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  • Strains on India-Russia Defence Cooperation

    As the war in Ukraine stretches over four months with no end in sight, it has given rise to apprehensions on Russia’s ability to adhere to timely deliveries of spares and hardware to India.

    History of the bilateral defence ties

    • India was reliant, almost solely on the British, and other Western nations for its arms imports immediately after Independence.
    • However, this dependence weaned, and by the 1970s India was importing several weapons systems from then USSR, making it the country’s largest defence importer for decades.

    A major chunk of India’s strategic arms

    • Russia has provided some of the most sensitive and important weapons platforms that India has required from time to time including nuclear submarines, aircraft carriers, tanks, guns, fighter jets, and missiles.
    • According to one estimate, the share of Russian-origin weapons and platforms across Indian armed forces is as high as 85%.
    • Russia is the second-largest arms exporter in the world, following only the United States.
    • For Russia, India is the largest importer, and for India, Russia is the largest exporter when it comes to arms transfer.

    What saw the decline?

    • Between 2000 and 2020, Russia accounted for 66.5% of India’s arms imports.
    • Russia’s share in Indian arms imports was down to about 50% between 2016 and 2020, but it still remained the largest single importer.

    Present status of defence cooperation

    • When the war began, Indian armed forces had stocks of spares and supplies for eight to ten months and the expectation was that the war would end quickly.
    • However, as it stretches on with no clear endgame, there are apprehensions on Russia’s ability to adhere to the timelines for both spares as well as new deliveries.
    • Armed forces are looking at certain alternative mitigation measures and identifying alternate sources from friendly foreign countries.
    • However, in the long term, this is also an opportunity for the private industry to step up production and meet the requirements.

    Impact of the war

    • While some timeline lapses and shipping delays were possible, there would not be any dent on the Army’s operational preparedness along the borders.
    • In addition, the armed forces have also made significant emergency procurements since the standoff in Eastern Ladakh and have stocked up on spares and ammunition.
    • However, Russia has assured India that it would adhere to delivery timelines.
    • Since the war sees no end, Russian industry would be caught up in replenishing the inventories of their own armed forces.

    What is the status of deals underway/new deals pending with Russia?

    • The defence trade between India and Russia has crossed $15 billion since 2018, in the backdrop of some big deals including the $5.43 billion S-400 long range air defence systems.
    • Other major contracts currently under implementation are construction of four additional stealth frigates in Russia and India,
    • There is a licensed production of the Mango Armor-piercing fin-stabilised discarding sabot (APFSDS) rounds for the T-90S tanks as also additional T-90S tanks, AK-203 assault rifles among others.

    Deferred deals in downtime

    • There are several big deals deferred by the Defence Ministry as part of the review of all direct import deals.
    • This is in conjunction with efforts to push the ‘Make in India’ scheme in defence.
    • Russian deals have also been deferred including the one for 21 MiG-29 fighter jets for the Indian Air Force (IAF) along with the upgradation of 59 existing Mig-29 jets.
    • This also includes the deferment of the manufacture of 12 SU-30 MKI aircraft by Hindustan Aeronautics Limited (HAL).

    What is the status of payments?

    • While India continues to remain Russia’s largest arms buyer with a major chunk of legacy hardware from Russia and the Soviet Union, the volume of imports has reduced in the last decade.
    • With Russia being shut out of the global SWIFT system for money transfers, India and Russia have agreed to conduct payments through the Rupee-Rouble arrangement.
    • With several big ticket deals including the S-400 under implementation, there are large volume of payments to be made.

     

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  • Earthquake in Afghanistan

    Recently a powerful earthquake of magnitude 5.9 on the Richter scale struck a remote town in Afghanistan, killing over a thousand and injuring many more.

    How do earthquakes happen?

    • According to the theory of plate tectonics, the Earth’s crust and upper mantle are made of large rigid plates that can move relative to one another.
    • Slip on faults near the plate boundaries can result in earthquakes.
    • The point inside the Earth where the earthquake rupture starts is called the focus or hypocentre.
    • The point directly above it on the surface of the Earth is the epicentre.

    What are Seismic Waves?

