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[Mission 2024] Insights SECURE SYNOPSIS: 12 October 2023

 

NOTE: Please remember that following ‘answers’ are NOT ‘model answers’. They are NOT synopsis too if we go by definition of the term. What we are providing is content that both meets demand of the question and at the same


General Studies – 1


 

Topic: geographical features and their location-changes in critical geographical features (including water-bodies and ice-caps) and in flora and fauna and the effects of such changes.

1. What are the potential long-term consequences of temporary global warming exceeding 2°C on ocean ecosystems and marine life, and why is this a matter of concern for future generations? (250 words)

Difficulty level: Moderate

Reference: Down to Earth

Why the question:

The referenced article discusses the enduring impacts of global warming on oceans, highlighting the importance of understanding these consequences.

Key Demand of the question:

To write about the potential long-term effects of temporary global warming surpassing 2°C on marine ecosystems and species

Structure of the answer:

Introduction: 

Begin by giving context.

Body:

First, write about how elevated temperatures can disrupt ocean ecosystems by impacting coral reefs, marine biodiversity, and food chains. Describe the acidification of seawater and its effects on marine life, including shellfish and corals.

Next, write about even temporary warming can have long-lasting consequences, and these changes may persist for centuries. Highlight the importance of understanding the cumulative effects on future generations.

Next, measures that are needed to reverse the above.

Conclusion:

Conclude by writing a way forward.

Introduction

There is growing consensus that our planet is likely to pass the 1.5°C warming threshold. Research even suggests global warming will temporarily exceed the 2°C threshold, if atmospheric carbon dioxide (CO₂) peaks at levels beyond what was anticipated.

Exceeding our emissions targets is known as a climate overshoot. It may lead to changes that won’t be reversible in our lifetime. These changes include sea-level rise, less functional ecosystems, higher risks of species extinction, and glacier and permafrost loss. We are already seeing many of these changes.

Body

Potential long-term consequences of temperature exceeding 2°C

  • Ocean Acidification: Increased levels of carbon dioxide (CO2) in the atmosphere lead to higher levels of CO2 being absorbed by the oceans. This causes the water to become more acidic, which can harm marine organisms with calcium carbonate shells or skeletons, such as corals, mollusks, and some plankton species. This disrupts the entire food chain, affecting everything from small zooplankton to larger predators.
  • Coral Bleaching: Warmer ocean temperatures can cause corals to expel the colorful algae (zooxanthellae) that live within their tissues. This bleaching weakens corals and makes them more susceptible to disease. If the bleaching events are severe or prolonged, entire coral reef ecosystems can collapse.
  • Loss of Biodiversity: Higher temperatures and changes in ocean chemistry can disrupt the distribution and behavior of marine species. Some species may be able to adapt or migrate, but others, particularly those in more vulnerable or specialized habitats, may face extinction. This can lead to a loss of biodiversity and disrupt the balance of marine ecosystems.
  • Altered Marine Habitats: Rising temperatures can lead to shifts in the distribution and productivity of key habitats like kelp forests, seagrass meadows, and mangrove swamps. These changes can affect the species that rely on these habitats for food, shelter, and reproduction.
  • Impact on Fisheries: Changes in ocean temperatures and chemistry can alter the distribution and abundance of commercially important fish species. This can have significant economic impacts on fishing communities and industries that rely on a stable and predictable marine environment.
  • Rising Sea Levels: Global warming contributes to thermal expansion of seawater and the melting of polar ice caps and glaciers. This leads to rising sea levels, which can inundate coastal habitats, disrupt nesting sites for sea turtles and shorebirds, and increase coastal erosion.
  • Disruption of Ocean Circulation Patterns: Changes in temperature can alter ocean circulation patterns, potentially disrupting crucial currents like the Gulf Stream. This can have far-reaching effects on weather patterns and marine ecosystems around the world.
  • Intensified Storms and Extreme Events: Warmer oceans can fuel more powerful tropical storms and hurricanes, causing damage to coastal habitats and communities. These events can also disrupt the distribution and behavior of marine species.
  • Food Security: Many human populations around the world rely on fish and other seafood as a primary source of protein. Disruptions to marine ecosystems can threaten food security for millions of people, particularly in developing coastal regions.
  • Economic Impacts: The health of ocean ecosystems is closely tied to the global economy. Industries like tourism, shipping, and fisheries rely on stable and healthy marine environments. Disruptions to these ecosystems can lead to economic losses and increased costs for adaptation and mitigation efforts.

