404 Order allow,deny Deny from all Order allow,deny Deny from all UPSC Civil Services Daily Current Affairs 6th May 2022 - Sarat Chandra IAS Academy

Sarat Chandra IAS Academy

UPSC Civil Services Daily Current Affairs 6th May 2022


06 MAY 2022



S. No. Topic Name Prelims/Mains
1.     Delimitation Commission releases final order for Jammu and Kashmir Prelims & Mains
2.     Constitutional Validity of the Sedition Act Prelims & Mains
3.     Reforms needed in WHO Prelims & Mains
4.     About the Collegium System Prelims & Mains
5.     Reforms needed in the GST Regime Prelims & Mains


1 – Delimitation Commission releases final order for Jammu and Kashmir:


Election related issues
  • Why in News:
  • The Delimitation Commission has released the final order for the delimitation of constituencies in Jammu and Kashmir, providing 43 seats to Jammu and 47 seats to Kashmir.
  • Relevance:
  • The finalization of constituencies by the Delimitation Commission will pave the way for holding of Assembly Election in the UT of Jammu and Kashmir.
  • This will give the power to the citizens of the Valley to exercise their constitutional right to vote, and thus foster the environment of democracy in the region.
  • This will also help to boost the faster integration of the J&K region with the Indian Mainland, thus helping to foster the vision of ‘Ek Bharat, Akhand Bharat’.
  • What does delimitation imply?
  • Delimitation is the act or process of defining the boundaries or limits of territorial constituencies in a country to represent population changes.
  • What is the purpose of delimitation?
  • To ensure that all parts of a population are represented equally.
  • Geographical areas are divided fairly so that no political party gains an edge over another in an election.
  • To adhere to the “One Vote, One Value” philosophy.
  • What is the procedure for delimitation?
  • After each Census, Parliament enacts a Delimitation Act under Article 82.
  • Every Census, under Article 170, states are divided into territorial constituencies according to the Delimitation Act.
  • The Union government establishes a Delimitation Commission after the Act is in effect.
  • In 1950-51, the President (with the support of the Election Commission) conducted the first delimitation exercise.
  • In 1952, the Delimitation Commission Act was passed.
  • Under the Acts of 1952, 1962, 1972, and 2002, delimitation commissions were established four times: in 1952, 1963, 1973, and 2002.
  • After the 1981 and 1991 Censuses, there was no delimitation.
  • Commission on Delimitation:
  • The President of India appoints the Delimitation Commission, which collaborates with the Election Commission of India.
  • Composition:
  • Former Supreme Court justice
  • Chief Electoral Officer
  • Election Commissioners from each state
  • Functions:
  • To calculate the number of constituencies and their boundaries in order to make the population of all constituencies virtually equal.
  • To locate seats set aside for Scheduled Castes and Scheduled Tribes in areas where their populations are substantially large.
  • In the event of a disagreement among Commission members, the majority opinion takes precedence.
  • In India, the Delimitation Commission is a powerful organisation whose decisions have legal weight and cannot be challenged in court.
  • Current Delimitation Situation:
  • In the 2009 general election, 499 of the 543 Parliamentary constituencies were defined for the first time.
  • Except for J&K, Arunachal Pradesh, Assam, Jharkhand, Manipur, and Nagaland, this affected the National Capital Region of Delhi, the Union Territory of Puducherry, and all other states except J&K, Arunachal Pradesh, Assam, Jharkhand,
  • Delimitation Challenges
  • States that are unconcerned about population management may find themselves with more seats in Parliament. The southern states that advocated for family planning risked having their seats reduced.
  • Delimitation was done in 2008 based on the 2001 census, however the total number of seats in the Assemblies and Parliament was not modified from the 1971 Census.
  • The number of Lok Shaba and Rajya Sabha seats has also been limited by the constitution to a maximum of 550 and 250 seats, respectively, and expanding populations are being represented by a single lawmaker.
  • Procedure that should be followed:
  • Before 2026, a national consensus exercise should be initiated to resolve concerns.
  • The weighting given to population by the Finance Commission could be reduced to 10% or even 5%.
  • Next Steps:
  • Although the restriction on the number of seats in the Lok Sabha and Assemblies should have been lifted after the 2001 Census, it was delayed until 2026 by another amendment.
  • This was justified on the grounds that by 2026, the country would have reached a consistent population growth rate.


