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  • Goods and Services Tax (GST)

    Need to deal with the flaws in the existing structure of GST

    op-ed snap | Economics | Mains Paper 3: Indian Economy

    Context

    After four years, the promise of the Goods and Services Tax (GST) remains substantially unrealised.

    Why tax base of GST is not expanding

    • The GST is strongly co-related to overall GDP.
    • Revenue collection of the GST is dependent on the nominal growth rate of Gross Value Added (GVA) in the economy.
    • Since inception, GVA per quarter has been between ₹40-lakh crore to ₹47-lakh crore and GST revenue has not been higher than ₹2.7-lakh crore to ₹3.1-lakh crore.
    • The Tax to Gross value addition is only about 5% to 6.5% though GVA growth was much higher.
    • Issues: A very large segment is covered by exemption, composition schemes, evasion and lower tax rate.

    Five Issues with the GST structure

    1) Dominance of the Centre

    • The political architecture of GST is asymmetrically loaded in favour of the Centre.
    • No body to adjudicate: There is no particular body is tasked to adjudicate if there is a dispute between States and between the Centre and the States.
    • Centre’s domination: In the voting, the central government has one-third vote and States have two-thirds of total votes.
    • All states have equal voting rights regardless of size and stake.
    • With the support of a dozen small States whose total GST collection is not more than 5% of the total central government can dominate the decision making process in GST Council.
    • Small states dictate the terms: With equal value for each States’ voting, larger and mid-sized States feel shortchanged.

    2) Flaw in tax structure

    • Nearly 45% to 50% of commodity value is outside the purview of the GST, such as petrol and petroleum products.
    • Certain states not getting revenue as origin state: States which export or have inter-State transfers or mineral and fossil fuel extractions are not getting revenue as the origin States and need a compensation mechanism.
    • The pre-existing threshold level of VAT has been tweaked too often which has led to an evaporation of tax base incentivising, enabling evasion and mis-reporting.
    • Most trading and retail establishments, (however small) are out of the fold of the GST.
    • At the retail level, irrespective of whether Input Tax Credit (ITC) is required or not, the burden can be passed off to the consumer.
    • As a result, the loss could be as high as one third.

    3) Exemptions

    • Exemptions from registration and taxation of the GST have further eroded the GST tax base compared to the tax base of the pre-existing VAT.
    • Ground for evasion: Exemptions are purely distortionary and also provide a good chance to remain under the radar, thereby directly increasing evasion or misclassification.
    • Theoretically, exemptions at the final stages reduce tax realisation.
    • Multiple rates: As multiple rates are charged at different stages, it goes against the lessons of GST history.
    • This tax works well with a single uniform tax rate for all commodities and services at all stages, inputs and outputs alike.
    • While most countries have a single rate, India stands out and is among the five countries to have four rates/slabs.

    4) Exclusion

    • Against the interest of States: Petroleum products remaining outside the purview of GST has helped the Centre to increase cesses and decrease central excise, in what would otherwise have been shareable with the States.
    • Now, States will be keen on including petrol and diesel under the GST as their share of tax goes up in the process, even if there is a special rate fixed for it.
    • Equity requires that petrol and diesel be brought under the GST.
    • Cascading of taxes: Apart from the complexity it creates in record keeping and ‘granting ITC’, in the present form it also leads to a cascading which the GST avowedly tried to avoid.

    5) Lack of compliance

    • Compliance with GST return (GSTR-1) filing stipulation and the resultant tax information is not up to date.
    • Fraudulent claims of Input Tax Credit (ITC) because of a lack of timely reconciliation are quite high though it has come down by two thirds.
    • Tax evasion, estimated by a National Institute of Public Finance and Policy’s paper, is at least 5% in minor States and plus 3% in the major States.

    Conclusion

    Policy gaps along with compliance gaps do need to be addressed. Without proper tax information, infrastructure and base, the States would go in for selective tax enforcement. In the long run, voluntary compliance will suffer and equity in taxation will be violated.

