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December 2018

Tax Reforms

[op-ed snap] Why expanding India’s direct tax net is relevant


Mains Paper 3: Economy | Mobilization of resources

From the UPSC perspective, the following things are important:

Prelims level: Direct taxes- types and trends

Mains level: India’s rising middle class and its impact on tax collections


Widening tax base

  1. Most citizens pay direct taxes in successful democracies, but not so in India—partly because of high levels of poverty but also because of rampant tax evasion
  2. Finance minister predicted earlier this month that India can have around 120 million taxpayers as more Indians become part of the formal economy
  3. The number of people filing income tax returns in the current assessment year is already at around 60 million, or 50% higher than the previous year
  4. The finance minister is thus predicting a doubling of the number of income taxpayers in the coming years

Will the number actually double?

  1. India has around 250 million families, more than half of whom will anyway be outside the tax net either because they are farmers or they are too poor to pay taxes
  2. That leaves around 125 million families that can potentially pay income tax
  3. FM is implicitly suggesting that most Indians who should be paying taxes will be doing so soon, even if you adjust for the fact that many families will have more than one taxpayer
  4. However, it is important to remember that a tax filing is not the same as a tax payment, and many Indians who file returns do not actually report any tax liabilities

Why the fiscal deepening of the Indian state is important now?

  1. Neither faster economic growth nor foreign aid will suffice to end extreme poverty by 2030
  2. To end extreme poverty sustainably and as quickly as possible, the states governing the world’s poor need to be strengthened such that they are both accountable to the needs of the poor and have the capacity to meet those needs
  3. Most of the poorest people in the world live in countries such as India that are classified as middle-income countries based on average incomes
  4. These countries are unlikely to get enough foreign aid but they do not have the deep fiscal resources to help their poor either directly through redistribution or indirectly through the provision of public goods that will raise their ability to earn extra income
  5. Countries such as India are thus trapped between the very poor countries that get a lot of foreign aid and the wealthy ones with very strong tax collections

Important consequences of getting more people into the direct tax net

  1. First, the overall boost to tax collections means that the Indian state will be in a better position to perform its key duties without running into repeated fiscal crises
  2. Second, higher direct taxes could provide space for significant cuts in indirect taxes such as the goods and services tax, which in effect means a shift from a regressive to a progressive tax system
  3. Third, a widening tax pool because of formalization means the current perverse system in which efficient firms are taxed at a high rate because inefficient firms manage to slip outside the tax system will end

Way forward

  1. The Indian state has historically battled immense fiscal constraints
  2. The recent trends in direct taxes offer hope but are too preliminary to jump to any conclusion

Minority Issues – SC, ST, Dalits, OBC, Reservations, etc.

[op-ed snap] Review and revise


Mains Paper 2: Governance | mechanisms, laws, institutions & Bodies constituted for the protection & betterment of these vulnerable sections

From the UPSC perspective, the following things are important:

Prelims level: Transgender rights bill 2018, Private members bill

Mains level: Need of protecting and uplifting transgender community


Transgender rights bill 2018

  1. A Supreme Court judgment in 2014 laid out, for the first time, a bill of rights for the country’s much-exploited transgender community
  2. Four years on, despite misgivings of the community, the Lok Sabha has rushed through a bill that imperils many of the gains of the Nalsa judgment

Flaws in the bill

  1. The trans/queer movement is known for its radical insistence that gender is not a one-time fixed membership, but a flowing, subjective and personal experience
  2. In this reimagination, an individual’s freedom to define herself as male or female or neither is entirely hers — with no quarter given to social or parental vetoes
  3. This freedom is enshrined at the heart of the Nalsa judgment — and completely missing from the Transgender Persons (Protection of Rights) Bill, 2016
  4. Instead, the bill envisions a district screening committee which will be invested the power to certify people as trans or not
  5. A person who wishes to transition from one gender identity to another will be certified as male/female only after a gender reassignment surgery — in effect, turning an issue of personal identity into a medical procedure, and making vast swathes of marginalised persons dependent on the whims of an often hostile bureaucracy
  6. There is a provision that they should either live with their natal “family” — defined as blood or adoptive relations — or sent to rehabilitation centres, without factoring in the extent to which discrimination begins at home
  7. It also ignores the fact that hijra communities have for long sheltered young trans-people from the violence and coercion of family
  8. The bill is also silent on the issue of reserving jobs or educational opportunities for trans-people, or ways to punish the prevalent social and economic discrimination that impoverishes them