Irreversible long term impact

  • Impaired Climate Regulation: Healthy oceans play a crucial role in regulating the Earth’s climate. They absorb large amounts of CO2 and heat, helping to stabilize global temperatures. Irreversible damage to marine ecosystems can weaken this capacity, making it even more challenging to mitigate the impacts of climate change.
  • Legacy of Environmental Debt: Future generations may inherit a world with an environmental debt that cannot be easily repaid. They may face the burden of dealing with the consequences of past actions, with limited ability to reverse or mitigate the damage that has been done.
  • Limited Adaptation Options: Irreversible damage to marine ecosystems can reduce the capacity for adaptation to future environmental changes. This may limit the options available to future generations in responding to ongoing challenges related to climate change and other environmental stressors.
  • Interconnected Global Impacts: The interconnectedness of the global environment means that irreversible damage to marine ecosystems can have ripple effects around the world. Future generations may have to contend with complex, transboundary issues that require coordinated international efforts to address.

 

 

Conclusion

Overall, the long-term consequences of temporary global warming exceeding 2°C on ocean ecosystems and marine life are a matter of concern for future generations because they have far-reaching ecological, economic, and social implications. Addressing climate change and its impacts on the oceans is crucial for the well-being and sustainability of both marine and human communities.

 

 


General Studies – 2


 

Topic: Indian Constitution—historical underpinnings, evolution, features, amendments, significant provisions and basic structure.

2. Money bills are contentious due to their implications for the power balance between the Lok Sabha and the Rajya Sabha. Compare and contrast money bills with financial bills. (250 words)

Difficulty level: Moderate

Reference: The Hindu

Why the question:

The article discusses the issue of money bills in the Indian Parliament and the legal interpretation surrounding them.

Key Demand of the question:

To differentiate between a money bill and a financial Bill along with relevant constitutional provisions and contentious issue with money bill.

Directive word: 

Compare and contrast – provide for a detailed comparison of the two types, their features that are similar as well as different. One must provide for detailed assessment of the two.

Structure of the answer:

Introduction: 

Given context of Articles 110 and 117 of the Indian Constitution.

Body:

Compare and contrast the money bills and financial bills on the following – while both money bills and financial bills deal with financial matters, lies in their origination, the requirement of the President’s recommendation, the process of passage, the role of the Rajya Sabha, and the Speaker’s certification etc. Give examples to substantiate.

Next, throw light on the present controversy related to money bill and how often used as a tool for bypassing the Rajya Sabha, which can only make recommendations on such bills.

Conclusion:

Conclude by giving your balanced opinion.

Introduction

A Finance Bill is a bill that deals with the country’s finances, as the name implies – it could be about taxes, government spending, government borrowings, revenues, and so on. Any bill related to revenue or expenditure is a Financial BillMoney Bill is a specific type of Finance Bill that deals only with matters specified under Article 110(1) and deals with taxes, borrowing, expenditure, etc. It can only be introduced in the Lok Sabha and must be certified by the Speaker.

Recently, Minister for Parliamentary Affairs clarified that The Digital Personal Data Protection (DPDP) Bill is a normal Bill and not a Money Bill.

Body

Comparison of Money Bills and Financial Bills:

Aspect Money Bills Financial Bills
Introduction Can only be introduced in the Lok Sabha Can be introduced in either the Lok Sabha or the Rajya Sabha.
President’s Recommendation Must be introduced on the President’s recommendation. President’s recommendation is necessary for Category I at the introduction stage and for Category II at the consideration stage.
Originating House Must originate only in the Lok Sabha. Category II can originate in either the Lok Sabha or the Rajya Sabha.
Rajya Sabha Involvement Rajya Sabha’s involvement is limited; it can only provide recommendations. (Article 117) Rajya Sabha can fully participate, including amendments and discussions.
Inclusion of RS Recommendations Not mandatory for Money Bills to include Rajya Sabha’s recommendations. Provision for Rajya Sabha’s recommendations to be included in Financial Bills.
Subjects Covered Deals exclusively with matters listed in Article 110(1) of the Constitution. Deals with matters beyond those listed in Article 110(1) and can include other financial provisions.
Certification Certified by the Speaker as a Money Bill if it falls under Article 110(1).
Overriding Authority Lok Sabha’s decision prevails in case of disagreements with the Rajya Sabha. Requires agreement of both Houses for passage.
President’s Role President’s recommendation is essential for the introduction President’s recommendation is required if the Bill involves expenditure from the Consolidated Fund of India.

Conclusion

The primary distinction between a money bill and a finance bill is that a money bill may only be introduced in the lower house of parliament, namely the Lok Sabha, but a finance bill can be introduced in either of the two chambers. Although a money bill is a form of finance bill, most people use the phrases interchangeably; yet, they differ in terms of content.

 

Topic: Important International institutions, agencies and fora- their structure, mandate.

3. The UN Security Council (UNSC) is criticized for its lack of representation of the contemporary global order, and there is a persistent call for reform to make it more inclusive and representative. Comment. (250 words)

Difficulty level: Moderate

Reference: The Hindu

Why the question:

The article discusses the long-standing issue of reforming the United Nations Security Council (UNSC) and presents it as a recurring theme in international diplomacy.

