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Subject: Economics

  • GST Collections Rise 8.1% to ₹1.83 Lakh Crore in February

    Why in the News

    Gross Goods and Services Tax collections rose 8.1% year on year to over ₹1.83 lakh crore in February 2026, indicating steady consumption and import activity.

    Key Figures

    • Gross GST: ₹1.83 lakh crore
    • Net GST: ₹1.61 lakh crore up 7.9%
    • Gross domestic revenue: ₹1.36 lakh crore up 5.3%
    • Import revenue: ₹47,837 crore up 17.2%
    • Refunds: ₹22,595 crore up 10.2%
    • Cumulative GST collection so far this fiscal: ₹20.27 lakh crore up 8.3%.

    Policy Context

    • GST slabs merged into two major rates: 5% and 18%
    • 40% slab retained for ultra luxury goods and tobacco
    • Around 375 items saw rate cuts from September 2025
    • Initial dip in November after tax cuts followed by recovery in December, January and February.

    State Level Trends

    Negative growth observed in:

    • Tamil Nadu
    • Madhya Pradesh
    • Rajasthan

    Below national average growth in:

    • West Bengal
    • Haryana
    • Uttar Pradesh
    • Maharashtra

    Significance

    • Reflects resilience of consumption demand
    • Strong import growth suggests trade momentum
    • Stable revenue trend despite rate rationalisation
    • Indicates structural maturity of GST ecosystem
    [2017] What is/are the most likely advantages of implementing ‘Goods and Services Tax (GST)’? 

    1. It will replace multiple taxes collected by multiple authorities and will thus create a single market in India. 
    2. It will drastically reduce the ‘Current Account Deficit’ of India and will enable it to increase its foreign exchange reserves. 
    3. It will enormously increase the growth and size of economy of India and will enable it to overtake China in the near future. 

    Select the correct answer using the code given below: 

    (a) 1 only (b) 2 and 3 only (c) 1 and 3 only (d) 1, 2 and 3

  • SEBI to Leverage AI and Tech to Crack Down on Market Manipulators

    Why in the News

    SEBI Chairman Tuhin Kanta Pandey said the regulator will strengthen surveillance using Artificial Intelligence and technology to curb market manipulation and cyber fraud.

    Key Announcements

    • Tech Driven Surveillance

      • Use of AI to detect market manipulation and suspicious trading patterns.
      • Stronger enforcement against fraudulent brokers and cyber criminals.

    • SEBI Check Tool

      • Integrated within UPI interface.
      • Helps investors verify registered intermediaries before making payments.
      • Aimed at curbing fake brokers promising unrealistic returns.
      • SEBI has partnered with Bengaluru based AI firm SARVAM for multilingual awareness campaigns.

    • Investor Awareness Push

      • AI based outreach pilot contacted 3.85 lakh people.
      • Campaigns to caution against financial influencers promising “astronomical” returns.
      • Emphasis on disciplined and long term investing.

    • Derivatives & Market Stability

      • Measures introduced to cool speculation in equity derivatives.
      • Focus on short duration options segment.
      • SEBI says no signs of systemic instability.

    • Enforcement Record

      • Action against unregistered advisors and alleged market manipulators.
      • High success rate in tribunal and Supreme Court cases.
      • Regulator defends combined legislative, executive and quasi judicial role.

    • Future Focus Areas

      • Revitalising agricultural commodity markets.
      • Deepening corporate bond market.
      • More scientific policy making with impact assessment.

    Significance

    • Strengthens investor protection.
    • Improves trust and transparency in capital markets.
    • Reflects shift toward data driven regulation.
    • Aligns with digital public infrastructure ecosystem including UPI.
    [2025] Consider the following statements: I. India accounts for a very large portion of all equity option contracts traded globally, thus exhibiting a great boom. 

    II. India’s stock market has grown rapidly in the recent past, even overtaking Hong Kong’s at some point in time. 

    III. There is no regulatory body either to warn small investors about the risks of options trading or to act on unregistered financial advisors in this regard. 

