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Daily Current Affairs

2-April -2024- Top News of the Day

1. Centre and Cong. spar over Katchatheevu issue

Topic: GS2 – International Relations – Bilateral Relations

Critical for UPSC as it reflects diplomatic history, territorial disputes, and political ramifications in India-Sri Lanka relations.

Context
● The news pertains to the controversy surrounding the ceding of Katchatheevu to Sri Lanka in 1974, with Prime Minister Modi and External Affairs Minister Jaishankar involved in the discourse.

 Additional information on this news:

  • Prime Minister Narendra Modi and External Affairs Minister S. Jaishankar addressed the controversy over the ceding of Katchatheevu to Sri Lanka in 1974.
  • Modi accused the DMK of neglecting Tamil Nadu’s interests, citing reports suggesting their involvement in the decision.
  • External Affairs Minister S. Jaishankar defended the Central Government’s stance, stating that the issue has been raised frequently in Parliament and correspondence with the State government.
  • He pointed out agreements in 1974 and 1976, suggesting a shift in fishing rights despite legal views to the contrary.
  • Opposition countered with a 2015 RTI response stating no territorial transfer occurred, questioning the government’s motive amidst election politics.
 Issue over Katchatheevu Island between India and Sri Lanka:

● Background: Katchatheevu Island, located in the Palk Strait between India and Sri Lanka, has been a contentious issue between the two countries.

● Historical Context: Under the 1974 and 1976 agreements, India ceded administrative control of Katchatheevu to Sri Lanka, sparking disputes over fishing rights and sovereignty.

Fishermen Disputes: Indian fishermen regularly venture into Sri Lankan waters near Katchatheevu for fishing, leading to arrests and tensions between the two countries.

Legal Challenges: Indian fishermen argue that the transfer of Katchatheevu was unconstitutional and challenge it in Indian courts, seeking restoration of fishing rights.

●  Diplomatic Efforts: Both India and Sri Lanka engage in diplomatic dialogues to address fishing disputes and territorial claims over Katchatheevu.

● Impact on Fishermen: Arrests and detention of Indian fishermen by Sri Lankan authorities strain bilateral relations and impact livelihoods.

●  International Arbitration: Calls for international arbitration or intervention to resolve the Katchatheevu issue have been made by various stakeholders.

● Humanitarian Concerns: Issues of humanitarianism arise concerning the treatment of fishermen and their families affected by the disputes.

● Need for Resolution: There is a pressing need for a mutually acceptable solution to the Katchatheevu issue to ensure peace and stability in the region.

PYQ: In respect of India — Sri Lanka relations, discuss how domestic factors influence foreign policy. (200 words/10m) (UPSC CSE (M) GS-2 2013)
Practice Question:  Discuss the ongoing dispute over Katchatheevu Island between India and Sri Lanka and its implications for bilateral relations. (150 Words /10 marks)

2. Heatwave conditions likely during election season, warns IMD

Topic: GS3 – Environment – Environmental pollution and degradation

Critical for UPSC as it highlights the intersection of weather phenomena, public health concerns, and increasing instances of heatwave situations.

Context
●  The news warns of above-normal heatwave conditions across India during April and May, coinciding with the upcoming Lok Sabha elections, prompting advisories from authorities.

 Additional information on this news:

  • IMD warns of “above-normal” heatwave conditions across most of India in April and May, coinciding with the polling period.
  • Gujarat, Maharashtra, Andhra Pradesh, north Karnataka, Odisha, and western Madhya Pradesh are particularly vulnerable, likely to experience two to eight heatwave days.
  • Heatwave days occur when temperatures are at least 4.5 degrees Celsius above normal or exceed 45 degrees Celsius for two consecutive days.
  • Advisories issued to Election Commission and States to take precautions, including equipping polling booths with oral rehydration salts.
  • Electors advised to carry wet towels to prevent dehydration, and women urged to avoid bringing small children to booths during hot weather.
  • El Nino effect contributes to hotter-than-usual summers, associated with surface water heating in the Central Pacific and drying up of Indian rains.
Increasing instances of Heatwave situation:

What is the heatwave?

