Current Affair

Back
DAILY CURRENT AFFAIRS, 09 AUGUST 2024

MONETARY POLICY COMMITTEE (MPC)

 
 
1. Context
The recent rapid turnarounds in global markets have come on the back of attempts by central banks to combat the problems of inflation and repressed economic activity using the tool of interest rates. It indicates the difficulty in implementing monetary policy in the presence of strong financial markets
 

Monetary policy refers to the actions and strategies undertaken by a country's central bank to control and regulate the supply of money, credit availability, and interest rates in an economy. Its primary goal is to achieve specific economic objectives, such as price stability, full employment, and sustainable economic growth.

Central banks use various tools to implement monetary policy, including:

Interest Rates: Adjusting the interest rates at which banks lend to each other (known as the federal funds rate in the United States) influences borrowing and spending in the economy.

Open Market Operations: Buying or selling government securities in the open market to regulate the money supply. When a central bank buys securities, it injects money into the system, and when it sells them, it reduces the money supply.

Reserve Requirements: Mandating the amount of reserves banks must hold, affecting their ability to lend money.

By influencing the availability and cost of money, central banks aim to stabilize prices, control inflation, encourage or discourage borrowing and spending, and promote economic growth. However, the effectiveness of monetary policy can be influenced by various factors such as global economic conditions, fiscal policies, and market expectations.

3.What is the primary objective of the monetary policy?

The primary objective of monetary policy typically revolves around maintaining price stability or controlling inflation within an economy. Central banks often set an inflation target, aiming to keep it at a moderate and steady level. Stable prices help in fostering confidence in the economy, encouraging investment, and ensuring that the value of money remains relatively constant over time.

However, while controlling inflation is often the primary goal, central banks might also consider other objectives, such as:

Full Employment: Some central banks have a secondary objective of supporting maximum employment or reducing unemployment rates.

Economic Growth: Encouraging sustainable economic growth by managing interest rates and credit availability to stimulate or cool down economic activity.

Exchange Rate Stability: In some cases, maintaining stable exchange rates might be an important consideration, especially for countries with open economies heavily reliant on international trade.

These additional objectives can vary depending on the economic conditions, priorities of the government, and the central bank's mandate. Nonetheless, ensuring price stability is typically the fundamental goal of most monetary policies, as it forms the basis for a healthy and growing economy.

4. Monetary Policy Committee (MPC)

  • In line with the amended RBI Act, 1934, Section 45ZB grants authority to the central government to establish a six-member Monetary Policy Committee (MPC) responsible for determining the policy interest rate aimed at achieving the inflation target.
  • The inaugural MPC was formed on September 29, 2016. Section 45ZB stipulates that "the Monetary Policy Committee will ascertain the Policy Rate necessary to meet the inflation target" and that "the decisions made by the Monetary Policy Committee will be obligatory for the Bank."
  • According to Section 45ZB, the MPC comprises the RBI Governor as the ex officio chairperson, the Deputy Governor overseeing monetary policy, a Bank official nominated by the Central Board, and three individuals appointed by the central government.
  • The individuals chosen by the central government must possess "capabilities, ethical standing, expertise, and experience in economics, banking, finance, or monetary policy" (Section 45ZC)
5.Monetary Policy Committe and Inflation
  • The Monetary Policy Committee (MPC) plays a crucial role in managing inflation through its decisions on the policy interest rate.
  • When inflation is too high, the MPC might decide to increase the policy interest rate. This action aims to make borrowing more expensive, which can reduce spending and investment in the economy.
  • As a result, it could help decrease demand for goods and services, potentially curbing inflation.
  • Conversely, when inflation is too low or the economy needs a boost, the MPC might decrease the policy interest rate.
  • This move makes borrowing cheaper, encouraging businesses and individuals to spend and invest more, thus stimulating economic activity and potentially raising inflation closer to the target level.
  • The MPC's goal is to use the policy interest rate as a tool to steer inflation toward a target set by the government or central bank.
  • By monitoring economic indicators and assessing the current and expected inflation levels, the MPC makes informed decisions to maintain price stability within the economy
6. Way forward
With more than half of the current financial year witnessing positive developments in the economy, the full financial year should conclude as projected with a strong growth performance and macroeconomic stability. Yet risks on the downside persist. Inflation is one of them that has kept both the government and the RBI on high alert. Financial flows in the external sector also need constant monitoring as they impact the value of rupee and the balance of payments. A fuller transmission of the monetary policy may also temper domestic demand
 