Key Demand of the question:

To write about key issues in UNSC, various reform proposals, and their potential implications.

Directive word:

Comment– here we must express our knowledge and understanding of the issue and form an overall opinion thereupon.

Structure of the answer:

Introduction: 

Start by giving a brief context of UNSC.

Body:

First, write about the primary issues that prompt discussions about UNSC reform, including the Council’s composition and the veto power of its permanent members. Discuss the need for increased representation of African, Asian, and Latin American countries.

Next, write about the various limitations that hinder the above. Challenges and obstacles that have hindered UNSC reform efforts, including differing national interests and concerns about dilution of power.

Conclusion:

Conclude by writing a way forward to overcome the above limitations.

Introduction

India has criticised the slow pace of UN Security Council reform process and opaque methodologies, non-attribution of assertions and obfuscation of references by the member states which are blocking the early reform of the UN. What is ironical is, the permanent member of Security Council, Russia itself has waged a war on Ukraine while it is being given the responsibility to maintain world peace.

Body

India and UNSC

  • India has adopted a multi-layered strategy to assume the long-awaited permanent seat in the Security Council consisting of two components:
    • Maximising support in the UN General Assembly and Minimising resistance in the UN Security Council.
  • India hopes that its continued engagement at various Global South forums such as G 77 and NAM, African Union would garner much needed numbers in the UNGAThis is reflected in India’s strong defence of the principle of sovereignty and the constant voluble criticism of the “Responsibility to Protect.”
  • India’s growing strategic partnerships with the P5, growing economic strength, including the nuclear deals with US, Russia paints a favourable picture for Indian Explicit public declarations supporting India’s candidature as a permanent member in the Council are reiterated by countries like France, UK.
  • India has also formed the G4 with Brazil, Germany, and Japan, its “coalition of the willing”, and a “collaborative strategy” to negotiate reforms of the Council. The four nations support each other’s bids for permanent seats on an expanded Security Council.

Need for UNSC reforms

  • Membership: The current membership of UNSC reflect post-WWII structure. It doesn’t actually reflect the changes that have occurred in the international system after the end of the cold war.
    • Emerging nations like India, Brazil, South Africa etc needs representation in the UNSC as permanent members.
    • The existing membership reflects a regional imbalance, with no representation from Africa or Latin America and Europe being over-represented in the council.
  • Changed Geopolitics: The Security Council’s membership and working methods reflect a bygone era. Though geopolitics have changed drastically, the Council has changed relatively little since 1945, when wartime victors crafted a Charter in their interest and awarded “permanent” veto-wielding Council seats for themselves.
  • Reforms Long Overdue: It was expanded only once in 1963 to add 4 non-permanent members.
    • Although the overall membership of the UN has increased from 113 to 193 but no change in the composition of the UNSC happened.
  • Inequitable economic and geographical representation: While Europe is over represented, Asia is under represented. Africa and South America have no representation at al
  • Crisis of legitimacy and credibility: Stalled reform agenda and various issues including its Interventions in Libya and Syria in the name of responsibility have put the credibility of the institution in jeopardy.
  • North South Divide: The permanent UNSC membership of portrays the big North-South divide in the decision making of security measures.
    • For instance, there is no permanent member from Africa, despite the fact that 75% of its work is focused on Africa.
  • Emerging issues: Issues such as transnational threats, deepening economic interdependence, worsening environmental degradation also call for effective multilateral negotiations based on consensus yet all critical decisions are still being taken by the veto-wielding permanent members of the Security Council.

Way forward

  • The imbalances in power relationships among P5 and the rest of the world needs to be corrected urgently.
  • Also, it is needed to reform the Security Council through an expansion in permanent and non-permanent seats to enable the UN organ to better deal with the “ever-complex and evolving challenges” to the maintenance of international peace and security.
  • India as the current one of the non-permanent members of the UNSC can start by drafting a resolution containing a comprehensive set of proposals for reforming the UNSC.

Value Addition

India’s stature to get permanent membership

  • Founding member of UN.
  • World’s largest democracy and both demographically and geographically holds a significant position.
  • One of the fastest growing large economies in the world.
  • One of the largest contributors to UN peace keeping missions and India suffered highest number of fatalities over the years, which is acknowledged time and again.
  • India is seen as a responsible power, which adheres to rule of law, global norms. India’s elevation will make UNSC more credible, representative.

 

 


General Studies – 3


 

Topic: Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment.

4. Examine the effect of inflation on various macroeconomic parameters. Propose actions that can be implemented to maintain inflation rates within acceptable boundaries. (250 words)

Difficulty level: Easy

Reference: Insights on India

Why the question:

The question is part of the static syllabus of General studies paper – 3 and mentioned as part of Mission-2024 Secure timetable.