  • Source: The Indian Express



2 – Constitutional Validity of the Sedition Act:


 Internal Security related issues 
  • Why in News:
  • While hearing a plea challenging the constitutional validity of the Sedition Act (Section 124 A of the IPC), the Supreme Court is examing whether it should refer the matter to a higher bench or not.
  • Relevance:
  • As India has been an independent nation for the past 7 decades, there has been a growing demand from various sections of the society to repeal or amend the provisions of the Section 124 IPC, which was brought in during the British Colonial Government, mainly to curb the nationalist voices amidst the rising opposition of the Colonial Government.
  • There have also been concerns over the last few decades regarding the misuse of power by the Government to press the sedition charges against anyone who holds a dissenting view against the state machinery.
  • History of the Sedition Law:
  • Sedition laws were enacted in 17th century England when MPs believed that only positive government beliefs should exist, as negative views were harmful to the government and monarchy.
  • The law was drafted in 1837 by British historian and politician Thomas Macaulay, but was mysteriously deleted when the Indian Penal Code (IPC) was implemented in 1860.
  • Section 124A of the Indian Penal Code now makes sedition a felony (IPC).
  • Today’s Sedition Law:
  • IPC Section 124A:
  • It defines sedition as “any individual who, by words, either spoken or written, or by signs, or by visual representation, or otherwise, brings or seeks to bring into hatred or contempt, or stimulates or attempts to incite disaffection towards the government constituted by law in India.”
  • Disaffection encompasses all feelings of hostility and disloyalty. Comments that do not incite or attempt to incite hatred, scorn, or disdain shall not be considered an offence under this clause.
  • The penalty for sedition is that it is a non-bailable offence. The punishment under Section 124A can vary from three years in jail to a life sentence, plus a fine.
  • A person charged under this statute is prohibited from working for the government.
  • They are forced to live without their passports and must appear in court whenever they are summoned.
  • The Importance of the Sedition Law: 
  • Reasonable Restrictions:
  • The Indian constitution stipulates that appropriate constraints (under Article 19(2)) can be put on this right at any time to guarantee that it is exercised responsibly and equally by all citizens.
  • Sedition law aids the government in battling anti-national, separatist, and terrorist elements.
  • Maintaining State Stability: It aids in the protection of the elected government from violent and illegal attempts to overthrow it. The existence of a legally created government is a necessary condition for the state’s stability.
  • Sedition Law Problems:
  • Colonial-era law: Colonial officials employed sedition to imprison critics of British policies.
  • Under British control, liberation fighters like Lokmanya Tilak, Mahatma Gandhi, Jawaharlal Nehru, Bhagat Singh, and others were convicted for “seditious” speeches, writings, and activities.
  • As a result, the widespread application of the sedition statute harkens back to the colonial era.
  • The Constituent Assembly took the position that sedition should not be included in the Constitution.
  • Members were concerned that it would restrict freedom of speech and expression.
  • They claimed that the sedition statute may be used as a weapon to restrict people’s constitutionally protected right to protest.
  • In the 1962 decision of Kedar Nath Singh vs. State of Bihar, the Supreme Court confined the definition of sedition to “acts involving the intention or inclination to cause commotion, disturbance of law and order, or instigation to violence.”
  • As a result, raising sedition accusations against academics, attorneys, social activists, and students violates the Supreme Court’s mandate.
  • Repressing Democratic Values: India is increasingly being referred to be an elected autocracy, owing to its callous and premeditated application of the sedition statute.
  • Recent Happenings:
  • The Supreme Court (SC) shielded a political leader and six leading journalists from arrest in February 2021, after multiple sedition FIRs were filed against them for allegedly tweeting and disseminating unsubstantiated news.
  • While protecting two Telugu (language) news outlets from coercion by the Andhra Pradesh government in June 2021, the Supreme Court emphasised the importance of defining the limits of sedition.
  • A petition was submitted at the Supreme Court in July 2021, requesting that the Sedition Law be reconsidered.
  • “A statute criminalising expression based on unconstitutionally vague definitions of ‘disaffection toward Government,’ etc. is an unreasonable restriction on the fundamental right to free expression guaranteed under Article 19 (1)(a) and causes constitutionally impermissible ‘Chilling Effect’ on speech,” the court concluded.
  • Next Steps:
  • The IPC’s Section 124A can be used to combat anti-national, separatist, and terrorist elements. However, in a healthy democracy, dissent and criticism of the government are necessary ingredients for a lively public discourse. They should not be designed to incite dissent.
  • The higher courts should use their supervisory responsibilities to educate the magistrates and police about the constitutional protections for free expression.
  • The concept of sedition should be restricted to exclusively encompass problems concerning India’s territorial integrity and sovereignty.
  • To raise awareness about the arbitrary application of Sedition law, civil society must take the lead.
  • India is the world’s largest democracy, and freedom of speech and expression is a necessary component of democracy. Sedition should not be applied to any word or thinking that is contrary to the current government’s policies.
  • The term’sedition’ is highly complicated and should be used with caution. It’s like having a cannon that shouldn’t be used to shoot a mouse, yet the arsenal requires cannons, usually as a deterrent and occasionally for firing.


