Specific Concerns

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

3. Money laundering

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

3.1. Different stages in money laundering

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 Integration: Laundered money is withdrawn from the legitimate account to be used for criminal purposes.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

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

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

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

4.1. Key Features of the PMLA

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

4.2. Significance of the PMLA

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

4.3. Challenges in Implementing the PMLA

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

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

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

5.1. Functions and Roles of ED

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

MONSOON IN INDIA

 

 

 

1. Context

The trust in weather forecasts has increased significantly, thanks to improvements in accuracy. But the demand for even more accurate and specific predictions continues to grow, particularly in light of the increasing instances of extreme weather events being triggered by climate change, and the disasters that they sometimes turn into.

 

2. What is a Monsoon?

 

A monsoon is a seasonal weather pattern characterized by changes in the direction of prevailing winds, which typically result in distinct wet and dry seasons. Monsoons are caused by the differential heating of land and sea, which creates pressure gradients that drive large-scale wind systems.

Key features of a monsoon include:

• Monsoons involve a significant shift in wind direction between seasons. During the wet season, winds blow from the ocean towards the land, bringing moist air and heavy rainfall. During the dry season, winds reverse direction, blowing from the land to the ocean, resulting in dry conditions
• The wet season is marked by heavy and sustained rainfall, often leading to flooding and lush vegetation growth. The dry season, in contrast, has little to no rainfall, leading to drought conditions in some regions
• Monsoons are most commonly associated with South Asia, particularly the Indian subcontinent. Other regions that experience monsoon patterns include Southeast Asia, parts of Africa, Australia, and the southwestern United States
• Monsoons play a crucial role in the climate and agriculture of affected regions. They provide essential water for crops and replenish groundwater supplies. However, they can also cause destructive flooding and landslides

3. Indian Monsoon

 

• The Indian monsoon is a significant and complex weather phenomenon that has a profound impact on the climate, agriculture, and economy of the Indian subcontinent one of the most well-known and studied monsoon systems is the Indian monsoon, which significantly affects the climate and economy of India and its neighbouring countries.
• Southwest Monsoon: Occurs from June to September. Winds blow from the southwest, bringing moisture-laden air from the Indian Ocean, resulting in heavy rainfall over the Indian subcontinent.
• Northeast Monsoon: Occurs from October to December. Winds blow from the northeast, bringing drier air, although the southeastern coast of India and Sri Lanka receive some rainfall during this period.

4. Monsoon basics and dates

 

• The Southwest Monsoon from June to September delivers over 70% of India's annual rainfall. Typically, the monsoon reaches the Andaman Sea in the third week of May and moves onto the mainland through Kerala, with June 1 being the usual start date.
• Its progression is characterised by surges, advancing rapidly to central India before slowing down.
• By the end of June, it generally reaches north Uttar Pradesh, Delhi, and surrounding areas, covering the entire country by July 15. An early or timely onset does not ensure consistent or adequate rainfall throughout the season, nor does a delayed onset necessarily lead to below-average rainfall.
• The total rainfall from June to September is influenced by various factors and exhibits natural year-to-year variability, making each monsoon season unique. The distribution of rainfall is as important as the total amount.
• The India Meteorological Department (IMD) predicts 'above normal' rainfall for this season, estimated to be 106% of the Long Period Average of 880 mm (based on 1971-2020 data).
• This forecast of increased rainfall is largely due to the expected development of La Niña conditions, which typically enhance the Indian monsoon, and a positive phase of the Indian Ocean Dipole (IOD)

 

5.Branches of Indian Monsoon

The Indian Monsoon is broadly divided into two main branches, each with distinct characteristics and regions of influence: the Arabian Sea Branch and the Bay of Bengal Branch.

Arabian Sea Branch

Characteristics:

• Source: Originates from the southwestern part of the Arabian Sea.
• Path: Moves towards the western coast of India.
• Onset: Typically hits the Kerala coast around June 1st, marking the official start of the Southwest Monsoon.

Key Features:

• Western Ghats: The moist air from the Arabian Sea rises when it encounters the Western Ghats, causing heavy rainfall on the windward side.
• Progression: Advances northwards along the western coast, bringing significant rainfall to regions such as Goa, Karnataka, Maharashtra, and Gujarat.
• Reach: Extends into central and northwestern India, contributing to the monsoon rains in these areas.

Bay of Bengal Branch

Characteristics:

• Source: Originates from the southeastern part of the Bay of Bengal.
• Path: Moves towards the eastern coast of India and then travels northwestwards.