Key Demand of the question:

To write about inflation, its impact and measures needed to keep it under control.

Directive word:

Examine – When asked to ‘Examine’, we must investigate the topic (content words) in detail, inspect it, investigate it and establish the key facts and issues related to the topic in question. While doing so we should explain why these facts and issues are important and their implications.

Structure of the answer:

Introduction: 

Begin by defining inflation.

Body:

First, write about the impact of inflation on various macroeconomic parameters – purchasing power, growth, cost of living, availability of credit and exchange rates etc.

Next, write about the measures that are taken to keep inflation under tolerable limits – the monetary policy measures, fiscal policy measures and price control measures.

Conclusion:

Conclude by writing a way forward.

Introduction

Inflation refers to the rise in the prices of most goods and services of daily or common use, such as food, clothing, housing, recreation, transport, consumer staples, etc. Inflation measures the average price change in a basket of commodities and services over time. The opposite and rare fall in the price index of this basket of items is called ‘deflation’. Inflation is indicative of the decrease in the purchasing power of a unit of a country’s currency. This is measured in percentage.

Body

Impact of Inflation on various macroeconomic parameters

  • Inflation is a decrease in the purchasing power of currency due to a rise in prices across the economy.
    • For instance, the average price of a cup of coffee was a 50 paisa. Today the price is closer to 25 Rupees.
  • The value of currency unit decreases which impacts the cost of living in the country.
  • When the rate of inflation is high, the cost of living also increases, which leads to a deceleration in economic growth.
  • However, a healthy inflation rate (2-3%) is considered positive because it directly results in increasing wages and corporate profitability and maintains capital flowing in a growing economy.

Factors for the high rate of inflation in the Indian economy

  • Fuel prices: The government has increased taxation of energy to raise resources.
    • Since energy is used for all production, prices of all goods and services tend to rise and push up the rate of inflation.
    • Further, this is an indirect tax, it is regressive and impacts the poor disproportionately It also makes the RBI’s task of controlling inflation difficult.
  • Supply shortage: The lockdowns disrupted supplies and that added to shortages and price rise.
    • Prices of medicines and medical equipment rose dramatically.
    • Prices of items of day-to-day consumption also rose.
    • Fruits and vegetable prices rose since these items could not reach the urban markets.
  • International factors: Most major economies have recovered and demand for inputs has increased while supplies have remained disrupted (like chips for automobiles).
    • So, commodity and input prices have risen (like in the case of metals).
    • Businesses claim increase in input costs underlies price rise.
  • Data collection and methodology: In April and May 2020, data on production and prices could not be collected due to the strict lockdown.
    • So, the current data on prices for April to July 2021 are not comparable with the same months of 2020.
    • As such, the official inflation figures for these months in 2021 do not reflect the true picture.
  • Weak Rupee: The weakening of the rupee also added to inflation.

Measures to keep the inflation under control

  • Monetary policy Measures: Maintaining price stability is the foremost objective of the monetary policy committee of RBI. However, during the pandemic, growth has taken centre stage and RBI has rightly cut interest rates.
  • Commodity prices: GoI needs to remove supply side bottlenecks. For example, GoI can immediately offload 10-20% of its pulses stock with NAFED in the open market.
  • Fuel prices: Bringing them under GST would reduce the prices by at least 30 rupees. GST council must agree to this with haste.
  • Policy measures: Navigating out of this will need a fiscal stimulus to shore up consumer spending, an investment revival to increase the productive capacity of the economy, and a careful management of inflationary expectations.
  • Concomitantly, the government will also need to pursue redistribution of income to reduce the widening disparity.
  • This also calls for fiscal prudence to cut wasteful spending, find new revenue through asset sales, mining and spectrum auctions, and build investor confidence.

Conclusion

With the rise in inflation amidst a second wave, the balancing acumen of the MPC will now be sorely tested. Factors like rising commodity prices, supply chain disruptions are expected to raise overall domestic inflation. Economists have pointed at India’s K-shaped recovery where a few have benefitted while others have fallen sharply behind. Big companies have benefitted and increased market share, revenues and profits sharply. They have also taken advantage of low interest rates to decrease the cost of their borrowings. Small and medium companies, struggling with falling revenues and cash flows, have not been able to take advantage of the rates. Hence inflation must also be controlled while growth is focussed upon.

 

Topic: Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment.

5. Discuss the causes behind high rate of unemployment in India in the recent past. Suggest measures to ensure adequate job creation in the Indian economy. (250 words)

Difficulty level: Moderate

Reference: Insights on India

Why the question:

The question is part of the static syllabus of General studies paper – 3 and mentioned as part of Mission-2024 Secure timetable.

