UNIFORM CIVIL CODE (UCC)
1. Context
The Bharatiya Janata Party government in Rajasthan is considering bringing a Bill for enactment of the Uniform Civil Code (UCC). A time frame for the introduction of the Bill is yet to be decided, though the State government is studying a similar Bill passed in Uttarakhand, where the legislation to establish a common set of personal laws has been enacted.
2. 22nd law commission on UCC
- Underlining that the Uniform Civil Code is “neither necessary nor desirable at this stage”, the 21st Law Commission of India, in 2018, argued for reform of family laws of every religion through amendments and codification of certain aspects so as to make them gender-just
- In its ‘Consultation Paper on Family Law Reforms’, the Law Commission took a stand in favour of “equality ‘within communities’ between men and women” (personal law reform), “rather than ‘equality between’ communities” (UCC)
- According to the 22nd Law Commission Cultural diversity cannot be compromised to the extent that our urge for uniformity itself becomes a reason for threat to the territorial integrity of the nation
- women must be guaranteed their freedom of faith without any compromise on their right to equality
3. What is the Uniform Civil Code
- A UCC would provide for one law for the entire country, applicable to all religious communities, in their personal matters such as marriage, divorce, inheritance, adoption etc
- Currently, Indian personal law is fairly complex, with each religion adhering to its own specific laws
- Separate laws govern Hindus including Sikhs, Jains and Buddhist, Muslims, Christians, and followers of other religions
- Moreover, there is diversity even within communities. All Hindus of the country are not governed by one law, nor are all Muslims or all Christians
- For instance, in the Northeast, there are more than 200 tribes with their own varied customary laws
- The Constitution itself protects local customs in Nagaland. Similar protections are enjoyed by Meghalaya and Mizoram. Even reformed Hindu law, in spite of codification, protects customary practices
- The exception to this rule is the state of Goa, where all religions have a common law regarding marriages, divorces, and adoption
4. Constitution on UCC
- Article 44 of the Constitution lays down that the state shall endeavour to secure a UCC for citizens throughout the territory of India
- Article 44 is among the Directive Principles of State Policy. Directive Principles are not enforceable by court, but are supposed to inform and guide governance
- However, in some senses, Article 44 is unique in this manner. While Article 44 uses the words “state shall endeavour”, other Articles in the ‘Directive Principles’ chapter use words such as “in particular strive”; “shall in particular direct its policy”; “shall be obligation of the state
- The phrase “by suitable legislation” is absent in Article 44. All this implies that the duty of the state is greater in other directive principles than in Article 44
5. Uniform Code for Personal Law
Article 25 lays down an individual’s fundamental right to religion; Article 26(b) upholds the right of each religious denomination or any section thereof to “manage its own affairs in matters of religion”
Article 29 defines the right to conserve distinctive culture
An individual’s freedom of religion under Article 25 is subject to “public order, health, morality” and other provisions relating to fundamental rights, but a group’s freedom under Article 26 has not been subjected to other fundamental rights
6. Way forward
Over the next 30 days, the Law Commission will receive views of the public and stakeholders
The notice said the stakeholders concerned are at liberty to make submissions in the form of consultation/discussion/working papers on any of the issues pertaining to the UCC to the Member Secretary, Law Commission of India
After reviewing the submissions, the Law Commission will again make observations/recommendations regarding a UCC, which may or may not differ from the previous Commission’s observations
Source: indianexpress
FLASH FLOODS
1. Context
Flash floods, that have ripped through northern Afghanistan, have left more than 300 people dead, the United Nations World Food Programme (WFP) said.
2. What is a Flood
- Flood is an overflow of a large amount of water beyond its normal limits, especially over what is normally dry land.
- Flooding is an overflowing of water onto land that is normally dry.
- Floods can happen during heavy rains, when ocean waves come on shore, when the snow melts quickly, or when dams or levees break.
- Damaging flooding may happen with only a few inches of water, or it may cover a house to the rooftop.
- Floods can occur within minutes or over a long period, and may last days, weeks, or longer.
- Floods are the most widespread of all weather-related natural disasters.
