04 December, 2019
0 Min Read
|GS-II||GST revenues not enough for States’ compensation: Centre|
|Lok Sabha passes Bill to regulate ship recycling|
|32% conviction rate in rape cases: NCRB|
|What is Gender Pay Gap and why is it so wide in India?|
|GS-III||DRDO to develop naval fighter jet|
|2019 could be second warmest year on record: WMO|
Syllabus subtopic: Functions and responsibilities of the Union and the States, issues and challenges pertaining to the federal structure, devolution of powers and finances up to local levels and challenges therein.
News: The Centre has written to all States voicing concern that due to the lower Goods and Services Tax (GST) collections, the compensation cess might not be enough to pay for losses arising out of the tax system
Prelims and Mains focus: About GST, merits and challenges in implementation, Concerns of the states and about the recent shortfall in GST collection and its implications on the centre-state financial relations
Context: The communication comes at a time when several States, including Rajasthan, Kerala, Delhi, Punjab and West Bengal, have publicly urged the Centre to transfer pending compensation payments as they have not received the dues for several months.
The government of Punjab has even said that it may take the matter to the Supreme Court if the Centre does not release the dues. The issue will be discussed in detail at the next GST Council meeting, scheduled for the second fortnight of December.
Lower GST and compensation cess collections have been a major concern in the last few months.
The government had budgeted for ?6,63,343 crore in GST collections for the current financial year 201920, out of which it has collected only about 50% in the first eight months. It had targeted ?1,09,343 crore of compensation cess collections, of which it has so far collected ?64,528 crore.
The compensation requirements have increased significantly and are unlikely to be met from the compensation cess being collected.
What is its significance?
This situation assumes significance because it was the promise of compensation to the States for losses arising out of GST implementation that convinced a large number of reluctant States to sign on to the new indirect tax regime. The Centre had promised compensation for any shortfall in tax revenue due to GST implementation for a period of five years.
In the letter, the Centre also asked the States to submit their suggestions by December 6 on augmenting GST collections. They were specifically asked to look into ways to review the items currently exempted from GST, review the tax rates and compensation cess rates on various items, and on improving compliance measures. These suggestions will be placed before the Committee of Officers from the States and Centre that has been set up to suggest measures to increase collections.
What is Goods and Services Tax (GST)?
It is a destination based tax on consumption of goods and services. It is proposed to be levied at all stages right from manufacture up to final consumption with credit of taxes paid at previous stages available as set off. In a nutshell, only value addition will be taxed and burden of tax is to be borne by the final consumer.
What exactly is the concept of destination based tax on consumption?
The tax would accrue to the taxing authority which has jurisdiction over the place of consumption which is also termed as place of supply.
Which of the existing taxes are proposed to be subsumed under GST?
The GST would replace the following taxes:
Taxes currently levied and collected by the Centre:
State taxes that would be subsumed under the GST are:
The GST Council shall make recommendations to the Union and States on the taxes, cesses and surcharges levied by the Centre, the States and the local bodies which may be subsumed in the GST.
What principles were adopted for subsuming the above taxes under GST?
The various Central, State and Local levies were examined to identify their possibility of being subsumed under GST. While identifying, the following principles were kept in mind:
Which are the commodities proposed to be kept outside the purview of GST?
Article 366(12A) of the Constitution as amended by 101st Constitutional Amendment Act, 2016 defines the Goods and Services tax (GST) as a tax on supply of goods or services or both, except supply of alcoholic liquor for human consumption. So alcohol for human consumption is kept out of GST by way of definition of GST in constitution. Five petroleum products viz. petroleum crude, motor spirit ( petrol), high speed diesel, natural gas and aviation turbine fuel have temporarily been kept out and GST Council shall decide the date from which they shall be included in GST. Furthermore, electricity has been kept out of GST.
What will be the status in respect of taxation of above commodities after introduction of GST?
The existing taxation system (VAT & Central Excise) will continue in respect of the above commodities.
What will be status of Tobacco and Tobacco products under the GST regime?
Tobacco and tobacco products would be subject to GST. In addition, the Centre would have the power to levy Central Excise duty on these products.
What type of GST is proposed to be implemented?
It would be a dual GST with the Centre and States simultaneously levying it on a common tax base. The GST to be levied by the Centre on intra-State supply of goods and / or services would be called the Central GST (CGST) and that to be levied by the States would be called the State GST (SGST). Similarly Integrated GST (IGST) will be levied and administered by Centre on every inter-state supply of goods and services.
Why is Dual GST required?
India is a federal country where both the Centre and the States have been assigned the powers to levy and collect taxes through appropriate legislation. Both the levels of Government have distinct responsibilities to perform according to the division of powers prescribed in the Constitution for which they need to raise resources. A dual GST will, therefore, be in keeping with the Constitutional requirement of fiscal federalism.
Which authority will levy and administer GST?
Centre will levy and administer CGST & IGST while respective states / UTs will levy and administer SGST / UTST.
Why was the Constitution of India amended recently in the context of GST?
