member-nations.
    • India had participated in SCO peace mission exercise in 2018, and in 2019, for the first time, was involved in a strategic command and staff exercise as part of Exercise Tsentr.

  • Despite the messaging, it is still advantage China

    The article examines whether India has been proving a favourable alternative to China or not.

    Is India becoming alternate supply source and investment destination?

    • Despite media reports and strong messaging from Washington, fewer U.S. companies than predicted might quit China.
    • Companies focused on the Chinese domestic market rather than as a base for exports will likely remain, at least for now.
    • Those that do leave may not choose India as a relocation destination.
    • Many U.S. companies with experience working with China are not convinced that India has China’s established industrial base and expertise.
    • They also see other Asian countries as more competitive.

    India’s strengths

    • Democracy: India’s identity as a democratic “un-China” is one of its strongest selling points.
    • Strong IPR: There is no threat of stealing of intellectual property rights.
    • No coercive tactics: Foreign companies in India are not subject to coercive tactics as in China.
    • Institutions: India’s open and vibrant press, an independent judiciary, and other advantages of democratic governance also provide a contrast to China.
    • Domestic market:India’s well-off domestic market also attracts foreign investors.

    Why China is a favoured destination

    • China offers many advantages, such as a manufacturing infrastructure and skill level that allows innovations to move quickly from prototype to product.
    • China’s specialised industrial zones are massive, collocating companies, factories, logistics, and even research and universities.

    Way forward

    1) Focus on the States

    • India can start by focusing development in those Indian States that have already demonstrated the ability to produce and export in key sectors.
    • Foreign capital could also greatly increase infrastructure funds beyond government spending alone.
    • India might also usefully build up new industrial centres with an eye to geography. [for instance-linking the southeast of the country to supply chains in Southeast Asia]

    2) Focus on the policy framework

    • India should take two great steps-
    • 1) Reduce the number of investments needing approval by the Centre.
    • 2)To increase intra-Ministry coordination on foreign direct investment policies.
    • The same coordination could be extended to the appointment of a high-level official or body in the Prime Minister’s Office.
    • This will ensure that all proposed economic policy changes are consistent with the goal of attracting foreign investment.

    Conclusion

    A policy framework that is transparent, predictable, and provides increased consultations with existing and potential foreign company stakeholders before introducing new Indian economic policies, will play a crucial role in determining India’s foreign investment outlook.

  • Implications of World Bank halting ‘Doing Business’ report for India

    India’s ranking in the World Bank’s ‘Ease of Doing Business’ index has improved spectacularly. However, the World Bank recently halted its publication and announced decision to review and assess data changes for last five years.

    Background

    • Citing irregularities of data for a few countries, the World Bank halted its annual publication ‘Doing Business’ report.
    • It will conduct a systematic review and assessment of data changes that occurred subsequent to the institutional data review process for the last five Doing Business reports.

    Why India should be concerned

    • Through improved ranking India sought to attract investments to achieve the targets set for ‘Make in India’.
    • India’s success in boosting its ease of doing business ranking is spectacular, to 63rd rank in 2019, up from the 142nd position in 2014.
    • Policymakers celebrated it to signal India’s commitment to “minimum government and maximum governance”.
    • The World Bank decision to audit the ‘Doing Business’ report for the last five years may soon cause discomfort by shining a spotlight on the sharp rise in India’s ranking.
    • Study at the Center for Global Development found that the improvement in India’s ranking was almost entirely due to methodological changes.
    • During the same period, however, Chile’s global rank went down sharply, from 34th position in 2014 to 67th in 2017.
    • The contrasting experience of Chile and India casts doubts on not just the country-level data but also the changes in underlying methodologies.

    Does ease of doing business have predictive power?

    • While India’s rank drastically improved, it has meant nothing on the ground.
    • The share of the manufacturing sector has stagnated at around 16-17% of GDP, and 3.5 million jobs were lost between 2011-12 and 2017-18.
    • Annual GDP growth rate in manufacturing fell from 13.1% in 2015-16 to zero in 2019-20, as per the National Accounts Statistics.
    • India’s import dependence on China has shot up.
    • In case of Russia, ease of doing business rank jumped from 120 in 2012 to 20, but without becoming a magnet for investment inflows.
    • China, on the contrary, attracted one of the highest capital inflows but its ease of doing business ranking was low and hovered between 78 and 96 for the years between 2006 and 2017.

    Other flaws in the Index

    • The Indicators used for the index are de jure (as per the statute), not de facto (in reality).
    • The data for computing the index are obtained from larger enterprises in two cities, Mumbai and Delhi, by lawyers, accountants and brokers — not from entrepreneurs.
    • The World Bank’s own internal watchdog, the Independent Evaluation Group, in its 2013 report, has widely questioned the reliability and objectivity of the index.
    • The World Bank conducts a global enterprise survey collecting information from companies.
    • There is no correlation between the rankings obtained from ease of doing business and the enterprise surveys.