    Which of the statements given above are correct? 

    (a) I and II only (b) II and III only (c) I and III only (d) I, II and III

  • [27th February 2026] The Hindu OpED: The shift of critical minerals to India’s strategic centre

    PYQ Relevance

    [UPSC 2022] Do you think India will meet 50 percent of its energy needs from renewable energy by 2030? Justify your answer. How will the shift of subsidies from fossil fuels to renewables help achieve the above objective? Explain.

    Linkage: Renewable energy expansion depends on critical minerals like lithium and rare earths used in solar, wind, and EVs. Achieving 50% renewable capacity by 2030 requires secure mineral supply chains and shifting subsidies from fossil fuels to clean energy.

    Mentor’s Comment

    Critical minerals are now central to India’s industrial and geopolitical strategy. The Union Budget 2026 marks a shift from policy intent to implementation, focusing on processing capacity, domestic value addition, and secure supply chains. With 30 minerals identified and ₹16,300 crore allocated under the National Critical Minerals Mission, India is prioritising strategic autonomy amid global supply disruptions.

    Why is the shift to critical minerals a strategic turning point for India?

    1. Policy Mainstreaming: Moves critical minerals from peripheral policy concern to core industrial and geopolitical agenda. Budget speech shifts focus from identification to execution
    2. Institutional Framework: Establishes National Critical Minerals Mission (NCMM) with ₹16,300 crore outlay to coordinate exploration, mining, and processing.
    3. Strategic Context: Responds to global weaponisation of rare earth magnets and battery supply chains in 2025, exposing industrial vulnerabilities
    4. Global Concentration Risk: China controls up to 90% of global processing capacity for several critical minerals, creating supply asymmetry.
    5. Implementation Phase: Shifts discourse from “Does India need a policy?” to “Can India execute at scale, speed, and depth?”

    How does governance architecture address exploration and processing gaps?

    1. Mineral Identification: Notifies 30 critical minerals to guide regulatory and fiscal prioritisation
    2. Exploration Reform: Eases mineral exploration norms for junior miners and rationalises royalty rates.
    3. Project Pipeline: Targets 1,200 exploration projects by FY2031 under NCMM.
    4. Fiscal Incentives: Enables tax deductions for exploration expenditure for nine critical minerals.
    5. Processing Capability: Leverages existing capacity in copper, graphite, rare earth oxides, tin, and titanium, often exceeding 99.9% purity.
    6. Technological Upgradation: Recognises need for deeper refining and advanced processing for clean energy and defence applications.

    Does demand creation remain the missing link in mineral security?

    1. Capital Goods Rationalisation: Removes import duties on capital goods used in processing of critical minerals
    2. Domestic Manufacturing Push: Links mineral processing to batteries, solar modules, wind turbines, and electric vehicles.
    3. Demand Constraint: Identifies lack of assured domestic demand as a barrier to private investment in refining capacity.
    4. Industrial Multiplier: Expands electric mobility and renewable energy deployment to generate downstream mineral demand.
    5. Backward Integration: Addresses delays in domestic value chain integration that create uncertainty for midstream processors.

    Can technology and AI-driven governance enhance mineral discovery and efficiency?

    1. AI-First Exploration: Mandates Artificial Intelligence integration in mineral exploration to de-risk investments.
    2. Institutional Convergence: Aligns IndiaAI Mission, National Geospatial Policy, and Mission Anveshan for data-driven exploration.
    3. Hydrocarbon Model Extension: Expands seismic and geospatial analytics used in hydrocarbon discovery to mineral exploration.
    4. Geoscience Data Repository: Improves prospectivity analysis and site discovery through centralised digital data systems.
    5. Tax Support: Extends tax deductions for exploration expenditure to reduce risk premium.

    How does geopolitical disruption reshape India’s strategic mineral policy?