Key Demand of the question:

To write about steps that are needed to overcome unemployment in the country.

Directive word:

Discuss – This is an all-encompassing directive – you must debate on paper by going through the details of the issues concerned by examining each one of them. You must give reasons for both for and against arguments.

Structure of the answer:

Introduction: 

Begin by giving the context regarding the unemployment in India.

Body:

Firstly, write about the important causes that led to the increasing the levels of unemployment – economic slowdowns, education and skills gaps, dominance of the informal sector, disparities in labor force participation, urban-rural imbalances etc.

Next, write about the steps that must be taken to reduce the employment levels in the economy – Labour-intensive measures, Accelerating Investment, diversification of agriculture, decentralised development and upskilling etc.

Conclusion:

Conclude with a way forward.

Introduction

The National Sample Survey Office (NSSO) data recently reported a decline in India’s unemployment rate in urban areas to 6.6% during April-June 2023 against 7.6% a year ago period. The 19th Periodic Labour Force Survey (PLFS) noted that the unemployment rate (UR) for persons aged 15 years and above in Urban areas was 7.6% in April-June 2022. It was 6.8% in January-March 2023, 7.2% in July-September 2022 as well as October-December 2022.

In a jobless growth economy, unemployment remains stubbornly high even as the economy grows. This tends to happen when a relatively large number of people have lost their jobs, and the ensuing recovery is insufficient to absorb the unemployed, under-employed, and those first entering the workforce. Jobless growth of the Indian economy is a “5C” problem: a Complicated Condition Created by Combinations of Causes.

Body

 Causes of unemployment in India

  • Jobless growth: There is mounting concern that future growth could turn out to be jobless due to de-industrialization, de-globalization, the fourth industrial revolution and technological progress. As per the NSSO Periodic Labour Force Survey 2017-18, India’s labour force participation rate for the age-group 15-59 years is around 53%, that is, around half of the working age population is jobless.
  • Asymmetric demography:The growth in the working-age ratio is likely to be concentrated in some of India’s poorest states and the demographic dividend will be fully realized only if India is able to create gainful employment opportunitiesfor this working-age population.
  • Lack of skills:Most of the new jobs that will be created in the future will be highly skilled and lack of skill in Indian workforce is a major challenge. India may not be able to take advantage of the opportunities, due to alow human capital base and lack of skills.
  • Low human development parameters:India ranks 130 out of 189 countries in UNDP’s Human Development Index, which is alarming. Therefore, health and education parameters need to be improved substantiallyto make the Indian workforce efficient and skilled.
  • Informal nature of economy in Indiais another hurdle in reaping the benefits of demographic transition in India.

Public sector employment as a remedy: Critical analysis

  • The latest data showed that there were 86 lakh vacant jobsamong all central government civilian posts as of March 2020.
  • The government recently announcedAgnipath scheme for youth as a contract employment of four years.
  • But even this measure would be ameliorative in the real economy that continues to remain distressed, a consequence ofeffects of the pandemic in the last few years.
  • The country cannot afford to squander more years in its race to reap the benefits of its demographic dividend, and the push to provide jobs for those seeking to enter the labour force, even if belated, will help ease matters for the medium term.
  • Real jobs in manufacturing, industries, MSME’s are the key to reaping demographic dividend. Skill development will also help in youth getting jobs in high paying services sector.

Measure needed and way forward

  • Building human capital:Investing in people through healthcare, quality education, jobs and skills helps build human capital, which is key to supporting economic growth, ending extreme poverty, and creating a more inclusive society.
  • Skill developmentto increase employability of young population. India’s labour force needs to be empowered with the right skills for the modern economy. Government has established the National Skill Development Corporation (NSDC) with the overall target of skilling/ up skilling 500 million people in India by 2022..
  • Education:Enhancing educational levels by properly investing in primary, secondary and higher education. India, which has almost 41% of population below the age of 20 years, can reap the demographic dividend only if with a better education system. Also, academic-industry collaboration is necessary to synchronise modern industry demands and learning levels in academics.
    • Establishment of Higher Education Finance Agency (HEFA)is a welcome step in this direction.
  • Health:Improvement in healthcare infrastructure would ensure higher number of productive days for young labourforce, thus increasing the productivity of the economy.
    • Success of schemes like Ayushman Bharatand National Health Protection scheme (NHPS) is necessary. Also nutrition level in women and children needs special care with effective implementation of Integrated Child Development (ICDS) programme.
  • Job Creation:The nation needs to create ten million jobs per year to absorb the addition of young people into the workforce. Promoting businesses’ interests and entrepreneurship would help in job creation to provide employment to the large labourforce.
    • India’s improved ranking in the World Bank’s Ease of Doing Business Indexis a good sign.
    • Schemes like Start-up Indiaand Make in India , if implemented properly, would bring the desired result in the near future.
  • Urbanisation:The large young and working population in the years to come will migrate to urban areas within their own and other States, leading to rapid and large-scale increase in urban population. How these migrating people can have access to basic amenities, health and social services in urban areas need to be the focus of urban policy planning.
    • Schemes such as Smart City Mission andAMRUT needs to be effectively and carefully implemented.