    • Any elastic material when subjected to stress, stretches in a proportional way, until the elastic limit is reached.
    • When the elastic limit is crossed, it breaks.
    • Similarly, the Earth also has an elastic limit and when the stress is higher than this limit, it breaks.
    • Then there is a generation of heat, and energy is released. Since the material is elastic, the energy is released in the form of elastic waves.
    • These propagate to a distance determined by the extent of the impact. These are known as seismic waves.

    Why Earthquake in Afghanistan?

    • Afghanistan is earthquake-prone because it’s located in the mountainous Hindu Kush region, which is part of the Alpide belt — the second most seismically active region in the world after the Pacific Ring of Fire.
    • The Alpide belt runs about 15,000 kilometers, from the southern part of Eurasia through the Himalayas and into the Atlantic.
    • Along with the Hindu Kush, it includes a number of mountain ranges, such as the Alps, Atlas Mountains and the Caucasus Mountains.
    • Additionally, the Earth’s crust is especially lively in Afghanistan because it is where the Arabian, Indian and Eurasian tectonic plates meet.
    • The boundary between the Indian and Eurasian plates exists near Afghanistan’s border with Pakistan.

    How are earthquakes measured?

    • Earthquakes are measured by seismographic networks, which are made of seismic stations, each of which measures the shaking of the ground beneath it.
    • In India, the National Seismological Network does this work.
    • It has a history of about 120 years and its sensors can now detect an earthquake within five to ten minutes.

    Issues with Earthquake measurement

    • Everywhere, the wave parameters are measured, not the total energy released.
    • There is a direct relationship between the quantum of energy released and the wave amplitude.
    • The amplitude of the wave is a function of the time period of the wave.
    • It is possible to convert the measured wave amplitude into the energy released for that earthquake.
    • This is what seismologists call the magnitude of the earthquake.

    What is the Richter magnitude scale?

    • This is a measure of the magnitude of an earthquake and was first defined by Charles F. Richter of the California Institute of Technology, U.S., in 1935.
    • The magnitude of an earthquake is the logarithm of the amplitude of the waves measured by the seismographs.
    • Richter scale magnitudes are expressed as a whole number and a decimal part, for example 6.3 or 5.2.
    • Since it is a logarithmic scale, an increase of the whole number by one unit signifies a tenfold increase in the amplitude of the wave and a 31-times increase of the energy released.

    How are zones designated?

    • Based on seismicity, intensity of earthquakes experienced, and geological and tectonic qualities of a region, countries are divided into several zones.
    • In India, for example, there are four zones, designated Zone II-Zone V. Among these, Zone V is the most hazardous and Zone II the least hazardous.

    Can we predict Earthquakes?

    • Since parameters of the earthquake are unknown, it is near impossible to predict an earthquake.
    • The problem with earthquakes is that they are heavily dependent on the material property, which varies from place to place.
    • If there are elastic waves propagating through a material, there are two kinds of waves — the primary wave which reaches first, and the second one called the secondary wave, which is more destructive.
    • If it is known that the amount of energy released is extremely high, trains and power grids can be shut down and the damage minimised.
    • This has worked in some locations, but not on a large commercial basis.

    Successful attempts made so far

    • The most successful early warning systems are in Japan.
    • They have several hundreds of thousands recording devices.
    • Responses are sent to a central point where they estimate whether it is large enough to form a tsunami or some other hazard, and precautionary steps are taken.

     

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  • Functioning of the National Investigation Agency (NIA)

    The National Investigation Agency (NIA) has taken over the probe into the terrible beheading of a person in Udaipur by Jihadi radicalists.

    What is the NIA?

    • Headquartered in Delhi, the NIA has its branches in Hyderabad, Guwahati, Kochi, Lucknow, Mumbai, Kolkata, Raipur, Jammu, Chandigarh, Ranchi, Chennai, Imphal, Bengaluru and Patna.
    • It is a central agency mandated to investigate all the offences affecting:
    1. Sovereignty, security and integrity of India
    2. Friendly relations with foreign states
    3. Offences under the statutory laws enacted to implement international treaties, agreements, conventions and resolutions of the United Nations, its agencies and other international organisations
    • The offense include terror acts and their possible links with crimes like smuggling of arms, drugs and fake Indian currency and infiltration from across the borders.
    • The agency has the power to search, seize, arrest and prosecute those involved in such offences.