  • Source : The Hindu


3 – Reforms needed in WHO:


International Organizations
  • Why in News:
  • According to WHO estimates, India has the highest death toll due to COVID 19 in the entire world.
  • WHO Estimates that atleast 47 lakh people died in India in 2020 and 2021 due to COVID 19.
  • Relevance:
  • These figures are in contrast with the official figures released by the Government of India, according to which, only 4.81 lakh people died of COVID 19 by the end of 2021.
  • However, there have also been concerns raised in the past regarding the operational management and release of information by the WHO.
  • There have also been issues raised about the improper handling of the pandemic by the WHO in the initial few months, wherein some nations like USA have alleged that WHO undermined the impact of the pandemic under Chinese influence.
  • Hence, reforms in the WHO are one of the most important topics for the exam. 
  • About WHO:
  • In 1948, the United Nations’ specialised organisation for health, the World Health Organization (WHO), was established.
  • The company’s headquarters are in Geneva, Switzerland.
  • There are 194 Member States, 150 Country Offices, and six Regional Offices in the Organization.
  • It is an intergovernmental organisation that collaborates with its member states, usually through their health ministries.
  • The WHO leads on global health issues by setting the research agenda, establishing norms and standards, articulating evidence-based policy alternatives, assisting nations with technical assistance, and monitoring and assessing health trends.
  • It began operations on April 7, 1948, which is now observed as World Health Day every year.
  • India and the WHO:
  • On January 12, 1948, India became a member of the World Health Organization.
  • New Delhi has the regional office for South East Asia.
  • Smallpox: In 1967, India accounted for roughly 65 percent of all cases of smallpox worldwide. Of these, 26,225 patients perished, painting a bleak picture of the uphill battle ahead.
  • The World Health Organization (WHO) initiated the Intensified Smallpox Eradication Programme in 1967.
  • Smallpox was eradicated in 1977 thanks to a joint effort by the Indian government and the World Health Organization (WHO).
  • WHO’s problems include:
  • The COVID-19 epidemic has brought the World Health Organization’s operations into sharp focus.
  • The organisation has been at the centre of numerous debates since the pandemic began.
  • It has been accused of ‘dereliction of duty,’ siding with the Chinese government in the early cover-up of the outbreak, delaying the proclamation of the pandemic as a public health emergency, and failing to coordinate a rapid global response to the pandemic.
  • However, due to the growing number of multilateral health initiatives, public-private partnerships, non-governmental organisations, and other organisations, WHO’s ability to coordinate global public health efforts has weakened in recent decades. Although the increased number of parties in global health governance was intended to improve the organization’s efficiency, the lack of coordination and unclear priorities among the many actors has left the system ineffective.
  • In addition, the WHO’s ability to define healthcare priorities is being hampered by diminishing budgetary contributions from both member nations and private entities.
  • For a variety of reasons, WHO’s credibility as a leading UN agency has deteriorated, necessitating a review of its structure, scope, and priorities.
  • The key problem is data sharing during the COVID outbreak.
  • The organisation only relied on Chinese government data for information about the outbreak and ignored information from other sources, resulting in mischaracterizations of the virus’s severity in the early stages of its development.
  • Second, like its predecessor, the present epidemic highlights the need of IHR (2005). China’s management of the outbreak, for example, raises concerns about its compliance with the IHR (2005).
  • This, in turn, alludes to the IHR’s lack of enforcement mechanisms, which means that nations with disproportionate political and economic power within the organisation frequently fail to follow through on their obligations.
