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GS Paper: GS3

  • GST collections hit 5-month high

    India’s gross Goods and Services Tax (GST) revenues crossed ₹1.17 lakh crore in September, hitting a five-month high.

    Take a look towards the share of GST in government earnings for the previous fiscal:

    UPSC can ask about the majority component of the Revenue Receipts of the govt. See how Corporate tax is nearing the GST revenues.

    Do you think it will surpass GST revenue when the economy is fully recovered?

    What is the news?

    • September’s revenues were 23% higher than a year ago and 27.3% more than collections in the pre-pandemic month of September 2019.
    • Revenues from import of goods were 30% higher while indirect tax collected on domestic transactions, including the import of services, were 20% higher in September, compared to the same month in 2020.
    • Among the major States, GST revenues grew 29% in Karnataka, 28% in Gujarat, followed by 22% in Maharashtra and 21% each in Tamil Nadu and Andhra Pradesh.
    • Telangana recorded a 25% surge in revenues, while Odisha saw a sharper 40% rise.

    Significance

    • This clearly indicates that the economy is recovering at a fast pace.
    • Coupled with economic growth, anti-evasion activities, especially action against fake billers have also been contributing to the enhanced GST collections.
    • It is expected that the positive trend in the revenues will continue and the second half of the year will post higher revenues.

    Issues underlying

    • Though GST revenues are picking up pace after the impact of the Covid-19 pandemic, revenue buoyancy under GST is being seen as a concern.
    • This is especially after the legally mandated compensation to states for revenue shortfall from the GST implementation comes to an end in June 2022.

    Back2Basics: Goods and Services Tax

    • The GST is a value-added tax levied on most goods and services sold for domestic consumption.
    • It was launched into operation on the midnight of 1st July 2017.
    • It subsumed almost all domestic indirect taxes (petroleum, alcoholic beverages, and stamp duty are the major exceptions) under one head.
    • The GST is paid by consumers, but it is remitted to the government by the businesses selling the goods and services.
    • GST is levied at four rates viz. 5%, 12%, 18% and 28%. The schedule or list of items that would fall under these multiple slabs is worked out by the GST council.

    Types

    • The GST to be levied by the Centre is called Central GST (CGST) and that to be levied by the States is called State GST (SGST).
    • Import of goods or services would be treated as inter-state supplies and would be subject to Integrated Goods & Services Tax (IGST) in addition to the applicable customs duties.

    The GST Council

    • It is a constitutional body (Article 279A) for making recommendations to the Union and State Government on issues related to GST.
    • The GST Council is chaired by the Union Finance Minister and other members are the Union State Minister of Revenue or Finance and Ministers in charge of Finance or Taxation of all the States.
    • It is considered as a federal body where both the centre and the states get due representation.

  • What is Computer Tomography?

    The first computed tomography image – a CT scan – of the human brain was made 50 years ago, on Oct. 1, 1971.

    A few months back, almost all of us have heard about the High-resolution computed tomography (HRCT) scan being conducted on our relatives for diagnosing the damage of lungs caused due to the Wuhan Virus.

    About Computer Tomography (CT)

    • A CT scan is a medical imaging technique used in radiology to get detailed images of the body noninvasively for diagnostic purposes.
    • The multiple X-ray measurements taken from different angles are then processed on a computer using reconstruction algorithms to produce tomographic (cross-sectional) images (virtual “slices”) of a body.

    How does it work?

    • They use a narrow X-ray beam that circles around one part of your body. This provides a series of images from many different angles.
    • A computer uses this information to create a cross-sectional picture. Like one piece in a loaf of bread, this two-dimensional (2D) scan shows a “slice” of the inside of your body.
    • This process is repeated to produce a number of slices.
    • The computer stacks these scans one on top of the other to create a detailed image of your organs, bones, or blood vessels.
    • For example, a surgeon may use this type of scan to look at all sides of a tumor to prepare for an operation.

    Its development

    • Since its development in the 1970s, CT has proven to be a versatile imaging technique.
    • While CT is most prominently used in diagnostic medicine, it also may be used to form images of non-living objects.
    • The 1979 Nobel Prize in Physiology or Medicine was awarded jointly to South African-American physicist Allan M. Cormack and British electrical engineer Godfrey N. Hounsfield “for the development of computer-assisted tomography”.

