Wednesday, September 02, 2020
INSTA PT 2020 Exclusive Art & Culture Part-2 PDF
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Psychology Notes by Mukul Pathak Part-2 PDF
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GS Score Current Affairs 2020 Yearly Compilation International Relations Vol-2 PDF
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Tuesday, September 01, 2020
Daily Current Affairs, 01st September 2020
VisionIAS
21:38
1) PM Narendra Modi announced September to be observed as “Nutrition month”
•During the Nutrition Month, Food and Nutrition Quiz and meme competition will be organised by the MyGov portal. The month will be celebrated across India to educate everyone on the importance of optimum nutrition. The nutrition month was celebrated earlier in September 2018 and 2019.
2) Dept. of Fertilizers observes Swachhta Pakhwada from 1-15 September 2020
•Swachhta Pakhwada has become more relevant in year 2020 in view of the outbreak of COVID 19 pandemic. The initiative was launched to bring a fortnight of intense focus on the issues as well as practices of Swachhata by engaging GOI Ministries/Departments in their jurisdictions. The Ministries observing Swachhata Pakhwada are monitored closely with the help of online monitoring system of Swachhata Samiksha.
3) Japan commits ODA of Rs 3500 crore to fight COVID-19 in India
•The ODA loan will support India’s efforts in its fight against COVID-19. It will also assist the country to prepare the health system to handle future epidemics. It will also increase the resilience of India’s health systems against infectious diseases.
•Japanese government has also committed Grant Assistance of an amount of JPY 1 billion (approx. Rs. 70 crore) for offering medical equipment to bolster the public health and medical system in India.
4) Committee set up to review effective utilisation of AFHQ CS cadre
•The 3-member committee will conduct a study and find out such appointments in Service HQs and Inter-Service Organisations (ISO) that may fall under the domains of AFHQ CS officers as recognised in the report by the committee of experts due to their longer tenures and expertise. It will also interact with various branches, directorates of service headquarters as well as ISOs for the study. The committee is expected to submit its report by November.
5) Ease of Doing Business report suspended by World Bank
•World Bank would conduct a systematic review of data changes in the last five Doing Business reports, and independent auditors will probe data collection and review processes. The last Doing Business report was published in October 2019 in which India was ranked 63rd while New Zealand was on top.
6) India withdraws from Russia military exercise Kavkaz 2020
•Kavkaz 2020 would be held in Astrakhan province of Southern Russia where member countries of Shanghai Cooperation Organisation (SCO) and Central Asian countries would be participating. Other countries that would participate in this exercise are China, Pakistan, Russia, Kazakhstan, Kyrgyzstan, Tajikistan, Uzbekistan, Mongolia, Syria, Iran, Egypt, Belarus, Turkey, Armenia, Abkhazia, South Ossetia, Azerbaijan and Turkmenistan.
7) CSIR-CMERI develops World’s Largest Solar Tree
•The Solar Tree has been designed in such a way that it ensures maximum exposure of each Solar PV Panel to Sunlight. A single solar tree comprises of 35 Solar PV Panels each having a capacity of 330 wp each. The energy generation data of the tree can be monitored either real-time or on daily basis. This tree will also ensure minimum Shadow Area which will make it available for usage in Agricultural activities like High Capacity Pumps, e-Tractors and e-Power Tillers.
8) Indian economy contracted by 23.9% in Q1 of 2020-21
•According to the latest release, the GDP at Constant (2011-12) Prices in Q1 of 2020-21 is estimated at Rs 26.90 lakh crore. This value was Rs 35.35 lakh crore in Q1 of 2019-20. Hence, the Indian economy has experienced a contraction of 23.9% as compared to 5.2% growth in Q1 2019-20.
•While the GDP at Current Prices in the year Q1 2020-21 is estimated at Rs 38.08 lakh crore. This value was Rs 49.18 lakh crore in Q1 2019-20. Hence, it showed a contraction of 22.6% as compared to 8.1% growth in Q1 2019-20.
9) Rajiv Kumar takes charge as new Election Commissioner of India
•Rajiv Kumar is a 1984 batch Indian Administrative Service Officer, with more than 36 years of Government of India service. He has a very rich work experience across various sectors namely Social Sector, Environment & Forests, Human Resources, Finance and Banking Sector. He retired in February 2020 as Finance Secretary, Government of India and later on served as the Chairman of Public Enterprises Selection Board from April 2020 to 31st August 2020.
10) MoD signs contracts worth Rs 2580 Cr with BEML, TPCL & L&T
•Induction of Six Pinaka Regiments which comprise 114 Launchers with Automated Gun Aiming & Positioning System (AGAPS); 45 Command Posts to be procured from M/s TPCL and M/s L&T and 330 Vehicles to be procured from M/s BEML, is planned to be completed by 2024. It will also provide further boost to the ‘Make in India’ initiative of Government of India in the Defence Sector.
The HINDU Notes – 01st September 2020
VisionIAS
21:02
📰 GST reform needs a new grand bargain
The GST compensation issue strengthens the necessity for a new system between sovereign and sub-sovereign entities
•Three years ago, the Centre and the States of the Union of India struck a grand bargain resulting in the launch of the unified Goods and Services Tax (GST) era. The States gave up their right to collect sales tax and sundry taxes, and the Centre gave up excise and services tax. The nationwide GST promised frictionless commerce across State borders,buoyant and leakproof tax compliance, and removal of inefficiencies like the cascade of “tax on tax”. This historic grand bargain was the result of painstaking consensus building, which inter alia involved addressing the apprehension of States, of revenue loss due to the GST.