Currently, the fiscal powers between the Centre and the States are clearly demarcated in the Constitution with almost no overlap between the respective domains. The Centre has the powers to levy tax on the manufacture of goods (except alcoholic liquor for human consumption, opium, narcotics etc.) while the States have the powers to levy tax on the sale of goods. In the case of inter-State sales, the Centre has the power to levy a tax (the Central Sales Tax) but, the tax is collected and retained entirely by the States. As for services, it is the Centre alone that is empowered to levy service tax.
Introduction of the GST required amendments in the Constitution so as to simultaneously empower the Centre and the States to levy and collect this tax. The Constitution of India has been amended by the Constitution (one hundred and first amendment) Act, 2016 recently for this purpose. Article 246A of the Constitution empowers the Centre and the States to levy and collect the GST.
What are the benefits which the Country will accrue from GST?
Introduction of GST would be a very significant step in the field of indirect tax reforms in India. By amalgamating a large number of Central and State taxes into a single tax and allowing set-off of prior-stage taxes, it would mitigate the ill effects of cascading and pave the way for a common national market. For the consumers, the biggest gain would be in terms of a reduction in the overall tax burden on goods, which is currently estimated at 25%-30%. Introduction of GST would also make our products competitive in the domestic and international markets. Studies show that this would instantly spur economic growth. There may also be revenue gain for the Centre and the States due to widening of the tax base, increase in trade volumes and improved 10 11 tax compliance. Last but not the least, this tax, because of its transparent character, would be easier to administer
Syllabus subtopic: Government policies and interventions for development in various sectors and issues arising out of their design and implementation
News: The Lok Sabha passed a Bill to regulate recycling of ships as per international standards
Prelims and Mains focus: key highlights of the Bill and its significance
About the Bill
The Recycling of Ships Bill, 2019 will help the ship recycling industry and generate more jobs.
Syllabus subtopic: Important aspects of governance, transparency and accountability, e-governance- applications, models, successes, limitations, and potential; citizens charters, transparency & accountability and institutional and other measures.
News: Notwithstanding the rising incidence of sexual assault on women, the conviction rate in rape cases is as low as 32.2 per cent at the national level, according to the latest report of the National Crime Records Bureau (NCRB).
Prelims and Mains focus: About NCRB, key findings of the report.
Key findings of the report
Syllabus subtopic: Issues relating to development and management of Social Sector/Services relating to Health, Education, Human Resources, issues relating to poverty and hunger.
News: According to the latest World Economic Forum’s (WEF) Global Gender Gap Report 2018, India ranked 108th out of 149 countries on the gender gap index. The global list was topped by Iceland for the 10th consecutive year, having closed more than 85.8% of its overall gender gap.
Prelims and Mains focus: about WEF, its various reports and India’s performance, issues related to gender disparity in India
Despite the continued efforts of activists and policymakers, in many ways, gender equality is still a pipe dream. Research shows gender discrimination mostly against women and in favour of men in many realms, including the workplace.
While India fared better in wage equality for similar work indicator, on which it held the 72nd position, it ranked 142nd in the economic opportunity and participation subindex.
This dichotomy can be explained by the difference between unequal pay and the gender pay gap.
UNEQUAL PAY VERSUS GENDER PAY GAP
Unequal pay refers to situations where women are paid less than men for doing the same work. To counter this, equal pay is legally enforced in most organized sectors. The gender pay gap, on the other hand, is a measure of the gap in the overall earnings of men and women. It is calculated by considering several parameters applied to the total number of employed members of both genders. This means that it does not account for women who have voluntarily stayed out of the workforce or have taken a sabbatical.
WHAT IS GENDER PAY GAP?
While the gender pay gap is essentially the average difference between the remuneration received by working men and women, there is more nuance here. There are two distinct numbers: the unadjusted pay gap and the adjusted pay gap. The former simply differentiates between mean and median wages of the two genders, the latter takes into account differences in factors like occupation, education and job experience. So the difference is starker if you consider the unadjusted figure.
An often-cited number in this context is the unadjusted salary of the average female in the US, which is supposed to be 78% of the average male salary, whereas the adjusted figure is 80-98%.
The gender pay gap stems from the difference in the number of men versus women who work. It also arises from differences in work tenures and the need for sabbaticals.
WHAT CONTRIBUTES TO THE GAP IN INDIA?
In a country like India, gender pay gap is a little more complicated and can be linked to reasons ranging from the socio-economic to the structural. Girl children are sometimes kept out of schools or made to drop out of school early. Even if they are educated, many women are not allowed to work by their families. Women who do join the workforce often need to take extended leaves for maternity and childcare, and even the healthcare of other family members. All these factors lead up to women as a whole falling well behind men when it comes to their earnings over time. In India, therefore, the gender pay gap is still quite wide.
According to the Monster Salary Index (MSI) published in March 2019, women in the country earn 19% less than men. The survey revealed that the median gross hourly salary for men in India in 2018 was ?242.49, while it was ?196.3 for women, meaning men earned ?46.19 more than women.
According to the survey, the gender pay gap spans across key industries. IT services showed a sharp pay gap of 26% in favour of men, while in the manufacturing sector, men earn 24% more than women.