3. Common causes of floods can be divided into the factors triggering them.
These factors include -
- Meteorological factors
- Physical factors
- Human factors
3.1 Meteorological Factors
The natural causes of floods are discussed below -
- Heavy Rainfall: The season of monsoon
- Cloud Burst: Cloud Burst occurs due to intense precipitation in a short duration which can sometimes be accompanied by hail and storms and can cause a flood.
- Climate Change: According to the International Panel for Climate Change, the rainfall intensity, duration and frequency are going to increase in the future.
- Skewed Rainfall Pattern: 80% of the precipitation takes place in the monsoon months
- Trans-National Rivers: The fact that some of the rivers (like the Brahmaputra, many tributaries of Ganga) causing damage in India to originate in neighbouring countries, adds another complex dimension to the problem
- Cyclone & Heavy rainfall
3.2. Physical Factors.
- Insufficient Drainage Management: Improper planning of the drainage system of an area can cause excess water due to heavy rainfall to get stuck and lead to a flood.
- Catchment Area: Catchment area is an area from where the rainfall water flows into a river. This can be a lake or reservoir. During monsoon, when excess water exceeds the limited holding capacity of the catchment area, it leads to floods.
3.3. Human Factor
- Siltation: Siltation refers to the flow of silt and sediments in the riverbed. As particles remain suspended in the river and accumulated in the riverbed, it disrupts the flow of the river, causing a flood.
- Improper Agricultural Practices: If farmers are not cautious of the effects of farming practices meaning if they leave the waste material in the river or cannot handle water management properly, it can lead to a flood.
- Deforestation: Deforestation is one of the major human causes of floods. Trees act like a sponge that helps to hold soil and water and prevent flooding. As trees are being cut down at a fast pace to make way for urbanisation to grow, more water runs towards a river during heavy rainfall. As a result, a flood occurs.
- Collapse of Dams: Dams are built to store water and provide water to people. As dams are human-made, these can be worn out and subsequently collapse causing floods. Also, if heavy rainfall sustains for a long time, State Governments often declare to open dam gates which can lead to a dangerous flood.- Temples of Modern India to Water Bombs
- Unplanned Development
- Neglect of Pre-Disaster Planning
4.Types of Flood
- Coastal Floods: Coastal floods occur when strong winds or storms move towards the coast during high tide.
- Flash Floods: Flash floods usually occur in hilly areas in limited space. Here the sudden heavy rainfall or snow thaws are the causes of flooding. The fast-moving torrent of Flash floods can sweep large objects such as cars, rocks and everything that comes in their path.
- River Floods: River floods occur due to the inflow of water from heavy rainfall, snowmelt or powerful storms.
- Pluvial Floods: Pluvial floods occur in areas that cannot hold rainwater and end up forming puddles and ponds. eg- rural areas.
- Urban Floods: When the drainage system of urban areas fails to absorb rainwater.
5. Damages Caused by Floods in India
The impacts of floods affect both individuals and communities and have social-environmental consequences.
- Human Loss and Property Loss: Every year, millions of people become homeless and washed away due to floods.
- Spread of Communicable Diseases: Waterborne diseases like cholera, typhoid fever, hepatitis, and leptospirosis spread in flood-affected areas. Floods also lead to vector-borne diseases, transmitted through parasites and pathogens such as a mosquito. As a result, the health of flood victims deteriorates.
- Destruction of Crops: Every year, floods destroy a large number of crops.
- Loss of Livestock: Like humans, livestock also get displaced during floods and dies due to the loss of their habitats.
- Disruption of Communication Link and Transportation: Flood causes damage to transportation links such as bridges, rail, power plants etc., thus causing communication disruption in those areas.
- Economic and Social Disruption: The economy comes to a standstill as people are forced to move to another place, and revival of this situation takes time.
6. Flood Management
Approaches to dealing with floods may be any one or a combination of the following available options:
- Attempts to modify the flood
- Attempts to modify the susceptibility to flooding damage
- Attempts to modify the loss burden
- Bearing the loss.
- The main thrust of the flood protection programme undertaken in India so far has been an attempt to modify the flood in the form of physical (structural) measures to prevent the floodwaters from reaching potential damage centres and modify susceptibility to flooding damage through early warning systems.