Heatwave days occur when temperatures are at least 4.5 degrees Celsius above normal or exceed 45 degrees Celsius for two consecutive days.

Reasons for Increasing Heatwave Situations:

●  Climate Change: Rising global temperatures due to greenhouse gas emissions intensify heatwaves.

Urbanization: Urban heat island effect exacerbates heatwaves in densely populated areas with concrete and asphalt.

● Deforestation: Reduced vegetation leads to higher temperatures and less moisture, amplifying heatwave impacts.

Air Pollution: Particulate matter and pollutants trap heat, exacerbating heatwave conditions.

●  Weather Patterns: Changes in atmospheric circulation patterns contribute to prolonged heatwave events.

Tackling Increasing Heatwave Situations:

● Climate Action: Mitigate greenhouse gas emissions through renewable energy adoption and carbon reduction measures.

● Urban Planning: Implement green infrastructure, such as parks and green roofs, to mitigate urban heat island effects.

● Reforestation: Promote afforestation and reforestation efforts to increase green cover and reduce temperatures.

● Pollution Control: Implement strict regulations to reduce air pollution and improve air quality.

Early Warning Systems: Develop robust heatwave early warning systems to alert vulnerable populations.

● Public Awareness: Educate communities about heatwave risks and promote adaptive measures, such as staying hydrated and seeking shade.

Urban Design: Design buildings with heat-resilient materials and incorporate natural cooling strategies.

● Emergency Response: Establish cooling centres and provide assistance to vulnerable populations during heatwave events.

Addressing the increasing frequency and intensity of heatwaves requires a multi-faceted approach encompassing climate mitigation, urban planning, environmental conservation, and community resilience measures.

PYQ: Bring out the causes for the formation of heat islands in the urban habitat of the world. (100 words/5m) (UPSC CSE (M) GS-1 2013)
Practice Question:  Discuss the factors contributing to the increasing frequency of heatwave situations globally and propose measures to mitigate their impacts. (250 Words /15 marks)

3. Team led by PRL Ahmedabad finds ozone on Jupiter’s moon

Topic: GS3 – Science and Technology –  Space

From a UPSC perspective, this topic addresses scientific exploration, astrochemistry, and potential habitability beyond Earth.

Context
●  The news discusses the discovery of ozone on Jupiter’s moon Callisto, revealing insights into complex chemical processes on icy celestial bodies.

 Discovery of Ozone on Callisto:

  • An international team, including Indian scientists, discovered ozone on Jupiter’s moon, Callisto, indicating complex chemical processes on icy celestial bodies.
  • Published in Icarus, the study investigates the chemical evolution of ‘SO2 astrochemical ice’, primarily composed of sulphur dioxide (SO2), under ultraviolet irradiation.

Importance of Ozone:

  • Ozone shields Earth from harmful UV radiation, crucial for sustaining life by preventing DNA damage and promoting ecosystem stability.
  • Detection of ozone on Callisto suggests stable atmospheric conditions, raising questions about moon habitability and potential for life beyond Earth.

Unique Environment of Callisto:

  • Callisto, Jupiter’s third-largest moon, primarily comprises water ice, sulphur dioxide, and organic compounds, making it a potential candidate for life.
  • Its heavily cratered, geologically inactive surface indicates long-term stability, vital for preserving potential subsurface habitats.

Experimental Methodology:

  • Scientists led by R. Ramachandran recreated conditions for sulphur dioxide ice irradiation at the National Synchrotron Radiation Research Centre in Taiwan.
  • Sulphur dioxide ice samples deposited on lithium fluoride substrates simulated Callisto’s surface for spectroscopic observations.