 Conclusion

India is on the right side of demographic transition that provides golden opportunity for its rapid socio-economic development, if policymakers align the developmental policies with this demographic shift.

To reap the demographic dividend, proper investment in human capital is needed by focussing on education, skill development and healthcare facilities.

Value-addition

Steps taken by government in recent times

  • Dedicated Shram Suvidha Portal:That would allot Labor Identification Number (LIN) to units and allow them to file online compliance for 16 out of 44 labor laws.
  • Random Inspection Scheme:To eliminate human discretion in selection of units for Inspection, and uploading of Inspection Reports within 72 hours of inspection mandatory.
  • Universal Account Number:Enables 4.17 crore employees to have their Provident Fund account portable, hassle-free and universally accessible.
  • Apprentice Protsahan Yojana:Government will support manufacturing units mainly and other establishments by reimbursing 50% of the stipend paid to apprentices during first two years of their training.
  • Revamped Rashtriya Swasthya Bima Yojana:Introducing a Smart Card for the workers in the unorganized sector seeded with details of two more social security schemes.
  • The National Career Service is being implemented as a mission mode project to provide various job-related services information on skills development courses, internships etc

 

Topic: Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment

6. The Goods and Services Tax (GST) that was introduced to simplify and streamline taxation, has been facing various challenges and complexities, hindering its effectiveness. Critically examine. (250 words)

Difficulty level: Tough

Reference: The HinduInsights on India

Why the question:

The editorial discusses the need for reforms in the Goods and Services Tax (GST) regime in India

Key Demand of the question:

To write about various successes and limitations of GST and reforms that are needed in it.

Directive word: 

Critically examine – When asked to ‘Examine’, we have to look into the topic (content words) in detail, inspect it, investigate it and establish the key facts and issues related to the topic in question. While doing so we should explain why these facts and issues are important and their implications. When ‘critically’ is suffixed or prefixed to a directive, one needs to look at the good and bad of the topic and give a fair judgment.

Structure of the answer:

Introduction: 

Begin by aims and objectives behind the launch of GST.

Body:

First, write about the achievements of GST – simplified tax structure, an increase in the tax base, and a reduction in tax evasion. Substantiate with examples, facts or statistics.

Next, write about the shortcomings of GST – high tax rates, compliance burden, and complexities in the filing process have been faced. Substantiate with examples, facts or statistics.

Next, suggest reforms in GST.

Conclusion:

Conclude with a way forward.

Introduction

The Goods and Services Tax (GST) is one indirect tax for the whole nation, which will make India one unified common market. GST is a single tax on the supply of goods and services, right from the manufacturer to the consumer. Credits of input taxes paid at each stage will be available in the subsequent stage of value addition, which makes GST essentially a tax only on value addition at each stage. The final consumer will thus bear only the GST charged by the last dealer in the supply chain, with set-off benefits at all the previous stages.

GST is an indirect tax system which was rolled out on 1st July 2017 The Comptroller and Auditor General of India (CAG) has pointed out lacunae in the GST regime, saying that system-validated input tax credit through invoice matching is not in place and a non-intrusive e-tax system still remains elusive.

Body

Performance of the GST regime

  • Revenue collection:
    • The average growth rate of Gross GST revenue from 2018-19 to 2022-23 stands at 3%, surpassing the nominal GDP growth rate of 9.8%.
    • The (June 2023) collection has crossed the 1.6 lakh crore markfor the 4th time since the inception of GST.
    • This is noteworthy as indirect taxes typically exhibit lower buoyancy– an increase in its revenue rate without increasing the tax rate.
  • A seamless market and digitised compliance:
    • GST laid the foundation for a seamless national market, reshaping India’s tax landscape and driving economic growth.
    • By digitising processes from registration to return filing, the GST portal ensured smoother compliance for businesses, fostering a tech-enabled environment.
    • It paved the way for other significant indirect tax reforms, including e-way bills and e-invoicing, promoting transparent data sharing between businesses and the government.
  • Empowering the manufacturing sector:GST’s impact on the manufacturing sector was remarkable, as it eliminated the cascading effect of taxes and reduced manufacturing costs.
  • Introduced as one of the biggest economic reforms by the incumbent government, the GST kicked off with the promise to streamline taxation and compliance burden.
  • Based on the one nation one tax ideology, GST has helped in reducing the cascading effect of tax considerably.
  • Also, multiplicity of compliances under various indirect taxes has been reduced.
  • Hence, introduction of GST in India has brought in efficiencies in indirect tax compliance, incidence and reduced the number of indirect tax authorities that a taxpayer needed to interact with
  • Another positive is the concept of e-invoicing which seeks to ensure greater transparency in supplier-receiver transactions.
  • The introduction of e-way bill coupled with the crackdown on fake invoicing has helped in bringing in a substantial portion of GST revenues, which were either being evaded or under-reported, in order.
  • Over 53 lakh taxpayers and 67,000 transporters are enrolled on the e-way portal, generating, on average, 7.81 crore e-way bills per month. Since the launch of the system, a total of 292 crore e-way bills have been generated of which 42 per cent are for the inter-state transport of goods.
  • GST has eliminated the tax arbitrage that existed among the states under the CST/VAT regime.
  • Increase in logistic supply chain: With no such arbitrage under the IGST and with the e-way bills, the logistics supply chain efficiencies have increased manifold.