    Lack of theoretical basis: Major flaw

    • There is little in any major strand of economic thought which suggests that minimally regulated markets for labour and capital produce superior outcomes in terms of output and employment.
    • Economic history shows rich variations in performance across countries and policy regimes, defying simplistic generalisations.
    • Such simplistic basis is used under a seemingly scientific garb of the quantitative index to the disadvantage of workers.
    • To meet the ease of doing business targets, safety standards of factories are compromised.
    • For instance, in 2016, the Maharashtra government abolished the annual mandatory inspection of steam boilers under the Boilers Act of 1923 and the Indian Boilers Regulation 1950.
    •  However, no factory has complied with self-certification or submitted the third party certification.

    Consider the question “Examine the issues with the World Bank’s ‘Ease of Doing Business Index’?  What are its implications for India?”

    Conclusion

    It is time the World Bank rethinks its institutional investment in producing the ‘Doing Business’ report. India should do some soul searching as to why the much trumpeted rise in global ranking has failed miserably on the ground.

  • UN’s guidelines on Access to Social Justice for People with Disabilities

    The United Nations has released it’s first-ever guidelines on access to social justice for people with disabilities to make it easier for them to access justice systems around the world.

    Note: These guidelines can be used in mains answer while substantiating their rights.

    Defining a person with a disability

    • The UN Convention on the Rights of Persons with Disabilities was adopted in 2007 as the first major instrument of human rights in the 21st century.
    • It defines persons with disabilities as those “who have long-term physical, mental, intellectual or sensory impairments which in interaction with various barriers may hinder their full and effective participation in society on an equal basis with others”.

    Highlights of the Guidelines

    The guidelines outline a set of 10 principles and detail the steps for implementation. The 10 principles are:

    • Principle 1: All persons with disabilities have the legal capacity and, therefore, no one shall be denied access to justice on the basis of disability.
    • Principle 2: Facilities and services must be universally accessible to ensure equal access to justice without discrimination of persons with disabilities.
    • Principle 3: PWDS including children with disabilities, have the right to appropriate procedural accommodations.
    • Principle 4: PWDS have the right to access legal notices and information in a timely and accessible manner on an equal basis with others.
    • Principle 5: PWDS are entitled to all substantive and procedural safeguards recognized in international law on an equal basis with others, and States must provide the necessary accommodations to guarantee due process.
    • Principle 6: PWDS have the right to free or affordable legal assistance.
    • Principle 7: PWDS have the right to participate in the administration of justice on an equal basis with others.
    • Principle 8: PWDS have the rights to report complaints and initiate legal proceedings concerning human rights violations and crimes, have their complaints investigated and be afforded effective remedies.
    • Principle 9: Effective and robust monitoring mechanisms play a critical role in supporting access to justice for persons with disabilities.
    • Principle 10: All those working in the justice system must be provided with awareness-raising and training programmes addressing the rights of persons with disabilities, in particular in the context of access to justice.

    Significance for India

    • As per statistics maintained by the UN, in India 2.4 per cent of males are disabled and two per cent of females from all age groups are disabled.
    • Disabilities include psychological impairment, intellectual impairment, speaking, multiple impairments, hearing, seeing among others.
    • In comparison, the disability prevalence in the US is 12.9 per cent among females and 12.7 per cent among males.
    • Disability prevalence in the UK is at 22.7 per cent among females and 18.7 per cent among males.

  • Person in news: Noor Inayat Khan

    World War II spy Noor Inayat Khan is now the first woman of Indian origin to be commemorated by the distinct blue London plaque.

    Try this PYQ:

    Q.A recent movie titled “The Man Who Knew Infinity” is based on the biography of-

    (a) S. Ramanujan
    (b) S. Chandrasekhar
    (c) S. N. Bose
    (d) C. V. Raman

    Noor Inayat Khan

    • A descendant of Tipu Sultan, Noor Inayat Khan became a secret agent during the Second World War.
    • She was the first woman radio operator to be infiltrated into occupied France in 1943 and worked under the code name ‘Madeleine’.
    • Renowned for her service in the Special Operations Executive, an independent British secret service set up by Winston Churchill in 1940.
    • Noor was Britain’s first Indian Muslim war heroine in Europe and the first female radio operator sent into Nazi-occupied France.
    • She was killed at the Dachau concentration camp in 1944 and was posthumously awarded the George Cross in 1949.

    What are Blue Plaques?

    • The idea of placing commemorative plaques on historically significant buildings was first mooted in 1863.
    • The idea was to honour important people and organisations that have lived or worked in London buildings.
    • Currently, the blue plaque scheme is being run by the charity organisation, English Heritage that takes care of historic sites and buildings in England.
    • While Khan is the first woman of Indian origin to be honoured with a blue plaque, it has been erected on houses and venues associated with several Indian men including Mahatma Gandhi, Raja Ram Mohun Roy, B R Ambedkar, Sardar Patel and Swami Vivekananda among others.

