UPSC Key | Modi-Biden meet, Indus Civilisation, Streamlining GST and more

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Front Page

Biden, Modi meet ahead of Quad; China, Ukraine, Israel on table

UPSC Syllabus:

Preliminary Examination: Current events of national and international importance

Mains Examination: GS-II: Effect of policies and politics of developed and developing countries on India’s interests, Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests.

What’s the ongoing story- US President Joe Biden welcomed Prime Minister Narendra Modi Saturday at his home in Wilmington, Delaware, on the margins and ahead of the 6th Quad summit.

Prerequisites:

— What is Quadrilateral Security Dialogue or the Quad?

— How was the Quad formed, and what are its objectives?

— What is the history of bilateral relations between India and the US?

— Map work: Locate Quad member countries. (Refer Atlas)

Key takeaways: 

— The leaders are expected to discuss China’s assertive behaviour in the Indo-Pacific, the Russia-Ukraine war; and the rising tension in West Asia in the wake of the Israel-Hamas conflict.

— After the meeting with Modi that lasted about an hour, Biden said: “The US partnership with India is stronger, closer, and more dynamic than any time in history.”

— Biden offered to host the Quad leaders’ summit — swapping with India which will now host in 2025 — and this is being seen as his “farewell summit.”

— The Modi-Biden bilateral will be watched by many as the two leaders take stock of the state of the relationship that has faced challenges in the last year over the assassination plot of a pro-Khalistan separatist figure in the US.

— However, convergences far outweigh the differences: the strategic alignment has deepened, there is a growing and shared concern about an aggressive Beijing, access to technology and capital, and the US is emerging as the most favoured destination for Indian youth for education, jobs and innovation.

— As part of the summit, the leaders are also likely to announce new initiatives to bolster maritime security in the region — with enhanced coast guard collaboration through the Pacific and Indian oceans — and to improve cooperation on humanitarian response missions.

For Your Information:

— Quad is the informal strategic dialogue between India, USA, Japan and Australia. The four nations share a common objective to ensure and support a “free, open and prosperous” Indo-Pacific region.

— Quad is not structured like a typical multilateral organisation, and lacks a secretariat and any permanent decision-making body (like the EU or UN). Instead, it has focused on expanding existing agreements between member countries and highlighting their shared values. Additionally, unlike NATO, the Quad does not include provisions for collective defence, instead choosing to conduct joint military exercises as a show of unity and diplomatic cohesion.

Points to Ponder: 

— What are the areas of cooperation between India and the US?

— What are the challenges faced by India-US bilateral ties?

— What is the significance of Quad?

— What are the challenges faced by the Quad?

(Thought Process: Challenges presented by the  Russia-Ukraine war, the continuing China threat, and other non-security issues) 

Post Read Question:

(1) Which of the following countries are the members of the Quad grouping?

1. India

2. United States

3. United Kingdom

4. Australia

5. Japan

Select the correct answer using the codes given below:

(a) 1, 2, 3 and 4

(b) 1, 2, 4, and 5

(c) 1, 2, 3 and 5

(d) 1, 3, 4 and 5

Other Important Articles Covering the same topic:

UPSC Essentials: One word a day- Quad

 

Economy

Streamlining GST structure: The complications and the way ahead

UPSC Syllabus:

Preliminary Examination: Current events of national importance and economic development

Mains Examination: GS-II, GS-III: Government policies and interventions,  IndianEconomyandissues relating to planning, mobilisation, of resources, growth.

What’s the ongoing story- As the Goods and Services Tax (GST) authorities set out to chart the future roadmap of the indirect tax regime, seven years after its implementation in July 2017, the biggest question in the minds of stakeholders is — can it be simplified further? 

Prerequisites:

— What is Goods and Services Tax (GST)?

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

— Know in detail about the GST Council and Article 279A of the Constitution of India. 

Key takeaways: 

— A less-complex GST structure essentially would imply a reduction in the number of tax slabs, minimal carve outs and exemptions, easier compliance mechanism and rates at a level at which both states and the Centre are able to safeguard their revenue streams.

— It’s not the first time that the multiplicity of rates under GST has been flagged as an issue. Multiple rates, especially for different parts of the same item, often result in classification disputes. At multiple times over the course of the last six years, the GST Council has worked towards clarifying discrepancies in the rate structure. 

