Specific Concerns

• The PMLA's retrospective application, allowing for the prosecution of offences committed before the law's enactment, has been challenged as violative of the fundamental right against ex post facto laws.
• The PMLA places the burden of proof on the accused to establish innocence, a departure from the general principle of criminal law that presumes innocence until proven guilty.
• Critics argue that the PMLA's provisions are overly broad and draconian, giving the ED excessive powers to arrest, detain, and seize assets without adequate judicial oversight.
•  The PMLA's lack of adequate safeguards against arbitrary actions and misuse of power has raised concerns about the potential for abuse of authority by the ED.
•  The PMLA's provisions have been criticized for potentially infringing upon fundamental rights such as the right to personal liberty, the right to property, and the right against self-incrimination.

3. Money laundering

• Money laundering is the illegal process of making large amounts of money.
• This money is generated by criminal activity but may appear to come from a legitimate source.
• Criminal activities include drug trafficking, terrorist funding, illegal arms sales, smuggling, prostitution rings, insider trading, bribery and computer fraud schemes that produce large profits.

3.1. Different stages in money laundering

1. Placement: The crime money is injected into the formal financial system.
2. Layering: Money injected into the system is layered and spread over various transactions and book-keeping tricks to hide the source of origin.
3. Integration: Laundered money is withdrawn from the legitimate account to be used for criminal purposes. Now, Money enters the financial system in such a way that the original association with the crime is disassociated.  The money now can be used by the offender as legitimate money.

Money laundering can have a significant impact on economic development by:

• When money laundering occurs, it can undermine public confidence in banks and other financial institutions. This can lead to increased risk aversion and a decline in investment, which can hamper economic growth.
• Money laundering can distort economic activity by directing funds away from legitimate businesses and into criminal enterprises. This can lead to inefficient allocation of resources and slower economic growth.
• Money laundering can facilitate corruption by providing a means to conceal the proceeds of corrupt activities. This can weaken governance and undermine the rule of law, further hindering economic development.
• Money laundering can also lead to a loss of tax revenue, as criminals seek to evade taxes on their illicit gains. This can deprive governments of much-needed funds for essential services, such as education and healthcare.
• Money laundering is often used to finance organized crime groups, which can lead to an increase in violence and instability.
• Money laundering can also be used to finance terrorist activities, posing a serious threat to international security.
• Money laundering can also have a direct impact on individuals and businesses, who may lose money or be victims of fraud as a result of this crime.

The Prevention of Money-Laundering Act, 2002 (PMLA) is a comprehensive legislation enacted by the Indian Parliament to combat money laundering and other financial crimes. It aims to prevent the use of proceeds of crime, particularly those derived from drug trafficking, organized crime and corruption, from being laundered and utilized to finance further criminal activities or to gain legitimacy.

4.1. Key Features of the PMLA

• The PMLA prohibits the process of money laundering, defined as the act of concealing or disguising the proceeds of crime.
• The PMLA empowers the Enforcement Directorate (ED), the designated agency for investigating money laundering cases, to attach and seize property derived from or involved in money laundering.
• The PMLA provides for the confiscation of property that is involved in money laundering, even if it is not in the possession of the accused person.
• The PMLA grants the ED extensive powers to conduct searches, make arrests, and detain individuals suspected of money laundering.
• The PMLA facilitates international cooperation in combating money laundering through mutual legal assistance treaties and other mechanisms.

4.2. Significance of the PMLA

The PMLA has played a crucial role in strengthening India's anti-money laundering framework and enhancing its global standing in combating financial crimes. It has enabled the investigation and prosecution of numerous money laundering cases, leading to the recovery of substantial illicit funds.

4.3. Challenges in Implementing the PMLA

Despite its significance, the implementation of the PMLA has faced certain challenges, including:

• The PMLA and other laws, such as the Narcotics Drugs and Psychotropic Substances Act, have overlapping jurisdictions, which can lead to confusion and delays in investigations.
• There have been concerns about the lack of adequate safeguards against arbitrary actions and misuse of power under the PMLA.
• The ED faces resource constraints in terms of manpower and infrastructure, which can hamper its ability to effectively investigate and prosecute money laundering cases.

• The Directorate of Enforcement (ED) is an agency in India that primarily deals with the enforcement of economic laws and regulations to combat money laundering, foreign exchange violations, and financial fraud.
• The ED is part of the Department of Revenue under the Ministry of Finance, Government of India.
• The Directorate of Enforcement was established on 1st May 1956, as the "Enforcement Unit" within the Department of Economic Affairs.
• Its primary focus was on preventing and detecting violations of the Foreign Exchange Regulation Act (FERA) of 1947.
• Over the years, the agency's role expanded, and in 1999, the Enforcement Directorate was established as a separate entity under the Ministry of Finance.
• The enactment of the Prevention of Money Laundering Act (PMLA) in 2002 further broadened its jurisdiction, giving it the power to investigate cases related to money laundering.
• Since its establishment, the ED has played a crucial role in combating economic offences and ensuring compliance with economic laws in India.
• It has been involved in several high-profile cases, including those related to financial scams, money laundering by influential individuals, and cross-border financial crimes.
• The ED collaborates with various domestic and international agencies, including financial intelligence units, law enforcement agencies, and Interpol, to gather information, share intelligence, and effectively coordinate efforts to combat economic offences.

