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  • Financial Inclusion in India and Its Challenges

    What is Small Savings Scheme?

    Schemes | Economics | Mains Paper 3: Indian Economy

    Economists expect the Centre to raise the interest rates paid on small savings schemes for the July to September 2022 quarter.

    Small Savings Scheme

    • Small Savings Schemes are a set of savings instruments managed by the central government with an aim to encourage citizens to save regularly irrespective of their age.
    • They are popular as they provide returns higher than bank fixed deposits, sovereign guarantee and tax benefits.

    How is it managed?

    • Since 2016, the Finance Ministry has been reviewing the interest rates on small savings schemes on a quarterly basis.
    • All deposits received under various schemes are pooled in the National Small Savings Fund.
    • The money in the fund is used by the Centre to finance its fiscal deficit.

    What are the different saving schemes?

    The schemes can be grouped under three heads –

    1. Post office deposits
    2. Savings certificates and
    3. Social security schemes

    (1) Post Office Deposits

    • Under this we have the savings deposit, recurring deposit and time deposits with 1, 2, 3 and 5 year maturities and the monthly income account.
    • The savings account currently pays an interest of 4% per annum and can be opened individually or jointly with an initial investment of Rs 500.
    • The recurring deposit that pays 5.8% a year compounded quarterly matures after 60 months from the date of opening.
    • It allows investors to save on a monthly basis with a minimum deposit of Rs 100 per month.
    • Investments under the 5-year time deposit up to Rs 1.5 lakh further qualifies for benefit under section 80C of Income Tax Act.

    (2) Savings Certificates

    • Under this, we have the National Savings Certificate and the Kisan Vikas Patra.
    • The National Savings Certificate pays interest at a rate of 6.8% per annum upon maturity after 5 years. The interest that is earned is reinvested into the scheme every year automatically.
    • The NSC also qualifies for tax saving under Section 80C of the income tax act.
    • The Kisan Vikas Patra, which is open to everyone, doubles your one-time investment at the end of 124 months signifying a return of 6.9% compounded annually.
    • The minimum investment amount is Rs 1000 while there is no upper limit.

    (3) Social security schemes

    • In the third head of social security schemes, there is Public Provident Fund, Sukanya Samriddhi Account and Senior Citizens Savings Scheme.

    a. Public Provident Fund

    • The Public Provident Fund is a popular saving option for long term goals like retirement.
    • It pays 7.1% a year and qualifies for tax benefit under Section 80C of the Income Tax Act.
    • Upon maturity of the account after 15 years, it can be extended indefinitely in blocks of 5 years.
    • The accumulated amount and interest earned are exempt from tax at the time of withdrawal.

    b. Sukanya Samriddhi Account

    • The Sukanya Samriddhi Account was launched in 2015 under the Beti Bachao Beti Padhao campaign exclusively for a girl child.
    • The account can be opened in the name of a girl child below the age of 10 years.
    • The scheme guarantees a return of 7.6% per annum and is eligible for tax benefit under Section 80C of the Income Tax Act.
    • The tenure of the deposit is 21 years from the date of opening of the account and a maximum of Rs 1.5 lakh can be invested in a year.

    c. Senior Citizen Savings Account

    • And finally, the 5-year ​​Senior Citizen Savings Account can be opened by anyone who is over 60 years to age.
    • It carries an interest of 7.4% per annum payable quarterly and qualifies for Section 80C tax benefit.
    • These time-tested and safe modes of investments don’t offer quick returns, but are safer when compared to market-linked schemes.

     

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  • Primary and Secondary Education – RTE, Education Policy, SEQI, RMSA, Committee Reports, etc.

    Performance Grading Index for Districts (PGI-D)

    DOMR | Governance | Mains Paper 2: Health & Education

    The Ministry of Education has released the Performance Grading Index for Districts (PGI-D) for 2019 which studied 83 indicators grouped in six categories.

    What is PGI-D?