    Threats

    • CT scans use X-rays, which produce ionizing radiation.
    • Such radiation may damage your DNA and lead to cancer.
    • The risk increases with every CT scan we get.
    • Ionizing radiation may be more harmful in children.

     

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  • Species in news: Adi Cascade

    Making of check dams on streams and removal of boulders may wipe out the local population of Adi cascade frogs (Amolops adicola), a recently discovered species in Arunachal Pradesh, scientists claimed.

    About Adi cascade

    • The species was discovered while revisiting a century-old Adi expedition in 2018 and named after the land of the Adi tribe where the frogs dwell, particularly post-monsoon.
    • The call of the frog is quite unique with continuous notes almost like a cricket.
    • They are delivered at very short intervals, not long call groups — giving an impression of being continuous: A typical call lasts 485.2 milliseconds.
    • The species is predominantly found in open riverine landscapes and human-inhabited rural areas.
    • Males were mostly observed on tree saplings, fern fronds, and banana plants in and around the cultivated land.
    • Locally known as Juri (stream) Tatik (frog) — is considered a local delicacy.

    What are Cascade Frogs?

    • The nomenclature ‘cascade frogs’ draws on their preference for small waterfalls.
    • Cascade frogs, in general, depend on the flow of water.
    • Both adults and tadpoles of Adi cascade frogs, the species in question, are particularly adapted to fast flowing sections of stream.

    Rich biodiversity of Arunachal

    • Arunachal, a biodiversity hotspot, is home to many endemics, endangered and threatened species as well as to indigenous people who depend on its biological resources.
    • The Forest Survey of India in 2019 estimated that Arunachal had 66,688 sq km of forests — 79.6 per cent of the state’s area.
    • Global Forest Watch, however, estimated the forests cover at 74 per cent of its total land area.

     

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  • GI ecosystem

    This editorial discusses various economic and socio-cultural benefits offered by the Geographical Indication (GI) Tagging.

    What is Geographical Indication?

    • A GI is a sign used on products that have a specific geographical origin and possess qualities or a reputation that are due to that origin.
    • India, as a member of the World Trade Organization (WTO), enacted the Geographical Indications of Goods (Registration and Protection) Act, 1999 w.e.f. September 2003.
    • GIs have been defined under Article 22 (1) of the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement.
    • GI is granted for a term of 10 years in India. As of today, more than 300 GI tags has been allocated so far in India (*Wikipedia).

    Why must we promote GI?

    Several studies show that the patents and copyright protection of products under GIs result in higher economic gains, fostering quality production and better distribution of profits.

    • Lost in history: Most GI are either assigned to the dusty pages of history books or left to rural artisans to propagate and preserve.
    • Source of income: Today, with the emphasis on climate change and sustainability, these products can be ready revenue generators.
    • Demand in e-com market: A modern distribution system exists in India’s robust global e-commerce backbone which will propel the nascent GI industry onto the national and world stage.

    Need for govt support

    • GI products need the support of governments.
    • The Europeans are masters at it, as seen by products such as Brie cheese and sparkling wine from Champagne. The EU has an $87 billion GI economy.
    • China has also done very well by GI, strengthening e-commerce in rural areas and actively promoting agricultural special product brands in lesser developed areas.

    Role of GI in China’s rise

    • A 2017 UNCTAD report on inclusive growth and e-commerce deems China’s e-commerce-driven growth as inclusive.
    • That means China has successfully empowered micro, small and medium enterprises (MSMEs) to compete with large companies on the same stage, with no geographic boundaries.
    • Likewise, despite a globally depressed market for wines, the produce from the Ningxia region of China saw exports surge 46.4 per cent in 2020, benefitting 211 wineries in Ningxia.
    • The output value of GI producers in China totalled $92.771 billion as of 2020.