Observations and Implications:

  • Ultraviolet absorption spectra confirmed ozone formation in irradiated ice samples, corroborating Hubble Telescope data.
  • Presence of ozone suggests oxygen availability, essential for complex molecule formation and potential habitability.
  • Unidentified absorption band hints at common molecular sources across Jupiter’s moons, providing insights into geological and atmospheric processes.

Contribution to Scientific Understanding:

  • Discovery extends beyond Callisto, informing understanding of habitable conditions and chemical processes on icy moons in the Solar System.
  • Findings contribute to ongoing research on Jupiter’s moon formation mechanisms and potential for life beyond Earth.
Practice Question:  Discuss the significance of the recent discovery of ozone on Jupiter’s moon Callisto, and its implications for astrobiology. (150 Words /10 marks)

4. Ladakh’s protest; a hunger for justice

Topic: GS2 – Indian polity – Federal Structure

From a UPSC perspective, Ladakh’s governance issues and environmental challenges highlight the complexities of regional development and policy formulation.

Context
●   The news discusses Sonam Wangchuk’s hunger strike in Ladakh advocating for Statehood and Sixth Schedule inclusion, addressing governance and environmental concerns.

 Sonam Wangchuk’s Hunger Strike:

  • Sonam Wangchuk initiated a 21-day hunger strike in Leh, Ladakh, advocating for Statehood and Sixth Schedule inclusion for Ladakh.
  • He halted the strike on March 26, urging PM Modi and Home Minister Shah to address Ladakh’s concerns.

Impact of UT Formation on Ladakh:

  • Ladakh’s transition into a UT removed exclusive land and job rights, leading to discontent among residents.
  • Administrated by a Lieutenant Governor and non-local bureaucrats, decisions affecting Ladakh’s future lack local representation.

Diminished Authority of Local Bodies:

  • Ladakh Autonomous Hill Development Councils (LAHDCs) in Leh and Kargil lost power post-UT declaration.
  • Draft policies like the Ladakh Industrial Land Allotment Policy exclude LAHDCs from land-use decision-making.

Advocacy for Sixth Schedule Inclusion:

  • Local bodies like LAB and KDA advocate for Sixth Schedule inclusion to empower regional councils for resource management.
  • Despite promises by the BJP, demands for Ladakh’s Sixth Schedule inclusion remain unmet.

Resource Pressures in Ladakh:

  • Rising tourist influx and urbanisation strain Ladakh’s resources, particularly water.
  • Dependence on underground water increases due to inadequate distribution, affecting locals, especially during peak tourist seasons.

Climate Change Challenges:

  • Ladakh faces floods, landslides, and glacial lake outburst floods (GLOFs) due to climate change.
  • Increasing temperatures lead to glacial melting, permafrost degradation, and heightened landslide risks.

Environmental Threats from Development:

  • Mining and renewable energy projects threaten Ladakh’s environment, exacerbating climate change impacts.
  • Tourism-related activities contribute to pollution, accelerating glacier melting and environmental degradation.

Conclusion:

  • Ladakh’s hunger strike underscores the urgency of addressing governance issues and environmental challenges in the region.
  • Sustainable development strategies are imperative to mitigate climate change impacts and preserve Ladakh’s fragile ecosystem.
Sixth schedule of Indian Constitution:

The Sixth Schedule of the Indian Constitution provides special provisions for the administration of tribal areas in Assam, Meghalaya, Tripura, and Mizoram.

● It aims to safeguard the interests of tribal communities and promote their socio-economic development.

● The Sixth Schedule consists of provisions for the establishment of autonomous district councils (ADCs) and autonomous regions in tribal areas.

● These ADCs have legislative, executive, and financial powers to govern the areas under their jurisdiction.

● The ADCs are empowered to make laws on specified subjects such as land, forests, agriculture, and local customs and traditions.

● The Governor of the state has special responsibilities regarding the administration of tribal areas and can modify or annul laws made by the ADCs.