    • The 83-indicator-based PGI for District (PGI-D) has been designed to grade the performance of all districts in school education.
    • The data is filled by districts through an online portal.
    • The indicator-wise PGI score shows the areas where a district needs to improve.
    • The PGI-D structure comprises a total weightage of 600 points across 83 indicators.
    • They are grouped under 6 categories, viz., Outcomes, Effective Classroom Transaction, Infrastructure Facilities & Students’ Entitlements, School Safety & Child Protection, Digital Learning, and Governance Process.
    • These categories are outcomes, effective classroom transaction, infrastructure facilities and student’s entitlements, school safety and child protection, digital learning and governance process.

    How does the grading scale works?

    • The PGI-D grades the districts into 10 grades with the highest achievable grade being ‘Daksh’, which is for districts scoring more than 90% of the total points in that category or overall.
    • ‘Utkarsh’ category is for districts with score between 81-90%, followed by ‘Ati-Uttam’ (71-80%), ‘Uttam’ (61-70%), ‘Prachesta-I’ (51-60%), ‘Prachesta-II’ (41-50%) and ‘Pracheshta III’ (31-40%).
    • The lowest grade in PGI-D is called ‘Akanshi-3’ which is for scores up to 10% of the total points.

    Performance of the states

    • Rajasthan’s Sikar is the top performer, followed by Jhunjhunu and Jaipur.
    • The other States whose districts have performed best are Punjab with 14 districts in ‘Ati-uttam’ grade (scoring 71-80% on a scale of 100).
    • It followed by Gujarat and Kerala with each having 13 districts in this category.
    • However, there are 12 States and UTs which do not have even a single district in the ‘Ati-uttam’ and ‘Uttam’ categories and these include seven of the eight States from the North East region.

    Significance

    • The PGI-D will reflect the relative performance of all the districts on a uniform scale which encourages them to perform better.
    • It is expected to help the state education departments to identify gaps at the district level and improve their performance in a decentralized manner.

     

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  • G20 : Economic Cooperation ahead

    G-20

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

    The Jammu and Kashmir administration has constituted a committee to coordinate with the delegates of G-20 countries scheduled to participate in a meeting to be held in the Union Territory (UT) next year.

    Why such move?

    • The participation of the delegates from G-20 countries will be a major boost to the efforts of the Centre to project the situation in J&K as normal.
    • This is especially after J&K’s special constitutional position was ended in 2019.

    What is G-20?

    • Formed in 1999, the G20 is an international forum of the governments and central bank governors from 20 major economies.
    • Collectively, the G20 economies account for around 85 percent of the Gross World Product (GWP), 80 percent of world trade.
    • To tackle the problems or address issues that plague the world, the heads of governments of the G20 nations periodically participate in summits.
    • In addition to it, the group also hosts separate meetings of the finance ministers and foreign ministers.
    • The G20 has no permanent staff of its own and its chairmanship rotates annually between nations divided into regional groupings.

    Aims and objectives

    • The Group was formed with the aim of studying, reviewing, and promoting high-level discussion of policy issues pertaining to the promotion of international financial stability.
    • The forum aims to pre-empt the balance of payments problems and turmoil on financial markets by improved coordination of monetary, fiscal, and financial policies.
    • It seeks to address issues that go beyond the responsibilities of any one organization.

    Members of G20

    The members of the G20 consist of 19 individual countries plus the European Union (EU).

    • The 19 member countries of the forum are Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, United Kingdom and the United States.
    • The European Union is represented by the European Commission and by the European Central Bank.

    Its significance

    • G20 is a major international grouping that brings together 19 of the world’s major economies and the European Union.
    • Its members account for more than 80% of global GDP, 75% of trade and 60% of population.

    India and G20

    • India has been a member of the G20 since its inception in 1999.

     

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  • Anti Defection Law

    Political crisis in Maharashtra underscores ineffectiveness of anti-defection law

    | Polity | Mains Paper 2: Parliament & State Legislatures

    Context

    The political crisis in Maharashtra has brought focus back on the anti-defection law. By all accounts, the law has failed to shore up the stability of elected governments.