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  • Interstate River Water Dispute

    CJI recuses himself from Andhra-Telangana Case

    | Polity | Mains Paper 2: Federalism

    The Chief Justice of India (CJI) N V Ramana (who hails from AP) recused himself from hearing Andhra Pradesh’s plea after it said “no” to the Supreme Court’s suggestion to go for mediation over a dispute with Telangana over the Krishna River dispute.

    Q. Can you list down some basic principles of judicial conduct?

    Independence, Impartiality, Integrity, Propriety, Competence and diligence and Equality are some of them as listed under the Bangalore Principles of Judicial Conduct.

    What is the Recusal of Judges?

    • Recusal is the removal of oneself as a judge or policymaker in a particular matter, especially because of a conflict of interest.
    • Recusal usually takes place when a judge has a conflict of interest or has a prior association with the parties in the case.
    • For example, if the case pertains to a company in which the judge holds stakes, the apprehension would seem reasonable.
    • Similarly, if the judge has, in the past, appeared for one of the parties involved in a case, the call for recusal may seem right.
    • A recusal inevitably leads to delay. The case goes back to the Chief Justice, who has to constitute a fresh Bench.

    Rules on Recusals

    • There are no written rules on the recusal of judges from hearing cases listed before them in constitutional courts.
    • It is left to the discretion of a judge.
    • The reasons for recusal are not disclosed in an order of the court. Some judges orally convey to the lawyers involved in the case their reasons for recusal, many do not. Some explain the reasons in their order.
    • The decision rests on the conscience of the judge. At times, parties involved raise apprehensions about a possible conflict of interest.

    Issues with recusal

    • Recusal is also regarded as the abdication of duty. Maintaining institutional civilities is distinct from the fiercely independent role of the judge as an adjudicator.
    • In his separate opinion in the NJAC judgment in 2015, Justice Kurian Joseph highlighted the need for judges to give reasons for recusal as a measure to build transparency.
    • It is the constitutional duty, as reflected in one’s oath, to be transparent and accountable, and hence, a judge is required to indicate reasons for his recusal from a particular case.

    Back2Basics:

    https://www.civilsdaily.com/news/krishna-water-dispute/

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  • Parliament – Sessions, Procedures, Motions, Committees etc

    Members of Parliament Local Area Development Scheme (MPLADS)

    Schemes | Governance | Mains Paper 2: Government Scheme/Policies

    Virtually, 50% of funds allotted for ongoing MPLADS projects have lapsed.

    What is the MPLAD scheme?

    • The Members of Parliament Local Area Development Scheme (MPLADS) is a program first launched during the Narasimha Rao Government in 1993.
    • It was aimed towards providing funds for developmental works recommended by individual MPs.

    Funds available

    • The MPs then were entitled to recommend works to the tune of Rs 1 crore annually between 1994-95 and 1997-98, after which the annual entitlement was enhanced to Rs 2 crore.
    • The UPA government in 2011-12 raised the annual entitlement to Rs 5 crore per MP.

    Implementation

    • To implement their plans in an area, MPs have to recommend them to the District Authority of the respective Nodal District.
    • The District Authorities then identify Implementing Agencies that execute the projects.
    • The respective District Authority is supposed to oversee the implementation and has to submit monthly reports, audit reports, and work completion reports to the Nodal District Authority.
    • The MPLADS funds can be merged with other schemes such as MGNREGA and Khelo India.

    Guidelines for MPLADS implementation

    • The document ‘Guidelines on MPLADS’ was published by the Ministry of Statistics and Programme Implementation in June 2016 in this regard.
    • It stated the objective of the scheme to enable MPs to recommend works of developmental nature with emphasis on the creation of durable community assets based on the locally felt needs in their Constituencies.
    • Right from the inception of the Scheme, durable assets of national priorities viz. drinking water, primary education, public health, sanitation, and roads, etc. should be created.
    • It recommended MPs to works costing at least 15 percent of their entitlement for the year for areas inhabited by Scheduled Caste population and 7.5 percent for areas inhabited by ST population.
    • It lays down a number of development works including construction of railway halt stations, providing financial assistance to recognized bodies, cooperative societies, installing CCTV cameras etc.