5.1. Functions and Roles of ED

• Enforcing Economic Laws: The primary function of the ED is to enforce two key economic laws in India: the Prevention of Money Laundering Act (PMLA) and the Foreign Exchange Management Act (FEMA). It ensures compliance with these laws and investigates money laundering, foreign exchange violations, and economic fraud cases.
• Money Laundering Investigations: The ED investigates cases involving money laundering, which is the process of concealing the origins of illegally obtained money to make it appear legitimate. It identifies and seizes properties and assets derived from illicit activities and prevents their further use.
• Foreign Exchange Violations: The ED is responsible for investigating cases related to violations of foreign exchange laws and regulations. It monitors and controls foreign exchange transactions to maintain the stability of the Indian rupee and prevent illegal activities such as smuggling and illegal money transfers.
• Financial Frauds: The ED also investigates and takes action against financial frauds, including bank frauds, Ponzi schemes, and other fraudulent activities affecting the Indian financial system. It works closely with other law enforcement agencies, such as the Central Bureau of Investigation (CBI), to tackle complex financial crimes.

GOODS AND SERVICE TAX (GST)

 

 

1. Context

 

The Goods and Services Tax (GST) Council has reconstituted a ministerial group tasked with identifying possible sources of revenue evasion, improving coordination between central and State GST authorities, and reviewing the IT systems in place for implementing the indirect tax

 

2. What is the Goods and Services Tax (GST)?

• The Goods and Services Tax (GST) is a value-added tax levied on the supply of goods and services at each stage of the production and distribution chain. It is a comprehensive indirect tax that aims to replace multiple indirect taxes imposed by the central and state governments in India.
• GST is designed to simplify the tax structure, eliminate the cascading effect of taxes, and create a unified national market. Under the GST system, both goods and services are taxed at multiple rates based on the nature of the product or service. The tax is collected at each stage of the supply chain, and businesses are allowed to claim a credit for the taxes paid on their inputs.
• The GST system in India came into effect on July 1, 2017, replacing a complex tax structure that included central excise duty, service tax, and state-level taxes like VAT (Value Added Tax), among others. The GST Council, consisting of representatives from the central and state governments, is responsible for making decisions on various aspects of GST, including tax rates and rules.
• GST is intended to create a more transparent and efficient tax system, reduce tax evasion, and promote economic growth by fostering a seamless flow of goods and services across the country. It has a significant impact on businesses, as they need to comply with the new tax regulations and maintain detailed records of their transactions for GST filing

3.Goods and Services Tax (GST) and 101st Amendment Act, 2016

The Goods and Services Tax (GST) in India was introduced through the 101st Amendment Act of 2016. This constitutional amendment was a crucial step in the implementation of GST, which aimed to create a unified and comprehensive indirect tax system across the country.

Here are some key points related to the 101st Amendment Act and GST:

 

• The 101st Amendment Act was enacted to amend the Constitution of India to pave the way for the introduction of the Goods and Services Tax.
• It added a new article, Article 246A, which confers concurrent powers to both the central and state governments to levy and collect GST
• The amendment led to the creation of the GST Council, a constitutional body consisting of representatives from the central and state governments. The council is responsible for making recommendations on GST rates, exemptions, and other related issues
• The amendment introduced a dual GST structure, where both the central government and the state governments have the power to levy and collect GST on the supply of goods and services
• For inter-state transactions, the 101st Amendment Act provides that the central government would levy and collect the Integrated Goods and Services Tax (IGST), which would be a sum total of the central and state GST
• The amendment also included a provision for compensating states for any revenue loss they might incur due to the implementation of GST for a period of five years

The 101st Amendment Act was a critical legislative step that provided the constitutional framework for the implementation of GST in India. It addressed the need for a unified tax system, simplifying the tax structure and promoting a common market across the country. The subsequent establishment of the GST Council has played a pivotal role in the ongoing management and evolution of the GST system in India

 

4. What are the different types of Goods and Services Tax (GST)?

In India, the Goods and Services Tax (GST) is structured into different tax rates based on the nature of the goods and services. As of my last knowledge update in January 2022, the GST rates are divided into multiple slabs. It's important to note that tax rates may be subject to changes, and new amendments could have been introduced since then. As of my last update, the GST rates are as follows:

• Nil Rate:

  • Some goods and services are categorized under the nil rate, meaning they attract a 0% GST. This implies that no tax is levied on the supply of these goods or services.

• 5% Rate:

  • This is a lower rate, applicable to essential goods such as certain food items, medical supplies, and other basic necessities.

• 12% Rate:

  • Goods and services falling in this category attract a 12% GST rate. Items such as mobile phones, processed foods, and certain services fall under this slab.

• 18% Rate:

  • A higher rate of 18% is applicable to goods and services such as electronic items, capital goods, and various services.

• 28% Rate:

  • The highest GST rate of 28% is applied to luxury items, automobiles, and certain goods and services that are considered non-essential or fall into the luxury category.

• Compensation Cess:

  • In addition to the above rates, some specific goods attract a compensation cess, which is levied to compensate the states for any revenue loss during the transition to GST. This is often applied to items like tobacco and luxury cars.

• Zero Rate:

  • Certain categories of goods and services may be specified as "zero-rated," which means they are effectively taxed at 0%. This is different from the nil rate, as it allows businesses to claim input tax credit on inputs, capital goods, and input services.