 
 
Source: Indianexpress
 

CITIZENSHIP AMENDMENT ACT (CAA)

 
 
 
 
1. Context 
 
The Union Home Ministry has amended a provision of the Rules of the Citizenship (Amendment) Act, 2019 (CAA) that required applicants seeking citizenship to submit a document by any government authority in Afghanistan, Bangladesh or Pakistan establishing their roots in these countries. The CAA requires applicants to declare that they are foreigners
 
 
2. About the Citizenship Amendment Act 2019

The Citizenship Amendment Act (CAA) of 2019 is a controversial piece of legislation enacted by the Government of India on December 12, 2019. The act amends the Citizenship Act of 1955 to provide a pathway to Indian citizenship for certain religious minorities from neighbouring countries.

Key features of the Citizenship Amendment Act include

  • Eligibility Criteria: The CAA grants eligibility for Indian citizenship to Hindu, Sikh, Buddhist, Jain, Parsi, and Christian migrants who arrived in India from Afghanistan, Bangladesh, and Pakistan on or before December 31, 2014, and have faced religious persecution on their home countries.
  • Exclusion of Muslims: Notably, the CAA excludes Muslims from its purview, leading to criticisms of religious discrimination and accusations of violating the secular principles enshrined in the Indian Constitution.
  • Criticism and Protests: The Citizenship Amendment Act sparked widespread protests across India, with critics arguing that the act undermines the secular fabric of the nation and discriminates against Muslims. Protesters also raised concerns about the potential marginalisation of Muslim communities and the exclusionary nature of the legislation.
  • Support from Government: The government defended the Citizenship Amendment Act, asserting that it aims to provide refuge and protection to persecuted religious minorities from neighbouring countries. The government argued that the act does not infringe upon the rights of Indian Muslims and is in line with the country's secular ethos.
  • Legal Challenges: Several petitions challenging the constitutional validity of the Citizenship Amendment Act were filed in the Supreme Court of India. The court has heard arguments from both sides and is expected to deliver its judgment on the matter.
 
3. The current status of the Citizenship Amendment Act, of 2019
  • The Ministry of Home Affairs (MHA) on March 11 notified the Citizenship Amendment Rules, 2024 that would enable the implementation of the Citizenship Amendment Act (CAA) passed by the Parliament in 2019.
  • Though the legislation facilitates citizenship to undocumented people belonging to Hindu, Sikh, Buddhist, Parsi, Christian and Jain communities from Pakistan, Bangladesh and Afghanistan, the rules state that the applicants will have to provide six types of documents and specify “date of entry” in India.

 

4. The concerns associated with the Citizenship Amendment Act, of 2019

The Citizenship Amendment Act (CAA) of 2019 has sparked various concerns and criticisms, both domestically within India and internationally. 