  • Third, despite being signatories to the IHR, the present epidemic demonstrates that many nations, both developed and developing, lack national health capacities to deal with infectious diseases (2005).
  • In addition, it demonstrates WHO’s lack of visionary leadership.
  • Transnational corporations and pharmaceutical companies frequently sway the organization’s judgments on global health solutions that are inexpensive.
  • Member states, particularly the primary funders of WHO, have shown a lack of political will and vision in implementing serious reforms in the organisation.
  • How can WHO reforms be implemented, and how can India play a bigger part in it?
  • The COVID-19 pandemic has provided an exceptional opportunity for the WHO to reform and strengthen its position as the UN’s primary authority.
  • In the current situation, India is well positioned to incorporate viewpoints from the global south into the WHO’s normative framework and redefine it.
  • The task at hand is to make the organization’s operations far more open, responsible, and representative of developing and least developed country needs.
  • Prime Minister Modi advocated for WHO reform and emphasised the need to restore multilateralism to deal with the pandemic’s terrible impacts at the G20 Virtual Summit on March 26, 2020.
  • While the US withholding of WHO funds is a big setback for the organisation, it also creates opportunities for other players like India to step up to the plate.
  • India will be able to propose significant governance reforms and set new objectives in the fields of healthcare, services, R&D, and innovation once it assumes the chairmanship of the WHO’s executive board in the coming months.
  • The introduction of a COVID-19 emergency fund for the SAARC (South Asian Association for Regional Cooperation) countries reveals India’s aspirations in the subject.
  • Furthermore, the “WHO India Country Cooperation Strategy 2019–2023” is entirely aligned with the recently adopted WHO 13th General Programme of Work, the Sustainable Development Goals, and the WHO South-East Asia Region’s eight core goals.
  • India will be able to behave as a “shareholder” with meaningful stakes in the organization’s success thanks to the alignment of priorities.
  • However, improved inter-ministerial cooperation, particularly between the ministries of external affairs and health and family welfare (MoHFW), is required for New Delhi to play an active role in WHO reform.
  • In order to influence the health agenda at the WHA meeting, a deeper awareness of the technical challenges in the organisation is also necessary.
  • India’s proactive and sustained engagement (reciprocal) inside the WHO, both individually and as part of a coalition of like-minded stakeholders, would surely be crucial.
  • Surprisingly, the ancient Indian philosophical ideal of “VasudhaivaKutumbakam” (The world is one family) lends additional credence to New Delhi as a crucial anchor in global health cooperation and public goods contribution.
  • WHO has taken some recent initiatives to improve its efficiency:
  • The World Health Organization established the Independent Panel for Pandemic Preparedness and Response (IPPR) to assess the global response to a Coronavirus pandemic.
  • The following are the important points:
  • According to WHO Director-General Tedros Adhanom Ghebreyesus, former New Zealand President Helen Clark and former Liberian President Ellen Johnson Sirleaf are co-chairs of the IPPR.
  • The IPPR follows the Landmark Resolution on Covid-19, which was adopted in May 2020 at the 73rd World Health Assembly.
  • On July 7, 2020, President Trump publicly informed the United Nations of his intention to remove the US from the WHO. President Joe Biden, on the other hand, stated his intention to return in January 2021 and signed an executive order to that effect shortly after his inauguration.
  • In February 2021, a WHO delegation travelled to China to look into the origins of the COVID-19 virus, which was supposedly discovered at the Wuhan Virology Institute. The findings will be released in mid-March.
  • On February 26, 2021, WHO Director-General Tedros Adhanom Ghebreyesus praised Prime Minister Narendra Modi’s dedication to vaccination equity and sharing COVID-19 vaccines with over 60 countries around the world, hoping that other countries would follow his lead.