Taking a cue from the model law

  1. It is not as if the government had no model to follow while drawing up this bill
  2. A private member’s bill, moved by DMK’s Thiruchi Siva, in 2015 was passed by the Rajya Sabha in 2015
  3. Its progressive provisions on reservation, education and employment, its understanding of gender self-determination, are a measure of what the newly amended bill could have become

Way forward

  1. It is hoped that as the bill moves to the Rajya Sabha, these fundamental errors are removed to allow it to become a piece of legislation that is an ally for the transgender community, rather than one more element in their exploitation

History- Important places, persons in news

How India fuelled slavery with the export of cotton


Mains Paper 1: Modern Indian History | From about the middle of the eighteenth century until the present- significant events.

From the UPSC perspective, the following things are important:

Prelims level:  The attached story is full of factual details

Mains level: Colonial trade and its impact on domestic artisans


200 years since cotton mills in India

  1. In 1708, the old English East India Company had just merged with the United Company of Merchants of England to become the East India Company.
  2. That same year, the company’s Indian headquarters shifted from Bombay to Calcutta.
  3. A century later, in 1818, the first Indian cotton mill, the Bowreah Mills, was created by Henry Gouger at Fort Gloster in the Hughli district of Calcutta.

Indian owned mills

  1. The first truly Indian cotton mill is usually attributed to Cowasjee Nanabhai Davar of Bombay Spinning and Weaving Company.
  2. Built in Bombay in 1851, it started work in 1854.
  3. The very first cotton mills in India, however, were powered by the British.

Quest for Indian Cotton

  1. When the American Civil War broke out (1861-65), the export of long-staple American cotton to the Lancashire Mills stopped, becoming the chief reason why Britain began to look towards India for raw cotton.
  2. Britain thus bought India’s crop, grown under strict regulations of imperial revenue and taxation, finished it into cheap textiles and oversold it to the colony under the monopoly of its administration.
  3. The number of cotton mills in India rose from 58 in 1880 to 79 in 1883, 193 in 1900, 271 in 1914, and 334 in 1929 — mostly in Bombay and Ahmedabad.

Fuelling slavery

  1. Indian cotton was the gasoline for the Industrial Revolution in Britain as well as the accelerator of railway projects in India.
  2. It is famously remarked that India “paid for its own oppression” under British rule.
  3. India has exported cotton and fabrics to Europe since the 16th century — in the process procuring its own slavery and that of Africa.
  4. And this came about a little over a century after driving millions of homespun cotton weavers and craftsmen to mortal bankruptcy.

Dhaka Muslin lost its popularity

  1. Indian muslins were known as aab-e-rawan (running water), shabnam (evening dew) and beft hawa (woven air).
  2. Before this revolution, Dhaka muslin was the lavish article in Britain, but soon the delicacy of Indian cotton was being feted.
  3. French travellers Francois Bernier and Jean-Baptiste Tavernier wrote of its ubiquity in Mughal harems and on the bodies of royal personages.

The three-continent spanning enterprise

  1. Even when East India Company took control of over 70% of the world’s saltpetre by controlling Bengal, cotton continued to be its principal export, occupying 75% of the company’s total trade in 1766.
  2. The India cotton trade became a three-continent spanning enterprise: “cotton from India, slaves from Africa, and sugar from the Caribbean moved across the planet in a complex commercial dance,” writes Beckert.
  3. Lancashire and Manchester — the cotton textile manufacturing and retailing cities of Britain — profited tremendously from the market for Indian cotton that had already existed in pre-industrial Europe.
  4. Mining the ‘white gold,’ as cotton was also called, became Britain’s native industry.

Deep paradox

  1. Gandhi understood the ghostliness of an industry that had mummified weavers into power looms.
  2. And one of the first strikes he led was at a cotton mill in Ahmedabad in 1918.
  3. The charkha was Gandhi’s attempt to crystallize the very deep paradox of an Indian economy and culture in the hands of Western imperialism.
  4. The real colonization was not just British economic exploitation, but the transition of India from a self-sustained economy to an industrialized nation, which would preserve and perpetuate the class divide.

