💥UPSC 2027,2028 Mentorship (April Batch) + Access XFactor Notes & Microthemes PDF
Talk to mentor

Civilsdaily

Login

Archives: News

  • Tax Reforms

    Increasing dependence on indirect taxes and issues with it

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

    India, with a tax-GDP ratio of 10.9 per cent in 2019 needs an overhaul of its tax system. This article analyses India’s growing dependence on indirect taxes and its implications for the poor.

    Important changes in direct taxes

    • The wealth tax was abolished in 2016.
    • Wealth tax was replaced by a 2 per cent surcharge on super-rich individuals with taxable income of over Rs 10 crore.
    • But the government rolled back the increase in surcharge in 2019.
    • Corporate taxes were slashed from 30 per cent to 22 per cent to attract foreign investors and induce Indian companies to invest.
    •  Cuts in corporate tax that have resulted in a revenue loss of Rs 1.5 lakh crore have contributed to making the state poor.

    Increasing indirect taxes and cess

    • The share of indirect taxes has increased by up to 50 per cent of the gross tax revenue in FY2019 from 43 per cent in FY2011.
    • The combined share of customs and excise duties and value-added tax reached an all-time high of 10.5 per cent of GDP.
    • This high was following a three-year-long steady increase in customs or excise duty on commonly used goods, such as petroleum products, metals and sugar, automobiles and consumer durables.
    • This is also when the service tax was hiked steadily to 18 per cent under GST from 12.4 per cent in 2014.
    • Swachh Bharat cess and Krishi Kalyan cesses were imposed in addition to GST.
    • The permanent nature of these cesses has been widely opposed by the states and criticised by the CAG.
    • CAG has pointed out the lack of transparency and incomplete reporting in accounts on the utilisation of amounts collected under cesses.
    • All of this is troubling because indirect taxes often penalise the poor and the middle class more than the rich.

    Case for the wealth tax

    • High tax rates on the wealthy in Europe have played a key role in ensuring a strong social security net for the poor.
    • This successful example should encourage India to consider the rationale for a wealth tax.
    • Higher taxes on the super-rich could be used for cash transfers and a fiscal stimulus, that, in India, at 1 per cent of GDP each, have been negligible so far.
    • A wealth tax, a COVID-19 cess on the super-rich and a surcharge on the super-rich for their income from listed equity shares are critical for mitigating the current situation.

    Issues with such policy

    • Cuts in corporate taxes, increased indirect tax revenues, decreased capital expenditure and practically no change in revenue expenditure on health and education show that India’s taxation policy is more business-friendly than pro-poor.
    • This is happening at a time when a supply-side oriented approach to the economy is counter-cyclical.
    • Faced with increased expenditure amid pandemic Centre increased the duty on fuel by a record Rs 10 per litre on petrol when global crude prices have been falling.
    • This speaks of the government’s increased dependency on indirect tax-based revenues.

    Examine the implications of India’s growing dependence on indirect tax revenue? Suggest the measures to reduce such dependence.

    Conclusion

    COVID-19 may be a blessing in disguise if it allows India to reform its tax system in order to make it work towards inclusive growth and sustainable development rather than targeting only investment-led economic growth.

    bACK 2 BASICS
    GO THROUGH THE ARTICLE BELOW FOR MORE INFORMATION ON TAXATION:

    Taxation in India: Classification, Types, Direct tax, Indirect tax

    Get an IAS/IPS ranker as your 1: 1 personal mentor

  • Trade Sector Updates – Falling Exports, TIES, MEIS, Foreign Trade Policy, etc.

    What is Balance of Payments?

    | Economics | Mains Paper 3: Indian Economy

    India’s balance of payments this year is going to be “very very strong” on the back of significant improvement in exports and a fall in imports said the Commerce and Industry Ministry.

    Try this PYQ:

    Q.In the context of India, which of the following factors is/are contributor/contributors to reducing the risk of a currency crisis? (CSP 2019)

    1. The foreign currency earnings of India’s IT sector
    2. Increasing the government expenditure
    3. Remittances from Indians abroad

    Select the correct answer using the code given below.

    (a) 1 only

    (b) 1 and 3 only

    (c) 2 only

    (d) 1, 2 and 3

    Balance of Payment

    • BOP is the oldest and the most important statistical statement for any country.
    • In a nutshell BOP of a country is “a systematic record of all economic transactions between the residents of one country with the residents of the other country in a financial year”.
    • Economic Transactions include all the foreign receipts and payments made by a country during a given financial year.
    • Foreign receipts include all the earnings and borrowings by a country from the other countries.