• Exempt Supplies:

  • Some goods and services may be exempt from GST altogether. This means that they are not subject to any GST, and businesses cannot claim input tax credit on related inputs

 

5.Central GST (CGST), State GST (SGST), Union territory GST (UTGST) and Integrated GST (IGST)

 

 

Subject	Central GST (CGST)	State GST (SGST)	Union Territory GST (UTGST)	Integrated GST (IGST)
Levied by	Central Government	Respective State Governments	Union Territory Administrations	Central Government (on inter-state transactions)
Applicability	On intra-state supplies (within the same state)	On intra-state supplies (within the same state)	On intra-union territory supplies (within the same union territory)	On inter-state supplies (across states or union territories)
Rate Determination	Determined by the Central Government	Determined by the Respective State Government	Determined by the Union Territory Administration	IGST rate is a sum of CGST and SGST rates
Revenue Collection	Collected by the Central Government	Collected by the Respective State Government	Collected by the Union Territory Administration	Collected by the Central Government (on inter-state transactions)
Utilization of Revenue	Shared between Central and State Governments	Retained by the Respective State Government	Retained by the Union Territory Administration	Shared between Central and State Governments
Purpose	Part of the dual GST structure, meant to cover central taxes	Part of the dual GST structure, meant to cover state taxes	Applicable in union territories for intra-territory supplies	Applied to regulate and tax inter-state supplies
Input Tax Credit (ITC)	ITC available for CGST paid on inputs and services	ITC available for SGST paid on inputs and services	ITC available for UTGST paid on inputs and services	ITC available for both CGST and SGST paid on inputs
Tax Jurisdiction	Applies within a particular state	Applies within a particular state	Applies within a particular union territory	Applies to transactions across states and union territories
GSTN Portal for Filing Returns	Central GSTN portal	State-specific GSTN portals	UTGSTN portal	Integrated GSTN portal

 

 

6.What are the benefits of Goods and Services Tax (GST) in India?

 

The Goods and Services Tax (GST) in India was implemented with the aim of bringing about significant reforms in the indirect tax structure. Several benefits have been associated with the introduction of GST.

 

Here are some key advantages:

 

• GST replaced multiple indirect taxes levied by the central and state governments, simplifying the tax structure. This streamlined system reduces the complexity of compliance for businesses
• GST eliminates the cascading effect of taxes, where taxes are levied on top of other taxes. With a seamless credit mechanism, businesses can claim input tax credit on the taxes paid on their purchases, leading to a more transparent and efficient system
• GST has facilitated the creation of a common national market by harmonizing tax rates and regulations across states. This has reduced trade barriers and promoted the free flow of goods and services throughout the country
• The GST system has incorporated technology-driven processes, including electronic filing and real-time reporting, making it harder for businesses to evade taxes. This has contributed to increased tax compliance
• The input tax credit mechanism under GST benefits manufacturers, as they can claim credits for taxes paid on raw materials and input services. This has a positive impact on the cost of production and enhances the competitiveness of Indian goods in the international market
• GST brings transparency to the taxation system. The online filing of returns and the availability of transaction-level data make it easier for tax authorities to monitor and track transactions, reducing the scope for corruption
• GST has replaced a complex system of filing multiple tax returns with a more straightforward mechanism. Businesses now need to file fewer returns, reducing the compliance burden
• The implementation of GST has contributed to an improvement in the ease of doing business in India. The unified tax system has made it simpler for businesses to operate across states and has reduced the paperwork and bureaucratic hurdles associated with tax compliance
• GST has led to the harmonization of tax rates across states and union territories, minimizing the tax rate disparities that existed earlier. This creates a more predictable tax environment for businesses

7.Goods and Services Tax (GST)-Issues and Challenge

 

• Despite the intention to simplify the tax structure, the multi-tiered rate system (0%, 5%, 12%, 18%, and 28%) and the inclusion of cess on certain goods have introduced complexity. The classification of goods and services under different tax slabs can be challenging, leading to disputes and confusion
• The successful implementation of GST relies heavily on technology. Issues such as technical glitches on the GSTN (Goods and Services Tax Network) portal, especially during the initial phases, have caused difficulties for businesses in filing returns and complying with regulations
• The compliance requirements for businesses under GST, including multiple returns filing, have been perceived as burdensome. Smaller businesses, in particular, may find it challenging to adapt to the new system and comply with the various provisions
• The transition from the previous tax regime to GST posed challenges, especially for businesses in terms of understanding the new tax structure, reconfiguring accounting systems, and ensuring a smooth transition of credits from the old tax system to the GST system
• The classification of certain goods and services into specific tax slabs has been a source of contention. Ambiguities in classification have led to disputes and litigations, with businesses seeking clarity on the applicable tax rates
• The implementation of GST has increased compliance costs for businesses due to the need for sophisticated IT infrastructure, the hiring of tax professionals, and efforts to ensure accurate reporting and filing
• Challenges related to availing and matching input tax credits have been reported. Timely matching of credits and resolving discrepancies can be cumbersome, leading to concerns about the seamless flow of credit across the supply chain
• The anti-profiteering provisions were introduced to ensure that businesses pass on the benefits of reduced tax rates to consumers. However, the implementation of anti-profiteering measures has been criticized for its complexity and potential for disputes
• The periodic changes in the GST return filing system have created challenges for businesses in adapting their processes. Delays and complexities in return filing can affect working capital management

8.Goods and Services Tax Council (GST Council)

 

The Goods and Services Tax Council (GST Council) is a constitutional body in India that makes recommendations on the Goods and Services Tax (GST). It was established under the Constitution (122nd Amendment) Act, 2016, which introduced the GST in India

The GST Council consists of the following members:

• The Union Finance Minister, who is the Chairperson of the Council.
• The Union Minister of State in charge of revenue or any other Minister of State nominated by the Union Government.
• One Minister from each state, nominated by the Governor of that state.
• The Chief Secretary of each state, ex-officio.
• If the President, on the recommendation of the Council, so directs, one representative of each Union territory which has a legislature, to be nominated by the Lieutenant Governor of that Union territory.
• Three to seven members (other than Ministers) to be nominated by the Union Government, of whom at least one member shall be from the field of economics and another from the field of chartered accountancy, legal affairs or public finance

9. Way forward

 

It's important to note that the composition and structure of the GST Council may evolve over time, and there might have been changes since my last update in January 2022. To obtain the latest and most accurate information about the GST Council and its members, it is recommended to refer to official government sources or recent announcements by the relevant authorities