    When did the NIA come into being?

    • In the wake of the 26/11 Mumbai terror attack in November 2008, which shocked the entire world, the then United Progressive Alliance government decided to establish the NIA.
    • In December 2008, former Union Home Minister P. Chidambaram introduced the National Investigation Agency Bill.
    • The agency would deal with only eight laws mentioned in the schedule and that a balance had been struck between the right of the State and duties of the Central government to investigate the more important cases.
    • The agency came into existence on December 31, 2008, and started its functioning in 2009.
    • Till date, the NIA has registered 447 cases.

    What are the scheduled offences?

    The list includes the

    1. Explosive Substances Act,
    2. Atomic Energy Act,
    3. Unlawful Activities (Prevention) Act,
    4. Anti-Hijacking Act,
    5. Suppression of Unlawful Acts against Safety of Civil Aviation Act,
    6. SAARC Convention (Suppression of Terrorism) Act,
    7. Suppression of Unlawful Acts Against Safety of Maritime Navigation and Fixed Platforms on Continental Shelf Act,
    8. Weapons of Mass Destruction and their Delivery Systems (Prohibition of Unlawful Activities) Act and
    9. Relevant offences under the Indian Penal Code, Arms Act and
    10. Information Technology Act
    • In September 2020, the Centre empowered the NIA to also probe offences under the Narcotic Drugs and Psychotropic Substances Act that are connected to terror cases.

    How wide is NIA’s jurisdiction?

    • The law under which the agency operates extends to the whole of India.
    • It also applies to:
    1. Indian citizens outside the country;
    2. Persons in the service of the government wherever they are posted;
    3. Persons on ships and aircraft registered in India wherever they may be;
    4. Persons who commit a scheduled offence beyond India against the Indian citizen or affecting the interest of India.

    How does the NIA take up a probe?

    • As provided under Section 6 of the Act, State governments can refer the cases pertaining to the scheduled offences registered at any police station to the Central government (Union Home Ministry) for NIA investigation.
    • After assessing the details made available, the Centre can then direct the agency to take over the case.
    • State governments are required to extend all assistance to the NIA.
    • Even when the Central government is of the opinion that a scheduled offence has been committed which is required to be investigated under the Act, it may, suo motu, direct the agency to take up/over the probe.

     

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  • 100 years of Rampa or Manyam Rebellion

    Hundred years ago, in August 1922 the “Rampa Rebellion” or “Manyam Rebellion” took place in the forests of the Godavari Agency in the Madras Presidency.

    Rampa Rebellion

    • The Rampa Rebellion of 1922, also known as the Manyam Rebellion, was a tribal uprising led by Alluri Sitarama Raju in Godavari Agency.
    • It began in August 1922 and lasted until the capture and killing of Raju in May 1924.
    • Forced labour, embargoes on collecting minor forest produce and bans on tribal agriculture practices led to severe distress among the Koyas in the area.
    • Sitarama Raju did not belong to the tribal community, but understood the restrictions that the British colonial administration placed on the tribal way of life.

    Background of the revolt

    • The Rampa administrative area comprised around 1,800 square km and had a mostly tribal population of approximately 28,000.
    • They had traditionally been able to support their food requirements through the use, in particular, of the podu system, whereby each year some areas of jungle forest were burned to clear land for cultivation.
    • The British Raj authorities had wanted to improve the economic usefulness of lands in Godavari Agency, an area that was noted for the prevalence of malaria and blackwater fever.
    • The traditional cultivation methods were greatly hindered when the authorities took control of the forests, mostly for commercial purposes such as produce for building railways and ships.
    • This was done regardless of the needs of the tribal people.

    Why did people revolt?

    • The tribal people of the forested hills, who now faced starvation had long felt that the legal system favoured the muttadar (estate landowners) and merchants.
    • This had also resulted in the earlier Rampa Rebellion of 1879.
    • Now they objected also to the Raj laws and continued actions that hindered their economic position and meant they had to find alternate livelihood.
    • They objected to attempts at that time to use them as forced labour in the construction of a road in the area.