    1. Rare Earth Corridors: Announces development of rare earth corridors across coastal States.
    2. Import Substitution: Reduces import duties on monazite sands to secure feedstock.
    3. Technological Sovereignty: Uses supply chain disruption as leverage to build domestic magnet and battery ecosystems.
    4. State Role: Encourages States to upgrade port infrastructure and manpower to serve global demand.
    5. Regional Growth: Links mineral processing clusters to job creation and industrial diversification.

    Are international partnerships aligned with domestic capacity building?

    1. Strategic Partnerships: Expands cooperation with Australia, European Union, Japan, United Kingdom, and United States.
    2. Technology Transfer Challenge: Addresses reluctance of advanced economies in sharing high-end processing technologies.
    3. Regulatory Certainty: Strengthens legal frameworks to attract foreign mineral processing investment.
    4. Sintered Magnet Scheme: Allocates ₹7,280 crore for permanent magnet manufacturing ecosystem.
    5. Trade Integration: Aligns mineral strategy with India-EU Free Trade Agreement and global supply chain networks.
    6. Research Collaboration: Enhances academic and industrial linkages through UK-India Critical Minerals Supply Chain Observatory.

    Conclusion

    Critical mineral security is no longer a sectoral concern but a strategic imperative linking energy transition, manufacturing growth, and geopolitical autonomy. Budget 2026 signals a shift from ambition to execution, with emphasis on processing, technology, and global partnerships. Sustained coordination between the Union, States, and industry will determine whether India can convert mineral potential into long-term industrial and strategic strength.

  • SEBI Revamps Mutual Fund Rulebook

    Why in the News

    The Securities and Exchange Board of India introduced major reforms for the ₹81 lakh crore mutual fund industry to ensure schemes remain true to their stated objectives.

    Key Changes

    1. Solution-Oriented Schemes Discontinued

    • No fresh inflows allowed in retirement and children funds.
    • Existing schemes to be merged with similar asset allocation schemes.
    • Aim: Remove redundant category and improve clarity.

    2. Introduction of Life Cycle Funds

    • Goal-based, open-ended schemes.
    • Asset allocation shifts automatically over time via glide path.
    • Designed around target maturity dates.

    3. Higher Exposure Limits

    • Up to 35% investment allowed in:
      • Gold
      • Silver
      • Infrastructure Investment Trusts
    • Provides equity funds greater flexibility and diversification.

    4. Restriction on Portfolio Overlap

    • Less than 50% overlap required:
      • Between sectoral and thematic funds
      • Between equity and sectoral or thematic funds
    • Objective: Reduce duplication and ensure differentiated strategies.

    5. Relaxation for Contra and Value Funds

    • Earlier: Only one of the two allowed per fund house.
    • Now: Both can be offered.

    Prelims Pointers

    • SEBI regulates securities market and mutual funds in India.
    • InvITs pool funds for infrastructure projects.
    • Life cycle funds follow glide path asset allocation.
    • Portfolio overlap norms aim to prevent excessive duplication across schemes.
    [2023] Consider the following statements: Statement-I: Interest income from the deposits in Infrastructure Investment Trusts (InvITs) distributed to their investors is exempted from tax, but the dividend is taxable. 

    Statement-II: InvITs are recognized as borrowers under the ‘Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002’. 

    Which one of the following is correct in respect of the above statements? 

    (a) Both Statement-I and Statement-II are correct and Statement-II is the correct explanation for Statement-I 

    (b) Both Statement-I and Statement-II are correct and Statement-II is not the correct explanation for Statement-I 

    (c) Statement-I is correct but Statement-II is incorrect 

    (d) Statement-I is incorrect but Statement-II is correct

  • New GDP Series to Better Capture Economy

    Why in the News

    The Ministry of Statistics and Programme Implementation will release a new GDP series on February 27, 2026, updating the base year to 2022-23 and introducing major data and methodological improvements.