 

For Prelims: Economic and Social Development and Indian Polity and Governance For Mains: General Studies II: Functions and responsibilities of the Union and the States, issues and challenges pertaining to the federal structure, devolution of powers and finances up to local levels and challenges therein General Studies III: Inclusive growth and issues arising from it

 

 

Previous Year Questions   1.Which of the following are true of the Goods and Services Tax (GST) introduced in India in recent times? (UGC Paper II 2020) A. It is a destination tax B. It benefits producing states more C. It benefits consuming states more D. It is a progressive taxation E. It is an umbrella tax to improve ease of doing business Choose the most appropriate answer from the options given below: A.B, D and E only B.A, C and D only C.A, D and E only D.A, C and E only Answer (D)

 

Source: Indianexpress

 

NORTH ATLANTIC TREATY ORGANISATION (NATO)

 

 

1. Context

 

The Prime Minister’s decision to travel to Vienna immediately after he met President Vladimir Putin in Moscow was significant — Austria is a European country that is not a part of NATO, the US-led anti-Russia trans-Atlantic military alliance

 

2. Why was NATO established?

 

NATO, established on April 4, 1949, is a Western security alliance comprising 12 original members: Belgium, Canada, Denmark, France, Iceland, Italy, Luxembourg, the Netherlands, Norway, Portugal, the United Kingdom, and the United States.

The alliance was formed by signing the Washington Treaty, deriving its authority from Article 51 of the United Nations Charter, which upholds the inherent right of independent states to individual or collective defense.

Central to NATO is the principle of "collective security," where an attack on any member nation is viewed as an attack on all, necessitating collective response. This principle emerged from the Cold War context of the late 1940s, amid the rivalry between the USSR and the US over ideological and economic dominance. Article 5 of the Washington Treaty, addressing collective security, was introduced to counter the perceived threat of Soviet expansionism beyond Eastern Europe. In response, the USSR formed the Warsaw Pact in 1955, uniting socialist countries as allies.

However, invoking Article 5 does not mandate uniform military action by all member states. The extent of intervention is determined by each country "as it deems necessary." To date, the only instance of Article 5 being activated was in response to the September 11, 2001 attacks on the US, leading to NATO's deployment in Afghanistan for nearly two decades

 

3. Who are NATO’s members today?

In addition to the initial 12 members, subsequent additions to NATO's membership include Greece and Turkey in 1952, West Germany in 1955 (later recognized as Germany), Spain in 1982, the Czech Republic, Hungary, and Poland in 1999, followed by Bulgaria, Estonia, Latvia, Lithuania, Romania, Slovakia, and Slovenia in 2004, Albania and Croatia in 2009, Montenegro in 2017, North Macedonia in 2020, Finland in 2023, and Sweden in 2024.

A surge of new members joined in 1999, a few years after the dissolution of the Soviet Union in 1991, prompting concerns about the alliance's potential obsolescence due to the absence of its original purpose

4.What challenges does NATO face today?

 

• During the 2019 commemoration of NATO's 70th anniversary, notable tensions arose among member nations.
• President Donald Trump of the United States emphasized the necessity for countries to increase their military expenditures.
• This call stemmed from a 2014 agreement among NATO members to allocate a minimum of 2 percent of their Gross Domestic Product (GDP) to defense spending, a commitment made following Russia's annexation of Crimea.
• However, only a handful of nations met this threshold, prompting criticism from President Trump who deemed it unfair, particularly to countries such as the US that were fulfilling their spending obligations. By 2023, among the 30 member countries at the time, only 11 exceeded the stipulated limit.
• One significant catalyst for increased defense spending was the Russian invasion of Ukraine the preceding year. Even traditionally neutral countries in foreign policy, such as Finland and Sweden, found appeal in the concept of collective security in response to Russia's assertive actions.
• Despite NATO's "open door" policy toward membership, the admission of new applicants requires unanimous approval from all member states. Turkey hesitated to support the applications of Sweden and Finland due to past criticisms from their politicians regarding Turkey's human rights record. Turkey also accused these nations of harboring "terrorists"

5. Way Forward

 

Although the Ukraine-Russia war seems to have given NATO a new focus area to converge at, funding the war has again become a source of disagreements among members, much to Ukraine’s displeasure. Just this year, Secretary-General Stoltenberg said a plan was being formulated so that 18 NATO would meet the 2 per cent limit by the end of 2024

 

Source: Indianexpress

 

ASTEROID

 

 

1. Context

Indian Space Research Organisation (ISRO) Chairman S Somanath said last week that “we should be able to go and meet” the asteroid Apophis when it passes by Earth at a distance of 32,000 km in 2029

 

 

2. What are asteroids?

 

Asteroids are small, rocky objects that orbit the Sun, primarily found in the asteroid belt between the orbits of Mars and Jupiter. They are remnants from the early solar system that never coalesced into planets.

Asteroids vary widely in size, from tiny pebbles to objects that are hundreds of kilometers in diameter. The largest known asteroid, Ceres, is about 940 kilometers (about 580 miles) in diameter

Asteroids are composed of various materials, including rock, metal, and sometimes organic compounds. Their composition can provide clues about the early solar system.