    Role of Raju

    • Raju was a charismatic sanyasin, believed by many tribal people to possess magical abilities and to have an almost messianic status.
    • He saw the overthrow of colonial rule in terms similar to a millenarian event and he harnessed the discontent of the tribal people to support his anti-colonial zeal.

    Course of revolt

    • Alluri Sitarama Raju, along with 500 tribal people, attacked the police stations of Chintapalli, Krishnadevipeta and Rajavommangi.
    • They walked away with 26 police carbine rifles and 2,500 rounds of ammunition.
    • Legend has it that Alluri himself would forewarn the British officers of an imminent attack and would challenge them to stop him with the superior resources that they had at hand.
    • He was finally captured, tied to a tree and shot dead.

     

    Try this PYQ:

    Q. With reference to the history of India, “Ulgulan” or the Great Tumult is the description of which of the following event?

    (a) The Revolt of 1857

    (b) The Mappila Rebellion of 1921

    (c) The Indigo Revolt of 1859-60

    (d) Birsa Munda’s Revolt of 1899-1900

     

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  • Researchers found gene regulating Nitrogen absorption in Plant

    Researchers led by those from the National Centre of Biological Sciences, Tata Institute of Fundamental Research, Bengaluru (NCBS-TIFR), have found a new pathway that regulates nitrate absorption in plants.

    Nitrogen in plant nutrition

    • Nitrogen is one of the most important macronutrients needed for development of a plant.
    • It is a part of chlorophyll, amino acids and nucleic acids, among others.
    • It is mostly sourced from the soil where it is mainly absorbed in the form of nitrates and ammonium by the roots.
    • Nitrates also play a role in controlling genome-wide gene expression that in turn regulates root system architecture, flowering time, leaf development, etc.
    • Thus, while a lot of action takes place in the roots to absorb and convert nitrogen into useful nitrates, the absorbed nitrates in turn regulate plant development apart from being useful as a macronutrient.

    What is MADS27?

    • The gene MADS27, which regulates nitrate absorption, root development and stress tolerance, is activated by the micro-RNA, miR444, therefore offers a way to control these properties of the plant.
    • The researchers studied this mechanism in both rice (monocot) and tobacco (dicot) plants.

    Regulatory switches

    • In addition to this route, several gene regulatory switches that regulate nitrate absorption and root development, such as the micro-RNA, miR444, are known in monocot plants, such as rice.
    • The micro-RNA ‘miR444’ is specific to monocots.
    • When this is not made, its target, MADS27, is produced in higher abundance, and it improves biosynthesis and transport of the hormone auxin, which is key for root development and its branching.
    • This regulatory miR444 switch is known to turn off at least five genes called MADS box transcription factor genes.
    • The speciality of the MADS box transcription factors is that they function like switch boxes of their own.
    • They bind to their favourite specific DNA sequences and they switch the neighbouring genes “on.”

    Why is the discovery important?

    • Presence of nitrates is important for the plant development and also for grain production.
    • However, the overuse of nitrates in fertilizers, for instance, can lead to the dumping of nitrates in the soil which leads to accumulation of nitrates in water and soil.
    • This accumulation adds to soil and water pollution and increased contribution to greenhouse gases.
    • Also, since the whole process of nitrate absorption takes place in the roots, a well-developed root system is needed for this to take place optimally.
    • At one level, it is known that the hormone auxin is responsible for well-developed roots across all plants.
    • A number of genes are known to help with auxin production, improved nitrate transport and assimilation in plants.

    Significance of MADS27

    • The MADS27 transcription factor has a three-pronged effect on the plant.
    • First, it regulates nitrate absorption by switching “on” proteins involved in this process.
    • Second, it leads to better development of the roots by regulating auxin hormone production and transport.
    • Finally, and somewhat surprisingly to the researchers, it helps in the abiotic stress tolerance by keeping the main stress player proteins “on.”

     

     

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  • Mayurbhanj’s superfood ‘Ant Chutney’

    The Kai Chutney made from Red Ants by the tribals of Mayurbhanj district in Odisha are seeking a Geographical Indications (GI) tag.