— At a time when the average monthly gross GST collections have stabilised around Rs 1.8 lakh crore with a year-on-year growth rate of 10 per cent, most stakeholders are reluctant to undertake any major change in the rate structure. 

— The ideal solution could have been to have a flat rate with no exemptions or carve outs as is the case in many countries such as Singapore and New Zealand. This was raised during the initial discussions at the time of the rate setting exercise before the GST rollout in India but it was viewed to be complicated for a country with a variety of products like India.

— There could be other possibilities also to bring in uniformity in the GST rates. Former Central Board of Indirect Taxes and Customs (CBIC) Chairman Najib Shah said that merging of rates would be challenging but if there is consensus that it has to be done, then options are many — either it could be merged chapter wise or the rates could be converged.

— Experts are also of the view that formation of industry-specific committees of officers, as was done during the initial rollout phase of GST, may now help the GST authorities to understand the finer details of the issues being faced by businesses across sectors. 

— Proposals to merge 12 and 18 per cent slabs or 5 and 12 per cent slabs have featured in internal discussions of the GST authorities. However, concerns about a potential loss of revenue through any major change in tax slabs looms large.

For Your Information:

— GST is a consumption tax and is levied at the final consumption point. The principle used in GST taxation is the Destination Principle. It is levied on the value addition and provides set-offs. As a result, it avoids the cascading effect or tax on tax which increases the tax burden on the end consumer. 

— It is collected on goods and services at each point of sale in the supply line. The GST that a merchant pays to procure goods or services can be set off later against the tax applicable on supply of goods and services.

Points to Ponder: 

— What are the advantages of GST?

— What are the challenges associated with the GST?

— What are the proposed reforms to streamline the GST structure? 

— How does streamlining the GST structure align with India’s economic growth and fiscal federalism?

Post Read Question:

(2) What is/are the most likely advantages of implementing ‘Goods and Services Tax (GST)’? (UPSC CSE 2017)

1. It will replace multiple taxes collected by multiple authorities and will thus create a single market in India.

2. It will drastically reduce the ‘Current Account Deficit’ of India and will enable it to increase its foreign exchange reserves.

3. It will enormously increase the growth and size of economy of India and will enable it to overtake China in the near future.

Select the correct answer using the code given below:

(a) 1 only

(b) 2 and 3 only

(c) 1 and 3 only

(d) 1, 2 and 3

Other Important Articles Covering the same topic:

Explained: What is the GST Council, and what does it do?

The deposit crunch faced by banks and why that is crimping their ability to lend

UPSC Syllabus:

Preliminary Examination: Economic development

Mains Examination: GS-III: Indian Economy and issues relating to planning, mobilisation, of resources, growth.

What’s the ongoing story- The Reserve Bank of India Governor Shaktikanta Das had, in July, raised concerns over slower deposit mobilisation compared to credit growth stating that as it may create structural liquidity issues.

Prerequisites:

— What is the process of credit creation by the Commercial bank?

— What is the capital market? 

— Read about the RBI.

Key takeaways: 

— In a potentially worrying trend, S&P Global on Thursday forecasted that year-on-year credit growth is set to decline during the current financial year to 14 per cent, compared to 16 per cent in the previous fiscal year.

— A healthy credit growth rate is essential to maintain economic momentum, especially in an economy such as India where bank credit is a key component. However, for banks to extend credit, deposits must grow in tandem. 

— But banks are currently experiencing a deposit crunch, which is limiting their ability to extend credit. This has led to a widening gap between bank deposits and credit growth, resulting in the worst deposit crunch in two decades.

— Current and savings accounts (CASA) – the banks’ primary low-cost funding sources, account for 41 per cent of total deposits, down from 43 per cent last year. Expressing worry over the declining CASA, former Department of Financial Services (DFS) Secretary Vivek Joshi had told the Indian Express in July that CASA should not fall below 40 per cent.

— The Reserve Bank of India Governor Shaktikanta Das had, in July, raised concerns over slower deposit mobilisation compared to credit growth stating that as it may create structural liquidity issues. The Governor said that households and consumers, who traditionally rely on banks for parking or investing their savings, are increasingly turning to the capital markets and other financial intermediaries.