  • One of the primary concerns regarding the CAA is its exclusion of Muslims from the list of religious minorities eligible for citizenship under the act. Critics argue that this selective approach based on religion goes against the secular principles enshrined in India's constitution and promotes religious discrimination.
  • The CAA's focus on granting citizenship based on religious identity raises concerns about the secular nature of India's democracy. Critics argue that the act undermines the inclusive and pluralistic ethos of the country by favouring specific religious communities.
  • Opponents of the CAA fear that the act, coupled with other proposed policies like the National Register of Citizens (NRC) and National Population Register (NPR), could have implications for the demographic composition of India. They raise concerns about the marginalisation and exclusion of certain communities, particularly Muslims, and the potential for statelessness among vulnerable populations.
  • The constitutionality of the Citizenship Amendment Act has been challenged in the Supreme Court of India. Critics argue that the act violates the fundamental rights guaranteed by the Indian Constitution, including the right to equality and non-discrimination.
  • The implementation of the CAA has led to social and political polarization within India. The act has become a contentious issue, leading to protests, debates, and divisions along religious and ideological lines.
  • The CAA has also attracted international attention and scrutiny, with concerns raised by human rights organizations and foreign governments regarding religious freedom, minority rights, and the potential impact on vulnerable communities.
 

5. The Indian ideas and rules of citizenship in the Constitution before the Citizenship Amendment Act (CAA), 2019

Before the enactment of the Citizenship Amendment Act (CAA) in 2019, the principles and rules of citizenship in India were primarily governed by the Constitution of India, which came into effect on January 26, 1950. The Constitution lays down the framework for citizenship and enshrines certain fundamental rights and principles related to citizenship. 

  • Citizenship by Birth: According to Article 5 of the Indian Constitution, any person born in India on or after January 26, 1950, but before July 1, 1987, was automatically considered a citizen of India by birth, regardless of the nationality of their parents.
  • Citizenship by Descent: Individuals born outside India on or after January 26, 1950, but before July 1, 1987, were eligible for Indian citizenship if either of their parents was a citizen of India at the time of their birth.
  • Citizenship by Registration: The Constitution provides provisions for certain categories of persons to acquire Indian citizenship through registration. This includes persons of Indian origin who have resided in India for a specified period and meet other criteria prescribed by law.
  • Citizenship by Naturalization: Foreigners who have resided in India for a specified period and fulfilled other conditions prescribed by law were eligible to apply for Indian citizenship through naturalization.
  • Citizenship by Incorporation of Territory: Any territory that became part of India through accession or merger automatically conferred Indian citizenship on its inhabitants as per the provisions of the Constitution.
  • Fundamental Rights: The Constitution guarantees certain fundamental rights to all citizens of India, regardless of their religion, ethnicity, or place of birth. These rights include the right to equality, freedom of speech and expression, freedom of religion, and the right to life and personal liberty.
  • Citizenship Act, 1955: This act, enacted based on the Constitution's provisions, outlined ways to acquire Indian citizenship. Here are the main routes:

    • Birth: Being born in India (with some limitations) granted citizenship.
    • Descent: Children born to Indian parents abroad could become citizens.
    • Registration: People of Indian origin residing in India for seven years could register.
    • Naturalization: Foreigners meeting specific residency requirements could apply for naturalization.

The Indian Constitution before the Citizenship Amendment Act (CAA) of 2019 outlined principles of citizenship that were based on inclusivity, equality, and non-discrimination, with provisions for acquiring citizenship through birth, descent, registration, naturalization, and territorial incorporation. The CAA introduced amendments to these principles, particularly regarding eligibility for citizenship based on religious identity.

 

6. Section 6A of the Citizenship Act

Section 6A is a special provision inserted into the Indian Citizenship Act, 1955, in 1985, as part of the Assam Accord. It deals with the citizenship of people who migrated to Assam from Bangladesh:

  • It applies to people who entered Assam on or after January 1, 1966, but before March 25, 1971.
  • It grants citizenship to these people if they can prove that they were "ordinarily resident" in Assam on March 24, 1971.
  • People who claim citizenship under Section 6A must apply to a Foreigners Tribunal. The Tribunal will then decide whether or not to grant them citizenship based on the evidence they provide.

