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July 2019

Tax Reforms

[op-ed of the day] Making anonymity work


From UPSC perspective, the following things are important :

Prelims level : Nothing Much

Mains level : Proposed tax reforms in Budget

Note- Op-ed of the day is the most important editorial of the day. Aspirants should try to cover at least this editorial on a daily basis to have command over most important issues in news. It will help in enhancing and enriching the content in mains answers. Please do not miss at any cost.


An important announcement in the finance minister’s budget speech pertains to the introduction of a system of faceless tax scrutiny assessment.

Meaning of  faceless tax scrutiny assessment.

  • Such an assessment is commendable because in the first place, it means that the assessing officer would not know the taxpayer’s identity and would use only the online filing, and technology platform, to scrutinise the details of the tax payer.
  • Second, there won’t be any personal interaction between the tax payer and the tax officer.
  • This step aims to eliminate corruption in the tax department.
  • Clarity – For faceless tax scrutiny to be successful in all respects, the most important rule is that tax rules ought to be drafted with utmost clarity.
  • Unfortunately, in our Indian tax system, legal disputes ensue because tax laws are not drafted with clarity and are hence misused by tax officers.
  • Litigation -Such litigation adds to cases in the country’s already overburdened courts.
  •  It is, therefore, more important to draft tax rules with clarity before embarking on faceless tax scrutiny.


  • Taxpayer friendly –The tax department should be more taxpayer friendly.
  • The department’s object should not be to maximise tax revenue by making unlawful additions to the taxable income of tax payers or by denying them timely tax refunds.
  • Even though we follow the online tax assessment system, tax payers are not issued large refunds in time.
  • One receives an assessment order or an order giving effect to tax appeals but refunds are issued at end of the financial year — that too without interest from the date of the order to the date of the issue of refund.
  • So before resorting to faceless scrutiny, it would be desirable to make the current online assessment more taxpayer friendly.
  • Last year, the CBDT issued a circular stating that the commissioners of appeal will be rewarded for issuing more orders in favour of the department than those in favour of the taxpayers. This was totally uncalled for.
  • It is important to fix accountability of tax officers and ensure that they pass assessment orders according to the tax statutes.

Case study of an Archaic provision

  • It is not easy for NRIs to sell their property in India.
  • After finding the buyer, they have to get a tax clearance under section 195 or 197 for each sale transaction before registering the sale deed. Such deals often fall through due to delay in securing tax clearance.”
  • To avoid harassment of NRI taxpayers, a circular was issued setting a time limit of 30 days to issue a clearance certificate.
  • But that has not been of much help, because of the corruption in the department and the unfriendly attitudes of tax officers. Taxpayers are issued online notices to submit affidavits or papers, which are not relevant to the determination of the tax or the TDS amount.
  • A person registering a sale deed without obtaining a tax clearance certificate — by accepting a token amount — can be subject to harassment.

Difficult Taxing procedure

  • At present, tax scrutiny assessments are done online.
  • Tax payers receive notices asking them to submit irrelevant details and papers.
  • They are issued notices stating that the required details have not been submitted in time.
  • Tax payers could be subject to penalty, prosecution or an income tax survey. Even senior citizens are not spared.
  • Facing the threat of a survey, the tax payer approaches the tax officer personally to manage the assessment.


Faceless scrutiny will definitely put an end to corruption as the personal interaction between a taxpayer and tax officer will not happen. But before that, the government must ensure that tax officers do not pass unlawful orders online. Tax statutes too need to be drafted with clarity.

Human Rights Issues

[op-ed snap] The terrorist tag: on the latest Amendments to the NIA Act


From UPSC perspective, the following things are important :

Prelims level : Nothing Much

Mains level : Giving tremendous power to NIA will harm human rights situation


The idea of designating an individual as a terrorist, as the latest amendments to the Unlawful Activities (Prevention) Act propose to do, may appear innocuous.

Questions regarding amendment

  • However, designating an individual as a terrorist raises serious constitutional questions and has the potential for misuse.
  • The practice of designating individuals under anti-terrorism laws, prevalent in several countries, is seen as being necessary because banned groups tend to change their names and continue to operate.
  • However, there is no set procedure for designating an individual a terrorist.

Need for precautions

  • Parliament must consider whether an individual can be called a ‘terrorist’ prior to conviction in a court of law.
  • The absence of a judicial determination may render the provision vulnerable to invalidation.
  • There ought to be a distinction between an individual and an organisation, as the former enjoys the right to life and liberty.