    Ant Chutney

    • Despite this, weaver ants are popular among the people, mostly of the tribes,
    • This food item, rich in proteins, calcium, zinc, vitamin B-12, iron, magnesium, potassium, sodium, copper, fibre and 18 amino acids, is known to boost the immune system and keep diseases at bay.
    • Applied under food category, the GI tag will help develop a structured hygiene protocol in the preparation of Kai chutney for standard wider use.
    • Geographical Indications labels enhance the reputation and value of local products and support local businesses.

    How is the Chutney prepared?

    • Weaver ants, Oecophylla smaragdina, are abundantly found in Mayurbhanj throughout the year.
    • They make nests with leaves of host trees.
    • The chutney is prepared by mixing and grinding salt, ginger, garlic and chilly and is sold by tribal people in rural markets.

     

    Answer this PYQ in the comment box:

    Q.Which of the following has/have been accorded ‘Geographical Indication’ status?

    1. Banaras Brocades and Sarees
    2. Rajasthani Daal-Bati-Churma
    3. Tirupathi Laddu

    Select the correct answer using the code given below:

    (a) 1 only

    (b) 2 and 3 only

    (c) 1 and 3 only

    (d) 1, 2 and 3

     

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    Back2Basics:  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.
    • Nodal Agency: Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce and Industry
    • 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).
    • The tag stands valid for 10 years.

     

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  • How the RBI unconventionally innovated policy to fight the pandemic

    Context

    Recently, the RBI has been at the receiving end for mission the inflation target.

    Understanding the RBI’s rationale

    • Supply side shock: Inflation has been largely the result of supply side shocks from vegetable prices, caused by crop damages due to unseasonal rains (tomato, onion and potato) in late 2019 and widespread supply-side disruptions after the outbreak of the pandemic.
    • A narrow-minded focus on inflation caused by supply shocks would have constrained the MPC from supporting growth amidst the unprecedented loss of life and livelihood.
    • Focusing on recovery: Therefore, it was necessary to provide a lifeline to the economy at that juncture by focusing on the recovery.
    • Moreover, the wide tolerance band of 200bps +/- in the inflation targeting framework was specifically designed to accommodate such supply shocks, which provided the flexibility in the flexible targeting (FIT) framework.
    • Taking into account objective of growth: In contrast to a pure inflation targeting framework (inflation nutters), the amended mandate of the RBI under FIT reads as “price stability, taking into account the objective of growth”.
    • Therefore, the MPC was justified in looking through the higher inflation print during the pandemic while trying to resurrect growth.

    No contradiction between Governor’s statement and MPC resolution

    • Recently, the MPC highlighted inflation concerns and voted to raise the policy repo rate.
    • The governor’s statement of the same day noted that the RBI will ensure an orderly completion of the government’s borrowing programme.
    • Contradictory objectives: It is said that the above two actions created confusion as lowering inflation and lowering government bond yields are contradictory objectives.
    • This justification is redundant as an orderly completion of the borrowing programme does not imply lowering yields.
    • It basically ensures that the borrowing programme is completed seamlessly at low costs (ensured through auctions).
    • Moreover, from a theoretical perspective, this is not inconsistent because controlling inflation and lowering inflation expectations bodes well for the term premia of bond yields — which moderate once expectations are anchored.
    • Therefore, if inflation is reined in, the government stands to gain in terms of lower interest costs.
    • Was width of corridor lost during pandemic? It is argued that  the MPC kept repo rates unchanged while the RBI changed the reverse repo rate during the pandemic, meaning that the fixed width of the corridor was lost and the MPC lost its role in setting interest rates and so, its credibility.
    • This argument does not stand scrutiny.
    • During the pandemic, the policy repo rate was cumulatively reduced by an unprecedented 115 bps and the interest rate on the overnight fixed-rate reverse repo was reduced cumulatively by 155 bps.
    • Assymetric corridor justified in crises: This measure was not incongruous with contemporary wisdom as an asymmetric corridor has been justified, particularly during crisis times (Goodhart, 2010).
    • Given that elevated inflation concerns precluded the possibility of any further repo rate cuts (cumulatively reduced by 250 basis points since February 2019), financial conditions were eased substantially by reducing the reverse repo rate, which lowered the floor rate of interest in the economy.
    • Since the mandate of the MPC is to control inflation for which the policy instrument is the repo rate, the RBI had used the LAF through changes in the reverse repo rate to alter liquidity conditions.