Key Features:

• Northeastern India: Initially brings heavy rainfall to northeastern states such as Assam, Meghalaya, and West Bengal as it hits the Eastern Himalayas.
• Progression: Moves across the Indo-Gangetic Plain, covering Bihar, Uttar Pradesh, and eventually reaching northern India including Delhi.
• Distribution: Influences the monsoon patterns in central and northern India, often merging with the Arabian Sea branch to provide widespread rainfall.

 

6.Factors affecting Indian Monsoon

Coriolis Force

The Coriolis Force is an apparent force resulting from the Earth's rotation. It influences the rotational movement seen in tropical cyclones, causing monsoon winds to deflect eastward and blow from the southwest to the northeast. Since the Earth's rotation is constant, the Coriolis Force experienced by air at a specific latitude and velocity remains steady.

Mascarene High

The Mascarene High is a significant high-pressure zone that drives the southwest monsoon winds toward the Indian subcontinent. Forming by mid-April, the strength of this high-pressure area is crucial in determining the intensity of the Indian monsoon. A stronger high leads to stronger winds and a more robust monsoon. A delayed formation of the Mascarene High can result in a delayed onset of the monsoon in India.

Indian Summer

High-pressure winds move towards low-pressure areas. The Himalayas play a key role in summer heating by blocking cold northern air, allowing for warmer conditions. During summer, India becomes extremely hot, and surrounding ocean temperatures rise. This creates a pressure gradient between the cooler sea air and the warmer land air, particularly over Rajasthan. Consequently, monsoon winds are drawn towards the low-pressure area over India.

Indian Ocean Dipole

In 1999, N.H. Saji and colleagues from Japan’s University of Aizu identified the Indian Ocean Dipole (IOD), an ENSO-like phenomenon in the Indian Ocean. The IOD has three phases: positive, negative, and neutral. During the positive IOD phase, sea surface temperatures in the western Indian Ocean are warmer than in the eastern part. Conversely, during the negative phase, the eastern Indian Ocean is warmer. No significant gradient exists during the neutral phase. Positive IOD phases are associated with significantly higher Indian summer monsoon rainfall compared to negative IOD phases.

El Niño

El Niño refers to the occasional appearance of a warm ocean current off the coast of Peru, temporarily replacing the cold Peruvian current. Named after the infant Christ ("El Niño" means "the child" in Spanish) because it occurs around Christmas, El Niño leads to increased sea-surface temperatures and reduced trade winds in the region.

El Niño Southern Oscillation (ENSO)

The El Niño Southern Oscillation (ENSO) describes the cyclic variations in sea surface temperatures around the equatorial Pacific Ocean. ENSO's unpredictable nature has long challenged forecasters. It affects global weather patterns, especially in countries bordering the Pacific Ocean, by influencing air circulation.

Intertropical Convergence Zone (ITCZ)

The ITCZ is a broad low-pressure area found in equatorial latitudes where the northeast and southeast trade winds converge. This zone shifts north and south following the sun’s apparent movement. The position and strength of the ITCZ significantly affect the Indian Monsoon.

Tropical Easterly Jet (TEJ)

The TEJ plays a crucial role in initiating the southwest monsoon. This jet stream flows over the Indian Ocean near Madagascar, intensifying the high-pressure cell and triggering the southwest monsoon. Persistent high summer temperatures over Tibet help develop the easterly jet, leading to heavy rainfall in India. Conversely, if the Tibetan Plateau retains its snow cover, the easterly jet does not form, resulting in reduced monsoon rainfall in India. Thus, years with extensive snow in Tibet are typically followed by weaker monsoons and less rainfall

 

 

 

For Prelims: Southwest monsoon El Nino, Coriolis Force For Mains: GS I- Monssons and their effects on Indian Agriculture

 

Source: Indianexpress

 

PRADHAN MANTRI JAN DHAN YOJANA (PMJDY)

 

 

 

1. Context

Financial inclusion has been a key tool used by policymakers and governments globally to reduce inequalities, strengthen livelihoods of people at the bottom of the pyramid, and spur growth.