    About Anti-defection law

    • The Anti-Defection Law under the Tenth Schedule of the Constitution punishes MPs/ MLAs for defecting from their party by taking away their membership of the legislature.
    • It gives the Speaker of the legislature the power to decide the outcome of defection proceedings.
    • It was added to the Constitution through the Fifty-Second (Amendment) Act, 1985 when Rajiv Gandhi was PM.
    • The law applies to both Parliament and state assemblies.

    How provisions of the law are being thwarted?

    • There are many ways to thwart provisions of the law:
    • The Speaker can sit on the defection pleas for the term of the assembly;
    • The beneficiary party can facilitate accretion of defectors to hit the magic two-thirds threshold.
    • The voters don’t seem to care about punishing the defectors either.

    Is an amendment to the law a solution?

    • Some have thus argued that the way forward is to amend the anti-defection law to fill these lacunae by mandating time-bound decisions by the Speaker and disqualifying defectors from standing for the next election as well.
    • These proposed amendments like the original law want to consolidate power without necessarily putting in the requisite politics.

    Why amendment to the law will not solve the problem

    •  Politicians are adept at subverting institutional processes for their own ends and there are many possibilities for payoff for defectors outside of elected office alone.
    • Moreover, politics has a rich history of exercise of power by proxy and the disqualified representative may simply choose to have a family member stand in their stead.
    •  The anti-defection law and proposed amendments approach the issue of defections from the prism of denying power to the defector, a framing which repeatedly comes up short in the face of a bigger and/or more punitive power.

    Way forward

    • Parties need to project power: Within this framework, if political parties want to resist defections, they must be able to project (imminent) power themselves.
    • Parties need to address organisational issues: At the same time, political parties must address organizational and ideological infirmities which have made them susceptible to mass defections in the first place.
    • Ideological clarity: Political parties need ideological clarity and the ability to attract individuals with a sense of purpose and not love for power alone.
    • This ideological depth if reflected in the party organization and its political programs will give members the ability to withstand lean periods of power.
    • Inner-party democracy: Political parties are failing to create intra-party forums where grievances can be expressed and resolved on an ongoing basis.
    • Internal mechanisms for inner-party democracy – from elections to deliberative forums – are ultimately at the discretion of the party leadership.
    • Scrap anti-defection law: Scrapping the anti-defection law would provide some institutional leverage to express intra-party dissidence and while it may be more chaotic in the short-term would lead to greater stability and political strength in the long-term.
    • Contributed to polarisation: The anti-defection law has undermined not just the very principle of representation but has also contributed to polarization in our country by making it impossible to construct a majority on any issue outside of party affiliation.
    • Avoid ceding political power to the judiciary: Political parties are repeatedly giving primacy to legal instead of political battles since these issues inevitably end up in court.
    • This repeated ceding of political power to the judiciary is a serious deviation from the democratic paradigm and must be checked.

    Conclusion

    Anti-defection law has failed to prevent the defections and subsequent toppings of the several state government. Scrapping it could provide leverage to express intra-party dissidence.

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  • How Hanoi and New Delhi are fortifying defence ties

    op-ed snap | International Relations | Mains Paper 2: Bilateral, Regional and Global Groupings and agreements involving India

    Context

    The two countries recently deepened bilateral cooperation with the signing of the Joint Vision Statement on India-Vietnam Defence Partnership towards 2030 during the recent visit of Defence Minister Rajnath Singh to Vietnam.

    About the Joint Vision Statement

    • India and Vietnam Wednesday signed a Joint Vision Statement on India-Vietnam Defence Partnership towards 2030, “which will significantly enhance the scope and scale of existing defence cooperation”.
    • Boosting the scale and scope of defence cooperation: The Joint Vision Statement is aimed at boosting the scope and scale of the existing defence cooperation between the two nations.
    • Mutual logistic support: The two sides also signed a Memorandum of Understanding (MoU) on mutual logistics support.
    • Elevating CSP: This is the first agreement of its kind that Hanoi has entered into with any other country and elevates the standing of Comprehensive Strategic Partnership (CSP) which Hanoi shares with New Delhi since 2016 (along with only Russia and China).