6.1 Structural measures
The following structural measures are generally adopted for flood protection:
- Embankments, flood walls, sea walls
- Dams and reservoirs
- Natural detention basins
- Channel improvement
- Drainage improvement
- Diversion of flood waters.
6.2 Non-structural measures
Non-structural measures include:
- Flood forecasting and warning
- Floodplain zoning
- Flood fighting
- Floodproofing
- Flood insurance.
7.What are Flash Floods
- Flash floods are the most dangerous kind of floods because they combine the destructive power of a flood with incredible speed.
- Flash floods occur when heavy rainfall exceeds the ability of the ground to absorb it. They also occur when water fills normally dry creeks or streams or enough water accumulates for streams to overtop their banks, causing rapid rises of water in a short amount of time.
- They can happen within minutes of the causative rainfall, limiting the time available to warn and protect the public.
8. Status of Floods in India
8.1 NDRF Report
- 40 million hectares (10% of the land mass) in India are prone to floods.
- On average every year, 5 million hectares of land are affected, 1600 lives are lost and more than Rs. 1,800 crores is incurred.
8.2 Statistics
- Between 1970 and 2004, 3 floods occurred per year on average. However, between 2005 and 2019, the yearly average rose to 11. 19 districts were affected annually on an average until 2005. After 2005, the number jumped to 55.
- 2017 analysis suggests that 4.48 million Indians are exposed to riverine floods, the highest in the world.
9. What areas are at risk from flash floods?
- Densely populated areas are at high risk for flash floods. The construction of buildings, highways, driveways, and parking lots increases runoff by reducing the amount of rain absorbed by the ground. This runoff increases the flash flood potential.
- Areas near rivers are at risk from floods. Embankments, known as levees, are often built along rivers and are used to prevent high water from flooding bordering land.
- Dam failures can send a sudden destructive surge of water downstream.
- Mountains and steep hills produce rapid runoff, which causes streams to rise quickly.
- Saturated soils can also lead to rapid flash flooding.
- Sometimes the thunderstorms that produce heavy rainfall may happen well upstream from the impacted area, making it harder to recognize a dangerous situation.
- Very intense rainfall can produce flooding even on dry soil.
- Additional high-risk locations include recent burn areas in mountains and urban areas from pavement and roofs which enhance runoff.
- Ice jams and snowmelt can help cause flash floods. A deep snowpack increases runoff produced by melting snow. Heavy spring rains falling on melting snowpacks can produce flash flooding.
10. The impact of floods in India
11. Impact of flood on wildlife
12. Government actions regarding flood management
12.1.The National Flood Management Commission
- Launched in 1954
- Different structural and non-structural methods have been applied by various states under it.
12.2.Rashtriya Barh Aayog, 1976
- To evolve a scientific, integrated and coordinated approach to flood control
- It recommended Flood plain zoning and management to regulate human activities.
12.3.Regional task forces, 1996
- It was set up to review the impact of the recommendations of Rashtriya Barh Aayog.
- It recommended large flood moderation projects, following up the enactment of flood plain zoning.
12.4.National Water Policy, 2002
- It recommended
- Basin-wise plan for flood control and management.
- Flood control to be given overriding consideration in reservoir regulation policy.
- More emphasis on non-structural measures.
- Strict regulation of settlements and economic activities in flood plains.
12.5. K. Mittal Committee, 2003
Its main recommendations were
- Afforestation and treatment of catchment area, right land-use practices and others.
- In the river itself a construction of suitable hydraulic structures that may trap silt.
- Embankment along the aggrading river should be constructed, only after proper studies are made on its behaviour especially due to sedimentation load and resultant morphological changes.
Source: Indianexpress
CLOUDBURST
1. Context
Four people were killed and 49 missing following multiple incidents of cloudburst in Shimla, Mandi,and Kullu districts of Himachal Pradesh, where torrential rain has left several rivers in a spate
According to the State’s Emergency Operation Centre, one person was injured and nine people were stranded at different places following incessant rain in different parts of the State
2. Cloudburst
- A cloudburst is a sudden and intense weather phenomenon characterized by a heavy and rapid release of precipitation from a cloud.