 

2.Background

• The Pradhan Mantri Jan Dhan Yojana (PMJDY) is a national financial inclusion scheme launched by the Government of India in 2014.
• The objective of this scheme is to ensure access to financial services at affordable cost to all the families in the country
• The primary objective of the scheme is to ensure that every household in India has access to basic banking services, such as a savings account, insurance, and pension.
• The program aims to bring the marginalized and economically weaker sections of society into the formal financial system and promote financial literacy

 

3. Objectives

• Ensure access of financial products & services at an affordable cost
• Use of technology to lower cost & widen reach
• Opening of basic savings bank deposit (BSBD) account with minimal paperwork, relaxed KYC, e-KYC, account opening in camp mode, zero balance & zero charges
• Issuance of Indigenous Debit cards for cash withdrawals & payments at merchant locations, with free accident insurance coverage of Rs. 2 lakhs
• Other financial products like micro-insurance, overdraft for consumption, micro-pension & micro-credit

 

4.Key features of PMJDY

Key features of Pradhan Mantri Jan Dhan Yojana (PMJDY):

1. No Minimum Balance Requirement: Under this scheme, individuals can open a bank account with zero minimum balance requirements. This is particularly beneficial for those who were unable to open bank accounts due to financial constraints.

2. Access to Banking Facilities: Account holders are provided with a basic savings account that allows them to deposit and withdraw money, and it also comes with a RuPay debit card which enables access to ATMs and facilitates cashless transactions.

3. Accidental Insurance Cover: Account holders are eligible for accidental insurance coverage. Initially, the insurance coverage was Rs. 1 lakh, but it was increased to Rs. 2 lakh.

4. Overdraft Facility: After a certain period of satisfactory operation of the account, account holders are eligible for an overdraft facility of up to Rs. 10,000, which helps them during emergencies.

5. Financial Literacy Programs: The scheme also emphasizes financial literacy and aims to educate account holders about the benefits of formal financial services, proper money management, and the importance of saving.

6. Direct Benefit Transfer (DBT): PMJDY accounts are often linked to various government welfare schemes, allowing beneficiaries to receive subsidies and benefits directly into their bank accounts, reducing leakages and ensuring efficient delivery of services.

7. Pension Schemes: Account holders can also access pension schemes like Atal Pension Yojana and Pradhan Mantri Shram Yogi Maan-Dhan Yojana, which provide social security and retirement benefits.

8. Mobile Banking: The scheme promotes the use of mobile banking through USSD (Unstructured Supplementary Service Data) codes, allowing account holders to access banking services using basic mobile phones.

5.Conclusion

The PMJDY has contributed significantly to increasing financial inclusion in India by bringing millions of people into the formal financial sector who previously did not have access to such services

The Pradhan Mantri Jan Dhan Yojana has been widely recognized for its success in expanding financial inclusion in India and has received attention from international organizations as well

 

 

 

Previous Year Questions 1.‘Pradhan Mantri Jan-Dhan Yojana’ has been launched for (UPSC CSE 2015) (a) providing housing loan to poor people at cheaper interest rates (b) promoting women’s Self-Help Groups in backward areas (c) promoting financial inclusion in the country (d) providing financial help to the marginalized communities Answer: (c)   1.Pradhan Mantri Jan Dhan Yojana (PMJDY) is necessary for bringing unbanked to the institutional finance fold. Do you agree with this for financial inclusion of the poorer section of the Indian society? Give arguments to justify your opinion. (2016)

Source: pib

 

CYBERCRIME

 

 

1. Context

 

 

The National Cyber Crime Reporting Portal of the Government of India recognises new-age crimes such as cyberbullying, stalking, email hacking etc. Yet, the BNS does not address these aspects.

 

2. About cybercrime

 

Cybercrime is essentially any illegal activity that involves computers, networks, or digital devices. Criminals can use these tools to steal data, commit fraud, disrupt computer systems, or cause other harm. Some common types of cybercrime include:

• Stealing someone's personal information like their name, Social Security number, or credit card details to impersonate them and commit fraud.
• Tricking people into giving up their personal information or clicking on malicious links by disguising emails or websites as legitimate ones.
• Malicious software that can be installed on a computer to steal data, damage files, or disrupt operations.
• Gaining unauthorized access to a computer system or network to steal data, install malware, or cause damage.

 

3. What is NCRP?

 

The National Cybercrime Reporting Portal is an online platform established by the government of India to facilitate the reporting of cybercrimes by citizens. The portal allows individuals to report incidents of cybercrime in a streamlined and accessible manner.