    Read the complete thread, here, at:

    India’s Balance of Payments: Current Account, Capital Account, Goods and Services Account

    Get an IAS/IPS ranker as your 1: 1 personal mentor

  • Foreign Policy Watch: India-Pakistan

    Back in news: Indus Water Treaty (IWT)

    IOCR | International Relations | Mains Paper 2: Bilateral, Regional and Global Groupings and agreements involving India

    India has refused a request by Pakistan to hold a meeting on issues around the Indus Water Treaty (IWT) at the Attari check post near the India-Pakistan border.

    The IWT has been in existence since 1960, and reached a flash point in the aftermath of the Uri attacks in 2016 with PM declaring that “blood and water couldn’t flow together”.

    About Indus Waters Treaty, 1960

    • The IWT is a water-distribution treaty between India and Pakistan, brokered by the World Bank signed in Karachi in 1960.
    • According to this agreement, control over the water flowing in three “eastern” rivers of India — the Beas, the Ravi and the Sutlej was given to India
    • The control over the water flowing in three “western” rivers of India — the Indus, the Chenab and the Jhelum was given to Pakistan
    • The treaty allowed India to use western rivers water for limited irrigation use and unrestricted use for power generation, domestic, industrial and non-consumptive uses such as navigation, floating of property, fish culture, etc. while laying down precise regulations for India to build projects
    • India has also been given the right to generate hydroelectricity through the run of the river (RoR) projects on the Western Rivers which, subject to specific criteria for design and operation is unrestricted.

    Talks stalled on key projects

    • Among the key points on the table was evolving a procedure to solve differences on technical aspects governing the construction of the Ratle run-of-the-river (RoR) project on the Chenab in the Kishtwar district.
    • India has called for the appointment of a ‘neutral’ party while Pakistan favours a Court of Arbitration to agree upon a final resolution on the design parameters of this hydropower project.
    • According to the IWT, India has the right to build RoR projects on the three ‘western’ rivers — the Chenab, Jhelum and Indus — provided it does so without substantially impeding water flow in Pakistan downstream.
    • Pakistan believes that the project’s current design does pose a serious impediment and has told the World Bank that it wants a Court of Arbitration (CoA) set up to decide on the issue.
    • India says this is only a technical issue and mutually solvable.

    Get an IAS/IPS ranker as your 1: 1 personal mentor

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

    What is the Negative Imports List for Defence?

    | Economics | Mains Paper 3: Effects Of Liberalization On The Economy, Changes In Industrial Policy and their effects on Industrial Growth

    The Defence Ministry announced a list of 101 items that it will stop importing.

    Try this question for mains:

    Q.Being one of the top importers of defence equipment India is well placed to enhance its domestic manufacturing capacity of defence equipment. Yet, India lacks it after repeated attempts to achieve it. Examine the reasons for this and suggest measures to overcome this anomaly.

    Negative Imports List

    • The negative list essentially means that the Armed Forces—Army, Navy and Air Force—will only procure all of these 101 items from domestic manufacturers.
    • The manufacturers could be private sector players or Defence Public Sector Undertakings (DPSUs).

    Why such a decision?

    • Reduce imports: As per the Stockholm International Peace Research Institute, which tracks defence exports and imports globally, India has been the second-largest importer between 2014 and 2019 with US$ 16.75 billion worth of imports.
    • Boost domestic industry: By denying the possibility of importing the items on the negative list, the domestic industry is given the opportunity to step up and manufacture them for the needs of the forces.
    • Boost exports: The government has been hoping that the defence manufacturing sector can play a leading role in boosting the economy, not just for the domestic market, but to become an exporter as well.

    Items included in the negative list

    The items mentioned in the negative imports list include:

    • water jet fast attack craft to survey vessels, pollution control vessels, light transport aircraft, GSAT-6 terminals, radars, unmanned aerial vehicles, to certain rifles, artillery guns, bulletproof jackets, missile destroyers, etc.

    Impact of the move

    • The items in the list are of proven technologies and do not involve any critical or cutting-edge technology for a next-generation weapon system or platform.
    • Little benefits for domestic players in short-run: Against each of these items are mentioned a year when import embargo would kick in, leading to apprehensions that demands will be placed with foreign vendors until then, leaving very little for domestic producers.
    • The biggest challenge for the government and the armed forces will be to keep this commitment to domestic producers in the event of an operational requirement.

    Get an IAS/IPS ranker as your 1: 1 personal mentor

  • Digital India Initiatives

    Submarine Cable Connectivity to Andaman and Nicobar Islands

    PIB | Science Tech | Mains Paper 3: Awareness in various sc and tech fields

    PM has launched the submarine Optical Fibre Cable (OFC) connecting Andaman & Nicobar Islands to the mainland.