However, this is only part of the picture. Across the unorganized sector and especially in areas like agriculture, women are routinely paid significantly less than men, citing differences in capability.
Until India’s social stigma against women in the workforce and the general environment of social injustice against women is tackled, the gender pay gap may not show any sign of closing.
About World Economic Forum (WEF):
Motto : Committed to improve the state of the world
Syllabus subtopic: Science and Technology- developments and their applications and effects in everyday life Achievements of Indians in science & technology; indigenization of technology and developing new technology.
News: The Defence Research Development Organisation (DRDO) has offered to develop a new twin-engine deck-based fighter aircraft for the Navy based on the experience of the naval light combat aircraft (LCA) and it should be ready by 2026, the Chief of the Naval Staff, Admiral Karambir Singh, said on Tuesday. He said the Navy expected to have the first indigenous aircraft carrier (IACI) Vikrant operational by 2022.
Prelims and Mains focus: about DRDO, IAC Vikrant, Exercise MILAN
The naval LCA recently successfully completed the takeoff and landing trials on the shorebased test facility (SBTF) in Goa. Adm. Singh said the current LCA Mk1 was a technology demonstrator and it would further be put to carrier compatibility tests. And if it worked, whatever lessons they had learnt would be ploughed back by the DRDO into the new fighter to be developed.
On the need for a third aircraft carrier, Adm. Singh said, “As the Navy chief, I am convinced the country requires three aircraft carriers so that two are operational at any given time.”
New aircraft carrier
He said they were preparing the case for IAC2 and finalising the requirements. After this, they would go to the government for Acceptance of Necessity (AoN) and it would be followed by design consultancy to decide the exact contours.
On the IACI, which is under an advanced stage of construction in Kochi, Adm. Singh said all shipbuild issues “are over” and trials would begin now. “We are almost certain that we will take delivery by February-March 2021”, he stated and added that aviation trials would take a year after that. “We should have a fully operational carrier by 2022.”
The Navy is scheduled to host its largest multilateral exercise, MILAN off the coast of Visakhapatnam in March 2020, for which 41 countries have been invited.
So far, over 15 countries have confirmed their participation. However, China has not been invited. Asked as to why China has been left out, Adm Singh said they invited “like-minded” countries with whom they have interacted earlier.
DRDO is the R&D wing of Ministry of Defence, Govt of India, with a vision to empower India with cutting-edge defence technologies and a mission to achieve self-reliance in critical defence technologies and systems, while equipping our armed forces with state-of-the-art weapon systems and equipment in accordance with requirements laid down by the three Services.
DRDO's pursuit of self-reliance and successful indigenous development and production of strategic systems and platforms such as Agni and Prithvi series of missiles; light combat aircraft, Tejas; multi-barrel rocket launcher, Pinaka; air defence system, Akash; a wide range of radars and electronic warfare systems; etc., have given quantum jump to India's military might, generating effective deterrence and providing crucial leverage.
"Balasya Mulam Vigyanam"—the source of strength is science-drives the nation in peace and war. DRDO has firm determination to make the nation strong and self-reliant in terms of science and technology, especially in the field of military technologies.
DRDO was formed in 1958 from the amalgamation of the then already functioning Technical Development Establishment (TDEs) of the Indian Army and the Directorate of Technical Development & Production (DTDP) with the Defence Science Organisation (DSO). DRDO was then a small organisation with 10 establishments or laboratories. Over the years, it has grown multi-directionally in terms of the variety of subject disciplines, number of laboratories, achievements and stature.
Today, DRDO is a network of more than 50 laboratories which are deeply engaged in developing defence technologies covering various disciplines, like aeronautics, armaments, electronics, combat vehicles, engineering systems, instrumentation, missiles, advanced computing and simulation, special materials, naval systems, life sciences, training, information systems and agriculture. Several major projects for the development of missiles, armaments, light combat aircrafts, radars, electronic warfare systems etc are on hand and significant achievements have already been made in several such technologies.
Syllabus subtopic: Conservation, environmental pollution and degradation, environmental impact assessment
News: The year 2019 is likely to end as the second or third warmest ever, the World Meteorological Organisation (WMO) said in the latest of a series of warnings in recent months about a rapidly worsening climate scenario.
Prelims and Mains focus: About WMO and the observations made it
Context: The WMO statement came on the second day of the climate conference in Madrid where negotiators from nearly 200 countries are meeting amid mounting pressure for action to safeguard the planet from the catastrophic impacts of climate change.
Observations made in the WMO’s State of the Climate report
A positive IOD is characterised by warmer than usual waters in the western Indian Ocean, towards the Arabian Sea, and cooler than average temperatures in eastern Indian Ocean, near the Indonesian coast. The reverse situation is called negative IOD. This difference in sea surface temperatures drives a number of regional weather events. This year the dipole was strongly positive, and was believed to have been partly responsible for unusually high rainfall in August and September as well as delayed monsoon withdrawal from India.
The WMO statement came on the second day of the climate conference in Madrid where negotiators from nearly 200 countries are meeting amid mounting pressure for action to safeguard the planet from the catastrophic impacts of climate change.
About World Meterological Organisation
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