India’s staggering cotton exports

  1. Five years ago, in 2013, there were about 2,000 cotton mills in India.
  2. This was still 600 less than the number of mills in Lancashire alone in 1860.
  3. Two hundred years after its first cotton mill, India has been unable to come close to the scale that Britain enjoyed during the Industrial Revolution.
  4. And from 2013 to 2017, although still the third biggest cotton exporter in the world, India’s total cotton exports have fallen by a staggering 59%.

Climate Change Impact on India and World – International Reports, Key Observations, etc.

[op-ed snap] What’s in climate change Rulebook


Mains Paper 3: Environment | Conservation, environmental pollution and degradation, environmental impact assessment

From UPSC perspective, the following things are important:

Prelims level: Rulebook for implementing Paris Agreement

Mains level:  Outcomes of COP-24


The quest for a global Rulebook

  1. During the weekend, the global fight against climate change reached another milestone when negotiators from 196 countries finalised a rulebook for the 2015 Paris Agreement.
  2. The finalization paves the way for implementation of the Paris Agreement, which is supposed to replace the existing Kyoto Protocol in 2020.
  3. The creation of the rulebook has been hailed as an important step that has breathed life into the Paris Agreement.
  4. At the same time, several countries and nongovernmental organisations have said the deal reached in Katowice, though welcome, was not enough.

The Rulebook

  1. The rulebook contains various other processes and guidelines needed for implementing the other provisions of the Paris Agreement.
  2. In short, it holds the operational details of the Paris Agreement.

What is in the Rulebook?

  1. Broadly, the Paris Agreement, which seeks to keep the global average temperatures “well below” 2°C from pre-industrial times, specifies what steps countries need to take in the fight against climate change.
  2. The rulebook prescribes how to do those things, and how each of them would be measured and verified.
  3. For example, the Paris Agreement says every country must have a climate action plan, and that this should be periodically updated and submitted to the UN climate body.
  4. The rulebook now specifies what actions can be included in the action plan, how and when to submit them.
  5. Further, the Paris Agreement asks every member nation to submit information about their greenhouse gas emissions every two years.
  6. The rulebook specifies which gases to measure, what methodologies and standards to apply while measuring them, and the kinds of information to be included in their submissions.

Climate Finance: A crucial element of Rulebook

  1. Again, under the Paris Agreement, developed countries are supposed to provide “climate finance” to developing countries to help them deal with climate change, and submit an account of this.
  2. The rulebook says what kinds of financial flows — loans, concessions, grants — can be classified as climate finance, how they should be accounted for, and the kind of information about them needed to be submitted.

Was Katowice only about the rulebook?

  1. It was primarily about the rulebook.
  2. But a few other discussions had also become important.
  3. The current level of climate actions was insufficient to hold the global average temperature within 2°C above pre-industrial levels.

Lack of Ambition & Spat over IPCC report

  1. The special report of the IPCC on the feasibility of attaining a 1.5°C target, which had come out weeks ahead of the Katowice meeting, had added urgency to the discussions.
  2. It was expected that the countries would give some indication of their willingness to do more that what they were currently committed to, and would agree to start a process towards that.
  3. But that did not happen.
  4. Instead, an ugly battle was fought over how to acknowledge the IPCC report, which had been requested by this same conference three years ago, in the final outcome.

Has the rulebook addressed all issues it was meant to look at?

  1. One important element could not be agreed upon and had to be deferred for until next year.
  2. This relates to Article 6 of the Paris Agreement which talks about setting up a market mechanism for trading of carbon emissions.
  3. An emission trading system already exists under the Kyoto Protocol, though it has become ineffective over the last few years and is meant to end with the end of Kyoto Protocol in 2020.
  4. A carbon market allows countries, or industries, to earn carbon credits for the emission reductions they make in excess of what is required of them.
  5. These carbon credits can be traded to the highest bidder in exchange of money. The buyers of carbon credits can show the emission reductions as their own and use them to meet their own reduction targets.