    Trade offs involved in inflation targeting for emerging economies

    • Inflation-targeting countries, because of their sole focus on inflation, experience lower inflation volatility but higher output volatility.
    • Higher output volatility entails a higher sacrifice ratio — the proportion of output foregone for lowering inflation.
    • For an emerging economy, the costs of higher output foregone against the benefits of lower inflation must always be balanced as potential output keeps on changing given the shift of the production function.
    • Developed countries, on the other hand, operate near full employment — therefore, sacrifice ratios are lower.
    • As a result, smoothening inflation volatility is relatively costless for them.

    Conclusion

    The RBI has innovated admirably under its current stewards during the pandemic, keeping in mind the task of reinvigorating the economy. Despite the existing targeting framework, it did not get fixated on a one-point agenda, daring to look beyond the inflation print.

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    Back2Basics: Liquidity corridor

    • The Corridor in monetary policy of the RBI refers to the area between the reverse repo rate and the MSF rate.
    • Reverse repo rate will be the lowest of the policy rates whereas Marginal Standing Facility is something like an upper ceiling with a higher rate than the repo rate.
    • The MSF rate and reverse repo rate determine the corridor for the daily movement in the weighted average call money rate.

  • What are G-Sec Yields?

    Government Securities (G-Secs) yields are at an all-time high.

    What are G-Secs?

    • These are debt instruments issued by the government to borrow money.
    • The two key categories are:
    1. Treasury bills (T-Bills) – short-term instruments which mature in 91 days, 182 days, or 364 days, and
    2. Dated securities – long-term instruments, which mature anywhere between 5 years and 40 years

    Note: T-Bills are issued only by the central government, and the interest on them is determined by market forces.

    Why G-Secs?

    • Like bank fixed deposits, g-secs are not tax-free.
    • They are generally considered the safest form of investment because they are backed by the government. So, the risk of default is almost nil.
    • However, they are not completely risk-free, since they are subject to fluctuations in interest rates.
    • Bank fixed deposits, on the other hand, are guaranteed only to the extent of Rs 5 lakh by the Deposit Insurance and Credit Guarantee Corporation (DICGC).

    How are G-sec yields calculated?

    • G-sec yields change over time; often several times during a single day.
    • This happens because of the manner in which G-secs are structured.
    • Every G-sec has a face value, a coupon payment and price.
    • The price of the bond may or may not be equal to the face value of the bond.
    • Here’s an example: Suppose the government floats a 10-year G-sec with a face value of Rs 100 and a coupon payment of Rs 5.
    • If one were to buy this single G-sec from the government, it would mean that one will give Rs 100 to the government today and the government will promises to 1) return the sum of Rs 100 at the end of tenure (10 years), and 2) pay Rs 5 each year until the end of this tenure.
    • At this point, the face value of this G-sec is equal to its price, and its yield (or the effective interest rate) is 5%.

    How do G-sec yields go up and down?

    • Imagine a scenario in which the government floats just one G-sec, and two people want to buy it.
    • Competitive bidding will ensue, and the price of the bond may rise from Rs 100 (its face value) to Rs 105.
    • Now imagine another lender in the picture, which pushes the price further up to Rs 110.

    What do G-sec yields show?

    • If G-sec yields (say for a 10-year bond) are going up, it would imply that lenders are demanding even more from private sector firms or individuals; that’s because anyone else is riskier when compared to the government.
    • It is also known that when it comes to lending, interest rates rise with the rise in risk profile.
    • As such, if G-sec yields start going up, it means lending to the government is becoming riskier.
    • If you read that the G-sec yields are going up, it suggests that the bond prices are falling. But the prices are falling because fewer people want to lend to the government.
    • And that in turn happens when people are worried about the government’s finances (or its ability to pay back).
    • The government’s finances may be in trouble because the economy is faltering and it is unlikely that the government will meet its expenses.
    • By the reverse logic, if a government’s finances are sorted, more and more people want to lend money to such a G-sec.
    • This in turn, leads to bond prices going up and yields coming down.