    Socio-cultural benefits offered by GI

    • GI protection has wider positive benefits, especially for local communities.
    • In particular, it encourages the preservation of biodiversity, local know-how and natural resources. And this is where India can do well.
    • Multiple benefits flows from a strong GI ecosystem, which can be a wellspring of economic and soft power.
    • It will automatically resolve the three fraught India issues of poor pay for talent, low female participation in the labour force, and urban migration.

    How can GI induce economic transformation?

    (1) Promotes Entrepreneurship and ‘Passion Economy’

    • It will convert talent into entrepreneurship with gig workers, and create a “passion” economy, that is, a new way for individuals to monetise their skills and scale their businesses exponentially.
    • It removes the hurdles associated with freelance work to earn a regular income from a source other than an employer.

    (2) Employment generation

    • The labour-intensive nature of GI offers the best solution to boosting the employment-to-population ratio in India.
    • India presently has an abysmal 43 per cent compared with the 55 per cent global average.

    (3) Women Empowerment

    • GI production mostly involves artisanal work-from-home culture.
    • Monetising this artisanal work done at home will increase India’s low female labour force participation rate, which at 21 per cent in 2019 was half the 47 per cent global average.

    (4) Prevents migration

    • The hyper-localised nature of GI offers solutions to reverse urban migration and conserve India’s ancient crafts, culture and food.

    (5) MSME Promotion

    • A rejuvenation of MSMEs, which account for 31 per cent of India’s GDP and 45 per cent of exports, will follow.
    • An estimated 55.80 million MSMEs employ close to 130 million people; of this, 14 per cent are women-led enterprises and 59.5 per cent are rural.

    (6) GI Tourism

    • Another revenue-earner, GI tourism, is typically a by-product of a strong GI ecosystem.

    Hurdles in GIs progress

    (1) Credit Facilities and Capacity Building

    • Since GI businesses are micro, it is necessary to address the challenges of capacity-building, formal or easy access to credit.
    • There is a need for forming marketing linkages, research and development, product innovation and competitiveness in both domestic and international markets.

    (2) Issue of Intermediaries

    • With the shift to digital platforms, the distribution margins of these gate keepers or mandi agents must be competitive.
    • They often act as countervailing agents by getting into similar businesses or product lines which will erode GI producer incomes.

    (3) Ensuring smoother transition

    • As seen from the experience of the new farm laws, this will be a task for the central and state governments; they must ensure the transition without breaking down too many existing linkages.

    Way forward

    • Control: Guardrails like regular audits and consultations with the GI producers must be mandated.
    • Cooperative management: Pulling it together will be local GI cooperative bodies or associations which can be nationally managed by a GI board.
    • Ministerial support: The Department for the Promotion of Industry and Internal Trade (DPIIT) and the Ministry of Commerce department should be tasked with developing this new sector.
    • Digital literacy: Finally, a required skill for GI producers is digital literacy. This should be a priority agenda item for NGOs and stakeholders like the DPIIT.

    Conclusion

    • It is an opportunity for India to redefine the future of work using automation, technology and artificial intelligence while simultaneously enhancing and adorning the country’s talented local work force.
    • The Indian GI economy can be a platform for India to showcase to the world a model for ethical capitalism, social entrepreneurship, de-urbanisation, and bringing women to the workforce, on the back of a robust digital system.
    • It recalls and attributes of multi-cultural ethos, authenticity, and ethnic diversity are potential turbochargers for the country’s economy.
    • It encompasses the concept of trusteeship, as advocated by Mahatma Gandhi and more recently, by our PM at the UN. It is truly Made in India.

     

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  • India’s Current Account Balance sees a spike

    India’s current account balance saw a far lower surplus of $6.5 billion (0.9% of GDP) in the first quarter compared with a surplus of $19.1 billion (3.7% of GDP) a year earlier.

    What is External Sector?

    • The external sector is the portion of a country’s economy that interacts with the economies of other countries.
    • In the goods market, the external sector involves exports and imports.
    • In the financial market it involves capital flows.

    Various terminologies related:

    [A] Balance of Payment (BoP)

    • BoP is the difference between all money flowing into the country in a particular period of time (e.g., a quarter or a year) and the outflow of money to the rest of the world.
    • These financial transactions are made by individuals, firms and government bodies to compare receipts and payments arising out of trade of goods and services.
    • It consists of two components: the current account and the capital account.
    • The current account reflects a country’s net income, while the capital account reflects the net change in ownership of national assets.