    Enhanced maritime cooperation

    • Both countries find convergence in their approaches towards the maintenance of stability and security of the Indo-Pacific.
    • This approach has translated into diplomatic and political support in the context of developments within the region and manifested in the form of tangible and functional cooperation instruments — the most vital being bilateral defence partnership.
    • Because of the volume of maritime trade that passes through sea lanes of communication in the Indo-Pacific and potential as well as estimated energy reserves in these waters, maritime cooperation between countries in the region have expanded exponentially.

    Emphasis on the cooperative mechanism

    • The enhanced geostrategic prominence and attendant uncertainties vis-à-vis China’s expanding and often abrasive footprints in the Indo-Pacific have resulted in an overall increase in emphasis on cooperative mechanisms and frameworks across the region.
    • Defence partnership between the two countries has been growing steadily following the signing of the Defence Protocol in 2000 and today covers extensive navy-to-navy cooperation.

    Dealing with Chinese transgression

    • Vietnam has and continues to be one of the most vocal countries with respect to China’s periodic transgressions in the South China Sea.
    • Freedom of navigation: In India, Vietnam has found an equally uncompromising partner when it comes to the question of violations of freedom of navigation and threats to sovereign maritime territorial rights as enshrined under international maritime law.
    • New Delhi has supported Vietnam’s position in the South China Sea with respect to Beijing’s destabilising actions and coercive tactics backing by reiterating the irrefutability of the UNCLOS.
    • India has also not backed down from continuing ONGC Videsh Ltd (OVL)’s oil exploration project in Block 128 (which is within Hanoi’s EEZ) despite China’s protests.
    • Emphasis on naval diplomacy: It is also in the last few years that Vietnam has augmented its emphasis on naval diplomacy and strengthened its ties with the US alongside the extension of its engagement with India and other ASEAN members.
    • Despite the fact that the China factor has provided impetus to the solidification of ties, it is also important to consider that mutual cooperation is not driven solely by it.
    • Support in the rubric of Indo-Pacific: Both countries have expanded areas of collaboration and are supportive of each other’s individual and multilateral involvements within the rubric of the Indo-Pacific.

    Conclusion

    Convergences between New Delhi and Hanoi has naturally found expression in bilateral relations and the two countries are poised to develop their partnership further in the coming years.

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    Back2Basics: About UNCLOS

    • UNCLOS is sometimes referred to as the Law of the Sea Convention or the Law of the Sea treaty.
    • It came into operation and became effective from 16th November 1982.
    • It defines the rights and responsibilities of nations with respect to their use of the world’s oceans, establishing guidelines for businesses, the environment, and the management of marine natural resources.
    • It has created three new institutions on the international scene :
      1. International Tribunal for the Law of the Sea,
      2. International Seabed Authority
      3. Commission on the Limits of the Continental Shelf

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  • Modern Indian History-Events and Personalities

    Centre asks firms to arrange Tricolours

    | | Mains Paper 1: Modern Indian History

    Independence Day 2020 | Independence Day: Facts about Indian tricolour that you may have missed | India News

    The Centre has reached out to manufacturers and e-commerce sites to boost the availability of the Tricolour, according to officials aware of the programme.

    Why in news?

    • The Centre is set to launch a large-scale campaign to encourage Indians to fly the National Fag at their homes to mark the 75th Independence Day.
    • The aim of the campaign was to inspire people, rather than carry out a distribution drive.

    How is it made possible?

    • In order to facilitate the campaign, the Union Home Ministry had last year amended the Flag Code, which earlier only allowed hand-woven or hand-spun flags to be made.
    • It has now allowed flags to be polyester and machine-made.

    Do you know?

    Earlier, the display of the national flag was governed by the provisions of The Emblems and Names (Prevention of Improper Use) Act, 1950 and the Prevention of Insults to National Honour Act, 1971.

    What is the Flag Code of India?