  • The likely adverse consequences of a terrorist tag may be worse for individuals than for organisations.
  • Further, individuals may be subjected to arrest and detention; even after obtaining bail from the courts, they may have their travel and movements restricted, besides carrying the taint.
  • This makes it vital that individuals have a faster means of redress than groups.
  • Unfortunately, there is no change in the process of getting an entity removed from the list.
  • Just as any organisation getting the tag, individuals, too, will have to apply to the Centre to get their names removed.

Human rights’ violations

  • A wrongful designation will cause irreparable damage to a person’s reputation, career and livelihood.
  • Union Home Minister’s warning that his government would not spare terrorists or their sympathisers, and his reference to ‘urban Maoists’, are portentous about the possibility of misuse.
  • It has been argued by some members in Parliament that the Bill contains anti-federal features.

Against Federalism

  • The provision to empower the head of the National Investigation Agency to approve the forfeiture of property of those involved in terrorism cases obviously overrides a function of the State government.
  • At present, the approval has to be given by the State police head.
  • Also, there will be a section allowing NIA Inspectors to investigate terrorism cases, as against a Deputy Superintendent of Police or an Assistant Commissioner.
  • This significantly enhances the scope for misuse.


  • The 2004 amendments to the Unlawful Activities (Prevention) Act, 1967, made it a comprehensive anti-terror law that provided for punishing acts of terrorism, as well as for designating groups as ‘terrorist organisations’.
  • Parliament further amended it in 2008 and 2013 to strengthen the legal framework to combat terror.
  • While none will question the need for stringent laws that show ‘zero tolerance’ towards terrorism, the government should be mindful of its obligations to preserve fundamental rights while enacting legislation on the subject.

Legislative Council in States: Issues & Way Forward

Explained: Floor test


From UPSC perspective, the following things are important :

Prelims level : Floor Test

Mains level : Read the attached story

  • The Supreme Court is scheduled to hear a plea filed for an immediate floor test in Karnataka Assembly.

What is a floor test?

  • A floor test is primarily taken to know whether the executive enjoys the confidence of the legislature.
  • It is a constitutional mechanism under which a Chief Minister appointed by the Governor can be asked to prove majority on the floor of the Legislative Assembly of the state.
  • As per the Constitution, the Chief Minister is appointed by the Governor of the state.
  • When a single party secures the majority of the seats in the house, the Governor appoints the leader of the party as the Chief Minister.
  • In case the majority is questioned, the leader of the party which claims majority has to move a vote of confidence and prove majority among those present and voting.
  • The Chief Minister has to resign if they fail to prove their majority in the house. This happens both in the parliament and the state legislative assemblies.
  • In situations when there are differences within a coalition government, the Governor can ask the Chief Minister to prove majority in the house.

What is composite floor test?

  • There is another test, Composite Floor Test, which is conducted only when more than one person stakes claim to form the government.
  • When the majority is not clear, the governor might call for a special session to see who has the majority.
  • The majority is counted based on those present and voting. This can also be done through a voice vote where the member can respond orally or through division voting.
  • Some legislators may be absent or choose not to vote.
  • In division vote, voting can be done through electronic gadgets, ballots or slips.
  • The person who has the majority will form the government. In case of tie, the speaker can also cast his vote.

Governors’ discretion

  • When no party gets a clear majority, the governor can use his discretion in the selection of chief ministerial candidate to prove the majority as soon as possible.

Health Sector – UHC, National Health Policy, Family Planning, Health Insurance, etc.

National Data Quality Forum (NDQF)


From UPSC perspective, the following things are important :

Prelims level : National Data Quality Forum (NDQF)

Mains level : Utilizing meadical health data

National Data Quality Forum

  • The Indian Council of Medical Research (ICMR)’s National Institute for Medical Statistics (ICMR-NIMS), in partnership with Population Council, launched the NDQF.
  • It will integrate learning from scientific and evidence-based initiatives and guide actions through periodic workshops and conferences.
  • Its activities will help establish protocols and good practices of data collection, storage, use and dissemination that can be applied to health and demographic data, as well as replicated across industries and sectors noted a release issued by ICMR.

Why need NDQF?