    (1) Current Account

    • Current account of BoP consists of all transactions relating to goods, services and income, it is functionally classified into merchandise and
    • Current account deficit is the situation where payments on the country are more than the payments into the country.
    • In current account surplus, there is a net inward payment into the country on the current.

    (2) Capital Account

    • The capital account records the net flow of investment transaction into an economy.
    • Investments (FDI and FII) and borrowings (ECB) are part of the capital account.

    [B] Balance of Trade

    • Trade “balance” of a country shows the difference between what it earns from its exports and what it pays for its imports.
    • If this number is in negative – that is, the total value of goods imported by a country is more than the total value of goods exported by that country – then it is referred to as a “trade deficit”.
    • If India has a trade deficit with China then China would necessarily have a “trade surplus” with India.

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  • What gives rise to the rural debt trap?

    Context

    The AIDIS report published this month reveals that non-institutional sources have a strong presence in the rural credit market, notwithstanding the high costs involved in borrowing from them.

    Highlights of AIDIS

    • The All-India Debt and Investment Surveys (AIDIS) is carried out by the National Statistical Office.
    • AIDIS is among the most important nationally representative data sources on the rural credit market in India.
    • According to the latest report, the average debt per household in rural India is Rs 59,748, nearly half the average debt per household in urban India.
    • IOI: As per the latest AIDIS report, the incidence of indebtedness (IOI) is 35 per cent in rural India — 17.8 per cent of rural households are indebted to institutional credit agencies, 10.2 per cent to non-institutional agencies and 7 per cent to both.
    • Dependence on institutional source: The share of debt from institutional credit agencies in total outstanding debt in rural India is 66 per cent as compared to 87 per cent in urban India.
    • Dependence on institutional sources is often seen as a positive development, signifying broadening financial inclusion, while reliance on non-institutional sources denotes vulnerability and backwardness.
    • Purpose: Institutional credit is taken mainly for farm business and housing in rural India.
    • A significant portion of debt from non-institutional sources is used for other household expenditures.
    • Socio-economic inequality: The data indicates that better-off households have greater access to formal-sector credit and use it for more income-generating purposes.
    • Access to institutional credit is largely determined by the ability of households to furnish assets as collateral.
    • The report shows that the top 10 per cent of asset-owning households have borrowed 80 per cent of their total debt from institutional sources, whereas those in the bottom 50 per cent borrowed around 53 per cent of total debt from non-institutional sources.
    • Debt-trap: the Debt-Asset Ratio (DAR) of the bottom 10 per cent asset-owning households in rural India is 39, much higher than the DAR of 2.6 estimated for the top 10 per cent households.
    • This, coupled with higher borrowing from non-institutional sources, acts as a debt trap for households with fewer assets.

    Way forward

    • Inadequate access to affordable credit lies at the heart of the rural distress
    • The credit policy needs to be revamped to accommodate the consumption needs of the rural poor and to find alternatives for collateral to bring the rural households within the network of institutional finance.

    Conclusion

    The solution to the problem of lack of access to credit in rural areas lies in policy changes.

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  • Probe shows use of toxic material in firecrackers: Supreme Court

    The Supreme Court has said a preliminary enquiry by the CBI into the firecracker industry, including in Tamil Nadu, revealed rampant violation of its ban on use of toxic ingredients like Barium and its salts.

    Air Pollution created by firecrackers

    • Firing crackers increase the concentration of dust and pollutants in the air.
    • After firing, the fine dust particles get settled on the surrounding surfaces which are packed with chemicals like copper, zinc, sodium, lead, magnesium, cadmium and pollutants like oxides of sulphur and nitrogen.
    • These invisible yet harmful particles affect the environment and in turn, put our health at stake.

    Harmful elements used

    • Copper: Irritates the respiratory tract.
    • Cadmium: Leads to anemia by reducing the capacity of blood to carry oxygen.
    • Zinc: Can cause metal fume fever and induces vomiting.
    • Lead: Harms the nervous system.
    • Magnesium: Metal fume fever is caused by Magnesium fumes.
    • Sodium: It is a highly reactive element and caused burns when it is combined with moisture.