 

7. What does NRC mean?

  • NRC stands for the National Register of Citizens. It is a register maintained by the Government of India containing names and certain relevant information for the identification of Indian citizens in the state of Assam.
  • The purpose of the NRC is to create a list of genuine Indian citizens residing in Assam and identify individuals who are not legal residents of the state.
  • The NRC process in Assam has its origins in the Assam Accord of 1985, which aimed to address the issue of illegal immigration from Bangladesh and determine the citizenship status of individuals living in Assam.
  • The NRC process requires individuals to provide documentary evidence to prove their citizenship based on criteria set by the government.
  • The NRC process involves extensive documentation and verification to establish citizenship status, and it has been a contentious issue due to its impact on individuals' rights and concerns about exclusion and discrimination.
  • The implementation of the NRC in Assam has led to debates, legal challenges, and social tensions regarding citizenship and immigration issues in India.
 

8. What is NPR?

  • NPR stands for the National Population Register. It is a register of usual residents of India, which includes both citizens and non-citizens who have resided in a local area for at least six months or intend to stay for the next six months or more.
  • The NPR is prepared at the local, sub-district, district, state, and national levels under the provisions of the Citizenship Act, 1955, and the Citizenship (Registration of Citizens and Issue of National Identity Cards) Rules, 2003.
  • The main purpose of the NPR is to create a comprehensive identity database of residents in India. It collects demographic and biometric information to establish the identity of individuals and households.
  • The data collected in the NPR includes details such as name, age, gender, marital status, occupation, educational qualification, address, and other relevant information.
  • The NPR process involves house-to-house enumeration and collection of data by government officials or designated enumerators. The data collected is used for various purposes, including government planning, policy formulation, and social welfare schemes.
  • It's important to note that the NPR is distinct from the National Register of Citizens (NRC). While the NPR focuses on creating a comprehensive database of residents, the NRC specifically deals with determining the citizenship status of individuals, particularly in the state of Assam, based on documentary evidence.
  • The NPR has been a topic of discussion and debate in India, with concerns raised about privacy, data security, and potential misuse of information.

 

9. The difference between the NRC, NPR and CAA 

 

Term Description Purpose Focus
NRC (National Register of Citizens) Register of Indian citizens in Assam Identify legal residents and non-citizens Citizenship status in Assam
NPR (National Population Register) Register of usual residents (citizens and non-citizens) Create a comprehensive identity database Residents of India for planning purposes
CAA (Citizenship Amendment Act) Law providing path to citizenship for religious minorities Grant citizenship based on religion and persecution

Specific religious minorities facing persecution

 

10. Is NPR connected to NRC?

The NPR (National Population Register) is connected to the NRC (National Register of Citizens) in the sense that the data collected during the NPR exercise can be used as a basis for the NRC verification process, especially in the context of Assam.

  1. Data Collection: The NPR involves collecting demographic and biometric information about residents of India, including both citizens and non-citizens who have lived in a local area for at least six months or intend to stay for the next six months or more. This data includes details such as name, age, gender, address, marital status, educational qualification, occupation, etc.

  2. Verification: The data collected during the NPR process can be used as a basis for verifying citizenship during the NRC process, particularly in Assam. In Assam, the NRC process requires individuals to provide documentary evidence to prove their citizenship based on certain criteria. The data from NPR can be cross-referenced during this verification process.

  3. Identification: The NPR data can help identify individuals who are considered genuine Indian citizens and those who may be considered doubtful citizens or non-citizens. This identification is crucial for the NRC process, especially in states like Assam where illegal immigration has been a longstanding issue.

While the NPR data can be used as a tool for verification during the NRC process, it's important to note that the NPR itself is not the same as the NRC. The NPR focuses on creating a comprehensive population database for administrative and planning purposes, while the NRC specifically deals with determining citizenship status, particularly in Assam, based on documentary evidence and verification.

 

11. Who are ‘Citizens’?

In general terms, citizens are individuals who hold citizenship in a particular country. Citizenship is a legal status that grants individuals certain rights, privileges, and responsibilities within the nation-state to which they belong. The concept of citizenship varies across different countries, but some common characteristics of citizenship include.