  • India has a rich resource of data on its population, its health status and demographic behaviour and economic condition among many other aspects of life and environment.
  • This wealth of data can be translated into insights and, eventually, into policy through a layered process involving human and technological inputs at every stage.
  • However, these data often suffer from some common challenges related to human and technological factors and affect its quality.

Global Geological And Climatic Events

Milky Way’s violent birth decoded


From UPSC perspective, the following things are important :

Prelims level : Milky Way, Big Bang

Mains level : Formation of our solar system

  • The Milky Way, home to our sun and billions of other stars, merged with another smaller galaxy in a colossal cosmic collision roughly 10 billion years ago, scientists said based on data from the Gaia space observatory.

What is Milky Way?

  • The Milky Way is the galaxy that contains the Solar System, with the name describing the galaxy’s appearance from Earth.
  • It resembles to a hazy band of light seen in the night sky formed from stars that cannot be individually distinguished by the naked eye.
  • Galileo Galilei first resolved the band of light into individual stars with his telescope in 1610.

Its formation

  • The union of the Milky Way and the so-called dwarf galaxy Gaia-Enceladus increased our galaxy’s mass by about a quarter and triggered a period of accelerated star formation lasting about 2 to 4 billion years.
  • Galaxies of all types, including the Milky Way, began to form relatively soon after the Big Bang explosion that marked the beginning of the universe some 13.8 billion years ago.
  • But they were generally smaller than those seen today and were forming stars at a rapid rate.
  • Subsequent galactic mergers were instrumental in configuring galaxies existing now.

How was that verified?

  • A high-precision measurement of the position, brightness and distance of around a million stars within 6,500 light years of the sun was obtained by the Gaia space telescope.
  • It helped pinpoint stars present before the merger and those that formed afterward.
  • Certain stars with higher content of elements other than hydrogen or helium arose in the Milky Way and others with lower such content originated in Gaia-Enceladus owing to its smaller mass.
  • While the merger was dramatic and helped shape the Milky Way, it was not a star-destroying calamity.
  • This crash was big in cosmic terms, but if it was happening now, we could probably not even notice at a human or solar system level.

Women empowerment issues – Jobs,Reservation and education

[op-ed snap] Making national legislatures more gender-balanced


From UPSC perspective, the following things are important :

Prelims level : Nothing Much

Mains level : Women's reservation Issue


  • The Global Gender Gap report for 2018 said that the widest gender disparity is in the field of political empowerment.
  • To cite the Inter-Parliamentary Union 2018 report, women legislators account for barely 24% of all MPs across the world.
  • However, the experience of the top-ranked countries in the IPU list does give an indication of how women’s presence in political spaces took an upward turn in those nations.


  • Rwanda, a landlocked nation with a population of 11.2 million, tops the list, with 61.3% seats in the Lower House and 38.5% in the Upper House occupied by women.
  • Since 2003, the country has implemented a legislated quota of 30% in all elected positions, which has enabled a steady inflow of women parliamentarians after successive elections.
  • Its Constitution has also set a quota of 30% in all elected offices.
  • However, some believe that the higher representation of women in the country cannot be attributed solely to quotas — women were thrust into the political limelight due to the huge vacuum that emerged in the aftermath of the 1994 genocide, which resulted in a large chunk of the country’s male population getting killed.

Leader in the Caribbean

  • Cuba, the largest Caribbean island nation with a population of about 11.1 million, holds the second rank, with 53.2 % seats of its 605-member single House being occupied by women representatives.
  • The Communist dispensation in Cuba did not opt for legislated gender quotas, but does follow a practice akin to voluntary quota systems.
  • However, Cuban women are less represented at the local level, where candidates are selected by the local communities that often overlook women candidates.
  • Sweden, the fifth-rank holder in the IPU, has a professedly feminist government and has maintained a women’s parliamentary representation of at least 40% since 90s.
  • The 349-member single House, Swedish Parliament, now has 161 women with 46.1% representation.
  • Sweden does not have any constitutional clause or electoral law earmarking representation for women in elected bodies.
  • The issue of compulsory gender quota didn’t find favour in Sweden as it was believed that such a quota will create reverse discrimination and violate the principles of equal opportunities.
  • Almost all political parties there have adopted measures to ensure a fair representation for women at all levels.
  • In 1993, the Social Democratic Party adopted the ‘zipper system’, described as “a gender quota system whereby women and men are placed alternately on all party lists.”
  • This further boosted women’s seat share.