- This concentrated burst of rainfall can lead to flash floods, landslides, and other forms of water-related disasters in a very short period of time.
- Cloudbursts typically occur in areas with high humidity and convective activity, such as mountainous regions, coastal areas, and places prone to thunderstorms.
3. How do Cloud bursts Occur?
Cloudbursts typically occur in regions with convective activity, such as areas prone to thunderstorms, mountainous terrain, and coastal regions. They are often associated with towering cumulonimbus clouds, which are large and vertically developed clouds capable of generating intense rainfall and thunderstorms. Here's how a cloudburst happens:
- Formation of Cumulonimbus Clouds: Cloudbursts are most commonly associated with cumulonimbus clouds, which are towering clouds formed through the process of convection. Warm air near the Earth's surface rises, cools, and condenses into water droplets as it encounters cooler air at higher altitudes. This process leads to the formation of these large, vertically oriented clouds.
- Updrafts and Water Vapor: Inside a cumulonimbus cloud, strong updrafts of air carry water vapor from lower altitudes to higher altitudes within the cloud. As the air rises, it cools and the water vapor condenses into tiny water droplets or ice crystals.
- Collision and Coalescence: Within the cloud, water droplets and ice crystals collide and combine, forming larger droplets. As these droplets continue to collide and grow in size, they become too heavy for the updrafts to support, causing them to fall.
- Downdrafts: The larger water droplets and ice crystals begin to descend as downdrafts within the cloud. As they fall through the cloud, they can pick up additional moisture, further increasing their size.
- Precipitation Release: Eventually, the water droplets and ice crystals become large enough that the force of gravity overcomes the upward force of the updrafts, and they start to fall rapidly toward the Earth's surface. This is the point at which the cloudburst occurs. The droplets fall in large quantities over a relatively small area, resulting in intense rainfall within a short timeframe.
- Impact and Consequences: The rapid and concentrated release of precipitation from the cloudburst can overwhelm drainage systems, lead to flash floods, and trigger landslides, especially in areas with steep terrain. The intensity of the rainfall can result in immediate and severe flooding, causing damage to property, and infrastructure, and posing risks to human safety.
4. Causes of Cloud Bursts
- Atmospheric Instability: Cloud bursts often occur in regions with convective instability in the atmosphere. Convective instability refers to the situation where warm and moist air near the Earth's surface rises rapidly due to its lower density compared to the surrounding cooler air. This vertical motion can lead to the formation of towering cumulonimbus clouds that are capable of generating intense rainfall.
- Moisture Availability: The presence of abundant moisture in the atmosphere is essential for the formation of cloud bursts. When warm, moisture-laden air rises and condenses at higher altitudes, it releases latent heat, which further fuels the upward motion of air. This process can lead to the development of strong updrafts within clouds and the rapid accumulation of water droplets.
- Orographic Effects: Cloudbursts are often common in mountainous regions due to orographic lifting. When moist air is forced to rise over a mountain range, it cools and condenses, leading to the formation of clouds and potentially intense rainfall. The combination of orographic lifting and convective instability can enhance the likelihood of cloud bursts in these areas.
- Frontal Boundaries: Cloudbursts can also occur along frontal boundaries, where two air masses of differing temperatures and moisture content meet. The convergence of these air masses can create strong vertical motion and promote the development of thunderstorms and heavy rainfall.
- Cumulonimbus Clouds: Cloud bursts are often associated with cumulonimbus clouds, which are large and vertically developed clouds capable of generating intense weather. These clouds are formed through the process of convection, where warm air rises, cools, and condenses into cloud droplets. The presence of cumulonimbus clouds increases the likelihood of intense rainfall and thunderstorm activity.
5. Consequences of Cloud Bursts
The consequences of a cloud burst, which is a sudden and intense release of precipitation from a cloud, can be significant and often lead to a range of water-related hazards and disruptions. Here are some of the key consequences of a cloud burst:
- Flash Floods: One of the most immediate and dangerous consequences of a cloud burst is the occurrence of flash floods. The intense and concentrated rainfall from the cloud burst can overwhelm drainage systems, rivers, and streams, leading to rapid and widespread flooding. Flash floods can occur within minutes of the onset of heavy rainfall and pose a serious threat to lives, property, and infrastructure.