    Answer this PYQ in the comment box:

    Q. With reference to the funds under the Members of Parliament Local Area Development Scheme (MPLADS), which of the following statements are correct? (CSP 2020)

    1. MPLADS funds must be used to create durable assets like physical infrastructure for health, education, etc.
    2. A specified portion of each MP’s fund must benefit SC/ST populations.
    3. MPLADS funds are sanctioned on a yearly basis and the unused funds cannot be carried forward to the next year.
    4. The district authority must inspect at least 10% of all works under implementation every year.

    Select the correct answer using the code given below:

    (a) 1 and 2 only

    (b) 3 and 4 only

    (c) 1, 2 and 3 only

    (d) 1, 2 and 4 only

    “Post your answers here”

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  • Air Pollution

    Air Quality Commission Bill, 2021

    | Enviro & Biodiversity | Mains Paper 3: Conservation, Environmental Pollution & Degradation, Eia

    The Lok Sabha has passed the Bill to formalize the Commission for Air Quality Management For National Capital Region and Adjoining Areas.

    Highlights of the AQC Bill

    • The AQC would be a ‘permanent’ body to address pollution in the National Capital Region Delhi and address sources of pollution in Delhi, Punjab, Rajasthan, Haryana and Uttar Pradesh.
    • The all-powerful body assumed several powers to coordinate action among States, levy fines — ranging up to ₹1 crore or five years of prison — to address air pollution.

    Key features

    • Over-riding powers: While the Central Pollution Control Board (CPCB) and its state branches have the powers to implement provisions of the Environment Protection Act for air, water and land pollution.
    • In case of dispute or a clash of jurisdictions, the AQC’s writ would prevail specific to matters concerning air pollution.
    • Chair: The body has a full-time chairperson and a range of members consisting of both representatives from several Ministries as well as independent experts and will have the final say on evolving policy and issuing directions.
    • Curb on stubble burning: the Commission may impose and collect environment compensation causing pollution by stubble burning.
    • No penalties to farmers: The Centre, facing flak earlier this year from farmers protesting the farm laws, had committed to removing a clause in the Air Commission Bill that would penalize farmers for burning stubble, an important contributor to noxious air quality.

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  • Defence Sector – DPP, Missions, Schemes, Security Forces, etc.

    Indigenous Aircraft Carrier 1 (INS Vikrant)

    Prelims Only | Security Issues | Mains Paper 3: Indigenization Of Technology

    The much-awaited sea trials of India’s maiden indigenous aircraft carrier (IAC-1), built by the public sector Cochin Shipyard Ltd (CSL) have begun.

    Indigenous Aircraft Carrier 1

    • IAC is the first aircraft carrier designed and built in India.
    • It has been designed by the Indian Navy’s Directorate of Naval Design (DND), and is being built at Cochin Shipyard Limited (CSL), a public sector shipyard under the Ministry of Shipping.
    • The IAC-1, the biggest warship made indigenously, has an overall length of 263 m and a breadth of 63 m.
    • It is capable of carrying 30 assorted aircraft including combat jets and helicopters.
    • Propelled by four gas turbines, it can attain a top speed of 30 knots (about 55 kmph).
    • The vessel will have a complement of 1,500 personnel.

    Significance of IAC 1

    • An aircraft carrier is one of the most potent marine assets for a nation, which enhances a Navy’s capability to travel far from its home shores to carry out air domination operations.
    • Many experts consider having an aircraft carrier as essential to be considered a ‘blue water’ navy — one that has the capacity to project a nation’s strength and power across the high seas.
    • An aircraft carrier generally leads as the capital ship of a carrier strike/battle group.
    • As the carrier is a valuable and sometimes vulnerable target, it is usually escorted in the group by destroyers, missile cruisers, frigates, submarines, and supply ships.