— Meanwhile, S&P Global also said that “regulatory actions to tame unsecured lending” are also slowing credit growth. The RBI recently increased risk weights for unsecured loans which has moderated loan growth in this segment in recent months.

For Your Information:

— The slowdown in deposit growth comes amid an outflow of household savings from banks to capital markets. Following the Covid-19 pandemic, the Indian capital markets have seen a meteoric rise. However, economists say that the shift in households’ saving behaviour towards alternative saving instruments has not alone lowered bank deposits as a move to alternate saving instruments would still imply that the money finds its way into bank deposits.

Points to Ponder: 

— What is the significance of bank deposits for the economy?

— What are the reasons for the decline in the deposit ratio?

— What are the implications of a deposit crunch on credit flow, investment, and growth?

— What measures can be taken by banks and regulators to address the challenge of deposit crunch and ensure sustainable lending?

Post Read Question:

(3) Consider the following statements:

Statement 1: The banking sector has been struggling with slower growth in deposits compared to credit.

Statement 2: As the gap increases between deposits and credit, it creates an asset-liability mismatch for lenders.

Which one of the following is correct in respect of the above statements?

(a) Both Statement 1 and Statement 2 are correct and Statement 2 is the correct explanation for Statement 1.

(b) Both Statement 1 and Statement 2 are correct and Statement 2 is not the correct explanation for Statement 1.

(c) Statement 1 is correct but Statement 2 is incorrect.

(d) Statement 1 is incorrect but Statement 2 is correct.

Other Important Articles Covering the same topic:

As banks face slowdown in deposit growth, what they are doing to reverse trend

A Financing Challenge

 

Govt & Politics

Govt plans ‘non-skippable’ anti-tobacco ads on OTT

UPSC Syllabus:

Preliminary Examination: Current events of national importance

Mains Examination: GS-II: Government Policies and Interventions and Health 

What’s the ongoing story- The Union Health Ministry has proposed a non-skippable health spot of not less than 30 seconds and an audio-visual disclaimer of not below 20 seconds on ill-effects of tobacco to be displayed on OTT platforms as soon as one starts streaming them.

Prerequisites:

— What are OTT platforms?

— How are the over-the-top (OTT) and other platforms regulated in India?

— Read about theCigarettes and Other Tobacco Products Act. 

Key takeaways: 

— Any content released on the platforms on or after September 1, 2023, that shows tobacco use has to carry a prominent static message at the screen’s bottom for the duration tobacco use is shown.

— The draft notification of the Ministry also states that all films released on or after September 1, 2023 — whether or not certified by the Central Board of Film Certification, whether Indian or foreign — will have to display an anti-tobacco health spot of 30 seconds duration in the beginning and the middle of the film, have an audio-visual disclaimer of 20 seconds before the film and display a static message for the duration tobacco use is shown.

— With the rules formulated under the Cigarettes and Other Tobacco Products Act, legal action can be taken against OTT platforms for not complying.

For Your Information:

— OTT, or over-the-top platforms, are audio and video hosting and streaming services which started out as content hosting platforms, but soon branched out into the production and release of short movies, feature films, documentaries and web-series themselves.

— These platforms offer a range of content and use artificial intelligence to suggest to users the content they are likely to view based on their past viewership on the platform. 

Points to Ponder: 

— What are the key provisions of India’s tobacco control laws?

— How do India’s tobacco control laws apply to advertising on digital platforms like OTT?

— What are the challenges associated with mandatory anti-tobacco advertisements on OTT platforms?

Post Read Question:

(4) With reference to the Over the top (OTT) streaming platforms, consider the following statements:

1. They require permission or a licence from the Union government.

2. They fall under the jurisdiction of the Telecom Regulatory Authority of India (TRAI).

Which of the statement(s) given above is/are correct?

(a) 1 only

(b) 2 only

(c) Both 1 and 2

(d) Neither 1 nor 2

Other Important Articles Covering the same topic:

OTT platforms do not fall under TRAI jurisdiction

NGT orders classification of Nainital town into prohibited, regulated, development zones

UPSC Syllabus:

Preliminary Examination: Current events of national importance and Environment

Mains Examination: GS-II, GS-III: Statutory, regulatory and various quasi-judicial bodies; Conservation, environmental pollution and degradation, environmental impact assessment.