    Why is the issue in news now?

    Ans. Barium content

    • A chemical analysis of the samples of finished and semi-finished firecrackers and raw materials taken from the manufacturers showed Barium content.
    • The court stated that loose quantities of Barium were purchased from the market.
    • Also, firecracker covers did not show the manufacture or expiry dates.

    Issues with Barium

    • Barium nitrate, which emits green flames when a cracker is lit, is a metal oxide that increases both air and noise pollution.
    • There is is no clarity on whether barium nitrate can actually be used or not.

    Alternatives: Green Crackers

    • The new CSIR-NEERI formulation for green crackers has NO barium nitrate — one of the key ingredients of traditional firecrackers.
    • These crackers have been named “safe water releaser (SWAS)”, “safe minimal aluminium (SAFAL)” and “safe thermite cracker (STAR)”.
    • The three crackers release water vapour or air as a dust suppressant and diluent for gaseous emissions.
    • These products can only be manufactured by those who have signed a non-disclosure agreement (NDA) with CSIR-NEERI.
    • The green crackers are sold with a unique logo on the box, and will also have a QR code with production and emission details.

     

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  • Antimalarial drug resistance in India

    In recent years there is increasing evidence for the failure of artemisinin-based combination therapy for falciparum malaria either alone or with partner drugs.

    What is Malaria?

    • Malaria is caused by the bite of the female Anopheles mosquito if the mosquito itself is infected with a malarial parasite.
    • There are five kinds of malarial parasites — Plasmodium falciparum, Plasmodium vivax (the commonest ones), Plasmodium malariae, Plasmodium ovale and Plasmodium knowlesi.
    • Therefore, to say that someone has contracted the Plasmodium ovale type of malaria means that the person has been infected by that particular parasite.

    Burden of Malaria in India

    • In 2018, the National Vector-borne Disease Control Programme (NVBDCP) estimated that approximately 5 lakh people suffered from malaria.
    • 63% of the cases were of Plasmodium falciparum.
    • The recent World Malaria Report 2020 said cases in India dropped from about 20 million in 2000 to about 5.6 million in 2019.

    Treatment of Malaria

    • Malaria is treated with prescription drugs to kill the parasite. Chloroquine is the preferred treatment for any parasite that is sensitive to the drug.
    • In most malaria-endemic countries including India, Artemisinin-based antimalarial drugs are the first-line choice for malaria treatment.
    • This is especially against Plasmodium falciparum parasite which is responsible for almost all malaria-related deaths in the world.

    Why in news now?

    • There are reports of artemisinin resistance in East Africa and is a matter of great concern as this is the only drug that has saved several lives across the globe.
    • In India, after the failure of chloroquine to treat P. falciparum malaria successfully, artemisinin-based combination therapy was initially introduced in 2008.
    • Currently, several combinations of artemisinin derivatives are registered in India.

    Artemisinin-based combination therapy failure in India

    • In 2019, a report from Eastern India indicated the presence of two mutations in P. falciparum cases treated with artemisinin that linked to its presence of resistance.
    • Again in 2021, artemisinin-based combination therapy failure was reported from Central India where the partner drug SP showed triple mutations with artemisinin wild type.
    • This means the failure of artemisinin-based combination therapy may not be solely linked to artemisinin. Here it is needed to change the partner drug as has been done in NE states in 2013.

    History of drug resistance

    • In the 1950s chloroquine resistance came to light.
    • Both chloroquine and pyrimethamine resistance originated from Southeast Asia following their migration to India and then on to Africa with disastrous consequences.
    • Similarly, artemisinin resistance developed from the six Southeast Asian countries and migrated to other continents, as is reported in India and Africa.
    • It would not be out of context that artemisinin is following the same path as has been seen with chloroquine.
    • Now, the time has come to carry out Molecular Malaria Surveillance to find out the drug-resistant variants so that corrective measures can be undertaken in time to avert any consequences.
    • Some experts even advocate using triple artemisinin-based combination therapies where the partner drug is less effective.