● The Sixth Schedule also provides for the establishment of autonomous councils for areas outside the ADCs, ensuring a decentralized governance structure.

● It reflects the constitutional recognition of the distinct cultural, social, and political identity of tribal communities, aiming to protect their rights and preserve their way of life.

●  The Sixth Schedule plays a crucial role in promoting inclusive development and empowering tribal communities to manage their own affairs autonomously within the framework of the Indian Constitution.

PYQ: Article 244 of Indian Constitution relates to Administration of Scheduled areas and tribal areas. Analyse the impact of non-implementation of the provisions of fifth schedule on the growth of Left Wing Extremism. (200 words/10m) (UPSC CSE (M) GS-3 2013)
Practice Question:  Discuss the implications of Ladakh’s transition into a Union Territory (UT) and the demand for Sixth Schedule inclusion in the context of local governance and resource management.(250 Words /15 marks)

5. Microfinance loans grow 21% to ₹3.9 lakh cr.

Topic: GS3 – Indian Economy.

Critical for UPSC to understand financial inclusion efforts, economic growth indicators, and challenges in underserved regions.

Context
●  The news highlights robust growth in India’s microfinance industry, reaching ₹3.93-lakh crore by December 2023, with efforts to expand into underserved areas and improve borrower awareness.

 Additional information on this news:

  • The microfinance industry saw a robust 21% growth in loan portfolio, reaching ₹3.93-lakh crore by December 2023.
  • Microfinance Institutions (MFIs) held the largest share at 40%, followed by banks (32%), Small Finance Banks (SFBs) (18%), NBFCs (11%), and non-profit MFIs (0.18%).
  • Sa-Dhan, an RBI-approved Self Regulatory Organisation (SRO), noted overall improved performance and expects sustained growth for the next few years.
  • Efforts are underway to expand microfinance to underserved regions, with Sa-Dhan conducting a study supported by SIDBI to identify and address issues in these areas.
  • Awareness among micro borrowers remains a challenge, tackled through workshops conducted in 19 States, benefiting 1.42 lakh individuals with the support of DEA Fund of RBI.
 What is Microfinance?

●  Microfinance refers to providing financial services, such as small loans, savings, and insurance, to low-income individuals and communities who lack access to traditional banking services.

Importance of Microfinance for Indian Economy and Upliftment of Vulnerable Sections:

● Microfinance facilitates financial inclusion by extending services to marginalized populations, empowering them economically.

●  It stimulates entrepreneurship and small-scale businesses among the poor, fostering self-reliance and employment generation.

Microfinance helps in poverty alleviation by enabling access to credit for income-generating activities, breaking the cycle of poverty.

●  It enhances women’s empowerment by offering financial independence and decision-making authority, contributing to gender equality.

● Microfinance promotes social development by addressing basic needs like education, healthcare, and housing through affordable loans.

It reduces dependency on informal moneylenders who often exploit the poor with exorbitant interest rates.

●  Microfinance institutions (MFIs) play a vital role in rural development and agricultural productivity enhancement by providing financial support to farmers and rural entrepreneurs.

●  It contributes to economic growth by fostering inclusive development, bridging the gap between formal financial institutions and the underserved sections of society.

PYQ: Microfinance as an anti-poverty vaccine, is aimed at asset creation and income security of the rural poor in India”. Evaluate the role of Self Help Groups in achieving the twin objectives along with empowering women in rural India. (250 words/15m) (UPSC CSE (M) GS-2 2020)
Practice Question:  Discuss the significance of robust growth in India’s microfinance industry and the challenges in expanding financial inclusion in underserved regions. (150 Words /10 marks)

6. Supreme Court Strikes Down Environment Ministry's Blanket Exemption for Linear Projects

Topic: GS2 – Governance – Government policies – Interventions for development in various sectors

GS3 – Environment

This topic is relevant for both Prelims and Mains in the context of understanding the balance between development imperatives and environmental conservation.