They are categorized based on their composition:

• • C-type (carbonaceous): Rich in carbon and the most common type.
  • S-type (silicaceous): Made up of silicate minerals and nickel-iron.
  • M-type (metallic): Mostly composed of metallic iron and nickel

Source: Indianexpress

3. How are asteroids different from satellites? 

 

Aspect	Asteroid	Satelite
Definition	Asteroids are small, rocky objects that orbit the Sun. They are remnants from the early solar system that did not form into planets	Satellites are natural or artificial objects that orbit around planets, dwarf planets, or other celestial bodies. Natural satellites are commonly known as moons
Orbit	Asteroids primarily orbit the Sun, mostly found in the asteroid belt between Mars and Jupiter. Some, known as Near-Earth Asteroids (NEAs), have orbits that bring them close to Earth	Satellites orbit planets or other celestial bodies rather than the Sun. Their orbits are influenced by the gravitational pull of the body they orbit
Composition	Asteroids are composed of rock, metal, and sometimes organic compounds. Their composition can vary widely, leading to different types such as C-type (carbonaceous), S-type (silicaceous), and M-type (metallic)	Natural satellites vary in composition depending on their parent planet. They can be rocky (like Earth’s Moon), icy (like Europa, one of Jupiter’s moons), or a mix of rock and ice (like Titan, Saturn’s moon)
Size and Shape	Asteroids range in size from small boulders to objects hundreds of kilometers in diameter. They often have irregular shapes due to their small size and insufficient gravity to form spherical shapes	Natural satellites range in size from small moonlets to large bodies like Ganymede, which is larger than the planet Mercury. Many larger moons are spherical due to their sufficient gravitational force, while smaller moons often have irregular shapes
Examples	Notable asteroids include Ceres (the largest and classified as a dwarf planet), Vesta, Bennu, and Ryugu.	Notable natural satellites include Earth’s Moon, Jupiter’s moons (e.g., Ganymede, Io, Europa, Callisto), Saturn’s moons (e.g., Titan, Enceladus), and Mars’ moons (Phobos and Deimos)

 

 

 

In 2022, the DART spacecraft successfully managed to change the motion of the asteroid Dimorphos by crashing into it. This is the first time that humanity has changed the motion of a celestial object. This is also the first demonstration of the “kinetic impactor” method of asteroid mitigation

 

4. What was the objective of the DART mission?

 

The Double Asteroid Redirection Test (DART) mission, conducted by NASA, aimed to test and demonstrate a method of asteroid deflection by kinetic impact. This mission was the first of its kind, focusing on planetary defense strategies to protect Earth from potential asteroid impacts.

 

Here are the key objectives and details of the DART mission:

• The primary objective was to test the effectiveness of the kinetic impact technique in altering the trajectory of an asteroid. This involves sending a spacecraft to collide with an asteroid at high speed to change its orbit
• The mission targeted the binary asteroid system Didymos, specifically its moonlet, Dimorphos. Didymos is a near-Earth asteroid, and Dimorphos, which orbits Didymos, was chosen for the impact test
• A critical objective was to measure the change in the orbit of Dimorphos around Didymos resulting from the kinetic impact. This change in orbit would demonstrate the feasibility of deflecting an asteroid to prevent a potential collision with Earth
• Collect data on the impact event, including the resulting crater, the ejecta (material expelled from the asteroid), and the change in the asteroid's momentum. This information is crucial for refining models and planning future asteroid deflection missions
• Showcase the technologies required for an asteroid deflection mission, including navigation, targeting, and impact capabilities. This demonstration helps validate the methods and tools needed for future planetary defense missions

 

5.Way Forward

 

The DART mission was part of NASA's larger planetary defense strategy, aimed at developing methods to protect Earth from potential asteroid impacts in the future

 

 

For Prelims: Current events of national and international importance For Mains: GS-III: GS-III: Achievements of Indians in science & technology; indigenization of technology and developing new technology.

 

 

Source: Indianexpress

RIGHT TO PRIVACY

 

 

1. Context

 

 The Supreme Court on Monday held that courts cannot impose bail conditions that require accused persons to share their location on Google Maps. A Bench comprising Justices Abhay S Oka and Ujjal Bhuyan also held that in cases where the accused is a foreign national, courts cannot demand a “certificate of assurance” from relevant Embassies or High Commissions that the accused will not leave the country

 

2.What is the Right to privacy? 

 

The Right to Privacy is a fundamental right that protects an individual's personal information from being disclosed without their consent. It encompasses various aspects, including the right to be left alone, control over personal data, and protection from unauthorized surveillance or intrusion

In many countries, the right to privacy is enshrined in the constitution. For instance, in India, the Supreme Court declared it a fundamental right under Article 21 (Right to Life and Personal Liberty) in the landmark judgment of Justice K.S. Puttaswamy (Retd.) vs. Union of India (2017)

The right to privacy is a fundamental human right and legal concept that protects individuals from unwarranted intrusion into their personal lives, affairs, or information. It encompasses several key aspects:

• Personal information: Protection of an individual's personal data and control over how it's collected, used, and shared.
• Physical privacy: The right to have personal space free from intrusion, such as in one's home or private property.
• Communication privacy: Protection of personal communications, including phone calls, emails, and other forms of correspondence.
• Bodily privacy: The right to make decisions about one's own body and medical treatments without interference.
• Territorial privacy: Freedom from surveillance in public and private spaces.
• Information privacy: Control over the collection, use, and dissemination of personal information.

The right to privacy is recognized in various international human rights documents, such as the Universal Declaration of Human Rights, and is enshrined in many national constitutions and laws. However, the extent and interpretation of privacy rights can vary between jurisdictions

3. What are the constitutional provisions related to the Right to Privacy?

The Right to Privacy, while not explicitly mentioned in many constitutions, is often derived from broader fundamental rights and principles. In India, the Right to Privacy has been recognized through judicial interpretation and is now considered a fundamental right.