- Landslides and Mudslides: In hilly or mountainous regions, a cloud burst can saturate the soil, making it more susceptible to landslides and mudslides. The additional water weight, coupled with the steep terrain, can trigger the sudden movement of soil and rock, leading to dangerous landslides that can bury homes, roads, and communities.
- Property Damage: The rapid and intense nature of a cloud burst's rainfall can result in significant damage to homes, buildings, and infrastructure. Floodwaters can enter structures, causing structural damage, waterlogging, and destruction of personal belongings. Infrastructure such as roads, bridges, and utility systems can also be severely affected.
- Disruption of Services: Cloud bursts can disrupt essential services, including transportation, communication, and utilities. Flooded roads and bridges can make travel difficult or impossible, hampering emergency response and evacuation efforts. Power outages can occur if the electrical infrastructure is damaged by flooding or landslides.
- Health and Safety Risks: The flooding and contamination of water sources during a cloud burst can pose health risks to the affected population. Contaminated water can lead to the spread of waterborne diseases, and individuals may be at risk of injuries, drowning, or exposure to hazardous materials in floodwaters.
6. Mitigating Measures for Cloud Bursts
Mitigating the impacts of cloud bursts requires a combination of proactive planning, infrastructure improvements, and community preparedness. Here are some key measures that can be taken to mitigate the effects of cloud bursts:
- Early Warning Systems: Implement effective early warning systems that can provide timely alerts about impending cloud bursts and heavy rainfall. These systems should be capable of reaching a wide audience through various communication channels, including mobile phones, sirens, and local media.
- Floodplain Zoning and Land Use Planning: Designate floodplain areas where development is restricted or regulated. Proper land use planning can help prevent construction in high-risk flood areas, reducing potential damage to property and infrastructure.
- Improved Drainage Infrastructure: Enhance drainage systems in urban and rural areas to handle sudden and intense rainfall. Well-designed drainage systems can help prevent water accumulation on roads and prevent flash floods.
- Erosion Control Measures: Implement erosion control measures, such as building retaining walls, stabilizing slopes, and using vegetation to prevent soil erosion in hilly and mountainous regions.
- Reservoirs and Dams: Construct reservoirs and dams to store excess water during heavy rainfall and release it gradually to prevent downstream flooding. Proper maintenance of these structures is essential to ensure their effectiveness.
- Green Infrastructure: Incorporate green infrastructure solutions such as permeable pavements, rain gardens, and rooftop gardens in urban planning. These measures can help absorb and manage excess rainwater, reducing the risk of flooding.
7. Conclusion
A cloudburst is a result of the complex interplay between atmospheric conditions, convective processes, and the physical properties of water droplets and ice crystals within a cloud. These intense weather events can have significant impacts on the affected areas and highlight the importance of preparedness, early warning systems, and proper urban planning to mitigate their effects.
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For Prelims: Cloudbursts, flash floods, landslides, Cumulonimbus Clouds, Water Vapour, Floodplain Zoning, Green Infrastructure.
For Mains: 1. What is a cloudburst, and how does it differ from regular rainfall? Explain the causes and meteorological factors that contribute to the occurrence of a cloudburst.
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Previous year Questions1. Which of the following statements with regard to Cloudburst is/are correct? (UPSC CDS 2017)
1. It is defined as sudden localized very heavy downpour with cloud thunder and lightning.
2. It mostly occurs in the hilly areas.
3. It results in a very high intensity of rainfall, i.e., 250 mm-300 mm in a couple of hours.
4. It occurs only during the daytime.
Select the correct answer using the code given below.