 

Context:
  • The Supreme Court recently annulled a notification issued by the Environment Ministry in 2020, which exempted the extraction of ordinary earth for linear projects from requiring Environmental Clearance (EC).
  • This exemption, challenged before the National Green Tribunal (NGT), drew scrutiny for its broad and arbitrary nature.
More about the news:

The 2020 Exemption: Context and Purpose

  • The 2020 exemption, introduced under The Environment (Protection) Act, 1986, aimed to align with amendments made to the Mines and Minerals (Development and Regulation) Act, 1957.
  • It sought to facilitate mining activities for linear projects like roads and pipelines by exempting them from the EC requirement.

Grounds for Challenge:

  • The exemption faced legal challenge primarily on the grounds of being arbitrary and violative of Article 14 of the Constitution.
  • Critics argued that it circumvented legal procedures, including public objections, and served private interests without due consideration of environmental concerns.

Judicial Scrutiny and Previous Instances

  • This isn’t the first time exemptions under the Environment Protection Act have faced judicial scrutiny.
  • Previous instances include the annulment of exemptions for construction activities and ex-post facto environmental clearances for various projects.
  • These cases underscore the importance of adherence to legal procedures and environmental safeguards.

Supreme Court’s Ruling:

  • The Supreme Court, in its ruling, criticized the blanket and arbitrary nature of the exemption. It highlighted the lack of clarity on key aspects such as the definition of linear projects and safeguards for environmental protection.
  • The court also questioned the haste with which the exemption was issued, especially during a nationwide lockdown.

Implications and Policy Considerations:

  • The annulment of the exemption underscores the importance of upholding environmental regulations and procedural integrity.
  • It emphasizes the need for transparent and accountable decision-making in environmental governance.
  • Going forward, policymakers must ensure that exemptions are justified, transparent, and consistent with environmental objectives.

Conclusion:

  • The Supreme Court’s decision reaffirms the principle of environmental protection and the need for rigorous scrutiny of regulatory exemptions.
  • It highlights the judiciary’s role in safeguarding environmental integrity and underscores the importance of balancing development imperatives with ecological sustainability.
  • Ultimately, the case underscores the imperative of environmental compliance in policy formulation and implementation.

Development vs Environment

 

  • Development and environment are two sides of the same coin.
  • On one hand people are concerned about the environment in which they live.
  • Major issues like global warming, greenhouse effect, air and water pollution are increasing each day.
  • On the other hand, to eradicate poverty and increase growth in the economy, development is mandatory.
  • Without economic development a nation cannot come out of the vicious circle of poverty.
  • As our population grows, finding a balance between economic advancement and consumption of natural resources is a vital question that India should address.
  • Development without environment is meaningless.
  • We need to save our resources for our future generations so that they can live in a healthy environment.

 

PYQ: Policy contradictions among various competing sectors and stakeholders have resulted in inadequate ‘protection and prevention of degradation’ to environment.” ” Comment with relevant illustration. (150 words/10m) (UPSC CSE (M) GS-2 2018)
Practice Question:  Critically analyze the Supreme Court’s recent decision to set aside the Environment Ministry’s notification exempting the extraction of ordinary earth for linear projects from requiring Environmental Clearance (EC). (250 words/15 m)

7. IMD Forecasts Harsh and Prolonged Summer with Intense Heat Waves Across India

Topic: GS1 – Geography – Climate Change: Effects of Climate change.

This topic is relevant for both Prelims and Mains in the context of understanding the impact of climate change.

 

Context:
  • The India Meteorological Department (IMD) has issued forecasts for a harsh and arid summer, warning of prolonged and more intense heat waves across many parts of the country in April-June.
  • These predictions indicate a departure from the norm, with a high probability of heat wave episodes lasting as long as 10-20 days, compared to the usual four-eight days during this period.
More about the news:

Regional Impact and Heat Wave Warnings:

  • Regions such as Rajasthan, Gujarat, Saurashtra-Kutch, Maharashtra, north Karnataka, Andhra Pradesh, and Odisha are likely to experience high day temperatures and heat waves.
  • The IMD specifically highlights the potential for higher-than-normal heat wave spells during April-June, emphasizing the need for preparedness and mitigation measures in these areas.