    Try this PYQ:

    Q. Consider the following statements regarding optical fibres:

    1. A layer called the cladding, which has a refractive index more than that of the core, surrounds the core of the optical fibre.
    2. Light is propagated in an optical fibre by refraction and internal reflection.

    Which of the above statements is/are correct?(CSP 2010)

    (a) 1 only

    (b) 2 only

    (c) Both 1 and 2

    (d) Neither 1 nor 2

    What is a submarine communications cable?

    • A submarine communications cable is a cable laid on the seabed between land-based stations to transmit telecommunication signals across stretches of ocean and sea.
    • The optical fibre elements are typically individually coated with plastic layers and contained in a protective tube suitable for the environment where the cable will be deployed.
    • Compared to satellites, using internet connection through submarine cables is more reliable, cost-efficient and of large capacity.

    About the project

    • About 2,300 km of submarine optical fibre cable (OFC) has been laid at a cost of about Rs 1,224 crore to provide better connectivity in the UT.
    • The project envisages better connectivity from Chennai to Port Blair and seven other Islands — Swaraj Deep (Havelock), Long Island, Rangat, Hutbay (Little Andaman), Kamorta, Car Nicobar and Campbell Bay (Great Nicobar).
    • The project is funded by the government through the Universal Service Obligation Fund under the ministry of communications.
    • The foundation stone for the project was laid by PM Modi in December 2018 at Port Blair.

    Expected outcomes

    • The OFC will enable the delivery of faster and more reliable mobile and landline telecom services to Andaman & Nicobar Islands, at par with other parts of India.
    • The submarine optical fibre cable link will deliver bandwidth of 2 x 200 Gigabits per second (Gbps) between Chennai and Port Blair, and 2 x 100 Gbps between Port Blair and the other islands.
    • 4G mobile services, which were constrained due to limited backhaul bandwidth provided via satellite, will also see a major boost.

    Benefits of the project

    • Better connectivity in the region will facilitate the delivery of e-governance services such as telemedicine and tele-education.
    • E-commerce: Small enterprises will benefit from opportunities in e-commerce, while educational institutions will utilise the enhanced availability of bandwidth for e-learning and knowledge sharing.
    • Business Process Outsourcing services and other medium and large enterprises too also benefit from better connectivity.
    • Low cost internet:The internet bills in Andaman and Nicobar will also come down substantially.

    Get an IAS/IPS ranker as your 1: 1 personal mentor

  • Air Pollution

    [pib] Himalayan Geothermal Springs release huge amount of carbon dioxide in the atmosphere

    PIB | Enviro & Biodiversity | Mains Paper 1: Geographical Features & Their Location

    The Himalayas, which hosts about 600 geothermal springs needs to be considered while estimating emissions to the carbon cycle and thereby to global warming says, Indian researchers.

    Note the following hot springs in India:

    1) Panamik in Nubra valley

    2) Kheer Ganga in Kullu, Himachal

    3) Manikaran Sahib, Himachal

    4) Tattapani, Chhattisgarh

    5) Gaurikund, Uttarakhand

    6) Yumthang, Sikkim

    7) Reshi, Sikkim

    Geothermal springs

    • Geothermal or Hot springs are heated by shallow intrusions of magma (molten rock) in volcanic areas. Some thermal springs, however, are not related to volcanic activity.
    • The water is heated by convective circulation: groundwater percolates downward & reaches depths of a kilometre or more where the temperature of rocks is high because of the normal temperature gradient of the Earth’s crust.

    Why consider the Himalayas?

    • The Himalayan geothermal springs which cover about 10,000 square km in the Garhwal region of Himalaya show a significant discharge of CO2 rich water.
    • The estimated carbon dioxide degassing (removal of dissolved gases from liquids, especially water or aqueous solutions) flux is nearly 7.2 ×106 mol/year to the atmosphere.
    • Such CO2 degassing should be taken into account to assess global carbon outflux in the earth’s atmosphere.

    Where does this CO2 come from?

    • Carbon outflux from Earth’s interior to the exosphere through volcanic eruptions, fault zones, and geothermal systems contribute to the global carbon cycle that effects short and long term climate of the Earth.
    • The CO2 in the thermal springs are sourced from metamorphic decarbonation of carbonate rocks present deep in the Himalayan core along with magmatism and oxidation of graphite.
    • Most of the geothermal water is dominated by evaporation followed by weathering of silicate rocks.
    • Isotopic analyses further point towards a meteoric source for geothermal water.