A. 1, 2 and 3
B. 1, 3 and 4
C. 2 and 3 only
D. 2 only
Answer: A
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Source: The Indian Express
FOOD CORPORATION OF INDIA (FCI)
1. Context
Union Food and Consumer Affairs Minister Pralhad Joshi announced here on Thursday that State governments can directly purchase rice from the Food Corporation of India (FCI) under the Open Market Sale Scheme (Domestic) from Thursday without participating in e-auction
2.Food Corporation of India (FCI)
The Food Corporation of India (FCI) is a government agency responsible for the procurement, storage, distribution, and maintenance of the public distribution system (PDS) of food grains in India. It was established under the Food Corporation Act of 1964 and operates under the Ministry of Consumer Affairs, Food and Public Distribution
Key functions of the Food Corporation of India include:
- FCI is involved in the purchase of various food grains, primarily rice and wheat, from farmers at the minimum support prices (MSP) declared by the government
- The FCI maintains large warehouses and storage facilities across the country to store the procured food grains. These storage facilities help in managing the food stock and ensuring its availability during periods of high demand or emergencies
- FCI plays a crucial role in the distribution of food grains to various states and union territories. The food grains are distributed through the Public Distribution System (PDS) to ensure food security and affordability for the economically weaker sections of the society
- FCI maintains a buffer stock of food grains to stabilize prices in the market and meet any sudden increase in demand. This buffer stock acts as a cushion against unforeseen events such as natural disasters or crop failures
- FCI may intervene in the market to stabilize prices by buying or selling food grains when necessary
- The corporation is involved in implementing various government schemes related to food distribution and management
3.Objectives of the FCI
The Food Corporation of India (FCI) has several key objectives, all aimed at ensuring food security, supporting farmers, and managing the distribution of food grains in India.
The primary objectives of FCI include:
- FCI is tasked with procuring food grains, primarily rice and wheat, from farmers at the minimum support prices (MSP) declared by the government. This helps in providing farmers with a fair price for their produce and ensures a stable income
- FCI operates warehouses and storage facilities to store the procured food grains. One of its key objectives is to maintain an adequate buffer stock to meet any sudden increase in demand, stabilize prices in the market, and address unforeseen events such as natural disasters or crop failures
- FCI plays a central role in distributing food grains through the Public Distribution System. This system aims to provide subsidized food to economically weaker sections of the society, ensuring that essential commodities are accessible and affordable to those in need
- FCI intervenes in the market to stabilize prices by buying or selling food grains as required. This intervention helps in preventing sharp fluctuations in food prices, which can impact both consumers and producers
- FCI is involved in implementing various government schemes related to food distribution and management. This includes initiatives to provide food grains to vulnerable populations, such as Antyodaya Anna Yojana and the National Food Security Act
- By procuring food grains directly from farmers at MSP, FCI supports agricultural practices and provides farmers with a reliable market for their produce. This helps in promoting agricultural sustainability and rural development
- FCI's overall objective is to contribute to national food security by managing the procurement, storage, and distribution of food grains efficiently. This involves ensuring a steady and reliable supply of essential commodities across the country
- FCI aims to maintain an efficient logistics system for the transportation and distribution of food grains. Timely and effective management of the supply chain is crucial to achieving the organization's objectives
4.Organizational Structure of the FCI
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Headquarters: The FCI is headquartered in New Delhi, India.
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Zonal Offices: FCI is divided into zones, each headed by a Zonal Manager. These zones are further subdivided into regional offices.
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Regional Offices: Each zone comprises several regional offices, each headed by a Regional Manager. These regional offices are responsible for the implementation of FCI's activities in their respective regions.
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District Offices: At the district level, FCI has offices responsible for coordinating procurement, storage, and distribution activities within the districts.
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Functional Divisions/Departments: FCI has various functional divisions or departments that focus on specific aspects of its operations. These may include:
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Procurement Division: Responsible for coordinating the procurement of food grains from farmers.
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Storage Division: Manages the storage facilities and buffer stocks of food grains.
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Distribution Division: Coordinates the distribution of food grains through the Public Distribution System (PDS) and other government schemes.
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Finance Division: Handles financial matters, budgeting, and accounting.
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Personnel and Administration Division: Manages human resources, personnel matters, and administrative functions.
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Corporate Office Functions: FCI also has central functions that oversee corporate governance, policy formulation, and coordination between different zones and regions.
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Board of Directors: The FCI is governed by a Board of Directors. The Chairman and Managing Director lead the board, and other directors may be responsible for specific functions such as finance, procurement, or distribution.