Unused Carbon Credits

  1. In the last few years, as several countries walked out of the Kyoto Protocol, and no country was feeling compelled to meet its 2020 emission reduction targets, there has been virtually no demand for carbon credits.
  2. As a result, developing countries like China, India and Brazil have accumulated huge amounts of unused carbon credits.
  3. Together, China and Brazil are estimated to account for about 70% of global unused carbon credits.
  4. When the rulebook was being discussed in Katowice, these countries argued that their unused carbon credits should be considered valid in the new market mechanism that was being created, something that the developed countries opposed strongly.

Negligence by Developed Countries

  1. The developed countries questioned the authenticity of the unused carbon credits, pointing to weak verification mechanisms of the Kyoto Protocol that allowed dubious projects to claim carbon credits.
  2. The developed countries also argued that some of the proposals being put forward by Brazil for the carbon markets would lead to double-counting of emission reductions.

Procrastination: The ultimate Option

  1. With no side willing to concede ground, there was no option but to defer the discussion over carbon markets to next year, while allowing for the rest of the rulebook to be finalised.
  2. The fact that no side was ready for a compromise, and preferred to reengage at some other time, is an indication of the importance that countries are attaching to the new emission trading system, and their high stakes in that market.
  3. The reemergence of the carbon market could be the next big thing to watch out for in the climate space.

Hits & Misses: Takeaways from COP24

Article 4: Pledges
Article 4 of the 2015 Paris Agreement mandates nationally determined contributions (NDCs) by countries.

Article 6: Carbon markets
Article 6 covers voluntary carbon markets.

Article 9: Climate finance
Developed countries are supposed to provide climate finance to developing countries to help deal with climate change, and submit an account of this.

Child Rights – POSCO, Child Labour Laws, NAPC, etc.

Centre drafts child protection policy


Mains Paper 2: Governance| Mechanisms, laws, institutions and Bodies constituted for the protection and betterment of the vulnerable sections.

The following things are important from UPSC perspective:

Prelims: Not Much

Mains level:  Facilitating more ease for reporting child sexual abuse cases.


  • The WCD Ministry has drafted a policy dedicated to the protection of children, an area that until now was only a part of the broader National Child Policy, 2013.


  1. The Supreme Court had directed the CBI to investigate allegations involving 17 shelter homes for children, destitute women, beggars and senior citizens in Muzaffarpur, Bihar.
  2. The apex court had also asked the Centre to consider framing a national policy on protection of children.

Provisions under draft Policy

  1. As per the draft, the policy will apply to all institutions, and organisations (including corporate and media houses), government or private sector.
  2. The draft policy recommends that all organisations must have a code of conduct based on zero tolerance of child abuse and exploitation.
  3. It requires organisations to lay down that employees don’t use language or behaviour that is inappropriate, harassing, abusive, sexually provocative, demeaning or culturally inappropriate.
  4. A code of conduct for employees of all organisations and a declaration was signed by them agreeing to ensure the safety of

Easy Reporting

  1. Institutions should also designate a staff member to ensure that procedures are in place to ensure the protection of children as well as to report any abuse.
  2. Any individual who suspects physical, sexual or emotional abuse must report it to the helpline number 1098, police or a child welfare committee.

What’s not included?

  1. Unlike the NCP, 2013, the latest draft doesn’t talk about children who may need additional special protection measures.
  2. It doesn’t include protecting those affected by migration, communal or sectarian violence, children forced into begging or in conflict with the law, and those infected with HIV/AIDS.
  3. It also doesn’t talk about the role of the state for ensuring the protection of child rights or addressing local grievances.

What’s more needed?

  1. A policy has four aspects — creating awareness, prevention, reporting and responding.
  2. This draft policy needs to go into all these aspects, especially a reporting structure involving various nodal bodies and a monitoring mechanism for implementation of the guidelines.
  3. Moreover, while it talks about organisations laying down a code of conduct, it doesn’t explain what is acceptable behaviour such as conduct of teachers in schools.
  4. The policy makers should use the opportunity to go beyond the role of institutions and look at the role of individuals.
  5. The norms should be designed in such a way that organisations can customize their policies according to the nature of their work, thereby, giving them a sense of ownership on safeguarding children’s rights.

