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Distribution: weekly

  • What is Compensation of GST?

    With Centre-State friction over pending compensation payments under the Goods and Services Tax (GST) taking a new turn in the 41st GST Council to meet, the strain on the finances of states is likely to continue in the near term.

    Try this question from CSP 2018:

    Q.Consider the following items:

    1. Cereal grains hulled
    2. Chicken eggs cooked
    3. Fish processed and canned
    4. Newspapers containing advertising material

    Which of the above items is/are exempt under GST (Goods and Services Tax)?

    (a) 1 only

    (b) 2 and 3 only

    (c) 1, 2 and 4 only

    (d) 1, 2, 3 and 4

    What is GST?

    • GST, being a consumption-based tax, would result in loss of revenue for manufacturing-heavy states.
    • GST launched in India on 1 July 2017 is a comprehensive indirect tax for the entire country.
    • It is charged at the time of supply and depends on the destination of consumption.
    • For instance, if a good is manufactured in state A but consumed in state B, then the revenue generated through GST collection is credited to the state of consumption (state B) and not to the state of production (state A).

    Compensation under GST regime

    • Due to the consumption-based nature of GST, manufacturing states like Gujarat, Haryana, Karnataka, Maharashtra and Tamil Nadu feared a revenue loss.
    • Thus, GST Compensation Cess or GST Cess was introduced by the government to compensate for the possible revenue losses suffered by such manufacturing states.
    • However, under existing rules, this compensation cess will be levied only for the first 5 years of the GST regime – from July 1st, 2017 to July 1st, 2022.
    • Compensation cess is levied on five products considered to be ‘sin’ or luxury as mentioned in the GST (Compensation to States) Act, 2017 and includes items such as- Pan Masala, Tobacco, and Automobiles etc.

    Alternatives to prevent losses

    • The input tax credit can help a producer by partially reducing GST liability by only paying the difference between the tax already paid on the raw materials of a particular good and that on the final product.
    • In other words, the taxes paid on purchase (input tax) can be subtracted from the taxes paid on the final product (output tax) to reduce the final GST liability.

    Distributing GST compensation

    • The compensation cess payable to states is calculated based on the methodology specified in the GST (Compensation to States) Act, 2017.
    • The compensation fund so collected is released to the states every 2 months.
    • Any unused money from the compensation fund at the end of the transition period shall be distributed between the states and the centre as per any applicable formula.

    Significance of GST compensation

    • States no longer possess taxation rights after most taxes, barring those on petroleum, alcohol, and stamp duty were subsumed under GST.
    • GST accounts for almost 42% of states’ own tax revenues, and tax revenues account for around 60% of states’ total revenues.
    • Finances of over a dozen states are under severe strain, resulting in delays in salary payments and sharp cuts in capital expenditure outlay amid the pandemic-induced lockdowns and the need to spend on healthcare.

    Back2Basics:

    Goods and Services Tax

  • GIS-enabled Land Bank System

    A prototype of the National GIS-enabled Land Bank System was e-launched by Commerce and Industry Ministry for six States based on which land can be identified for setting up industries.

    Try to answer this question in short:

    Q.Discuss the benefits of digitizing land records in India.

    Land Bank System

    • The system has been developed by the Integration of Industrial Information System (IIS) with state GIS (Geographic Information System).
    • IIS portal is a GIS-enabled database of industrial clusters/areas across the states.
    • On the system, more than 3,300 industrial parks across 31 states/UTs covering about 4,75,000 hectares of land have also been mapped out on the system.
    • The information available on the system will include drainage, forest; raw material heat maps (horticulture, agricultural, mineral layers); multilayer of connectivity.
    • IIS has adopted a committed approach towards industrial upgrading, resource optimization, and sustainability.

    Various stakeholders

    • The initiative has been supported by the National e-Governance Division (NeGD), National Centre of Geo-Informatics (NCoG), Invest India, Bhaskaracharya Institute for Space Applications and Geo-Informatics (BISAG), and Ministry of Electronics and Informational Technology.

  • Who was Dr. Dwarkanath Kotnis?

    A bronze statue of Indian doctor Dwarkanath Kotnis is set to be unveiled in China.