Article	Provision	Explanation
Article 21	Right to Life and Personal Liberty	States that "No person shall be deprived of his life or personal liberty except according to the procedure established by law." The Supreme Court in Justice K.S. Puttaswamy (Retd.) vs. Union of India (2017) held that the Right to Privacy is an intrinsic part of the Right to Life and Personal Liberty under Article 21
Article 19(1)(a)	Freedom of Speech and Expression	Guarantees the freedom of speech and expression. Privacy is linked to this right as it is essential for the effective exercise of this freedom.
Article 19(1)(d)	Freedom of Movement	Guarantees the right to move freely throughout the territory of India. Privacy is essential for the exercise of this right, ensuring individuals can move without unwarranted intrusion.
Article 14	Right to Equality	Guarantees equality before the law and equal protection of the laws. The Right to Privacy is seen as necessary to protect the dignity and autonomy of individuals, which are essential aspects of equality.

 

 

Judicial Interpretations and Their Contributions:

 

Case	Year	Contribution
Kharak Singh vs. State of Uttar Pradesh	1963	The Supreme Court first recognized the concept of privacy, though it did not explicitly declare it a fundamental right
Gobind vs. State of Madhya Pradesh	1975	The Court acknowledged that the right to privacy is a part of personal liberty under Article 21, though it was not given definitive recognition
Justice K.S. Puttaswamy (Retd.) vs. Union of India	2017	The Supreme Court unanimously declared that the Right to Privacy is a fundamental right, protected under Articles 14, 19, and 21 of the Constitution. This judgment overruled previous contradictory rulings and firmly established privacy as a fundamental right

 

 

4.Way Forward

While the fundamental principles of granting bail—ensuring the accused’s presence during trial and preventing tampering with evidence—remain the same, foreigners typically face stricter bail conditions due to higher perceived flight risks and complexities in legal jurisdictions. The court aims to balance these factors while ensuring justice and fair treatment

 

 

 

For Prelims: Indian Polity and Governance For Mains: GS-II: Polity, Constitution

 

Previous Year Questions 1.‘Right to Privacy’ is protected under which Article of the Constitution of India? (UPSC CSE 2021) (a) Article 15 (b) Article 19 (c) Article 21 (d) Article 29 Answer (c) The Right to Privacy in India is protected under Article 21 of the Constitution of India. This was explicitly established by the landmark judgment of the Supreme Court of India in the case of Justice K.S. Puttaswamy (Retd.) v. Union of India in 2017 Mains 1.Examine the scope of Fundamental Rights in the light of the latest judgement of the Supreme Court on the Right to Privacy. (UPSC CSE 2017)

 

Source: Indianexpress

 

GDP AND GVA

1. Context

The number of workers employed in the informal sector in 2022-23 has dropped by 16.45 lakh or about 1.5 per cent to 10.96 crore compared to 11.13 crore in 2015-16, according to the latest Annual Survey of Unincorporated Enterprises (ASUSE) for 2021-22 and 2022-23 released by the Ministry of Statistics and Programme Implementation (MoSPI)

2. GDP and GVA

• GDP and GVA are two main ways to ascertain the country's economic performance. Both are measures of national income.
• The GDP measures the monetary measure of all "final" goods and services that are bought by the final user produced in a country in a given period.
• The GDP does this by adding up the total expenditures in the economy; in other words, it looks at who spent how much. That is why GDP captures the total "demand" in the economy.

Broadly speaking there are four key "engines of GDP growth". These are 

1. All the money Indians spent on their private consumption (that is, Private Final Consumption Expenditure or PFCE).
2. All the money the government spent on its current consumption, such as salaries (Government, Final Consumption Expenditure or GFCE).
3. All the money is spent towards investments to boost the economy's productive capacity. This includes business firms investing in factories or the governments building roads and bridges (Gross Fixed Capital Expenditure).
4. The net effect of exports (What foreigners spent on our goods) and imports (what Indians spent on foreign goods) (Net Exports or NE).

• The GVA calculates the same national income from the supply side. 
• It does so by adding up all the value added across different sectors. 

According to the RBI, the GVA of a sector is defined as the value of output minus the value of its intermediary inputs. This "value added" is shared among the primary factors of production, labour and capital.

 

• By looking at GVA growth one can understand which sector of the economy is robust and which is struggling.

3.  How are the two related?

• When looking at quarterly it is best to look at GVA data because this is the observed data.
• The GDP is derived by looking at the GVA data.

The GDP and GVA are related by the following equation; GDP= (GVA)+ (Taxes earned by the Government)- (Subsidies provided by the government).

 

• As such, if the taxes earned by the government are more than the subsidies it provides, the GDP will be higher than GVA.
• Typically, that is how it is. For the second quarter too, the GDP (at 38, 16, 578 crores) is much higher than the GVA (Which is at Rs 35, 05, 5999 crores).
• The GDP data is more useful when looking at annual economic growth and when one wants to compare a country's economic growth with its past or with another country.

4. GVA data

4.1 Manufacturing sector

• It is a contraction in the manufacturing sector.  In Q2, manufacturing GVA declined by 4.3 per cent. 
• This is significant because manufacturing carries a huge potential for job creation and can soak up excess labour from the agriculture sector.
• The contraction has meant that manufacturing GVA has grown by just 6.3 per cent over the three years since the Covid pandemic; look at the change between FY23 and FY20 in the Chart.
• However, it would be a mistake to believe that only Covid and its after-effects are responsible for the lacklustre manufacturing performance.
• The fact is, as borne by the data, manufacturing GVA grew by just 10.6 per cent between FY 17 and FY20.
• For perspective, it is important to remember that between FY14 and FY17, manufacturing GVA grew by 31.3 per cent. 
• In other words, Indian manufacturing has been struggling to add value for the past six years.
• This would explain why data from the Centre for Monitoring Indian Economy (CMIE) shows that jobs in the manufacturing sector halved between 2016 and 2020.