    Why does it matter that this is a Made-in-India warship?

    • Only five or six nations currently have the capability of manufacturing an aircraft carrier — India joins this elite club now.
    • According to the Navy, over 76 per cent of the material and equipment on board IAC-1 is indigenous.
    • India’s earlier aircraft carriers were either built by the British or the Russians.
    • The INS Vikramaditya, currently the Navy’s only aircraft carrier that was commissioned in 2013, started out as the Soviet-Russian Admiral Gorshkov.
    • The country’s two earlier carriers, INS Vikrant and INS Viraat, were originally the British-built HMS Hercules and HMS Hermes before being commissioned into the Navy in 1961 and 1987 respectively.

    Why will this warship be named INS Vikrant?

    • INS Vikrant, a Majestic-class 19,500-tonne warship, was the name of India’s much-loved first aircraft carrier, a source of immense national pride over several decades of service before it was decommissioned in 1997.
    • India acquired the Vikrant from the United Kingdom in 1961, and the carrier played a stellar role in the 1971 war with Pakistan that led to the birth of Bangladesh.

    Now that India has the capability, will it build more carriers?

    • Since 2015, the Navy has been seeking approval to build a third aircraft carrier for the country, which, if approved, will become India’s second Indigenous Aircraft Carrier (IAC-2).
    • This proposed carrier, to be named INS Vishal, is intended to be a giant 65,000-tonne vessel, much bigger than IAC-1 and the INS Vikramaditya.
    • The Navy has been trying to convince the government of the “operational necessity” of having a third carrier.

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  • Judicial Pendency

    [pib] Fast Track Special Courts

    PIB | Polity | Mains Paper 2: Executive & Judiciary

    The Union Cabinet has approved the continuation of 1023 Fast Track Special Court (FTSCs) including 389 exclusive POCSO Courts for two more years.

    Fast Track Special Courts

    • Fast Track Special Courts are dedicated courts expected to ensure swift dispensation of justice.
    • They have a better clearance rate as compared to the regular courts and hold speedy trials.
    • Besides providing quick justice to the hapless victims, it strengthens the deterrence framework for sexual offenders.
    • Central Share is to be funded from Nirbhaya Fund. The Scheme was launched on 02.10.2019.
    • To bring more stringent provisions and expeditious trial and disposal of such cases, the Central Government enacted “The Criminal Law (Amendment) Act, 2018”.
    • It made provision of stringent punishment including the death penalty for perpetrators of rape.
    • This led to the establishment of the Fast Track Special Courts (FTSCs).

     Note: Article 247 gives power to Parliament to establish certain additional courts for the better administration of laws made by it or of any existing laws with respect to a matter enumerated in the Union List.

    Benefits offered by fast track courts

    • Further the commitment of the Nation to champion the cause of safety and security of women and girl child.
    • Reduce the number of pending cases of Rape & POCSO Act.
    • Provide speedy access to justice to the victims of sexual crimes and act as a deterrent for sexual offenders.
    • Fastracking of these cases will declog the judicial system of the burden of case pendency.

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  • Vaccination and normalising of monetary policy hold key to economic rebound

    | Economics | Mains Paper 3: Indian Economy

    Context

    Increasing pace of vaccination and normalising of monetary policy hold key to economic rebound.