    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

    Dr. Dwarkanath Kotnis

    • He is revered in China for his contributions during the Chinese revolution headed by its founder Mao Zedong and World War II.
    • He hailed from Sholapur in Maharashtra came to China in 1938 as part of a five-member team of doctors sent by the Indian National Congress to help the Chinese during World War II.
    • He joined the Communist Party of China (CPC) in 1942 and died the same year at the age of 32.
    • Kotnis’ medical assistance during the difficult days of the Chinese revolution was praised by Chinese leader Mao Zedong.
    • His statues and memorials were also set in some of the Chinese cities in recognition of his services.

    A revered personality in China

    • Late Chinese leader Mao Zedong was deeply affected by his death.
    • Mao wrote in his eulogy that “the army has lost a helping hand; the nation has lost a friend. Let us always bear in mind his internationalist spirit”.
    • Kotnis is remembered not only as a symbol inspiring medical students to work hard, but also an eternal bond between the people of China and India.

  • Species in news: Barn Owl

    With a thriving rat population playing havoc with its coconut yield, the UT of Lakshadweep hires barn owls for help.

    Try this PYQ:

    Q.The Red Data Books published by the International Union for Conservation of Nature and Natural Resources (IUCN) contains lists of:

    1. Endemic plant and animal species present in the biodiversity hotspots.
    2. Threatened plant and animal species.
    3. Protected sites for conservation of nature and natural resources in various countries.

    Select the correct answer using the codes given below:

    (a) 1 and 3

    (b) 2 only

    (c) 2 and 3

    (d) 3 only

    Barn Owl

    IUCN status: Least Concerned

    • The barn owl is the most widely distributed species of owl in the world and one of the most widespread of all species of birds.
    • It is found almost everywhere in the world except for the polar and desert regions, Asia north of the Himalayas, most of Indonesia, and some Pacific islands.

    What is Barn?

    • A barn is an agricultural building usually on farms and used for various purposes.
    • It refers to structures that house livestock, including cattle and horses, as well as equipment and fodder, and often grain.

  • [pib] Eklavya Model Residential Schools

    An Eklavya Model Residential School (EMRS) teacher was selected for National Award to Teachers 2020.

    Note the specific features of EMRS. Each year in the CSP, there is a question related to tribes/tribal development.

    Eklavya Model Residential Schools

    • EMRS started in the year 1997-98 to impart quality education to ST children in remote areas in order to enable them to avail of opportunities in high and professional education courses and get employment in various sectors.
    • Across the country, as per census 2011 figures, there are 564 such sub-districts out of which there is an EMRS in 102 sub-districts.
    • As per revised 2018 scheme, every block with more than 50% ST population and at least 20,000 tribal persons, will have an EMRS by the year 2022.
    • These schools will be on par with Navodaya Vidyalayas and will have special facilities for preserving local art and culture besides providing training in sports and skill development.

    Features of EMRS

    • Admission to these schools will be through selection/competition with suitable provision for preference to children belonging to Primitive Tribal Groups, first-generation students, etc.
    • Sufficient land would be given by the State Government for the school, playgrounds, hostels, residential quarters, etc., free of cost.
    • The number of seats for boys and girls will be equal.
    • In these schools, education will be entirely free.

  • Boosting demand with wage hike

    The article discusses the threat posed to the Indian economy by the subdued demand following the return of the labourers to their urban jobs.

    Rural employment issue

    • About 30 million migrant workers rushed home to their villages during the pandemic.
    • About 60 per cent of out-migration from rural India is aspiration-led.
    • Income earned in urban jobs is 2.5 higher than earned in rural area.
    • Though rural economy has been recovering faster than the urban economy, this optimism could prove short-lived, as eventually the more long-lasting determinants of rural wages could prevail.

    What are the determinants of rural wages

    1) NREGA wages

    • The government has raised the rural employment guarantee programme (NREGA) wages and outlays.
    • Demand for the scheme is outpacing supply.
    • This demand-supply mismatch means that it may not be an effective driver of higher rural wages.

    2) Low construction activities

    • Many rural Indians, especially those without land, have become building labourers.
    • 70 per cent of construction is related to real estate and property developers are dependent on funding from struggling non-banking financial companies.
    • Until this type of lending restarts, construction may not normalise.
    • And that means rural wages may not rise quickly either.