    Key Changes

    1. Base Year Updated

    • From 2011-12 to 2022-23
    • Reflects current economic structure including digitalisation and formalisation

    2. Better Corporate & Government Data

    • Sector-wise allocation based on actual activity share
    • Inclusion of government housing services
    • Expanded coverage of autonomous and local bodies

    3. Stronger Household & Informal Sector Estimates

    • Annual use of ASUSE and PLFS data
    • More granular measurement of private consumption

    4. New Data Sources

    • Wider use of GST data for output estimation
    • Banking data from Reserve Bank of India
    • Actual NBFC data instead of proxy estimates

    5. Technical Upgrade

    • Use of double deflator method for better real GDP estimation

    Prelims Takeaway

    • GDP and GVA series now aligned to 2022-23 base year
    • GST integrated more deeply in estimation
    • Informal and unincorporated sector measurement improved
    • Double deflation enhances accuracy of real growth calculation
    [2013] The national income of a country for a given period is equal to the (a) total value of goods and services produced by the nationals 

    (b) sum of total consumption and investment expenditure 

    (c) sum of personal income of all individuals 

    (d) money value of final goods and services produced

  • DGCA Revises Airfare Refund and Cancellation Rules

    Why in the News

    The Directorate General of Civil Aviation has revised airfare refund and cancellation rules to address rising passenger grievances. The new rules will come into effect from March 26, 2026.

    Why the Changes Were Introduced

    • DGCA stated that refund related complaints have become a major source of grievance, including:
      • Delayed refunds
      • Airlines adjusting refunds against future travel
      • Disputes over refund value

    Key Changes in the New Rules

    1. Faster Refunds for Agent Bookings

    • Earlier: 30 working days
    • Now: 14 working days
    • Applies to tickets booked through travel agents and online portals.

    2. Extended “Look-In” Period

    • The “look-in” period allows cancellation or amendment without charge.
    • Earlier: 24 hours
    • Now: 48 hours
    • However, conditions changed:
    • Must be booked at least:
      • 7 days before departure for domestic flights
      • 15 days before departure for international flights
    • Applies only to tickets booked directly via airline websites.
    • Not automatically applicable for bookings via agents or portals.

    3. Name Correction Window

    • Free correction allowed within 24 hours.
    • Now applies only if ticket is booked directly through airline website.
    • Bookings via agents may attract charges even within 24 hours.

    4. New Medical Emergency Clause

    • Refund or credit shell allowed in case of:
      • Hospitalisation of passenger
      • Hospitalisation of family member on same PNR
    • For other medical cases:
      • Refund subject to medical fitness certification from an airline aerospace medicine specialist or DGCA empanelled expert.

    What Remains Unchanged

    • Most other refund provisions remain the same.
    • Government maintains non interference in airline commercial pricing.
    • Benchmarks fixed to protect consumer interest.

    Prelims Pointers

    • DGCA functions under Ministry of Civil Aviation.
    • It regulates safety, licensing and consumer standards in aviation.
    • “Look-in” period allows free cancellation within a limited time after booking.
    • Refund timelines are now 14 working days for agent bookings.
    • Medical emergency clause newly introduced in 2026 revision.
    [2025] With reference to the Government of India, consider the following information: Organization : Some of its functions : It works under I. Directorate of Enforcement : Enforcement of the Fugitive Economic Offenders Act, 2018 : Internal Security Division–I, Ministry of Home Affairs 

    II. Directorate of Revenue Intelligence : Enforces the provisions of the Customs Act, 1962 : Department of Revenue, Ministry of Finance 

    III. Directorate General of Systems and Data Management : Carrying out big data analytics to assist tax officers for better policy and nabbing tax evaders : Department of Revenue, Ministry of Finance 

    In how many of the above rows is the information correctly matched?

    (a) Only one (b) Only two (c) All three (d) None

  • New GDP Series Will Not Use UPI Data

    Why in the News

    The Ministry of Statistics and Programme Implementation has decided not to use Unified Payments Interface transaction data in India’s new GDP series with base year 2022 to 23, citing instability and classification limitations.

    Why Was UPI Data Considered?