    K-shaped recovery and its impact

    • Growth indicators so far suggest resilience in the short term — a shallow dent in May’s economic activity followed by a recovery in June, back to April’s levels.
    • K-shaped recovery: The external, investment and industrial sectors have been relatively resilient, with consumption and services bearing the brunt.
    • Notwithstanding signs of some fatigue in ultra-high frequency indicators in July, damage from the second wave seems largely limited to April-June 2021.
    • However, K-shaped recovery means light cracks on the top conceal much larger structural faultlines below.
    • Rising poverty: The Pew Research Centre estimates that the pandemic has led to India’s poor rising by 75 million while the middle and upper-middle class has shrunk by 39 million.
    • MSMEs and informal workforce worst hit: A recent survey by the ILO finds that the worst-hit — MSMEs and their informal workforce — have struggled to access the government’s pandemic support programmes.
    • These more structural scars may become blurred in the GDP data in coming quarters but will almost certainly affect the medium-term growth story.

    Way forward in the near term

    1) Policy

    • Achieving two objectives: When inflation is under control, then flush liquidity and ultra-accommodative monetary policy will help achieve two objectives—
    • 1) Ensuring easy financial conditions.
    • 2) Help control borrowing costs of the government’s expansive borrowing programme.
    • Inflation risk: The above strategy is not costless, it effectively uses the central bank’s credibility in controlling inflation as “collateral”.
    • So when inflation flares up and remains sticky, this arithmetic becomes increasingly complicated.
    • The RBI’s consistent message recently has been to view the current inflation surge as a “temporary hump”.
    • Much as the current monetary policy stance maintains that the economy is ill-equipped to handle policy normalisation, it is a matter of when rather than if.
    • As growth strengthens and the RBI’s inflation-targeting credibility comes under greater scrutiny, a policy pivot would become increasingly likely.

    2) Vaccination

    • The “ultimate unlocking” of the economy remains contingent on a critical mass getting vaccinated, which on materialising should trigger a revival in consumer and business sentiment.
    • The uptick in the pace of vaccination over the last few days and higher seroprevalence reported in some states are welcome news.

    Conclusion

    Even with widespread vaccinations, future pandemic waves may well be unavoidable. Fiscal, monetary and administrative policies cannot remain in a suspended emergency.

    Back2Basics: K-shaped recovery

    • A K-shaped recovery occurs when, following a recession, different parts of the economy recover at different rates, times, or magnitudes.
    • This is in contrast to an even, uniform recovery across sectors, industries, or groups of people.
    • A K-shaped recovery leads to changes in the structure of the economy or the broader society as economic outcomes and relations are fundamentally changed before and after the recession.
    • This type of recovery is called K-shaped because the path of different parts of the economy when charted together may diverge, resembling the two arms of the Roman letter “K.”

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  • The goal of making the rupee a global reserve currency

    op-ed snap | Economics | Mains Paper 3: Indian Economy

    Context

    India will celebrate 100 years of Independence in 2047.  This article makes the case that prosperity is possible and best accomplished by the goal of making the rupee a global reserve currency by India@100.

    What is the purpose of having forex reserves?

    • Official foreign exchange reserves of about $12 trillion across 150 countries are currently stored in eight currencies: 55 per cent in US dollars, 30 per cent in euros, and 15 per cent in six other currencies.
    • Protection in case of volatility: This concentration is inevitable given exploding trade, rising capital flows, and the less acknowledged motivation of protecting your reserves from your currency’s volatility.
    •  A reserve currency has to serve as a medium of exchange, a store of value, and a unit of account. 

    Steps India would require to take

    • Full capital account convertibility: To fulfil the ambition of becoming the reserve currency, the first step is full capital account convertibility, as suggested by the Tarapore Committee in 1997. 
    • Advocate rupee invoicing: Dollar investors in the last decade not experiencing the usual big bite out of rupee returns is useful for advocating trading partners to start rupee invoicing.
    • Offshore corporate rupee borrowing: Raising corporate rupee borrowing offshore and onshore will also help.
    • Digital currency: We need to accelerate our CBDC (central bank digital bank currency) plans.
    • Take payment networks to a global level: We need to take our UPI payment technology to the world, the dollar gets heft from global networks like Visa, MasterCard and Swift.
    • Raise tax to GDP ratio: Fiscal policy must raise our tax to GDP ratio, raise the share of direct taxes in total taxes, and keep our public debt to GDP ratio under 100 per cent.
    • Monetary policy: Monetary policy must control inflation while moderating central bank balance sheet size.
    • Economic policy: Economic policy must raise the productivity to reach goals in formalisation, urbanisation, financialisation (100 per cent credit to GDP ratio), industrialisation (less than 15 per cent farm employment), internationalisation (higher share of global trade) and skilling.
    • Institutional reforms: These goals must be complemented by reinforcing institutions that signal rule of law; cooperative federalism, press freedom, civil service effectiveness, and judicial independence.