Temperature Outlook and Variability:

  • According to IMD Director General Mrutyunjay Mohapatra, most regions in the country are expected to witness above-normal maximum temperatures during the summer season, with certain areas like Jammu and Kashmir, Himachal Pradesh, and parts of eastern India potentially experiencing normal or below-normal temperatures.
  • This variability underscores the complex interplay of regional climate dynamics.

Onset of Summer Season:

  • The summer season is anticipated to commence with significantly high day temperatures in various states such as Madhya Pradesh, Maharashtra, Karnataka, Kerala, Telangana, Andhra Pradesh, and Odisha.
  • Heat wave spells lasting for two-eight days are forecasted for Andhra Pradesh, Saurashtra-Kutch, Maharashtra, and western regions of Madhya Pradesh in the upcoming month.

Factors Driving Heat Waves:

  • IMD attributes the prolonged heat wave spells to multiple factors, including the El Nino phenomenon.
  • El Nino conditions, characterized by abnormal warming of the sea surface in the equatorial Pacific Ocean, tend to suppress rainfall over India and elevate temperatures globally.
  • Although El Nino conditions are expected to wane by June, their influence on weather patterns remains significant.

Regional Impact and Climatic Trends:

  • During February-March, the southern peninsular region experienced hotter-than-normal weather, with reports of heat wave conditions in Maharashtra, northern Karnataka, Saurashtra-Kutch, and parts of Rajasthan.
  • These trends highlight the localized impact of climate variability and the need for region-specific adaptation strategies.

Conclusion:

  • IMD’s forecasts underscore the importance of proactive measures to mitigate the adverse effects of heat waves and prepare for potential challenges associated with arid conditions and below-average rainfall.
  • Additionally, the analysis sheds light on the complex interplay of climatic factors and their implications for regional weather patterns and agricultural practices.
About Heatwave

 

  • About: Heatwaves are prolonged periods of extreme hot weather that can harm human health, the environment, and the economy.
  • Heatwaves in India: India, as a tropical country, is especially subject to heatwaves, which have become increasingly common and severe in recent years.
  • Criteria for Declaring Heatwave: The basic criteria for IMD to declare a heatwave is when the temperature of a place crosses 40 degrees Celsius (°C) in the plains, 37°C in the coastal areas and 30°C in the hills.Apart from this, the temperature of a particular day has to be above normal by at least 4.5°C for two consecutive days for a heatwave to be declared.
  • Humid Heatwave: The basic criteria for IMD to declare a heatwave currently does not include taking into account relative humidity, which is increasingly becoming a cause of humid heat waves.
  • During a humid heatwave, the temperature felt by the human body or by other animals and plants is much higher.
  • Relative Humidity: This happens even when the observed temperatures are lower than the thresholds because of relative humidity, which is a measure of the moisture levels in the atmosphere.

 

PYQ: What are the possible limitations of India in mitigating global warming at present and in the immediate future? (2010)

1) Appropriate alternate technologies are not sufficiently available.

2) India cannot invest huge funds in research and development.

3) Many developed countries have already set up their polluting industries in India.

Which of the statements given above is/are correct?

(a) 1 and 2 only

(b) 2 only

(c) 1 and 3 only

(d) 1, 2 and 3

Ans: (a)

Practice Question:  Discuss the implications of the India Meteorological Department’s (IMD) forecast for a harsh and arid summer with prolonged and intense heat waves across India. Analyze the potential challenges posed by these weather predictions. (250 words/15 m)

8. India's GST Collections Surge: Signals Economic Recovery Amidst Strong Compliance Measures

Topic: GS3 – Indian Economy – Issues relating to growth

GS2 – Governance – Government policies – Issues arising out of their design & implementation.