4.2 Trade and hotels

• Almost 15 per cent growth in services such as trade and hotels etc. 
• This is also a huge sector for job creation. But again, if one looks at the Q2FY23 level and compares it to the pre-Covid level (Q2 of FY20), the growth is barely over 2 per cent.
• That this sector grew by over 26 per cent in the three years between FY17 and FY20 when India was experiencing a serious economic declaration shows how badly it has been affected by the Covid disruption.

4.3 Mining and quarrying

• Another sector crucial for job creation, even though it is smaller in terms of overall contribution to India's GVA, is mining and quarrying it, too, has contracted by almost 3 per cent.
• Looking back over the past six years, it has contracted by 3.5 per cent between FY17 and FY20 and grown by just 2.5 per cent since then.

4.4  Agriculture 

• One positive story emerging from the GVA pertains to agriculture (along with forestry and fishing), which has done better than expected by growing at 4.6 per cent.
• Typically, this is a good growth rate for this sector and has happened despite some worries that the sowing of crops did not happen in time.
• Overall, while the GVA has grown by 5.6 per cent year-on-year, the growth is just 7.6 per cent when compared to the pre-Covid level set in FY20.

5. GDP data 

5.1 Private Consumption Expenditure

• GDP is the biggest engine of growth in private consumption expenditure.
• It typically contributes over 55 per cent of India's total GDP.
• This component is also crucial because if this is depressed, it robs the business of any incentive to make fresh investments; and expenditures towards investments are the second biggest contributors to the GDP, accounting for around 33per cent of the total.
• Data shows that private consumption has grown by a healthy 9.7 per cent over the past year.
• However, the growth is relatively modest just 11 per cent when compared over the last three years.
• That between FY 14 and FY17, this component grew by almost 28 per cent providing some perspective.

5.2 Investment expenditure

• The investment expenditures have grown by 10.4 per cent over FY21 and by almost 21 per cent between FY20 and FY23.
• This is the best growth over any three years going back to FY14.
• This suggests brighter prospects for the economy over the medium term.

5.3  Government final consumption expenditures

• The biggest surprise though from the GDP is the contraction in government final consumption expenditures.
• While these types of expenditures account for just about 10-11 per cent of the GDP, they can prop up an economy during tough times when people and businesses hold back spending.
• Oddly enough, data shows that not only did government consumption expenditure contract by 4.4. per cent in Q2 (Over the Q2 of 2021), but that it is almost 20 per cent below the pre-covid level.

5.4 Net Exports data

• The last component of the GDP equation is the Net Exports data.
• Typically, since India imports far more than it exports, the NX value is negative. 
• In Q2, this negative value swelled by 89 per cent. 
• Over the past three years, this drag on GDP has also increased in size by almost 150 per cent.

For Prelims and Mains

For Prelims: GDP, GVA, India's economic growth data, Net Exports data, Centre for Monitoring Indian Economy (CMIE), Government final consumption expenditures, Investment expenditure, Private Consumption Expenditure, Mining and quarrying,  Agriculture, Trade and hotels, Manufacturing sector,  For Mains: 1. What is the difference between GDP and GVA and discuss their contributions to National development? (250 Words) 2. What are the engines of GDP growth? Explain the factors influencing economic growth. (250 Words)

 

 

Previous Year Questions   1.With reference to Indian economy, consider the following statements: (UPSC GS1, 2015) 1. The rate of growth of Real Gross Domestic Product has steadily increased in the last decade. 2. The Gross Domestic Product at market prices (in rupees) has steadily increased in the last decade. Which of the statements given above is/are correct? (a) 1 only (b) 2 only (c) Both 1 and 2 (d) Neither 1 nor 2 Answer (b) Statement 1 is incorrect: The rate of growth of Real GDP in India did not steadily increase in the last decade. While it started high in the late 2000s, it declined in the early 2010s due to the global financial crisis and other factors, before recovering in recent years. Statement 2 is correct: The nominal GDP of India, measured in rupees, has indeed steadily increased over the last decade. This is because even if the rate of growth of real GDP fluctuates, a general inflation in prices leads to an increase in nominal GDP even if the volume of goods and services produced remains the same 2.A decrease in tax to GDP ratio of a country indicates which of the following? (UPSC GS1, 2015) 1. Slowing economic growth rate 2. Less equitable distribution of national income Select the correct answer using the code given below: (a) 1 only (b) 2 only (c) Both 1 and 2 (d) Neither 1 nor 2  Answer (a) 1. Slowing economic growth rate: A decrease in the tax-to-GDP ratio can indeed be an indicator of a slowing economic growth rate. When the economy grows slower, people and businesses generate less income, leading to lower tax revenue collected by the government. However, it's important to note that this is not always the case. There could be other factors like changes in tax policy or tax evasion that contribute to a declining tax-to-GDP ratio even with sustained economic growth. 2. Less equitable distribution of national income: While income inequality can impact tax revenue, it's not a direct consequence of a declining tax-to-GDP ratio. For example, even with a more equitable income distribution, the overall economic slowdown could still lead to a drop in tax revenue and hence the ratio UPSC Mains Question  1.Define potential GDP and explain its determinants. What are the factors that have been inhibiting India from realizing its potential GDP? (UPSC GS3, 2020) 2.Explain the difference between computing methodology of India’s Gross Domestic Product (GDP) before the year 2015 and after the year 2015. (UPSC GS3, 2021)

Source: The Indian Express

 

BIMSTEC

 

1. Context

Underlining that BIMSTEC should harbour higher aspirations, External Affairs minister S Jaishankar said Thursday that the grouping should infuse new energies, resources and a fresh commitment to bolster cooperation among the Bay of Bengal countries