    • The Flag Code of India is a set of laws, practices and conventions that apply to the display of the national flag of India.
    • The Code took effect from 26 January 2002 and superseded the “Flag Code-India” as it existed earlier.
    • It permits the unrestricted display of the tricolour, consistent with the honour and dignity of the flag.

    The Flag Code of India has been divided into three parts:-

    • First Part: General Description of the National Flag.
    • Second Part: Display of the National Flag by members of public, private Organisations & educational institutions etc.
    • Third Part: Display of National Flag by Union or State Governments and their organisations and agencies.

    Disposing of the national flag

    • A/c to the Flag Code, such paper flags are not to be discarded or thrown on the ground after the event.
    • Such flags are to be disposed of, in private, consistent with the dignity of the flag.

    Hoisting the national flag is a fundamental right

    • The bench headed by Chief Justice of India V. N. Khare said that under Article 19(1)(a) of the Constitution of India, citizens had the fundamental right to fly the national flag on their premises throughout the year.
    • However, it provided that the premises do not undermine the dignity of the national flag.

    About Prevention of Insults to National Honour Act

    • The law, enacted on December 23, 1971, penalizes the desecration of or insult to Indian national symbols, such as the National Flag, the Constitution, the National Anthem, and the Indian map, as well as contempt of the Constitution of India.
    • Section 2 of the Act deals with insults to the Indian National Flag and the Constitution of India.

    Do you know?

    Article 51 ‘A’ contained in Part IV A i.e. Fundamental Duties asks:

    To abide by the constitution and respect its ideals and institutions, the National Flag and the National Anthem in clause (a).

    Back2Basics: Story of our National Flag

    (1) Public display for the first time

    • Arguably the first national flag of India is said to have been hoisted on August 7, 1906, in Kolkata at the Parsee Bagan Square (Green Park).
    • It comprised three horizontal stripes of red, yellow and green, with Vande Mataram written in the middle.
    • Believed to have been designed by freedom activists Sachindra Prasad Bose and Hemchandra Kanungo, the red stripe on the flag had symbols of the sun and a crescent moon, and the green strip had eight half-open lotuses.

    (2) In Germany

    • In 1907, Madame Cama and her group of exiled revolutionaries hoisted an Indian flag in Germany in 1907 — this was the first Indian flag to be hoisted in a foreign land.

    (3) During the Home Rule Movement

    • In 1917, Dr Annie Besant and Lokmanya Tilak adopted a new flag as part of the Home Rule Movement.
    • It had five alternate red and four green horizontal stripes, and seven stars in the saptarishi configuration.
    • A white crescent and star occupied one top corner, and the other had Union Jack.

    (4) Final version by Pingali Venkayya

    • The design of the present-day Indian tricolour is largely attributed to Pingali Venkayya, an Indian freedom fighter.
    • He reportedly first met Mahatma Gandhi in South Africa during the second Anglo-Boer War (1899-1902), when he was posted there as part of the British Indian Army.
    • Years of research went into designing the national flag. In 1916, he even published a book with possible designs of Indian flags.
    • At the All India Congress Committee in Bezwada in 1921, Venkayya again met Gandhi and proposed a basic design of the flag, consisting of two red and green bands to symbolise the two major communities, Hindus and Muslims.

    (5) During Constituent Assembly

    • On July 22, 1947, when members of the Constituent Assembly of India, the first item on the agenda was reportedly a motion by Pandit Nehru, about adopting a national flag for free India.
    • It was proposed that “the National Flag of India shall be horizontal tricolour of deep saffron (Kesari), white and dark green in equal proportion.”
    • The white band was to have a wheel in navy blue (the charkha being replaced by the chakra), which appears on the abacus of the Sarnath Lion Capital of Ashoka.

     

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

    What does our Current Account Deficit (CAD) show?

    | Economics | Mains Paper 3: Indian Economy

    The data for the country’s current account balance for the fourth quarter of FY 2021-22 shows a decrease in the deficit to 1.5% of gross domestic product (GDP) from 2.6% of GDP in Q3 FY 2021-22.

    What is Current Account Deficit (CAD)?