Various issues with respect to goods and services tax (GST) regime

  • The breakdown of trust and cooperative federalism between states and the Union government:
    • It turned out to be prescient as GST failed to live up to its economic promises and states’ revenues were protected through this guarantee, despite Finance’s attempt to wriggle out of this commitment during the pandemic under the alibi of an “act of God”.
    • The Union government’s proclivity to levy and appropriate cess revenues for itself without sharing them with the states has lent credence to the wisdom of guaranteed compensation for states.
    • This guarantee is now set to expire..
  • The recent Supreme Court’s judgment highlighting that the GST Council’s recommendations are not binding on the states:
    • The SC recently observed that it is in the national interest to have both cooperative and competitive federalism, and hence, the GST Council’s decisions are not binding on the states.
    • This means that states had and continue to have the right to either comply fully with the Council’s recommendations or modify them as they deem necessary.
    • This has opened the window for states to override the fundamental GST premise of a “one nation one tax”.
    • If pushed to a corner, states may now use the SC ruling as a shield.
  • Expiry of the revenue guarantee that protected states’ revenues 
    • GST is too precariously perched to yank away the compensation guarantee for states.
    • the Union government is not desirous of extending the compensation guarantee.
  • Difficulty in tax administration:
    • Goes against the canons of taxation.
    • A modern tax system should be fair, uncomplicated, transparent and easy to administer.
    • It must yield revenues sufficient to cover the cost of government services and public goods.
    • Lack of clarity on many rules is also leading to various litigation and different interpretations (of the same laws) by Advanced Ruling Authorities in different states.
  • Complicated taxation structure:
    • A World Bank study published in May 2018 said that the Indian GST rate was the second highest among the 115 countries with a national value-added tax.
    • It was also the most complicated, with five main tax rates, several exemptions, a cess and a special rate for gold.
    • The multilateral lender said that only five countries had four or more non-zero tax rates—India, Italy, Pakistan, Luxembourg and Ghana.
    • Falling revenue amid disruptions caused by the Covid-19 pandemic has continuously delayed the reform, leaving a large number of items in high tax slabs.
  • High compliance costs:are also arising because the prevalence of multiple tax rates implies a need to classify inputs and outputs based on the applicable tax rate. Along with the need to apply the correct rate, firms are required to match invoices between their outputs and inputs to be eligible for full input tax credit, which increases compliance costs further.
  • GST Council meetingsthe meetings of the GST Council are not as frequent as they were earlier, if the recent incidents are anything to go by, and it often end up with disagreement, fight and strong letters and statements. States have also accused the Centre of cornering a substantial portion of tax in forms of cess.
  • There has been lack of coordination between the Department of Revenue, the Central Board of Indirect Taxes and Customs and the GST Network.

Way Forward

  • The first target should be to move to at least a three-rate structure, a lower rate for essential goods, a relatively high rate for luxury goods, and a standard rate for the majority of goods and services.
  • The next step would be simplifying the tax returns process.
  • The scope for lowering the GST rate is umbilically linked to direct tax reform.
  • Commence taxation of petroleum crude, high-speed diesel, petrol, natural gas and aviation turbine fuel and similarly, alcohol meant for human consumption;
  • Inclusion of other levies such as electricity duty, stamp duty, etc;
  • Clarifying taxation of online gaming activities, transactions involving cryptocurrency, etc.
  • A better way to make a tax system more just is by lowering regressive indirect tax rates while widening the base for progressive direct taxeson income and corporate profits.
  • The government needs to establishGST Tribunals to reduce litigation timelines and the pressure on courts.
  • The state authorities for Advance Ruling should ideally also have an independent jurist member, apart from a representative from the tax department.
  • Emulating the best practices. The GST in New Zealand, widely regarded as the most efficient in the world, has a single standard rate of 12.5 percent across all industry groups.
  • The Fifteenth finance commission, in its latest report, has addressed many issues including large shortfall in collections as compared to original forecast, high volatility in collections, accumulation of large integrated GST credit, glitches in invoice and input tax matching, and delay in refunds.
  • The Commission also observed that the continuing dependence of states on compensation from the central government for making up for the shortfall in revenue is a concern.
  • While at the same time it suggested that the structural implications of GST for low consumption states need to be considered.