    Try this PYQ:

    Consider the following statements:

    1. The Reserve Bank of India manages and services the Government of India Securities but not any State Government Securities.
    2. Treasury bills are issued by the Government of India and there are no treasury bills issued by the State Governments.
    3. Treasury bills offer are issued at a discount from the par value.

    Which of the statements given above is/are correct?

    (a) 1 and 2 only

    (b) 3 Only

    (c) 2 and 3 only

    (d) 1, 2 and 3

     

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  • GST revenues surpass ₹1.44 lakh crore

    India recorded its second-highest monthly gross GST revenues in June at ₹1,44,616 crore, 56% more than a year earlier when the second COVID wave had hit economic activity.

    What is GST?

    • GST is an indirect tax that has replaced many indirect taxes in India such as excise duty, VAT, services tax, etc.
    • The Goods and Service Tax Act was passed in Parliament on 29th March 2017 and came into effect on 1st July 2017. It is a single domestic indirect tax law for the entire country.
    • It is a comprehensive, multi-stage, destination-based tax that is levied on every value addition.
    • Under the GST regime, the tax is levied at every point of sale. In the case of intra-state sales, Central GST and State GST are charged. All the inter-state sales are chargeable to the Integrated GST.

    Answer this PYQ in the comment box:

    Q.All revenues received by the Union. Government by way of taxes and other receipts for the conduct of Government business are credited to the (CSP 2015):

    (a) Contingency Fund of India

    (b) Public Account

    (c) Consolidated Fund of India

    (d) Deposits and Advances Fund

     

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    What are the components of GST?

    There are three taxes applicable under this system:

    1. CGST: It is the tax collected by the Central Government on an intra-state sale (e.g., a transaction happening within Maharashtra)
    2. SGST: It is the tax collected by the state government on an intra-state sale (e.g., a transaction happening within Maharashtra)
    3. IGST: It is a tax collected by the Central Government for an inter-state sale (e.g., Maharashtra to Tamil Nadu)

    Advantages Of GST

    • GST has mainly removed the cascading effect on the sale of goods and services.
    • Removal of the cascading effect has impacted the cost of goods.
    • Since the GST regime eliminates the tax on tax, the cost of goods decreases.
    • Also, GST is mainly technologically driven.
    • All the activities like registration, return filing, application for refund and response to notice needs to be done online on the GST portal, which accelerates the processes.

    Issues with GST

    • High operational cost
    • GST has given rise to complexity for many business owners across the nation.
    • GST has received criticism for being called a ‘Disability Tax’ as it now taxes articles such as braille paper, wheelchairs, hearing aid etc.
    • Petrol is not under GST, which goes against the ideals of the unification of commodities.

    Take a look at 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?

     

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  • DRDO tests Autonomous Flying Wing Technology Demonstrator

    The Defence Research and Development Organisation (DRDO) has successfully carried out the maiden test flight of a new Unmanned Aerial Vehicle (UAV), an autonomous Flying Wing Technology Demonstrator, from the Aeronautical Test Range, Chitradurga, Karnataka.

    About the Indigenous Drone

    • The Unmanned Aerial Vehicle (UAV) is powered by a small turbofan engine.
    • It is developed under unmanned combat aerial vehicle (UCAV) programme.
    • It is designed and developed by Aeronautical Development Establishment (ADE), Bengaluru, a premier research laboratory of DRDO.
    • The engine is Russian TRDD-50MT originally designed for cruise missiles.
    • A small turbo fan engine is being developed indigenously for meeting the requirement.

    Various initiatives by DRDO

    • DRDO is in the process of developing UAVs of different classes to met the requirements of the armed forces.
    • Rustom-2, the indigenous Medium Altitude Long Endurance (MALE) UAV under development, had crossed a milestone by reaching an altitude of 25,000 feet and an endurance of 10 hours.
    • It is now being designed to reach an altitude of 30,000 feet and 18 hours endurance.
    • An Unmanned Combat Aerial Vehicle is also on the drawing board.

    Significance of the development

    • Operating in a fully autonomous mode, the aircraft exhibited a perfect flight, including take-off, way point navigation and a smooth touchdown.
    • This flight marks a major milestone in terms of proving critical technologies towards the development of future unmanned aircraft.
    • This is a significant step towards self-reliance in strategic defence technologies.

     

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