Key features and functions of the National Cybercrime Reporting Portal include

• Individuals can report various types of cybercrimes such as online harassment, financial fraud, ransomware attacks, and identity theft. The portal provides specific categories for different types of cyber incidents to ensure proper documentation and handling.
• The portal places a special emphasis on crimes related to women and children, providing a dedicated section to report cases of online harassment, child pornography, and other related offences.
• The portal allows users to report crimes anonymously if they choose, ensuring the confidentiality and privacy of the complainant.
• Once a complaint is filed, the portal provides a tracking number which can be used to follow up on the status of the complaint.
• The portal offers resources and guidelines on how to protect oneself from cybercrime, as well as information on legal recourse and support available for victims.

 

4. What is the Indian Cyber Crime Coordination Centre (I4C)?

 

The Indian Cyber Crime Coordination Centre (I4C), established by the Ministry of Home Affairs (MHA), is essentially India's central command centre for combating cybercrime.

Functions

• The I4C serves as a focal point for coordinating efforts between various Law Enforcement Agencies (LEAs) across the country to tackle cybercrime effectively.
• It facilitates the exchange of information on cybercrime investigations, cyber threat intelligence, and best practices among LEAs. This allows for a more unified approach to combating cyber threats.
• The I4C is citizen-centric. It played a role in launching the National Cybercrime Reporting Portal (NCRP) which allows people to report cybercrime complaints online. There's also a National Cybercrime Helpline (1930) to report incidents and get assistance.
• The I4C identifies the need for adapting cyber laws to keep pace with evolving technology. They recommend amendments to existing laws and suggest the creation of new ones if necessary.
• The I4C works with academia and research institutes to develop new technologies and forensic tools to aid in cybercrime investigations.
• They promote collaboration between the government, industry, and academia to raise awareness about cybercrime and develop standard operating procedures (SOPs) for containing and responding to cyberattacks.

5. What is the Budapest Convention?

 

The Budapest Convention, also known as the Council of Europe Convention on Cybercrime, is the world's first international treaty specifically designed to address cybercrime. It came into effect in 2004 with three main objectives:

1. The convention aims to improve how countries investigate cybercrime by setting standards for collecting electronic evidence and fostering cooperation between law enforcement agencies.
2. It facilitates cooperation among member states in tackling cybercrime. This includes sharing information, assisting with investigations, and extraditing cybercriminals.
3. The convention encourages member countries to harmonize their national laws related to cybercrime. This creates a more unified approach to defining and prosecuting cyber offences.

India's Stand: India is not currently a party to the Budapest Convention. There are concerns that some provisions, like data sharing with foreign law enforcement agencies, might infringe on India's national sovereignty. India has also argued that it wasn't involved in drafting the initial convention.

 

6. What is the Global Cybersecurity Index?

 

The Global Cybersecurity Index (GCI) is an initiative by the International Telecommunication Union (ITU) to measure and rank the cybersecurity capabilities of countries around the world. The index provides insights into the commitment of countries to cybersecurity at a global level, assessing their strengths and identifying areas for improvement. The key aspects of the Global Cybersecurity Index

Purpose

• To promote cybersecurity awareness and foster a global culture of cybersecurity.
• To encourage countries to enhance their cybersecurity infrastructure and strategies.
• To facilitate knowledge sharing and cooperation among nations.

Assessment Criteria

 The GCI evaluates countries based on five main pillars:

1. Examines the existence of cybersecurity legislation and regulatory frameworks.
2. Assesses the implementation of cybersecurity technologies and technical institutions.
3.  Looks at national cybersecurity strategies, policies, and dedicated agencies.
4. Evaluate the availability of cybersecurity education, training, and awareness programs.
5. Measures the extent of international and national cooperation in cybersecurity efforts.

Methodology

 

The assessment is conducted through a comprehensive survey sent to ITU member states, followed by analysis and validation of the responses. The countries are then scored and ranked based on their overall cybersecurity posture.

Impact

 The GCI serves several important functions:

• Provides a benchmarking tool for countries to assess their cybersecurity maturity.
• Helps policymakers identify gaps and prioritize areas for improvement.
• Encourages international cooperation and collaboration to tackle global cyber threats.

The GCI reports typically highlight the growing importance of cybersecurity due to increasing digital transformation and the rising number of cyber threats. They showcase best practices and successful initiatives from top-ranking countries, serving as models for others.

 

7. The challenges related to cyber security in India

 

India faces numerous challenges related to cybersecurity, reflecting its rapidly growing digital economy and increasing reliance on technology. 