    Get an IAS/IPS ranker as your 1: 1 personal mentor

  • Global Geological And Climatic Events

    In news: Mount Sinabung

    Prelims Only | Enviro & Biodiversity | Mains Paper 1: Geographical Features & Their Location

    The Mount Sinabung volcano in Indonesia has erupted spouting ash at least 5,000 metres high into the sky.

    In the Philippines, a volcano called Taal on the island of Luzon; 50 km from Manila has recently erupted in January. Note all such recent eruption in news.

    Also, try this PYQ:

    Consider the following statements:

    1. The Barren Island volcano is an active volcano located in the Indian Territory.
    2. Barren Island lies about 140 km east of Great Nicobar
    3. The last time the Barren Island volcano erupted was in 1991 and it has remained inactive since then.

    Which of the statements given above is/are correct? (CSP 2018)

    (a) 1 only

    (b) 2 and 3 only

    (c) 3 only

    (d) 1 and 3

    Mount Sinabung

    • It is a Pleistocene-to-Holocene stratovolcano in the Karo plateau of Karo Regency, North Sumatra, Indonesia.
    • It is created by the subduction of the Indo-Australian Plate under the Eurasian Plate.
    • It erupted in 2010 after a 400-year-long hiatus and has been continuously active since September 2013.

    Get an IAS/IPS ranker as your 1: 1 personal mentor

  • Important Judgements In News

    Issue of contempt of court

    | Polity | Mains Paper 2: Executive & Judiciary

    The concept of contempt of court has been in the news recently. This article analyses the issue and draws on the approach adopted by the British judiciary.

    Issues with the concept of contempt

    • The concept of contempt is a centuries-old British law abolished in 2013.
    • At the time the British Law Commission said that one of the intentions for contempt of court was to hide judicial corruption.
    • The concept, therefore, clashed with the need for transparency but also freedom of speech.

    Let’s look into some comment’s from judges

    • In1968, a British judge, had this to say of the Law of Contempt “We will not use it to suppress those who speak against us. We do not fear criticism, nor do we resent it. For there is something far more important at stake. It is no less than freedom of speech itself. “
    • In a 2008 lecture by Justice Markandey Katju noted that “The test to determine whether an act amounts to contempt of court or not is this: Does it make the functioning of judges impossible or extremely difficult? If it does not, then it does not amount to contempt of court even if it’s harsh criticism”.

    Way forward

    • Whilst justice is important, judges must not take themselves too seriously.
    • Even if their amour propre is offended, it does not mean the institution has been questioned or justice brought into disrepute.
    • Judges deliver justice, they do not embody it.
    • They should never forget their Court is supreme because it’s final not because it’s infallible.
    • When they lapse they can be criticised, but of course, politely and fairly.

    Conclusion

    Indian Supreme Court hopefully pay attention to this aspect while delivering the judgement on the contempt cases.

    Get an IAS/IPS ranker as your 1: 1 personal mentor

  • Economic Indicators and Various Reports On It- GDP, FD, EODB, WIR etc

    The new consumer

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

    The focus of this article is on the behavioural changes in the consumer post Covid. It also suggest the ways to deal with these changes.

    Context

    • The consumer during and post-COVID is showing remarkable flexibility, bringing about a paradigm shift in her consumption pattern.

    Issue of generating demand

    • Some state governments are busy demanding the opening up of the economy.
    • However, the issue is that the economy does not merely need opening up, but it requires urgent generation of basic demand.
    • That is why consumer behaviour needs to be closely watched.
    • Since the lockdown, the priorities of consumers have seen a drastic shift.

    Factors to consider to increase demand

    • 1) The decrease in the purchasing power to buy products needs to be addressed.
    • The government must look at ways like a reduction in taxes which will help the common man.
    • 2) The current scenario has also made all of us go back to the basic needs.
    • Luxury products hold little value. But renting will increase.
    • 3) The emphasis will be on saving for a rainy day, whether in the case of banks or households
    • 4) Aviation, tourism and hospitality sectors have been hit and continue to remain so even after the restrictions are lifted.
    • 5)  e-commerce has shown exponential growth and will continue to do so.
    • 6) With “Vocal for Local” gaining momentum, there’s a huge increase in local apps, local kirana stores, local artisans and brands.
    • 7) Schools and colleges have taken a hit as e-learning and online courses are being preferred.
    • 8) The entertainment industry has been drastically hit. The media and entertainment industry needs to pay heed to this and curate content accordingly.
    • 9) With a lot of people laying emphasis on their health and immunity, there’s been a substantial rise in the consumption of organic, ayurvedic, and immunity-boosting products.
    • Apart from the obvious products, financial and medical insurance will play an important role.
    • 10) Real estate will suffer as no long-term, high investment purchases will be favoured, but renting will increase.