  1. Legal Recognition: Citizens are legally recognized members of a country or state. They are entitled to the protection of the state and have access to its legal system.
  2. Rights and Privileges: Citizens typically enjoy certain rights and privileges that non-citizens may not have, such as the right to vote, the right to work and reside in the country, access to social services, and the right to participate in the political process.
  3. Responsibilities: Along with rights and privileges, citizenship also entails certain responsibilities, such as obeying the laws of the country, paying taxes, serving on juries if called upon, and sometimes participating in military service.
  4. National Identity: Citizenship often involves a sense of national identity and belonging to a particular community or nation. This can include shared cultural, historical, and linguistic ties that bind citizens together.
  5. Acquisition and Loss: Citizenship can be acquired through birth (jus soli or jus sanguinis), naturalization, or descent from a citizen parent. It can also be lost or renounced voluntarily or involuntarily, depending on the laws of the country.
 
12. The Way Forward
 
By adopting the strategies, stakeholders can work towards addressing concerns related to the Citizenship Amendment Act, promoting inclusivity, protecting minority rights, and upholding democratic values in India's citizenship policies and practices.
 
Source: The Indian Express
 
 

JOINT PARLIAMENTARY COMMITTEE

1. Context 

The Opposition on February 2 joined hands to demand a probe either by a Joint Parliamentary Committee (JPC), headed by the Supreme Court or monitored by the Chief Justice of India, into the allegations of fraud and stock manipulation against the Adani Group.
 

2. About Joint Parliamentary Committee

  • A Joint Parliamentary Committee (JPC) is set up by the Parliament for a special purpose, like the detailed scrutiny of a subject or Bill.
  • It has members from both the Houses and from both the ruling parties and the opposition.
  • It is dissolved after its term ends or its task has been completed.

2.1. Set up of JPC

  • A JPC is set up after one House of Parliament has passed a motion and the other has agreed to it.
  • Members of the JPC are decided by the Parliament.
  • The number of members can vary there is no fixed number.

2.2. Functions of JPC

  • The mandate of a JPC depends on the motion constituting it. 
  • For example, The terms of reference for the JPC on the stock market scam asked the committee to look into financial irregularities, to fix responsibility on persons and institutions for the scam, to identify regulatory loopholes and also to make suitable recommendations.
To fulfil its mandate, a JPC can scrutinise documents and summon people for questioning.
It then submits a report and makes recommendations to the government.

2.3. Powers of JPC

  • While the recommendations of a JPC have persuasive value, they are not binding on the government.
  • The government can choose to launch further investigations based on what the JPC has said, but it can't be forced to do so.
  • The government is required to report on the follow-up action taken based on the recommendations of the JPC and other committees.
  • The Committees then submit "Action Taken Reports" in parliament based on the government's reply.

2.4. JPCs set up so far

There have been six JPCs set up so far. These are
  1. JPC to examine matters relating to the Allocation and Pricing of Telecom Licenses and Spectrum
  2. JPC on Pesticide Residues in and Safety Standards for Soft Drinks, Fruit Juice and other Beverages
  3. JPC on Stock Market Scam and Matters Relating thereto
  4. JPC to enquire into irregularities in Securities and Banking Transactions
  5. JPC to enquire into Bofors Contract
  6. Joint Committee to Examine the Constitutional and Legal Position Relating to Office of Profit.
 
Source: The Indian Express
 

GOODS AND SERVICE TAX (GST)

 
 
1. Context
 
The Union government has nothing to do with imposing the goods and services tax (GST) on health insurance premiums, Finance Minister Nirmala Sitharaman insisted in the Rajya Sabha on Thursday, maintaining that the issue is entirely in the realm of the GST Council
 
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
 
 
Source: Indianexpress
 

INDIAN HIMALAYAN RANGE (IHR)

 
 
 
1. Context
 
The Indian Himalayan Range (IHR), comprising 11 States and two Union Territories, had a decadal urban growth rate of more than 40% from 2011 to 2021. Towns have expanded, and more urban settlements are developing. However, Himalayan towns require a different definition of urbanisation.
 