    How it will help India?

    • Becoming a global reserve currency is helpful because it indirectly aligns fiscal, monetary, and economic policy.
    • Low-interest rate: The main advantage is the “exorbitant privilege” of lower real interest rates.
    • Edge over China: The 2 per cent renminbi share in global reserves — despite a 25 per cent increase last year — doesn’t reflect their status as the world’s second-largest economy and biggest trading nation.
    • China’s astounding economic success seems to be making China overconfident.
    • Chinese overconfidence creates an opportunity for India. 

    Conclusion

    Prosperity for all Indians by India at100 — a precondition for a country where the mind is without fear and the head is held high — needs bold reforms in the next 25 years. These reforms are best measured by the wholesome and achievable goal of the rupee becoming a global reserve currency by 2047. The journey is the reward.

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  • Renewable Energy – Wind, Tidal, Geothermal, etc.

    What India needs for a just energy transition

    op-ed snap | Economics | Mains Paper 3: Infrastructure: Energy, Ports, Roads, Airports, Railways Etc.

    Context

    With an ever-growing list of countries announcing net-zero emissions targets, the global energy system is set to undergo a transformation in the coming decades. But India needs to ensure that this transition is smooth and people-centric.

    Transition in India

    • According to an IEA analysis, 90 per cent of new electricity generation capacity around the world now comes from renewables.
    • In India, that energy transformation is well underway.
    • India is among the world’s top five countries in terms of renewable power capacity.
    • Ambitious target of 450 gigawatts: Its ambitious target to increase India’s renewable energy capacity to 450 gigawatts (GW) by 2030 would help move it closer to achieving the country’s broader climate goals and commitments made under the Paris Agreement.
    • Clean energy leadership by India: India is also showing global clean energy leadership through initiatives such as the International Solar Alliance, which has more than 70 member countries.
    • Transition in rural area: The energy transition in rural India can be driven by dedicated policies to promote renewables, incentivise investment in decentralised low-carbon power sources like rooftop solar, and train and build the capacity of clean energy entrepreneurs.
    • Incorporating energy efficiency in the Affordable Housing Mission: In the short term, stimulus spending in the labour-intensive construction sector could accelerate progress on the Affordable Housing Mission.
    • Incorporating energy efficiency and green construction methods into these projects could ensure millions of homes enjoy thermal comfort, and help make energy efficiency a core part of building designs.

    Factors to consider in transition to clean energy

    • Ensure equity: It must be ensured that the opportunities of India’s transition are shared fairly throughout society — and workers and communities are not left to face the challenges alone.
    • Make it people-centric: To achieve the trifecta of jobs, growth and sustainability, India must strive to put people at the centre of its energy transformation.
    • Provisions for coal-dependent regions: New jobs would need to be found over time for the coal miners affected by the changes, as well as for people who work in the fossil fuel power plants that will close down.
    • Policymakers must earmark special “transition funds” to help coal-dependent regions, some of which are among India’s poorest.
    • Increase investment by rationalising energy subsidies: Energy subsidies must be rationalised and directed towards those who need them most.
    • Fiscal resources freed up through subsidy reform should then be invested in clean energy solutions, especially in underdeveloped regions and marginalised communities.
    • Support rural livelihood: A just transition should focus on how clean energy can support rural livelihoods and increase communities’ resilience in the aftermath of the pandemic shock.
    • Ensure women’s participation in the green workforce: While India’s energy transition will create many new jobs, the limited participation of women in the growing green workforce must be addressed.
    • A 2019 study by CEEW and the IEA suggests that women account for nearly 32 per cent of the renewables workforce globally but only around 11 per cent of the rooftop solar workforce in India.
    • Engage youth: Engaging the youth is critical to ensure that the energy transition is sustainable, inclusive and enduring.
    • Young entrepreneurs in India have already shown their impact by expanding the footprint of renewables and disrupting traditional energy models.
    • Some of these key themes are being explored by the 30 members of the Global Commission on People-Centred Clean Energy Transitions, which the IEA launched in January.