    Try this PYQ:

    Widespread resistance of malarial parasite to drugs like chloroquine has prompted attempts to develop a malarial vaccine to combat malaria.

    Why is it difficult to develop an effective malaria vaccine?

    (a) Malaria is caused by several species of Plasmodium

    (b) Man does not develop immunity to malaria during natural infection

    (c) Vaccines can be developed only against bacteria

    (d) Man is only an intermediate host and not the definitive host

     

    [wpdiscuz-feedback id=”m5iy5a8pmc” question=”Please leave a feedback on this” opened=”1″]Post your answers here.[/wpdiscuz-feedback]

     

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  • [pib] Renewable Energy Certificate (REC) Mechanism

    Union Minister of Power and New & Renewable Energy has given his assent to amendments in the existing Renewable Energy Certificate (REC) mechanism.

    What are RECs?

    • Renewable Energy Certificates (REC) is a policy instrument to catalyze the development of renewable energy.
    • It is a market-based mechanism that will help the states meet their regulatory requirements (such as Renewable Purchase Obligations (RPOs)) by overcoming the geographical constraints on existing renewable potential in different states.

    REC Mechanism

    • REC mechanism is a market-based instrument to promote renewable energy and facilitate compliance of renewable purchase obligations (RPO).
    • It is aimed at addressing the mismatch between availability of RE resources in state and the requirement of the obligated entities to meet the RPO.
    • 1 REC is treated as equivalent to 1 MWh.

    How many types of RECs are there?

    There are two categories of RECs, viz., solar RECs and non-solar RECs.

    1. Solar RECs are issued to eligible entities for generation of electricity based on solar as renewable energy source.
    2. Non-solar RECs are issued to eligible entities for generation of electricity based on renewable energy sources other than solar.

    Sources of revenue under REC mechanism

    • Revenue for a RE generator under REC scheme includes revenue from the sale of electricity component of RE generation and the revenue from the sale of environmental attributes in the form of RECs.

    What are the proposed changes?

    The salient features of changes proposed in revamped REC mechanism are:

    • Validity of REC would be perpetual i.e., till it is sold.
    • Floor and forbearance prices are not required to be specified.
    • The RE generator who are eligible for REC, will be eligible for issuance of RECs for the period of PPA as per the prevailing guidelines.
    • The existing RE projects that are eligible for REC would continue to get RECs for 25 years.
    • A technology multiplier can be introduced for promotion of new and high priced RE technologies, which can be allocated in various baskets specific to technologies depending on maturity.
    • RECs can be issued to obligated entities (including DISCOMs and open access consumers) which purchase RE Power beyond their RPO compliance notified by the Central Government.
    • No REC to be issued to the beneficiary of subsidies/concessions or waiver of any other charges.
    • Allowing traders and bilateral transactions in REC mechanism.

     

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  • [pib] National Export Insurance Account (NEIA) Scheme

    The Centre has approved the contribution of Grant-in-aid (Corpus) of ₹1,650 Crore to the National Export Insurance Account (NEIA).

    National Export Insurance Account Scheme

    • NEIA Trust was established in 2006 to promote project exports from India that are of strategic and national importance.
    • The NEIA Trust promotes Medium and Long Term (MLT) /project exports.
    • It extends (partial/full) support to covers issued by ECGC (ECGC Ltd, formerly known as Export Credit Guarantee Corporation of India Ltd.) to MLT/project export and to Exim Bank for Buyer’s Credit (BC-NEIA) tied to project exports from India.

    Benefits offered

    • The capital infusion in NEIA Trust will help the Indian Project Exporters (IPE) to tap the huge potential of project exports in focus market.
    • Support to project exports with Indian content sourced from across the country will enhance the manufacturing in India.
    • In addition, assuming an average 75% Indian content in the projects, it is estimated that around 12000 workers will move into formal sector.

    Performance highlights

    • Since inception, NEIA has extended 213 covers, with a consolidated project value of Rs. 53,000 crores, to 52 countries as of 31st August 2021.
    • Its impact in enabling project exports has been most significant in Africa and South Asia.

     

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