 
2. What is the Indian Himalayan Range (IHR) ?
 
Pictorial map showing the boundary of the Indian Himalayan Region... |  Download Scientific Diagram
 
The Indian Himalayan Range, commonly referred to as the Himalayas, is a vast and prominent mountain range in Asia. It stretches across five countries: India, Nepal, Bhutan, China, and Pakistan. In India, it runs along the northern border and extends from the westernmost point in Jammu and Kashmir to the easternmost point in Arunachal Pradesh.
 
Key features of the Indian Himalayan Range include:
 
  • The range spans about 2,400 kilometers (1,500 miles) from west to east.

  • Major Peaks: It contains some of the world's highest peaks, including Mount Everest (8,848 meters), Kanchenjunga (8,586 meters), and Nanda Devi (7,816 meters).

  • Divisions: The range is often divided into three main sections:

    • Western Himalayas: Includes regions like Jammu and Kashmir and Himachal Pradesh.
    • Central Himalayas: Includes parts of Uttarakhand and western Nepal.
    • Eastern Himalayas: Includes Sikkim, Arunachal Pradesh, and eastern Nepal.
  • The Himalayas are crucial for their ecological, hydrological, and cultural impacts. They are the source of several major rivers, such as the Ganges, Yamuna, and Brahmaputra, and have a diverse range of flora and fauna. They also hold significant cultural and spiritual importance in Hinduism, Buddhism, and other local traditions

 
3. Situation of Indian Himalayan Range (IHR)
 
  • Many towns in the Himalayan region, including state capitals, face difficulties in addressing civic issues. Cities such as Srinagar, Guwahati, Shillong, and Shimla, along with smaller towns, encounter considerable problems with sanitation, waste management, and water resources.
  • Planning institutions in these states often struggle due to reliance on models adapted from plains regions and their limited capacity to execute these plans effectively. For example, in the Kashmir Valley, excluding Srinagar Municipal Corporation, there are only 15 executive officers overseeing over 40 urban local bodies, reflecting a significant shortage of human resources.
  • Urban expansion continues to encroach on village commons, with cities like Srinagar and Guwahati exemplifying this trend. This growth results in the degradation of open spaces, forest lands, and watersheds.
  • In Srinagar, land use data from 2000 to 2020 shows a 75.58% increase in built-up areas, while water bodies have decreased by nearly 25%, from 19.36 square kilometers to 14.44 square kilometers.
  • The area occupied by built-up real estate has grown from 34.53 square kilometers to 60.63 square kilometers, representing an increase from 13.35% to 23.44% of the total municipal area. Additionally, almost 90% of liquid waste is discharged into water bodies without treatment
  • The Indian Himalayan Region (IHR) is increasingly burdened by urbanization and development pressures, exacerbated by high levels of tourism, unsustainable infrastructure, and excessive use of resources like land and water.
  • These challenges are further intensified by climate changes such as altered precipitation patterns and rising temperatures.
  • Consequently, the region is experiencing water shortages, deforestation, land degradation, biodiversity loss, and heightened pollution, including from plastics. These factors have the potential to disrupt both lives and livelihoods, affecting the socio-ecological balance of the Himalayas.
  • In recent decades, tourism in the IHR has expanded and diversified, with an expected average annual growth rate of 7.9% from 2013 to 2023.
  • However, current tourism practices often replace eco-friendly infrastructure with unsuitable and hazardous constructions, poorly designed roads, and inadequate waste management systems.
  • This leads to the depletion of natural resources and harm to biodiversity and ecosystem services. Emphasizing ecotourism, which focuses on environmentally responsible travel, is essential for ensuring long-term sustainability
4.Possible Solutions
 