  • Changing India’s health delivery landscape through NDHM

    The National Digital Health Mission promises to transform the Indian healthcare system with the aid of technology. The article highlights the key aspects of the mission.

    Building integrated digital health infrastructure through NDHM

    • NDHM is based on the principles of health for all, inclusivity, accessibility, affordability, education, empowerment, wellness, portability, privacy and security by design.
    • NDHM will build the backbone necessary to create an integrated digital health infrastructure.
    • With its key building blocks HealthID, DigiDoctor, Health Facility Registry, Personal Health Records, Telemedicine, and e-Pharmacy, the mission will bring together disparate stakeholders and radically strengthen and, thus change India’s healthcare delivery landscape.
    • NDHM is also a purposeful step towards the achievement of the United Nations’ Sustainable Development Goal of Universal Health Coverage.

    Importance of digital intervention in health service

    • Digital interventions significantly enhance the outcomes of every health service delivery programme.
    • Importance of digital intervention is demonstrated in the Ayushman Bharat Pradhan Mantri Jan Arogya Yojana scheme.
    • Under PM-JAY, 1.2 crore cashless secondary and tertiary care treatments have been provided using an indigenously developed state-of-the-art IT platform.
    • The Arogya Setu mobile app deploys ICT innovations for contract tracing.

    Principal highlight of NDHM

    1) Voluntary in nature

    • HealthID is entirely voluntary for citizens.
    • Its absence will not mean denial of healthcare to a citizen.
    • They can choose to generate their Health Account or ID using their Aadhaar card or digitally authenticable mobile number and by using their basic address-related details and email ID.
    • The use of Aadhaar, therefore, is not mandatory.

    2) Data sharing based on consent

    • Providing access to and sharing of personal health records is a prerogative of the HealthID holder.
    • The consent of the health data owner is required to access this information or a part of it.The consent can be withdrawn anytime.
    • The personal health record will enable citizens to store and access their health data, provide them with more comprehensive information and empower them with control over their private health records.

    3) Compliance with laws and fundamental rights

    • NDHM has been built within a universe of fundamental rights and legislation such as the Aadhaar Act and the IT Act 2008 as well as the Personal Data Protection Bill 2019.
    • This project is also informed by the entire gamut of Supreme Court judgments and core democratic principles of cooperative federalism.
    • The Mission gets its strategic and technical foundation from the National Digital Health Blueprint, the architectural framework of which keeps the overall vision of NHP 2017 at its core and ensures security and privacy by design.

    4) Reaching out to the unconnected population

    •  NHDM is a digital mission led by technology powered by the internet.
    • So, to reach out to and empower the large number of “unconnected” masses specialised systems are being built and off-line modules that will be designed to reach out to the “unconnected”.

    5) Partnership with all key stakeholders

    • The design of NDHM has been built on the principle of partnership with all key stakeholders — doctors, health service providers, technology solution providers and above all citizens.
    • Without their belief, trust, adoption, and stewardship, this mission will not achieve its desired result.

    Consider the question “Examine the key aspects of the National Digital Heath Mission and how it could help transform the Indian healthcare landscape?”

    Conclusion

    NDHM is a mission whose time has come because health is the first step towards self-reliance and only a healthy nation can become Atma Nirbhar.

  • Issue of GST compensation to states

    The article analyses the issue of GST compensation to states under GST regime for five years and how this has turned to be contentious issues after the economic disruption caused by Covid-19.

    The basis for compensation

    • Under Goods and Services Tax (GST) regime the Centre would make good the loss in the first five years if States faced revenue deficits after the GST’s introduction.
    • States sacrificed their constitutionally granted powers of taxation in the national interest.

    GST compensation cess

    • To pay the compensation to states, GST compensation cess was introduced.
    • When the GST compensation cess exceeded the amount that had to be paid to States, the Central government absorbed the surplus.
    •  Now, the economy has slowed down dramatically and the resources raised are insufficient.
    • The Centre is raising questions about whether it is legally accountable to pay compensation.
    • The constitutional framework that ushered in the GST does not provide an escape clause for ‘Acts of God’.

    Way forward

    • As stated by the Secretary of the GST Council in the tenth meeting, the central government could raise resources by other means for compensation and this could then be recouped by continuing the cess beyond five years.
    • Monetary measures are the monopoly of the central government.
    • Even borrowing is more efficient and less expensive if it is undertaken by the Central government.
    • As equal representatives of the citizens State governments expected the Centre to demonstrate empathy and provide them relief through the Consolidated Fund of India.

    Conclusion

    Central government should consider the legal provision in the GST regime and act in the spirit of cooperative federalism.