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Field Staff: Field staff, including field officers and other operational personnel, play a crucial role in the day-to-day implementation of FCI's activities at the ground level.
5. Way Forward
FCI has procured a substantial amount of paddy (unhusked rice) during the ongoing Kharif Marketing Season (KMS) 2023-24, laying a strong foundation for the Public Distribution System (PDS)
FCI has been actively offloading wheat from its buffer stocks through e-auctions to manage rising wheat prices and ensure market stability. Open market sales of wheat from buffer stocks might be stopped in northern states from March 1, 2024
Source: The Hindu
GOODS AND SERVICE TAX (GST)
1. Context
India’s gross Goods and Services Tax (GST) collections crossed ₹1.82 lakh crore to hit the third-highest monthly level in July, with revenue growth rebounding to 10.3% from June’s three-year low of 7.6%
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:
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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.
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5% Rate:
- This is a lower rate, applicable to essential goods such as certain food items, medical supplies, and other basic necessities.
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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.
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18% Rate:
- A higher rate of 18% is applicable to goods and services such as electronic items, capital goods, and various services.
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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.
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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.
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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.
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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
Source: Indianexpress
PURCHASING MANAGERS INDEX (PMI)
1. Context
Growth in new orders and output eased slightly at Indian factories in July, even as firms raised selling prices at the fastest pace in almost 11 years amid a significant spike in input costs that accelerated at a two-year high rate, the HSBC India Manufacturing Purchasing Managers’ Index (PMI) survey shows
2. What is the Purchasing Managers Index (PMI)?
The Purchasing Managers' Index (PMI) is an economic indicator that provides insights into the health of a country's manufacturing or services sector.
PMI is widely used by businesses, economists, and policymakers to gauge the economic performance and future trends in these sectors.
It is usually expressed as a numerical value that reflects the prevailing business conditions.
2.1. Key Aspects of PMI
- PMI is typically calculated through surveys of purchasing managers in various industries. These managers are asked about their perception of different aspects of business activity, including new orders, production levels, employment, supplier deliveries, and inventories.
- PMI is usually reported as a number between 0 and 100.
- A PMI value above 50 generally indicates expansion in the sector, while a value below 50 suggests contraction. The farther the PMI is from 50, the stronger the perceived expansion or contraction.
- PMI is considered a leading indicator because it provides insights into economic conditions before official economic data, such as GDP growth or employment figures, are released. It can be used to anticipate changes in economic activity.
- PMIs are calculated separately for manufacturing and services sectors. A Manufacturing PMI focuses on the manufacturing sector, while a Services PMI provides insights into the services sector. These sector-specific PMIs can give a more detailed view of the economy.
Components: PMI is composed of several components, including:
- New Orders: This component measures the number of new orders received by businesses. An increase in new orders often signals growing demand and economic expansion.
- Production: This component reflects changes in production levels. An increase suggests increased economic activity.
- Employment: The employment component indicates changes in the level of employment within the sector. An increase typically means job growth.
- Supplier Deliveries: This measures the speed at which suppliers can deliver materials. Slower deliveries may indicate supply chain issues or increased demand.
- Inventories: Inventory levels can be an indicator of expected demand. A decrease in inventories might suggest an expectation of rising demand.
3. Significance of PMI
- The Purchasing Managers' Index (PMI) is a significant economic indicator with several important implications and uses
- PMI serves as a barometer of the economic health of a country or region. A PMI above 50 generally indicates economic expansion, while a PMI below 50 suggests contraction.
- This provides a quick and easily understandable snapshot of the direction of economic activity, making it a valuable tool for assessing the overall economic climate.
- PMI is a leading indicator, meaning it often provides insights into economic conditions ahead of other official economic data, such as GDP growth or employment figures. As such, it is used by businesses, investors, and policymakers to anticipate changes in economic activity and make informed decisions
4. Way forward
Purchasing Managers' Index (PMI) is a valuable economic indicator that helps gauge the economic health and trends in the manufacturing and services sectors. It provides timely insights into business activity and is widely used by businesses and policymakers for decision-making and economic forecasting
Source: The Hindu