  • Planning institutions in cities within the Indian Himalayan Region (IHR) still rely on traditional land-use principles. Each town should be mapped with layers that highlight vulnerabilities from both geological and hydrological perspectives. Climate-induced disasters annually damage infrastructure that lacks such comprehensive mapping. Consequently, the planning process should involve local communities and adopt a bottom-up approach.
  • Urban planning driven by consultants should be reconsidered for Himalayan towns, with a focus instead on designing for climate resilience.
  • Furthermore, IHR cities struggle to generate the capital needed for infrastructure. The Finance Commission should include a dedicated section on urban financing for the IHR. Due to high urban service costs and the absence of industrial corridors, these towns face unique financial challenges.
  • Intergovernmental transfers from the central government to urban local bodies currently make up only 0.5% of GDP; this should be increased to at least 1%. Himalayan towns need to participate in broader discussions on sustainability, emphasizing robust, eco-centric planning processes that include public input
 
5. What is the Significance of Himalayas for India?
 
 
The Himalayas hold immense significance for India across various dimensions:
 
  • The Himalayas form a natural barrier between the Indian subcontinent and the Tibetan Plateau, influencing weather patterns and climate. They protect India from the cold winds of Central Asia and help moderate the temperatures in the northern plains
  • The Himalayas are the source of major rivers such as the Ganges, Yamuna, Brahmaputra, and their tributaries. These rivers are crucial for agriculture, drinking water, and hydroelectric power generation in India
  • The range is home to a diverse range of flora and fauna, many of which are endemic to the region. This includes species like the Bengal tiger, snow leopard, and various medicinal plants, contributing to India’s rich biodiversity
  • The mountains play a critical role in regulating the climate of the Indian subcontinent. They influence the monsoon winds and precipitation patterns, which are essential for the agricultural cycle and water supply
  • The Himalayas are deeply embedded in Indian culture and spirituality. They are considered sacred in Hinduism, Buddhism, and other religions. Many important pilgrimage sites, such as the Char Dham, Mount Kailash, and the Yamunotri and Gangotri temples, are located in the region
  •  The Himalayas are rich in natural resources, including minerals, forests, and potential sites for hydropower projects. They support various industries and livelihoods, from traditional crafts to tourism
  • The Himalayas attract tourists from around the world for their natural beauty, trekking opportunities, and adventure sports. This tourism contributes significantly to the local economies of Himalayan states
  • The region holds strategic military importance due to its proximity to several neighboring countries. The challenging terrain also acts as a natural defense barrier
  •  The Himalayas play a vital role in maintaining ecological balance. They help in soil conservation, prevent soil erosion, and influence the hydrological cycles essential for sustaining various ecosystems
 

What is Char Dham Highway Development Project?

The Char Dham Highway Development Project is an ambitious infrastructure initiative by the Government of India aimed at improving the road connectivity and infrastructure in the Char Dham pilgrimage circuit in Uttarakhand. This project focuses on enhancing access to four major Hindu pilgrimage sites:

  1. Yamunotri
  2. Gangotri
  3. Kedarnath
  4. Badrinath
The project involves widening and upgrading existing roads, constructing new roads, and improving road safety measures. This aims to facilitate smoother and safer travel for pilgrims and tourists.
It seeks to provide year-round accessibility to these remote and high-altitude pilgrimage sites, which are often difficult to reach, especially during adverse weather conditions.
The project includes building bridges, tunnels, and other critical infrastructure to overcome geographical challenges and ensure better connectivity. For example, the construction of tunnels is designed to bypass landslide-prone areas and difficult terrains
Improved road infrastructure is expected to boost local economies by facilitating better transportation of goods and services and increasing tourism-related activities
 
 
6.Way Forward
 Indian Himalayan Range stands as a monumental and multifaceted feature of the Indian subcontinent, encompassing vital roles in geography, ecology, culture, and economy. This majestic mountain range is not only a natural barrier that influences climatic patterns but also a crucial source of water for major rivers that sustain millions of people. Its rich biodiversity and ecological significance further underscore its importance as a global environmental treasure
 
 
 
Source: The Hindu

Share to Social