Women empowerment issues – Jobs,Reservation and education

Gender equality at work more than 200 years off: WEF


Mains Paper 2: IR | Important International institutions, agencies and fora, their structure, mandate

The following things are important from UPSC perspective:

Prelims Level: Global Gender Gap Report

Mains level: Statistical data mentioned in the newscard


  • Women may be shouting louder than ever for equal treatment and pay, but a World Economic Forum (WEF) report indicates it will take centuries to achieve gender parity in workplaces around the globe.

Global Gender Gap Report

  1. The Global Gender Gap Report was first published in 2006 by the World Economic Forum.
  2. It releases an Gender Gap Index designed to measure gender equality.
  3. The index  ranks countries according to calculated gender gap between women and men in four key areas: health, education, economy and politics to gauge the state of gender equality in a country.
  4. The report measures women’s disadvantage compared to men, and is not strictly a measure of equality.

Highlights of 2018 Report

  1. At current rates, the global gender gap across a range of areas will not close for another 108 years, while it is expected to take 202 years to close the workplace gap, WEF found.
  2. After years of advances in education, health and political representation, women registered setbacks in all three areas this year, WEF said.
  3. Only in the area of economic opportunity did the gender gap narrow somewhat, although there is not much to celebrate, with the global wage gap narrowing to nearly 51%.
  4. And the number of women in leadership roles has risen to 34% globally, WEF said.
  5. The report said there had been some improvements in wage equality this year compared to 2017, when the global gender gap widened for the first time in a decade.

Impact of Automation and AI

  1. The report showed that there are now proportionately fewer women than men participating in the workforce, suggesting that automation is having a disproportionate impact on jobs traditionally performed by women.
  2. And women are significantly under-represented in growing areas of employment that require science, technology, engineering and mathematics skills, WEF said.
  3. It decried the particularly low participation of women within the artificial intelligence field, where they make up just 22% of the workforce.
  4. This gap is three times larger than in other industry talent pools.
  5. Women in AI are less likely to be positioned in senior roles

Global Scenario

  1. For instance, while Western European countries could close their gender gaps within 61 years, countries in the Middle East and North Africa will take 153 years.
  2. Overall, the Nordic countries once again dominated the top of the table: men and women were most equal in Iceland, followed by Norway, Sweden and Finland.
  3. Syria, Iraq, Pakistan and finally Yemen showed the biggest overall gender gaps of the countries surveyed.
  4. Among the world’s 20 leading economies, France fared the best, taking 12th place overall, followed by Germany in 14th place, Britain in 15th, Canada in 16th and South Africa in 19th.
  5. The US continued its decline, slipping two places to 51st, with the report in particular blaming a decrease in gender parity in ministerial-level positions.

Global Geological And Climatic Events

Volcano erupts in Indonesia


Mains Paper 1: Geography | Important Geophysical phenomena such as earthquakes, Tsunami, Volcanic activity, cyclone etc

From the UPSC perspective, the following things are important:

Prelims level: Mount Soputan

Mains level: Volcanic eruptions and Plate Tectonics Theory


Mount Soputan erupts

  1. A volcano, Mount Soputan has erupted in Indonesia’s North Sulawesi province spewing a column of ash measuring 7.5 km to the sky.
  2. Soputan is a small stratovolcano that rises to an elevation of 1,784m (5,853 ft).
  3. The cone is made of andesite and basalt rock.
  4. The volcano is one of Sulawesi’s most active, with 39 confirmed eruptions in the last 600 years.
  5. It is one of 129 active volcanoes in Indonesia which lies on a vulnerable quake-hit zone called “the Pacific Ring of Fire”.

Pacific Ring of Fire

  1. The Ring of Fire is a major area in the basin of the Pacific Ocean where many earthquakes and volcanic eruptions occur.
  2. In a large 40,000 km horseshoe shape, it is associated with a nearly continuous series of oceanic trenches, volcanic arcs, and volcanic belts and plate movements.
  3. It has 452 volcanoes (more than 75% of the world’s active and dormant volcanoes).
  4. About 90% of the world’s earthquakes and 81% of the world’s largest earthquakes occur along the Ring of Fire.
  5. The Ring of Fire is a direct result of plate tectonics: the movement and collisions of lithospheric plates, especially subduction in the northern portion.