What’s the ongoing story- Bearing in mind its environmental sensitivity, the National Green Tribunal (NGT) has ordered to classify Nainital town on the lines of a prohibited, regulated and development zone.

Prerequisites:

— What is the National Green Tribunal (NGT)?

— What are the powers and functions of NGT?

— Read about the Nainital Lake or Naini Lake

Key takeaways: 

— It has also directed the Uttarakhand government to evolve a mechanism for monitoring these zones by forming multi-district committees of officials, experts and local representatives from different fields.

— “…We are of view that based on carrying capacity and environmental sensitivity, Nainital town may be classified in different zones…development or prohibited zone, regulated zone with rider based on existing state of environmental conditions,” the order stated.

— The order comes at a time when Nainital Lake or Naini Lake has been under threat of drying up due to climate change-linked environmental factors as well as unchecked development activities such as encroachments and tree felling in the lake’s catchment area.

— Based on the site visit and the findings, the amicus had submitted a set of recommendations to the green court. Key among them was the recommendation to determine the carrying capacity of Nainital town.

— This carrying capacity was recommended to be based on factors such as hydrology, drainage and sanitation load bearing status, vegetation and current tourism trends.

For Your Information:

– Carrying capacity refers to the maximum threshold of population an area can bear in relation to the available resources.

— NGT was established in 2010 as a specialised body with judicial and expert minds to adjudicate environmental cases in India. 

Points to Ponder: 

— What are the key differences between prohibited, regulated, and development zones?

— What are the emerging challenges to lakes and other water bodies?

— How do tourism and urbanisation impact the environment of hilly areas?

— What measures have been taken by the government to promote sustainable development and climate resilience?

Post Read Question:

(5) Consider the following statements with regard to the National Green Tribunal:

1. The Tribunal’s orders are enforceable.

2. The Tribunal has power to review its own decisions.

Which of the statements given above is/are correct?

(a) 1 only

(b) 2 only

(c) Both 1 and 2

(d) Neither 1 nor 2

 

Express Network

NIA to create database of gangsters, prison networks, associates

UPSC Syllabus:

Preliminary Examination:  Current events of national and international importance

Mains Examination: GS-II, GS-III: Government policies and interventions, Security challenges and their management; Various Security forces and agencies and their mandate.

What’s the ongoing story- To improve the information network on a national level against “organised criminals”, the National Investigation Agency (NIA) will make a database of gangsters, criminals running their gangs from behind jails, and their associates. 

Prerequisites:

— Read about the NIA and its mandate.

— What are the Changes Made under the NIA (Amendment) Act 2019?

Key takeaways: 

— The Central agency will put updated details of the criminals, their social media accounts, their financial network, and most importantly information about their associates and key operational areas, The Indian Express has learnt.

— Sharing some of the key features of the database as per the discussion, a source said it would have the latest photographs of the criminals, biometric details, interrogation report, their logistics provider, weapon suppliers, and harbourers.

— In the meeting, which lasted for around six hours, a senior officer of the Haryana Police Special Task Force (STF) flagged the increasing use of encrypted apps, VPNs, and “dabba calls” by the gangsters based abroad to carry out extortions.

— “In his presentation, he also flagged the issue of lack of response from service providers and social media platforms for providing data as some of these platforms are being used for extortion as well as recruitment of new shooters,” the source said.

For Your Information:

— During a “dabba” call, which involves threats being made through a second phone or a dabba, a henchman of a gangster makes an extortion call using the Internet. Next, the henchman makes a second call using another phone to his boss sitting in a different country, keeps the two phones side-by-side, and turns on the loudspeaker to let the boss do the talking.

Points to Ponder: 

— What is the importance of creating a common database of organised criminals?

— What is the role of the NIA in combating organised crime in India? 

— How does organised crime in India affect national security and law enforcement efforts? 

— What are the legal and ethical considerations in creating and maintaining a database of criminals and their networks in India?