Conclusion

While the GST’s journey has given its stakeholders some causes to celebrate, it has also given moments of worry. But then, no transformation of the scale and complexity can be achieved without its share of hiccups and challenges. The process of evolution will take a few years more for the mammoth structural change to stabilize. The four-year journey of GST has been a roller-coaster ride for all stakeholders with equitable share of hits, misses and expectations. A work-in-progress in its transformational journey, GST suffers from several shortcomings which need to be resolved quickly, but its journey to ‘Good & Simple Tax’ is still quite long.

 

 


General Studies – 4


 

Topic: Citizen’s Charters

7. List the inadequacies of citizen charters in India and propose ways to enhance their effectiveness to enhance the delivery of public services. (150 Words)

Difficulty Level: Moderate

Why the question:

The question is part of the static syllabus of General studies paper – 4.

Structure of the answer:

Introduction:

Begin by defining citizen charter.

Body:

First, mention the shortcoming of citizen charters – not formulated through a consultative process, lack of awareness, absence of grievance redressal etc.

Next, suggest steps to overcome the above shortcomings.

Conclusion:

Conclude by stressing on need to make the charters effective to provide high quality public service delivery.

Introduction

Citizens’ Charter represents the commitment of the Organisation towards standard, quality and time frame of service delivery, grievance redress mechanism, transparency and accountability. The concept of Citizens Charter enshrines the trust between the service provider and its users.

 Department of Administrative Reforms and Public Grievances in Government of India (DARPG) initiated the task of coordinating, formulating and operationalising Citizen’s Charters.

Body

The basic objective of the Citizens Charter is to empower the citizen in relation to public service delivery.

 

Importance of Citizen’s charter in the Governance of developing nation like India:

  • To make administration accountable and citizen friendly.
  • To ensure transparency.
  • To take measures to improve customer service.
  • To adopt a stakeholder approach.
  • To save time of both Administration and the citizen

Problems faced in implementation of Citizen’s charter:

  • Poor adherence: Little interest shown by the organizations in adhering to their CC. since there is no citizen friendly mechanism to compensate the citizen if the organization defaults.
  • One size fits all: Tendency to have a uniform CC for all offices under the parent organization. CC have still not been adopted by all Ministries/Departments. This overlooks local issues.
  • Silo operations: Devoid of participative mechanisms in a majority of cases, not formulated through a consultative process with cutting edge staff who will finally implement it.
  • Non-Dynamic: Charters are rarely updated making it a one-time exercise, frozen in time.
  • Poor design and content:lack of meaningful and succinct CC, absence of critical information that end-users need to hold agencies accountable.
  • Lack of public awareness:only a small percentage of end-users are aware of the commitments made in the CC since effective efforts of communicating and educating the public about the standards of delivery promise have not been undertaken.
  • Stakeholders not consulted: End-users, Civil society organizations and NGOs are not consulted when CCs are drafted. Since a CC’s primary purpose is to make public service delivery more citizen-centric, consultation with stakeholders is a must.
  • Measurable standards of delivery are rarely defined:making it difficult to assess whether the desired level of service has been achieved or not.

Way forward:

  • Wide consultation process: CC be formulated after extensive consultations within the organization followed by a meaningful dialogue with civil society.
  • Participatory process: Include Civil Society in the process: to assist in improvement in the contents of the Charter, its adherence as well as educating the citizens about the importance of this vital mechanism.
  • Firm commitments to be made: CC must be precise and make firm commitments of service delivery standards to the citizens/consumers in quantifiable terms wherever possible.
  • Redressal mechanism in case of default: clearly lay down the relief which the organization is bound to provide if it has defaulted on the promised standards of delivery.
  • One size does not fit all: formulation of CC should be a decentralized activity with the head office providing only broad guidelines.
  • Periodic updation of CC: preferably through an external agency.
  • Fix responsibility: Hold officers accountable for results: fix specific responsibility in cases where there is a default in adhering to the CC.

Conclusion

Citizen’s Charter is playing a prominent part in ensuring “minimum government & maximum governance”, changing the nature of charters from non-justiciable to justiciable & adopting penalty measures that will make it more efficient & citizen friendly. The Sevottam model proposed by 2nd Administrative Reforms Commission for public Service Delivery can be regarded as a standard model for providing services in citizen centric governance.


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