    3) Rising debt level

    • The increase in borrowing and fall in inflation over the last few years has increased the “real” indebtedness of rural Indians.
    • This affected particularly the landowners who pay villagers to farm their land.
    • This is likely to hurt their ability to pay high wages.

    3 Reasons why wage outlook could be dimmer

    • As migrant labours start to return to their urban jobs, their wage outlook appears to be bleak for 3 reasons.
    • 1) As during demonetisation, workers could find jobs again, but at lower wages.
    • 2) There could be a second-round of pandemic-led labour market weakness, driven by job losses and falling wages from the first round.
    •  3) We find that both rural and urban wages are driven by economic growth, India’s post-pandemic medium-term growth falling by one percentage point to 5 per cent does not bode well.

    Way forward

    • Weak wages could keep demand subdued. To offset this policymakers have an important role to play.
    • 1) In particular, policymakers may have to ensure that capital is allocated efficiently.
    • After all, investment is the only way to increase the economy’s capacity to create well-paying jobs.
    • 2) Bringing back investment growth would also involve capital re-allocation.
    • This means taking it away from sectors that are not working and redeploying it in sectors that are.
    • Improving the Insolvency and Bankruptcy Code procedure is a key step here.
    • 3) Another important step is to improve the health of banks as they are the ones allocating capital by giving loans.
    •  Implementation of the 5-Rs — recognition, restructuring, resolution, recapitalisation and reforms — for the banking sector may be particularly useful here.

    Consider the question “After supply-side disruption is over, India’s growth may suffer from the subdued wage growth. Suggest the steps to avoid this from happening.”

    Conclusion

    Supply disruption caused by reverse migration won’t last long, but led by lower wages, demand could remain weak, requiring policy intervention.

  • PVTGS in Andaman

    Five members of the Great Andamanese tribe, a Particularly Vulnerable Tribal Group (PVTGs) have tested positive for COVID-19.

    Try this PYQ:

    Q. Consider the following statements about Particularly Vulnerable Tribal Groups (PVTGs) in India:

    1. PVTGs reside in 18 States and one Union Territory.
    2. A stagnant or declining population is one of the criteria for determining PVTG status.
    3. There are 95 PVTGs officially notified in the country so far.
    4. Irular and Konda Reddi tribes are included in the list of PVTGs.

    Which of the statements given above are correct?(CSP 2019)

    (a) 1, 2 and 3

    (b) 2, 3 and 4

    (c) 1, 2 and 4

    (d) 1, 3 and 4

    PVTGs in Andaman

    • Great Andamanese is one of five PVTGs that reside in Andamans archipelago.
    • The Great Andamanese speak Jeru dialect among themselves and their number stands at 51 as per the last study carried out by Andaman Adim Janjati Vikas Samiti in 2012.
    • The five PVTGS residing in Andamans are Great Andamanese, Jarwas, Onges, Shompens and North Sentinelese.

    What are PVTGs?

    • There are certain tribal communities who have declining or stagnant population, low level of literacy, pre-agricultural level of technology and are economically backward.
    • They generally inhabit remote localities having poor infrastructure and administrative support.
    • These groups are among the most vulnerable section of our society as they are few in numbers, have not attained any significant level of social and economic development.
    • 75 such groups have been identified and categorized as Particularly Vulnerable Tribal Groups (PVTGs).

  • Turkey’s Maritime Disputes

    Turkish President Erdogan has asserted that his country will take whatever belongs to it in the Mediterranean, as well as Aegean and the Black Sea.

    Try this PYQ:

    Q.Turkey is located between

    (a) The Black Sea and Caspian Sea

    (b) The Black Sea and Mediterranean Sea

    (c) Gulf of Suez and the Mediterranean Sea

    (d) Gulf of Aqaba and the Dead Sea

    Assertion over the Mediterranean

    • Greece and Turkey have been locked in a dispute over control of eastern Mediterranean waters.
    • They are at odds over the rights to potential hydrocarbon resources, based on conflicting claims over the extent of their continental shelves.
    • The Turkish navy will hold the shooting exercises in the eastern Mediterranean off the coast of Iskenderun, northeast of Cyprus.
    • Cyprus was divided in 1974 following a Turkish invasion triggered by a Greek-inspired coup.
    • Turkey recognizes the Turkish-populated north of Cyprus as a separate state, which is not recognised by other countries.