Post Read Question:

Indian Government has recently strengthened the anti-terrorism laws by amending the unlawful Activities (Prevention) Act (UAPA), 1967 and the NIA act. Analyze the changes in the context of prevailing security environment while discussing the scope and reasons for opposing the UAPA by human rights organizations. (UPSC CSE 2019)

Other Important Articles Covering the same topic:

Fingerprints to videos and photos, NIA builds its own database of terrorists

 

The Sunday Express Magazine “eye”

Keepers of Lost Cities

UPSC Syllabus:

Preliminary Examination: History of India

Mains Examination: GS-I: History

What’s the ongoing story- Nayanjot Lahiri writes— “After scholar-archaeologist John Marshall revealed the Indus Civilisation to the world in 1924, a look at the science behind one of history’s biggest finds.”

Prerequisites:

— Read about the Indus Valley Civilisation (IVC)—the Early Harappan Phase, the Mature Harappan Phase, and the Late Harappan Phase.

— Who was John Marshall?

— Organisation to look for: Archaeological Survey of India (ASI)

— Map work: Major sites of Indus civilisation.

Key takeaways: 

— “ Marshall came to India as director-general of the ASI in 1902. His preparations for work in India included an examination of many objects of Indian origin in England, including three British Museum seals from Harappa, inscribed in an unknown script.”

— “Marshall felt the need to follow up on his sixth sense. He deputed Hirananda Sastri in 1903. Sastri was the ‘pundit in charge’ of the ASI’s office in Punjab. He was sent to survey three sites in the Ganga–Yamuna Doab region, which had yielded copper objects in the form of hoards (tools). Marshall saw the copper hoard objects as belonging to an age of bronze which, he believed, could be correlated with what was then termed the Early Vedic Age.”

— “Today, such copper hoards are considered roughly contemporary with Harappan times; a century ago, their age was a mystery.”

— “ In this case, the slow pace was partly a consequence of the constraints within which field research was done in British India, where non-commercial departments worked on very small budgets. Marshall himself was keen to excavate Harappa as early as 1907 but the price for acquiring the mounds was beyond the budget of the ASI.”

— “Individuals who made the discovery possible: Moving on to the years when Harappa and Mohenjodaro first came to be excavated, my book revealed that the clues, which eventually led to the knowledge that these represented India’s first civilisation, were neither discovered by a single solitary scholar nor were found all at once….”

— “ Daya Ram Sahni, the archaeologist, who actually found the evidence for an early culture at Harappa in a dig he conducted in 1921. It also needs to be appreciated that a similar process unfolded in Mohenjodaro…”

— “Mohenjodaro’s unearthing, unlike the Harappa excavations, had nothing to do with Marshall’s planning. For many years, Rakhaldas Banerji, who headed the Western Circle of the ASI, had been keen to excavate it, believing it an important Buddhist site, when he went off to dig it up in the winter of 1922. Naturally, he began concentrating on the stupa site and it was there that his assistant, NS Chikte, made the momentous discovery of two inscribed seals.”

— “Banerji realised immediately that these were inscribed with characters similar to those on the Harappa seals. Mohenjodaro, though, was several hundred kilometres to the south-west of Harappa, which meant that this was an entire distinctive culture spread over a considerable region. It was for this reason that Banerji would always be considered an important protagonist in the story of the Indus discovery.”

— “Lacuna in ASI: Beyond individuals, there was an important institutional lacuna in the ASI. The organisation had no space for discussing ongoing research…the colonial ASI showed no institutional space for brainstorming, no “common room” for archaeologists to discuss their digs and share information about each other’s field work…”

Points to Ponder: 

— What are the characteristics of IVC?

— What is the debate about the reasons for the decline of IVC?

Post Read Question:

(6) It was one of the southernmost sites of the Indus Valley civilisation. This port city is believed to have been built in 2,200 BC. It was a thriving trade centre in ancient times, with its trade of beads, gems and ornaments reaching West Asia and Africa. Archaeologist SR Rao led the team which discovered this place. 

The above-mentioned lines refer to which of the following Harappan Sites?

(a) Surkotada

(b) Lothal

(c) Dholavira

(d) Banawali

Other Important Articles Covering the same topic:

Harappan society is ‘Sindhu-Sarasvati civilisation’ in NCERT’s new textbook