Abdication of responsibility
•Their consent was secured by a promise of reimbursing any shortfall in tax revenues for a period of five years. This reimbursement was to be funded by a special cess called the GST compensation cess. The promised reimbursement was to fill the gap for an assured 14% year on year tax growth for five years, and it was generous to a fault. Neither the national aggregate nor any of the major States had this record for the previous five years.
•But that was not the only fault with the design, which had also failed to learn from the successful design of harmonising Value Added Tax (VAT) rates across the nation, implemented just a decade ago. VAT was the precursor to GST and also needed a consensus. That design too had an inbuilt reimbursement formula. But that tapered over the years, making room for incentives for tax effort from the States, sort of “skin in the game”.
•As the economy battles a pandemic and recession, the tax collection has dropped significantly, while expenditure needs are sharply higher, especially at the frontline of the battle, at the State level. But it seems that the States have been told that they are on their own to meet the shortfall in revenues. Using an equivalent of the Force Majeure clause in commercial contracts, the Centre is abdicating its responsibility of making up for the shortfall in 14% growth in GST revenues to the states.
The onus is on the Centre
•This is wrong on many counts. First, the States do not have recourse to multiple options that the Centre has, such as issue of a sovereign bond (in dollars or rupees) or a loan against public sector unit shares from the Reserve Bank of India. Second, the Centre can anyway command much lower rates of borrowing from the markets as compared to the States. Third, in terms of aggregate public sector borrowing, it does not matter for the debt markets, nor the rating agencies, whether it is the States or the Centre that is increasing their indebtedness. Fourth, fighting this recession through increased fiscal stimulus is basically the job of macroeconomic stabilisation, which is the Centre’s domain. Fifth, and most importantly, breaking this important promise, using the alibi of the COVID-19 pandemic causes a serious dent in the trust built up between the Centre and States.
•Cooperative federalism is in the nature of a “repeated game” between the two entities, and every action must think of the future consequences, not just the immediate ones. Will it not weaken the foundation of trust?
•Kautilya too would have advised the sovereign against reneging on the promised bailout, as fulfilling the obligation helps build trust with sub-sovereigns.
The Australian example
•The issue of GST compensation to the States is just the latest in the bumpy three-year journey of the new tax design. It is clear that the design needs a radical overhaul. Just tinkering with the compensation mechanism, or frequently changing rate slabs, or pushing more goods in the “sin tax” cess category, to earn revenue that is not shareable with the States, is not the way forward. What we instead need is a Grand Bargain 2.0 between the sovereign and the sub-sovereign entities.
•What would this be based upon? We have to go back to first principles. GST is a destination-based consumption tax, which must include all goods and services with very few exceptions, such as food and medicine. That widening of the tax base itself will allow us to go back to the original recommendation of a standard rate of 12%, to be fixed for at least a five-year period.
•A comparison with Australia which also coincidentally shares its GST anniversary with India, is apt. For the past two decades their GST rate has been constant at 10%. Of course India’s single rate of 12% has to cover petrol, diesel, electricity, transport and real estate as well. Some extra elbow room for the States’ revenue autonomy is obtained by allowing the States non VATable surcharges on a small list of “sin” goods such as liquor, tobacco, polluting goods such as sport utility vehicles, and industrial fuels such as diesel, aviation turbine fuel and coal. A low moderate single rate of 12% encourages better compliance, reduces the need to do arbitrary classification and discretion, reduces litigation and will lead to buoyancy in collection.
•Incidentally this redesign will scrupulously avoid the bogey of a “revenue neutral rate” (RNR) which needlessly occupied the attention of lawmakers and officials. GST is a long-term structural reform, while RNR is a short term and basically an elusive concept. In the long term there are many changes in consumption patterns, production configurations and locations, which cannot be anticipated and hence a static concept of RNR cannot be reference. The commitment to a low and stable rate, à la Australia and many other federal democracies, is a must. Of course the compensation-cum-reimbursement incentive can remain, but more in the nature of what was done for VAT harmonisation.
Third tier of government
•This new grand bargain must recognise the increasing importance of the third tier of government. Even after 28 years of the 73rd and 74th Amendments, the local governments do not have the promised transfer of funds, functions and functionaries. These local bodies face increased responsibility of providing government services especially in view of increased urbanisation and decentralisation. Of the 12% GST, 10% should be equally shared between the States and the Centre, and 2% must be earmarked exclusively for the urban and rural local bodies, which ensures some basic revenue autonomy to them. The actual distribution across panchayats, districts and cities would be given by respective State Finance Commissions. GST consumption tax paid by every citizen establishes a tighter link between the governed and the government. The quality of governance improves as also, the tax base is better aligned with responsibilities of various tiers of government.
Other changes
•This fresh approach also calls for an overhaul of the interstate GST and the administration of the e-way bill. Research papers by Bhaskar and Kelkar (“Reforming Integrated GST: Towards accelerating exports Policy Brief” by Dr. V. Bhaskar and Dr. Vijay Kelkar and “National Agenda for 2019 – A proposal for the GST reform” by Dr. V. Bhaskar and Dr. Vijay Kelkar — https://bit.ly/3jlXnpo andhttps://bit.ly/3jyb6JB)describe the simplified mechanism, which essentially reduces the transaction costs drastically. The current system is too complex and burdensome. We also need to zero rate exports. GST is a crucial and long-term structural reform which can address the fiscal needs of the future, strike the right and desired balance to achieve co-operative federalism and also lead to enhanced economic growth. The current design and implementation has failed to deliver on that promise. A new grand bargain is needed.
📰 The environment is a national issue
Vision IAS Monthly Current Affairs July 2020 [Hindi Medium] pdf Download
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GS Score Current Affairs 2020 Yearly Compilation Indian Polity Vol-2 PDF
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