Increasing Cyber Threats:

• India has seen a significant rise in cybercrimes, including hacking, phishing, ransomware attacks, and identity theft. Sophisticated, state-sponsored attacks targeting critical infrastructure and sensitive data are becoming more common.
• Many public and private sector systems rely on outdated technology, making them vulnerable to attacks. Inadequate implementation of robust cybersecurity measures and protocols leaves systems exposed.
• There is a significant gap in the number of trained cybersecurity experts needed to protect against and respond to cyber threats. Ongoing education and training programs are insufficient to keep pace with evolving cyber threats.
• The absence of a unified regulatory framework complicates cybersecurity management. While laws like the IT Act 2000 exist, enforcement and implementation remain inconsistent and weak.
• Many individuals and small businesses lack awareness of basic cybersecurity practices. Practices like using weak passwords, not updating software, and falling for phishing scams are common.
• The absence of robust data protection legislation makes it difficult to safeguard personal and sensitive data. Ensuring privacy and protection of personal information remains a significant challenge.
• Effective cybersecurity often requires international cooperation, which is currently limited and inconsistent. Cross-border cyber threats and geopolitical tensions complicate collaboration and response efforts.
• The rapid adoption of IoT devices, often with minimal security features, increases vulnerabilities. While AI can enhance security, it also introduces new risks and attack vectors.
• Sectors like banking, healthcare, and energy are increasingly targeted, requiring enhanced protection measures. Ensuring coordinated efforts among various governmental and private entities involved in critical infrastructure protection is challenging.
• Limited financial resources allocated for cybersecurity initiatives hinder the development and implementation of comprehensive security measures.
• Staying abreast of the latest cybersecurity technologies and tools is difficult due to financial and logistical constraints.

 

8. Way Forward

 

Addressing these challenges requires a multifaceted approach involving improved regulatory frameworks, enhanced public awareness, investment in cybersecurity infrastructure, international cooperation, and the development of a skilled workforce. By strengthening these areas, India can better safeguard its digital ecosystem against the growing threat of cybercrime.

 

 

For Prelims: Cyber Crime, Artificial Intelligence, Internet of Things, Indian Cyber Crime Coordination Centre,  National Cybercrime Reporting Portal, Budapest Convention, Global Cybersecurity Index, International Telecommunication union For Mains:  1. India witnesses a high number of cybercrimes originating from Southeast Asia. Analyze the challenges this poses for Indian Law Enforcement Agencies and suggest measures to improve cross-border cooperation in tackling cybercrime. (250 words) 2. What are the key functions of the Indian Cyber Crime Coordination Centre (I4C)? Critically evaluate its effectiveness in combating cybercrime in India. (250 words) 3. The rise of Internet of Things (IoT) devices introduces new vulnerabilities in cyberspace. Analyze the cybersecurity challenges posed by IoT and suggest measures to mitigate these risks. (250 words)

 

Previous Year Questions   1. In India, under cyber insurance for individuals, which of the following benefits are generally covered, in addition to payment for the loss of funds and other benefits? (UPSC 2020) 1. Cost of restoration of the computer system in case of malware disrupting access to one's computer 2. Cost of a new computer if some miscreant wilfully damages it, if proved so 3. Cost of hiring a specialized consultant to minimize the loss in case of cyber extortion 4. Cost of defence in the Court of Law if any third party files a suit Select the correct answer using the code given below: A.1, 2 and 4 only  B.1, 3 and 4 only  C.2 and 3 only   D.1, 2, 3 and 4   2. Global Cyber Security Index (GCI) 2020 is released by which of the following organizations? (RRB Clerk Mains 2021) A. World Bank B. United Nations Development Programme C. International Telecommunication Union D. World Economic Forum E. None of these Answers: 1-D, 2-C

 

Source: The Indian Express

 

GOODS AND SERVICE TAX (GST)

 

 

1. Context

 

The upcoming Goods and Services Tax (GST) Council meeting on September 9 will discuss rationalisation of rates on several items but a decision regarding any rate change will be taken in subsequent meetings

 

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

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

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

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

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

 

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

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

 

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

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

• Nil Rate:

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

• 5% Rate:

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

• 12% Rate:

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

• 18% Rate:

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

• 28% Rate:

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

• Compensation Cess:

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

• Zero Rate:

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

• Exempt Supplies:

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

 

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

 

 

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

 

 

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

 

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

 

Here are some key advantages:

 

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

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

 

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

8.Goods and Services Tax Council (GST Council)

 

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

The GST Council consists of the following members:

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

9. Way forward

 

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

 

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

 

 

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

 

Source: Indianexpress