    • UPI transaction data from the National Payments Corporation of India provides:
    • Value of transactions in rupees
    • Volume of transactions
    • Merchant category codes
    • It was proposed as a non traditional indicator to estimate Private Final Consumption Expenditure (PFCE), a key component of GDP from the expenditure side.

    Why Was It Rejected?

    • Overlapping Merchant Categories: Merchant codes such as 5411 for supermarkets cover multiple product types, making it difficult to classify transactions under specific PFCE consumption heads.
    • Non Consumption Transactions Included: Certain categories like debt collection agencies do not represent household consumption but account for notable transaction value.
    • Unstable and Incomplete Data Coverage: Continued reliance on cash and ongoing digital transition mean UPI trends do not yet fully capture overall consumption patterns. The Advisory Committee suggested reconsideration once data stabilises.

    About GDP Estimation in India

    • India calculates GDP using:
      • Production or Income Approach
      • Expenditure Approach
      • PFCE forms more than half of India’s GDP.
    • Under the new series:
      • Base year updated from 2011 to 12 to 2022 to 23
      • PFCE items expanded from 46 to 128
      • Published data will cover 49 items across 13 categories

    Alternative Data Sources Being Used

    • Goods and Services Tax data
    • Vahan vehicle registration data
    • Sector specific indicators
    [2013] The national income of a country for a given period is equal to the (a) total value of goods and services produced by the nationals 

    (b) sum of total consumption and investment expenditure 

    (c) sum of personal income of all individuals 

    (d) money value of final goods and services produced

  • [24th february 2026] The Hindu OpED: India’s energy shift through the green ammonia route

    PYQ Relevance

    [UPSC 2022] Do you think India will meet 50 percent of its energy needs from renewable energy by 2030? Justify your answer. How will the shift of subsidies from fossil fuels to renewables help achieve the above objective?

    Linkage: Green ammonia auctions operationalise renewable energy targets through industrial decarbonisation. The subsidy shift logic mirrors SIGHT incentives and viability gap funding for green hydrogen.

    Mentor’s Comment

    India’s green hydrogen strategy has entered an implementation phase through competitive green ammonia auctions. The Solar Energy Corporation of India (SECI) has operationalised aggregated demand under the National Green Hydrogen Mission, securing long-term offtake contracts at prices nearly 40-50% lower than earlier global benchmarks. The development signals a structural shift from policy intent to market creation and positions India as a price-setter in emerging clean fuel markets.

    Why in the News?

    At India Energy Week 2026, the government operationalised its clean energy vision through SECI’s large-scale green ammonia auctions under the SIGHT programme, offering 10-year fixed-price contracts. 

    What is Green Ammonia?

      1. Green ammonia is a 100% renewable, carbon-free fertilizer and energy carrier produced by combining nitrogen from the air with green hydrogen (generated via water electrolysis using solar or wind energy). 
      2. Unlike traditional “grey” ammonia that uses fossil fuels, green ammonia emits zero, offering a sustainable solution for agriculture, energy storage, and marine fuel.
    • Production: Water is split into hydrogen and oxygen using renewable electricity. This green hydrogen is then combined with nitrogen using the Haber-Bosch process to produce ammonia.

    What is the SECI Green Ammonia Auction Model?

    The SECI Green Ammonia Auction Model, under the National Green Hydrogen Mission’s SIGHT Scheme (Mode 2A), is a competitive, cost-based e-reverse auction for procuring green ammonia. It is designed to bridge the price gap with conventional ammonia. It features a 10-year, fixed-price contract, with SECI acting as an intermediary to facilitate demand, resulting in record-low prices around ₹55.75/kg as of mid-2025. 