  • National Recruitment Agency: Taking jobs closer to people

    Recruitment reform in the form of National Recruitment Agency will resolve many issues faced by the youth appearing for the multiple government exam.

    Context

    • On average, 2.5-3 crore candidates appear for about 1.25 lakh vacancies in the central government every year.
    • But from next year, the NRA will conduct the CET and based on the score, one can apply for a vacancy with the respective agency.

    NRA: Composition and functioning

    • The NRA will have representatives from the Ministry of Railways, Ministry of Finance/Department of Financial Services, Staff Selection Commission (SSC), Railway Recruitment Boards (RRBs) and Institute of Banking Personnel Selection (IBPS).
    • A multi-agency body, the NRA will conduct a Common Eligibility Test (CET) to screen/shortlist candidates for the Group B and C (non-technical) posts.
    • The NRA shall conduct a separate CET each for the three levels of graduate, higher secondary (12th pass) and the matriculate (10th pass) candidates for those non-technical posts to which recruitment is presently carried out by the SSC, RRBs and IBPS.

    How it will benefit youth

    • It will eliminate multiple tests and save time as well as resources.
    • It will give a big boost to transparency.
    • The multiple recruitment examinations are a burden on the candidates, as also on the respective recruitment agencies, involving avoidable/repetitive expenditure, law and order/security-related issues and venue-related problems.
    • The NRA is a combination of convenience and cost-effectiveness for candidates.
    • Examination centres in every district would greatly enhance access to the candidates located in far-flung areas, with a special focus on creating examination infrastructure in the 117 Aspirational Districts.
    • This will prove a great boon to crores of aspirants residing in hilly, rural and remote areas and most importantly, for female candidates.
    • Taking job opportunities closer to the people is a radical step that would greatly enhance ease of living for the youth.

    Consider the question “Recruitment reform in the form of National Recruitment Agency is a radical step that would greatly enhance ease of living for the youth.”

    Conclusion

    Taking job opportunities closer to the people is a radical step that would greatly enhance ease of living for the youth.

  • How marriage age and women’s health are linked?

    PM had announced a panel to fight malnutrition in young women and ensure they get married at the right age. Take a look at how the two are linked:

    How prevalent is underage marriage?

    • Data show that the majority of women in India marry after the age of 21.
    • Chart 1 shows the mean age of women at marriage is 22.1 years, and more than 21 in all states. This does not mean that child marriages have disappeared.
    • The latest National Family Health Survey (NFHS-4) found that about 26.8% of women aged 20-24 (Chart 2) were married before adulthood (age 18).

    Try this question for mains:

    Q. Discuss how marriage age and women’s health are linked with each other?

    How does the age of marriage correlate with health?

    • Preventing early marriage can reduce the maternal mortality ratio and infant mortality ratio.
    • At present, the maternal mortality ratio — the number of maternal deaths for every 100,000 children born — is 145.
    • India’s IMR shows that 30 of every 1,000 children born in a year die before the age of one.
    • Young mothers are more susceptible to anaemia. More than half the women of reproductive age (15-49 years) in India are anaemic.

    What delayed marriage can alter?

    • Poverty, limited access to education and economic prospects, and security concerns are the known reasons for early marriage.
    • If the main causes of early marriage are not addressed, a law will not be enough to delay marriage among girls.

    What do the data show?

    • Women in the poorest 20% of the population married much younger than their peers from the wealthiest 20% (Chart 5).
    • The average age at marriage of women with no schooling was 17.6, considerably lower than that for women educated beyond class 12 (Chart 6).
    • Almost 40% of girls aged 15-18 do not attend school, as per a report of the National Commission for Protection of Child Rights.
    • Nearly 65% of these girls are engaged in non-remunerative work.
    • That is why many believe that merely tweaking the official age of marriage may discriminate against the poorer, less-educated and marginalised women.