    • A current account is a key component of balance of payments, which is the account of transactions or exchanges made between entities in a country and the rest of the world.
    • This includes a nation’s net trade in products and services, its net earnings on cross border investments including interest and dividends, and its net transfer payments such as remittances and foreign aid.
    • A CAD arises when the value of goods and services imported exceeds the value of exports, while the trade balance refers to the net balance of export and import of goods or merchandise trade.

    Components of Current Account

    Current Account Deficit (CAD) =

    Trade Deficit + Net Income + Net Transfers

    (1) Trade Deficit

    • Trade Deficit = Imports – Exports
    • A Country is said to have a trade deficit when it imports more goods and services than it exports.
    • Trade deficit is an economic measure of a negative balance of trade in which a country’s imports exceeds its exports.
    • A trade deficit represents an outflow of domestic currency to foreign markets.

    (2) Net Income

    • Net Income = Income Earned by MNCs from their investments in India.
    • When foreign investment income exceeds the savings of the country’s residents, then the country has net income deficit.
    • This foreign investment can help a country’s economy grow. But if foreign investors worry they won’t get a return in a reasonable amount of time, they will cut off funding.
    • Net income is measured by the following things:
    1. Payments made to foreigners in the form of dividends of domestic stocks.
    2. Interest payments on bonds.
    3. Wages paid to foreigners working in the country.

    (3) Net Transfers

    • In Net Transfers, foreign residents send back money to their home countries. It also includes government grants to foreigners.
    • It Includes Remittances, Gifts, Donation etc

    How does Current Account Transaction takes place?

    • While understanding the Current Account Deficit in detail, it is important to understand what the current account transactions are.
    • Current account transactions are transactions that require foreign currency.
    • Following transactions with from which component these transactions belong to :
    1. Component 1 : Payments connection with Foreign trade – Import & Export
    2. Component 2 : Interest on loans to other countries and Net income from investments in other countries
    3. Component 3 : Remittances for living expenses of parents, spouse and children residing abroad, and Expenses in connection with Foreign travel, Education and Medical care of parents, spouse and children

    What has been the recent trend?

    • In Q4 FY 2021-22, CAD improved to 1.5% of GDP or $13.4 billion from 2.6% of GDP in Q3 FY 2021-22 ($22.2 billion).
    • The difference between the value of goods imported and exported fell to $54.48 million in Q4FY 2021-22 from $59.75 million in Q3 FY2021-22.
    • However, based on robust performance by computer and business services, net service receipts rose both sequentially and on a year-on-year basis.
    • Remittances by Indians abroad also rose.

    What are the reasons for the current account deficit?

    • Intensifying geopolitical tensions and supply chain disruptions leading to crude oil and commodity prices soaring globally have been exerting upward pressure on the import bill.
    • A rise in prices of coal, natural gas, fertilizers, and edible oils have added to the pressure on trade deficit.
    • However, with global demand picking up, merchandise exports have also been rising.

    How will a large CAD affect the economy?

    • A large CAD will result in demand for foreign currency rising, thus leading to depreciation of the home currency.
    • Nations balance CAD by attracting capital inflows and running a surplus in capital accounts through increased foreign direct investments (FDI).
    • However, worsening CAD will put pressure on inflow under the capital account.
    • Nevertheless, if an increase in the import bill is because of imports for technological upgradation it would help in long-term development.

    Should a widening CAD worry policymakers?

    • Data shows the trade deficit widened to $24.29 billion in May 2022 from $6.53 billion a year ago.
    • Merchandise exports in May 2022 rose by 20.55% over May 2021, while merchandise imports rose by 62.83%.
    • However, if increasing imports is accompanied by an expansion in industrial production, it is a sign of economic development.
    • Immediately after the covid-19 lockdown, after a long time, the country experienced a current account surplus.

     

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  • Cyber Security – CERTs, Policy, etc

    India’s new VPN Rules

    | Security Issues | Mains Paper 3: Cyber Security

    On April 28, Computer Emergency Response Team (CERT-In) passed a rule mandating VPN (virtual private network) providers to record and keep their customers’ logs for 180 days.