    Key Features of the SECI Green Ammonia Model:

    1. SIGHT Scheme Mode 2A: The auction is part of the Strategic Interventions for Green Hydrogen Transition (SIGHT) scheme, which provides financial incentives for producing and supplying green ammonia, implemented by SECI.
    2. Intermediary Procurement Model: SECI acts as an intermediary, bidding for and procuring green ammonia from producers and supplying it to fertilizer companies, addressing the “chicken-and-egg” demand-supply challenge.
    3. Competitive Bidding & Reverse Auction: The process involves e-bidding followed by an e-reverse auction to ensure the most competitive, market-driven pricing.
    4. Long-Term Contracts: Green Ammonia Purchase Agreements (GAPA) are signed for a period of 10 years, providing certainty to developers and investors.
    5. Payment Security Mechanism: A robust, built-in payment security mechanism ensures the financial viability of projects and reassures stakeholders.
    6. Aggregated Demand: The model aggregates demand for green ammonia, with planned auctions covering a cumulative capacity of over 7 lakh MT per annum, promoting economies of scale.
    7. Record-Low Pricing: The first auction in 2025 achieved a significant breakthrough, with prices dropping to roughly ₹55.75/kg, making green ammonia increasingly competitive with traditional, gray ammonia.

    How Does the Green Ammonia Auction Model Reflect a Governance Shift from Subsidy to Market Creation?

    1. Aggregated Demand Mechanism: SECI pooled demand of up to 7,24,000 tonnes annually across 13 fertiliser plants, reducing fragmented procurement and enhancing scale efficiency.

    2. Long-term Offtake Contracts: Provides 10-year fixed-price agreements, ensuring revenue certainty and reducing investor risk.
    3. Competitive Bidding Framework: Attracted 15 bidders, with 7 successful awardees, strengthening transparency and price discovery.
    4. Production Subsidy Support: Includes viability gap support of ₹8.82/kg, ₹7.06/kg, and ₹5.3/kg over three years under SIGHT.
    5. Outcome: Establishes a cost-competitive domestic green ammonia market.

    How Does India’s Price Discovery Compare with Global Benchmarks and What Does it Indicate?

    1. Price Range Achieved: ₹49.75-₹64.74/kg ($572-$744/tonne).
    2. Global Benchmark Comparison: Nearly 40-50% lower than H2Global auction prices.
    3. Grey Ammonia Benchmark: Grey ammonia prices reach $515/tonne, narrowing cost gap significantly.
    4. Cost Gap Reduction: Long-term contracts and subsidies reduce transition risks.
    5. Outcome: Positions India as a potential global price influencer in green fuels.

    How Does the Policy Strengthen Energy Security and Reduce Import Vulnerability?

    1. Import Substitution: Contracted volume equals nearly 30% of India’s ammonia imports.
    2. Price Predictability: Fixed-price contracts reduce exposure to global volatility, currency risks, and geopolitical disruptions.
    3. Domestic Value Chain Creation: Integrates renewable energy, storage, hydrogen electrolysis, and ammonia synthesis.
    4. Energy Independence Objective: Aligns with India’s shift from energy security to energy independence.
    5. Outcome: Enhances strategic autonomy in fertiliser and energy sectors.

    What Institutional and Regulatory Innovations Support Market Viability?

    1. Pre-identified Delivery Points: Located near coastal fertiliser plants, enabling maritime logistics and reducing transportation bottlenecks.
    2. Banking and Grid Regulations: Requires harmonised regulations for renewable integration.
    3. Certification Alignment: Necessitates globally accepted green hydrogen certification frameworks.
    4. Risk Mitigation Mechanisms: Long-tenor blended finance and extended offtake agreements enhance bankability.
    5. Outcome: Strengthens institutional accountability and reduces implementation risks.

    How Does Green Ammonia Contribute to India’s Decarbonisation Commitments?

    1. Industrial Decarbonisation: Supports fertiliser sector transition from grey to green ammonia.
    2. Hard-to-Abate Sectors: Enables decarbonisation in shipping, power generation, and heavy industry.
    3. Renewable Integration: Utilises low-cost renewable energy at scale.
    4. National Green Hydrogen Mission Alignment: Operationalises Mission targets through market instruments.
    5. Outcome: Advances India’s Nationally Determined Contributions (NDCs).

    What Implementation Risks Could Affect Long-Term Sustainability?