Nepal’s example

Closer home, Nepal occupies the 36th position in the IPU and its 275-member Lower House has 90 women, about 32.7% of the total strength.

Situation in India

  • India, at 149 among the 192 countries in the IPU list, had barely 11.8% women’s representation in the 16th Lok Sabha, which improved to 14.5% in the current Lower House.
  • At least seven out of the 29 States have not sent a single woman MP.
  • The 108th Constitutional Amendment Bill stipulating 33% quota for women in the Parliament and in State Assemblies remains in political cold storage.

Way forward

  • The system of voluntary party quotas, which has worked well in many countries, is not likely to cut much ice in India’s deeply embedded patriarchal society.
  • As has happened in the case of panchayats and municipalities, only a legally mandated quota could perhaps ensure a large-scale entry of Indian women into the higher echelons of political power.

Financial Inclusion in India and Its Challenges

Kisan Vikas Patra


From UPSC perspective, the following things are important :

Prelims level : Kisan Vikas Patra

Mains level : Not Much

  • In view of falling interest rates, the government has increased the time period by 1 month for doubling the money invested in Kisan Vikas Patra (KVP) to 9 years and 5 months.

Kisan Vikas Patra (KVP)

  • KVP is a saving certificate scheme which was first launched in 1988 by India Post wherein invested money doubled during the maturity period.
  • It was discontinued in 2011 and later reintroduced in 2014.It is considered a part of the National Small Savings Fund.
  • The amount (Principal) invested in KVP would get doubled in 112 months. The rate of interest is 7.6% from 29th June 2019
  • KVP certificates are available in the denominations of Rs 1000, Rs 5000, Rs 10000 and Rs 50000.
  • The minimum amount that can be invested is Rs 1000. However, there is no upper limit on the purchase of KVPs.

Refund conditions

  • KVP does not offer any income tax benefits to the investor.
  • The amount of KVP can be withdrawn after 118 months (9 years and 10 months).The maturity period of a KVP is 2 years 6 months (30 months).
  • Premature encashment of the KVP certificate is not permissible. The certificates can only be encashed in event of the death of the holder or forfeiture by a pledge or on the order of the courts.

Unlawful Activities Prevention (Amendment) Bill, 2019


From UPSC perspective, the following things are important :

Prelims level : UAPA Act

Mains level : Curbing terror related activities in India

  • The Lok Sabha has passed the Unlawful Activities (Prevention) Amendment Bill 2019, in a move that gives a big push to India’s internal security machinery.
  • The move comes after amendment to the NIA Bill.

About UAPA

  • The UAPA is an upgrade on the Terrorist and Disruptive Activities (Prevention) Act TADA, which was allowed to lapse in 1995 and the Prevention of Terrorism Act (POTA) was repealed in 2004 .
  • It was originally passed in 1967 under the then Congress government led by former Prime Minister Indira Gandhi.
  • Till 2004, “unlawful” activities referred to actions related to secession and cession of territory. Following the 2004 amendment, “terrorist act” was added to the list of offences.

Why amendment?

  • The Bill amends the Unlawful Activities (Prevention) Act, 1967, providing special procedures to deal with terrorist activities, and individuals and groups that foster terrorism in India.

Key takeaways of the Bill

  • The proposed amendments to the existing Act redefines “Who may commit terrorism“, establishing that under the Act, the Centre may designate an organisation as a terrorist organisation if it commits or participates in acts of terrorism, prepares for terrorism, promotes terrorism, or is otherwise involved in terrorism.
  • The Bill also additionally empowers the government to designate individuals as terrorists on the same grounds.
  • The Bill also paves the way for the National Investigation Agency (NIA) to seize property as part of investigations into terror cases.
  • At the same time, while the existing Act provides for investigation of cases to be conducted by officers of the rank of Deputy Superintendent or Assistant Commissioner of Police or above.
  • The proposed amendment additionally empowers the officers of the NIA to investigate cases — of the rank of Inspector or above.
  • Further, the International Convention for Suppression of Acts of Nuclear Terrorism (2005) has also been added in the Second Schedule through this Amendment.

Why is UAPA amendment essential?

  • It is often accused that UAPA Act assigns absolute power to the central government to declare someone as terrorist.
  • Terrorism is not just fostered by the gun. Terrorism is also the spread of hate and radicalism.
  • If the bill is passed, a person can be declared a terrorist when they take part in terror activities, or provide funds, or harbour a terror theory and then spread it among youth.