    Conclusion

    A people-centric approach, backed by good policy design, will not only help India build a clean and inclusive energy future, but could also provide a model for other countries and communities worldwide.

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

    Net-Zero Concept in Climate Change

    | Enviro & Biodiversity | Mains Paper 1: Important Geophysical Phenomena

    Independent charitable organization Oxfam has said that ‘net zero’ carbon targets that many countries have announced maybe a “dangerous distraction” from the priority of cutting carbon emissions.

    What does Net-Zero mean?

    • Net-zero, which is also referred to as carbon-neutrality, does not mean that a country would bring down its emissions to zero.
    • That would be gross-zero, which means reaching a state where there are no emissions at all, a scenario hard to comprehend.
    • Therefore, net-zero is a state in which a country’s emissions are compensated by absorption and removal of greenhouse gases from the atmosphere.

    Achieving net-zero targets

    • One way by which carbon can be absorbed is by creating carbon sinks.
    • Until recently, the Amazon rainforests in South America, which are the largest tropical forests in the world, were carbon sinks.
    • But eastern parts of these forests have started emitting CO2 instead of absorbing carbon emissions as a result of significant deforestation.

    What’s the difference between gross zero and net zero?

    • Given the impact that carbon emissions have on our planet, you might wonder why we aren’t aiming for zero, or gross zero, rather than net-zero.
    • Gross zero would mean stopping all emissions, which isn’t realistically attainable across all sectors of our lives and industry. Even with best efforts to reduce them, there will still be some emissions.
    • Net-zero looks at emissions overall, allowing for the removal of any unavoidable emissions, such as those from aviation or manufacturing.
    • Removing greenhouse gases could be via nature, as trees take carbon dioxide from the atmosphere, or through new technology or changing industrial processes.

    What is carbon negativity?

    • It is even possible for a country to have negative emissions if the absorption and removal exceed the actual emissions.
    • Bhutan has negative emissions because it absorbs more than it emits.

    Which countries have recently announced net-zero targets?

    • In 2019, the New Zealand government passed the Zero Carbon Act, which committed the country to zero carbon emissions by 2050 or sooner.
    • In the same year, the UK’s parliament passed legislation requiring the government to reduce the UK’s net emissions of greenhouse gases by 100 per cent relative to 1990 levels by the year 2050.
    • More recently, US announced that the country will cut its greenhouse gas emissions by at least 50 per cent below 2005 levels by 2030.
    • The European Union too, has a similar plan, called “Fit for 55”, the European Commission has asked all of its 27 member countries to cut emissions by 55 per cent below 1990 levels by 2030.
    • Last year, China also announced that it would become net-zero by the year 2060 and that it would not allow its emissions to peak beyond what they are in 2030.

    What does the Oxfam report say?

    • “Land-hungry ‘net zero’ schemes could force an 80 per cent rise in global food prices and more hunger while allowing rich nations and corporates to continue “dirty business-as-usual”.
    • The report says that if the challenge of change is tackled only by way of planting more trees, then about 1.6 billion hectares of new forests would be required to remove the world’s excess carbon by 2050.
    • Currently, countries’ plans to cut emissions will only lead to a one percent reduction by the year 2030.
    • Oxfam estimates that it could rise by 80 percent by the year 2050.

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