    What is VPN?

    • VPN describes the opportunity to establish a protected network connection when using public networks.
    • It encrypts internet traffic and disguise a user’s online identity.
    • This makes it more difficult for third parties to track your activities online and steal data.
    • The encryption takes place in real time.

    How does a VPN work?

    • A VPN hides your IP address by letting the network redirect it through a specially configured remote server run by a VPN host.
    • This means that if you surf online with a VPN, the VPN server becomes the source of your data.
    • This means your Internet Service Provider (ISP) and other third parties cannot see which websites you visit or what data you send and receive online.
    • A VPN works like a filter that turns all your data into “gibberish”. Even if someone were to get their hands on your data, it would be useless.

    Why do people use VPN?

    • Secure encryption: A VPN connection disguises your data traffic online and protects it from external access. Unencrypted data can be viewed by anyone who has network access and wants to see it. With a VPN, hackers and cyber criminals can’t decipher this data.
    • Disguising whereabouts: VPN servers essentially act as your proxies on the internet. Because the demographic location data comes from a server in another country, your actual location cannot be determined.
    • Data privacy is held: Most VPN services do not store logs of your activities. Some providers, on the other hand, record your behaviour, but do not pass this information on to third parties. This means that any potential record of your user behaviour remains permanently hidden.
    • Access to regional content: Regional web content is not always accessible from everywhere. Services and websites often contain content that can only be accessed from certain parts of the world.
    • Secure data transfer: If you work remotely, you may need to access important files on your company’s network. For security reasons, this kind of information requires a secure connection. To gain access to the network, a VPN connection is often required.

    What does the new CERT-IN directive say?

    • VPN providers will need to store validated customer names, their physical addresses, email ids, phone numbers, and the reason they are using the service, along with the dates they use it and their “ownership pattern”.
    • In addition, Cert is also asking VPN providers to keep a record of the IP and email addresses that the customer uses to register the service, along with the timestamp of registration.
    • Most importantly, however, VPN providers will have to store all IP addresses issued to a customer and a list of IP addresses that its customers generally use.

    What does this mean for VPN providers?

    • VPN services are in violation of Cert’s rules by simply operating in India.
    • That said, it is worth noting that ‘no logs’ does not mean zero logs.
    • VPN services still need to maintain some logs to run their service efficiently.

    Does this mean VPNs will become useless?

    • The Indian government has not banned VPNs yet, so they can still be used to access content that is blocked in an area, which is the most common usage of these services.
    • However, journalists, activists, and others who use such services to hide their internet footprint will have to think twice about them.

    Why such move?

    • Crime control: For law enforcement agencies, a move like this will make it easier to track criminals who use VPNs to hide their internet footprint.
    • Curbing dark-net activities: Users these days are shifting towards the dark and deep web, which are much tougher to police than VPN services.

    Back2Basics: Indian Computer Emergency Response Team (CERT-IN)

    • CERT-IN is an office within the Ministry of Electronics and Information Technology.
    • It is the nodal agency to deal with cyber security threats like hacking and phishing. It strengthens the security-related defense of the Indian Internet domain.
    • It was formed in 2004 by the Government of India under the Information Technology Act, 2000 Section (70B) under the Ministry of Communications and Information Technology.

     

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  • Goods and Services Tax (GST)

    What is GST Compensation Cess?

    | Economics | Mains Paper 3: Indian Economy

    The Centre has extended the time for levy of GST compensation cess by almost four years till March 31, 2026.

    What is the news?

    • The Goods and Services Tax (Period of Levy and Collection of Cess) Rules were notified in 2022 by the Finance Ministry.
    • The levy of cess was to end on June 30 but the GST Council, chaired by Union Finance Minister decided to extend it till 2026.

    What is GST?

    • GST, being a consumption-based tax, would result in loss of revenue for manufacturing-heavy states.
    • GST launched in India on 1 July 2017 is a comprehensive indirect tax for the entire country.
    • It is charged at the time of supply and depends on the destination of consumption.
    • For instance, if a good is manufactured in state A but consumed in state B, then the revenue generated through GST collection is credited to the state of consumption (state B) and not to the state of production (state A).