2. About BIMSTEC

• BIMSTEC is the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation, is a regional organization comprising seven member states in South Asia and Southeast Asia.
• The organization aims to foster cooperation and strengthen ties among its member countries in various sectors, including trade, economy, technology, tourism, and people-to-people contact.
• BIMSTEC was established on June 6, 1997, through the Bangkok Declaration.
• The member countries of BIMSTEC are Bangladesh, Bhutan, India, Myanmar, Nepal, Sri Lanka, and Thailand.
• BIMSTEC brings together countries from two contiguous regions- South Asia and Southeast Asia- connected by the Bay of Bengal.
• The organization represents a diverse and vibrant mix of cultures, languages, and economies.
• Around 22% of the world’s population lives in the seven countries around the Bay of
  Bengal, with a combined GDP close to $2.7 trillion.
• All seven countries have sustained average annual rates of growth between 3.4% and 7.5% from 2012 to 2016. A fourth of the world’s traded goods cross the bay every year.

3. Objectives of BIMSTEC:

• Enhancing Economic Cooperation: BIMSTEC aims to promote economic cooperation among member countries by facilitating trade, investment, and the development of infrastructure. It seeks to create a seamless flow of goods and services within the region, fostering economic growth and development.
• Strengthening Connectivity: Improving physical and digital connectivity is a crucial aspect of BIMSTEC's objectives. By enhancing transport and communication links, the organization seeks to facilitate easier movement of people and goods, encouraging regional integration.
• Promoting People-to-People Contact: BIMSTEC strives to promote cultural, educational, and tourism exchanges among member countries. This approach helps in fostering mutual understanding, friendship, and trust among the people of the region.
• Addressing Common Challenges: BIMSTEC provides a platform for member countries to address common challenges such as climate change, natural disasters, terrorism, and transnational crime. Cooperation in these areas is vital to ensuring the security and well-being of the region.
• Facilitating Technical Cooperation: The organization promotes technical cooperation in various sectors, such as agriculture, fisheries, technology, energy, and the environment. Sharing knowledge and expertise helps member countries address their developmental needs more effectively.

4. How BIMSTEC is important for India?

• It provides a new platform for India to engage with its neighbors with the South Asian Association for Regional Cooperation (SAARC) becoming dysfunctional because of differences between India and Pakistan.
• BIMSTEC allows India to pursue three core policies:

• Neighborhood First – primacy to the country’s immediate periphery;
• Act East – connect India with Southeast Asia; and
• Economic development of India’s northeastern states – by linking them to the Bay of Bengal region via Bangladesh and Myanmar.

• Allow India to counter China's creeping influence in countries around the Bay of Bengal due to the spread of its One Belt and One Road initiative.

5. India's Renewed Push for BIMSTEC and Isolating Pakistan

• Trigger Event: Terror attack in Uri
• India held an outreach summit with BIMSTEC leaders alongside the BRICS summit in Goa.
• Some BIMSTEC countries backed India's call for boycotting the SAARC summit in Islamabad (November 2016).
• India declared victory in isolating Pakistan after the SAARC summit was postponed.
• India believed SAARC's potential was under-utilized due to Pakistan's lack of response and obstructionist approach.
• At the 2014 SAARC summit in Kathmandu, Modi emphasized realizing opportunities through SAARC or outside it, among all or some member countries.

6. Challenges faced by BIMSTEC

• Neglect by member states: It seems that India has used BIMSTEC only when it fails to work through SAARC in the regional setting and other major members like Thailand and Myanmar are focused more towards ASEAN than BIMSTEC.
• Inconsistent Meetings: BIMSTEC planned to hold summits every two years, and ministerial meetings every year, but only four summits have taken place in 20 years up to 2018.
• Broad Focus Areas: The focus of BIMSTEC is very wide, including 14 areas of cooperation like connectivity, public health, agriculture, etc. It is suggested that BIMSTEC should remain committed to small focus areas and cooperate in them efficiently.
• No FTA: BIMSTEC FTA was negotiated in 2004, talks on it are yet to be concluded.
• Bilateral Issues between Member Nations: Bangladesh is facing one of the worst refugee crisis of Rohingyas from Myanmar who are fleeing prosecution in the state of Rakhine in Myanmar. There is a border conflict between Myanmar and Thailand.
• BCIM: The formation of another sub-regional initiative, the Bangladesh-China-India-Myanmar (BCIM) Forum, with the proactive membership of China, has created more doubts about the exclusive potential of BIMSTEC.

For Prelims: BIMSTEC, Free Trade Agreement (FTA), Bangladesh-China-India-Myanmar (BCIM) Forum, ASEAN, South Asian Association for Regional Cooperation (SAARC), Act East Policy, Neighbourhood First Policy, and Uri Attack. For Mains: 1. Discuss the significance and challenges of the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) in promoting regional cooperation and integration among its member countries. (250 words)

 

Previous year Questions 1. With reference to the BIMSTEC, which of the following statements is/are true? (UPPSC 2022) 1. P. M. Narendra Modi addressed the 5th BIMSTEC Summit on 30th March 2022. 2. 5th Summit of BIMSTEC had been chaired by India. Select the correct answer from the code given below: A. Neither 1 nor 2 B. Both 1 and 2 C. Only 2 D. Only 1 Answer: D   2. Which of the following statement/s is/are true about the three-day international Seminar on 'Climate Smart Farming System' for BIMSTEC countries held during December 11-13, 2019? (UPPSC 2020) 1. It was held at Katmandu, Nepal. 2. It was aimed to have experience sharing for more resilience to climate change through an ecological approach to enable the improvement of tropical small-holding farming systems. Select the correct answer from the codes given below: A. Only 1 B. Only 2 C. Both 1 and 2 D. Neither 1 nor 2 Answer: B

Source: The Indian Express