This topic is relevant for both Prelims and Mains as analyzing GST collections provides insights into revenue generation, economic growth, fiscal policy, and government finances.

 

Context:
  • The data released by the Finance Ministry indicates a noteworthy 11.5% year-on-year increase in Gross Goods and Services Tax (GST) collections for March, reaching Rs 1.78 lakh crore, marking the second-highest level since the rollout of the GST regime in July 2017.
  • This surge is primarily attributed to robust revenue from domestic transactions, despite moderated revenue from imports.
  • The heightened compliance, bolstered by anti-evasion measures, has contributed to the growth in GST collections.
More about the news:

March 2024 Performance and Fiscal Year Overview:

  • March 2024 witnessed a substantial rise in GST collection from domestic transactions by 17.6%, driving the overall growth in revenue.
  • On a net basis, considering the impact of refunds, GST revenue increased by 18.4% to Rs 1.65 lakh crore.
  • For the full fiscal year 2023-24, net GST revenue stood at Rs 18.01 lakh crore, reflecting a notable growth of 13.4% over the previous year.
  • Gross GST collections for the fiscal year surged to Rs 20.18 lakh crore, surpassing the Rs 20 lakh crore mark, indicating an 11.7% increase compared to the previous year.

Performance Across States and Union Territories:

  • Among the 38 states and union territories, 26 recorded higher growth rates in GST collections compared to the national average of 11.5% in March.
  • Leading the pack, Maharashtra recorded the highest collection at Rs 27,688 crore, followed by Karnataka, Gujarat, Tamil Nadu, and Uttar Pradesh.
  • Overall, GST collections for March totaled Rs 1,78,484 crore, distributed across Central GST, State GST, Integrated GST, and cess.

Economic Recovery and Compliance:

  • Tax experts interpret the strong growth in GST collections as indicative of economic recovery.
  • The notable 17.6% growth in domestic transactions for March underscores robust domestic economic growth.
  • The consistent increase in average monthly collections throughout the fiscal year signifies a positive growth trajectory.
  • Experts also attribute the record collections exceeding Rs 20 lakh crore during FY24 to enhanced compliance measures and anti-evasion initiatives by GST authorities, emphasizing the importance of compliance across the entire value chain.

Conclusion:

  • The analysis of GST collections highlights a significant uptick in revenue, driven by robust performance in domestic transactions and enhanced compliance measures.
  • The substantial growth in collections reflects economic resurgence and underscores the effectiveness of anti-evasion efforts.
  • Looking ahead, sustaining this growth momentum and ensuring continued compliance will be crucial for fostering economic stability and fiscal sustainability.
What are the Current Major Challenges Related to GST in India?

 

  • Complexity and Compliance Burden: GST in India has a complex structure with multiple tax slabs, leading to increased compliance requirements.
  • This complexity poses a challenge for businesses, especially smaller enterprises, in understanding and adhering to the diverse regulations.
  • Technology and Infrastructure Readiness: The successful implementation of GST relies heavily on robust technological infrastructure. Issues such as lack of technological readiness among businesses, and disparities in technology adoption can hinder the seamless functioning of the GST network.
  • Input Tax Credit (ITC) Verification: The government authorities have recently identified and busted more than 29,000 bogus firms involved in evading GST dues.
  • Multiple Registrations Across States: Businesses operating in multiple states must register separately in each state for GST compliance.
  • This multiplicity of registrations adds administrative burden and increases compliance costs for businesses with a pan-India presence, contributing to logistical challenges.

 

PYQ: What is/are the most likely advantages of implementing ‘Goods and Services Tax (GST)’? (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

Ans: (a)

Practice Question:  Discuss the significance of the recent Gross Goods and Services Tax (GST) collections data released by the Finance Ministry, highlighting its implications for India’s economy, governance, and fiscal policies. (250 words/15 m)

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