    Compensation Cess under GST regime

    • Due to the consumption-based nature of GST, manufacturing states like Gujarat, Haryana, Karnataka, Maharashtra and Tamil Nadu feared a revenue loss.
    • Thus, GST Compensation Cess or GST Cess was introduced by the government to compensate for the possible revenue losses suffered by such manufacturing states.
    • However, under existing rules, this compensation cess will be levied only for the first 5 years of the GST regime – from July 1st, 2017 to July 1st, 2022.
    • Compensation cess is levied on five products considered to be ‘sin’ or luxury as mentioned in the GST (Compensation to States) Act, 2017 and includes items such as- Pan Masala, Tobacco, and Automobiles etc.

    Alternatives to prevent losses

    • The input tax credit can help a producer by partially reducing GST liability by only paying the difference between the tax already paid on the raw materials of a particular good and that on the final product.
    • In other words, the taxes paid on purchase (input tax) can be subtracted from the taxes paid on the final product (output tax) to reduce the final GST liability.

    Distributing GST compensation

    • The compensation cess payable to states is calculated based on the methodology specified in the GST (Compensation to States) Act, 2017.
    • The compensation fund so collected is released to the states every 2 months.
    • Any unused money from the compensation fund at the end of the transition period shall be distributed between the states and the centre as per any applicable formula.

    Significance of GST compensation

    • States no longer possess taxation rights after most taxes, barring those on petroleum, alcohol, and stamp duty were subsumed under GST.
    • GST accounts for almost 42% of states’ own tax revenues, and tax revenues account for around 60% of states’ total revenues.
    • Finances of over a dozen states are under severe strain, resulting in delays in salary payments and sharp cuts in capital expenditure outlay amid the pandemic-induced lockdowns and the need to spend on healthcare.

     

    Try this question from CSP 2018:

    Q.Consider the following items:

    1. Cereal grains hulled
    2. Chicken eggs cooked
    3. Fish processed and canned
    4. Newspapers containing advertising material

    Which of the above items is/are exempt under GST (Goods and Services Tax)?

    (a) 1 only

    (b) 2 and 3 only

    (c) 1, 2 and 4 only

    (d) 1, 2, 3 and 4

     

    Post your answers here.

     

     

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

    Typhi: A more drug-resistant Typhoid

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

    The bacteria causing typhoid fever is becoming increasingly resistant to some of the most important antibiotics for human health.

    What is the news?

    • The largest genome analysis of Salmonella Typhi (S. Typhi) also shows that resistant strains — almost all originating in South Asia — have spread to other countries nearly 200 times since 1990.
    • The researchers noted that typhoid fever is a global public health concern, causing 11 million infections and more than 1,00,000 deaths per year.
    • Antibiotics can be used to successfully treat typhoid fever infections, but their effectiveness is threatened by the emergence of resistant S. Typhi strains.

    What is Salmonella Typhi?

    • Salmonella Typhi (S. Typhi) are bacteria that infect the intestinal tract and the blood.
    • It is usually spread through contaminated food or water.
    • Once S. Typhi bacteria are eaten or drunk, they multiply and spread into the bloodstream.
    • The disease is referred to as typhoid fever. S. Paratyphi bacteria cause a similar, but milder illness, which comes under the same title.
    • Paratyphoid has a shorter duration, generally, than typhoid.
    • Typhi and S. Paratyphi are common in many developing countries where sewage and water treatment systems are poor.

    How does it spread?

    • Salmonella Typhi lives only in humans.
    • Persons with typhoid fever carry the bacteria in their bloodstream and intestinal tract.
    • Symptoms include prolonged high fever, fatigue, headache, nausea, abdominal pain, and constipation or diarrhoea.
    • Some patients may have a rash. Severe cases may lead to serious complications or even death.
    • Typhoid fever can be confirmed through blood testing.

     

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