    1. Financial Risk: High capital intensity of electrolysers and renewable infrastructure.
    2. Technology Risk: Need for hybrid renewable-storage integration.
    3. Regulatory Uncertainty: Grid access, incentives, and safety standards require stability.
    4. Global Competition: Emerging green ammonia producers may affect export competitiveness.
    5. Outcome: Sustained coordination between policymakers, developers, and financiers remains essential.

  • ₹14,601 Crore Undisclosed Offshore Investments Brought to Tax

    Why in the News

    The Central Board of Direct Taxes disclosed through an RTI reply that ₹14,601 crore worth of undisclosed offshore investments, revealed in the Panama, Paradise and Pandora Papers investigations, have been “brought to tax” by the Income Tax Department.

    Background: Global Offshore Investigations

    The investigations were conducted by The Indian Express in collaboration with the International Consortium of Investigative Journalists and global media partners.

    1. Panama Papers

    • Published in 2016
    • ₹13,800 crore brought to tax

    2. Paradise Papers

    • Published in 2017
    • ₹115 crore brought to tax

    3. Pandora Papers

    • Published in 2021
    • ₹686 crore brought to tax
    • Total: ₹14,601 crore

    What Does “Brought to Tax” Mean?

    • In taxation terminology, “brought to tax” means that income, assets, or investments that were previously undisclosed or underreported have been formally assessed by tax authorities and subjected to tax liability under the law.
    • It does not automatically mean that the tax has already been collected.

    Enforcement Action Taken

    • 1,255 tax cases filed in total
      • 426 Panama
      • 494 Paradise
      • 335 Pandora
    • Multi Agency Group formed after Pandora Papers revelations
    • Financial Intelligence Unit India sent requests to foreign jurisdictions regarding 482 persons
    • Seven meetings of the Multi Agency Group held

    Legal and Institutional Framework

    • Income Tax Act, 1961
    • Black Money Undisclosed Foreign Income and Assets Act, 2015
    • Information exchange under international tax treaties
    • Global cooperation to tackle tax havens
    [2021] Which one of the following effects of the creation of black money in India has been the main cause of worry to the Government of India? (a) Diversion of resources to the purchase of real estate and investment in luxury housing 

    (b) Investment in unproductive activities and purchase of precious stones, jewelry, gold, etc. 

    (c) Large donations to political parties and the growth of regionalism 

    (d) Loss of revenue to the State Exchequer due to tax evasion

  • Textile Mills Closure in Tamil Nadu 

    Why in the news? 

    As per the Annual Survey of Industries data released by the Union Ministry of Textiles, over 300 textile mills in Tamil Nadu went out of operation between 2021 to 22 and 2023 to 24.

    Key Data

    • 2021 to 22
      • Total mills: 2,773
      • Operational: 2,121
    • 2023 to 24
      • Total mills: 2,455
      • Operational: 1,672
    • Nearly 2 lakh powerlooms reportedly shut in the last few years.
    • Majority units fall under MSME segment.

    Major Reasons for Closures

    • High Power Cost

      • Electricity tariff around ₹9.25 per unit
      • Higher than competing States
      • Units with wind and solar investments survived relatively better

    • Raw Material Issues

      • Cotton, polyester, viscose sourced largely from northern India
      • High transportation cost
      • Earlier import duty on cotton impacted mills
      • Quality Control Orders created compliance burden

    • Environmental Compliance

      • Mandatory Zero Liquid Discharge norms for processing units
      • Higher compliance cost compared to States permitting marine discharge

    • Financial Stress

      • Higher bank interest rates
      • Limited subsidy coverage
      • MSMEs more vulnerable
    [2010] Tamil Nadu is a leading producer of mill-made cotton yarn in the country. What could be the reason? 1. Black cotton soil is the predominant type of soil in the State. 

    2. Rich pool of skilled labour is available. 

    Which of the above is/are the correct reasons? 

    (a) 1 only  (b) 2 only  (c) Both 1 and 2  (d) Neither 1 nor 2