    Role of the government

    • 1) People need to be provided with their daily needs — basic essentials such as food, water, housing, and electricity.
    • The government is already taking care of that, but money also needs to be given.
    • 2) Jobs need to be provided through development of infrastructure projects.
    • 3) Farmers need to have insurance for their crops and the infrastructure to sell at the right price.
    • 4) Migrant workers with their livelihoods being disrupted are looking for support,and many are focusing on agriculture as a means of income.

    Way forward

    • The government should focus on generating demand for products, and create jobs by improving infrastructure.
    • The government must incentivise spending by offering tax benefits on the amount spent.
    • Government must forget about fiscal prudence this year.
    • Consumers in rural areas are buying more than before.Companies should focus on tapping the rural demand

    Consider the question “Demand has been the driver of India’s growth. But the pandemic has dampened it with devastating effect. Agaist this backdrop suggest the measures to be taken by the government to revive the demand.”

    Conclusion

    With focus on these emerging trends and changing behaviour of the consumers, the government must take steps to bring the economy fast on the tracks.

    Get an IAS/IPS ranker as your 1: 1 personal mentor

  • Coronavirus – Health and Governance Issues

    What are Immunity Passports?

    | Ethics | Mains Paper 4: Ethics

    There is a growing debate for a rethink on “immunity passport” to be handed out to those who have recovered from COVID-19 for the purpose of travel or work without restrictions of quarantine.

    Try this question form mains:

    Q.Discuss various ethical issues evolved during the outbreaks of pandemics (of the scale of COVID-19).

    Immunity Passports

    • They are the recovery or release certificate or a document attesting that its bearer is immune to a contagious disease.
    • The concept has drawn much attention during the COVID-19 pandemic as a potential way to contain the pandemic and permit faster economic recovery.
    • The can be used as a legal document granted by a testing authority following a serology test demonstrating that the bearer has antibodies making them immune to a disease.

    What is the ongoing debate?

    • Experts argue that if reinfections were a significant problem, by now, there would have been hundreds or at least thousands of cases of reinfections at the global level.
    • Till such time effective vaccines become available people who have recovered from COVID-19 should be permitted to travel without restrictions.

    A case for consideration

    • Immune protection after infection/disease is always much more robust than most vaccines, and definitely than most COVID-19 vaccines in development.
    • Some of the vaccines undergoing clinical trials are mostly directed at a single or a couple of proteins (spike) of the virus.
    • But vaccines under trial that use the inactivated coronaviruses would expose the immune system to a whole range of viral proteins, much like natural infection and can produce immune responses.
    • However, it is not known if people who have experienced asymptomatic infection would show robust immune responses like those who have recovered from moderate or severe disease.

    Ethical issues involved

    • Issuing ‘immunity certificates’ to people who have recovered can be an ethical minefield.
    • Doctors do not generally prefer immunity to be induced by natural infection compared with vaccines. It seems logical, but there are multiple challenges.
    • There might be long-term health complications in those who had COVID-19, whereas the vaccine will have minimal or no adverse health consequences.
    • There is a danger that similar arguments will be made for other vaccine-preventable diseases for which we have a universal immunisation programme.

    There is also a public health risk of issuing immunity certificates:

    • People whose livelihood has have been affected would be encouraged to adopt risky behaviour so as to get infected rather than taking precautions to stay protected from the virus.
    • This would lead to a sharp increase in cases across the country with huge numbers requiring hospitalization.
    • Such a situation would lead to testing capabilities getting overwhelmed, crumbling of the health-care systems and increased deaths.

    Threats over malpractices:

    • Immunity certification will include a system for identification and monitoring, thus compromising privacy.
    • Other contentious issues would be profiteering by private labs performing tests, and the menace of fake certificates which we have already seen in some Indian states.
    • In the end, an immunity passport will further divide the society with different ‘haves’ and ‘have-nots’.

    Way forward

    • We need to look at COVID-19 with a sense of balance and not hysteria.
    • Terms such as immunity passports may not have relevance as we do not know anything about specific kinds of immune responses and the duration of protection in people.
    • There is currently not enough evidence about the effectiveness of antibody-mediated immunity to guarantee the accuracy of an ‘immunity passport’ or ‘risk-free certificate’.
    • The permission to travel or work should be decided on a case by case basis, according to the principles of ethics while dealing with a pandemic.

    Get an IAS/IPS ranker as your 1: 1 personal mentor

Join the Community

Join us across Social Media platforms.