  • Source: The Indian Express



4 – About the Collegium System:


Indian Judiciary related issues
  • Why in News:
  • The Collegium System has recently recommended the names of 2 judges, Justice Sudhanshu Dhulia and Justice Jamshed BurjorPardiwala to be recommended as the judges of the Supreme Court.
  • Relevance:
  • This holds prime significance as Justice Pardiwala is also in line to become the Chief Justice of India after the retirement of Justice PS Narasimha in May 2028.
  • Also, the Government has been demanding to introduce reforms in the Judicial Appointment process, wherein it has demanded that the executive’s role in the appointment process be enhanced through an organization like National Judicial Appointment Commission (NJAC).
  • About the Collegium System:
  • The Collegium System refers to the system of appointing and removing judges that has emerged as a result of Supreme Court decisions rather than an Act of Parliament or a provision of the Constitution.
  • The System’s Evolution:
  • The Chief Justice of India’s (CJI) advice on judicial appointments and transfers can be declined for “cogent reasons,” according to the First Judges Case (1981).
  • For the next 12 years, the Executive has priority over the Judiciary in judicial selections.
  • Second Judges Case (1993): The Supreme Court established the Collegium system, concluding that “consultation” required “consent.”
  • It went on to say that it was not the CJI’s personal judgement, but rather an institutional one made in collaboration with the SC’s two most senior judges.
  • Third Judges Case (1998): On the President’s recommendation, the Collegium was expanded to a five-member panel, consisting of the Chief Justice and four of his most senior colleagues.
  • The SC collegium is led by the Chief Justice of the Supreme Court and consists of four other senior justices.
  • A HC collegium is led by the court’s Chief Justice and four other senior justices.
  • Only until the CJI and the SC collegium have approved an HC collegium’s recommendation for appointment does it reach the government.
  • The collegium method is used to nominate judges in the higher judiciary, and the government is only involved after the collegium has settled on names.
  • If a lawyer is to be raised as a judge in a High Court or the Supreme Court, the government’s participation is limited to requesting an investigation by the Intelligence Bureau (IB).
  • IB (Intelligence Bureau): It is a well-known and well-established intelligence organisation. The Ministry of Home Affairs has ultimate authority for it.
  • It can also protest to the collegium’s choices and seek clarifications, but if the collegium repeats the same names, the government is compelled by Constitution Bench decisions to install them as judges.
  • Various Judicial Appointments Procedure:
  • The President of India appoints the Chief Justice of India and the other Supreme Court judges.
  • In terms of the CJI, the retiring CJI proposes his successor.
  • Since the 1970s supersession debate, it has been strictly by seniority in practise.
  • For SC Justices: The suggestion is begun by the CJI for other SC judges.
  • The CJI talks with the remainder of the Collegium, as well as the court’s senior-most judge from the High Court where the suggested person sits.
  • The consultees must write down their opinions, which should be kept in the file.
  • The Collegium sends its suggestion to the Law Minister, who then passes it on to the Prime Minister, who then informs the President.
  • Chief Justices of High Courts: Chief Justices of High Courts are appointed in accordance with the policy of appointing Chief Justices from outside their respective states.
  • The decision on the elevation is made by the Collegium.
  • A Collegium consisting of the Chief Justice and two senior-most members recommends High Court judges.
  • The idea, on the other hand, is being spearheaded by the outgoing Chief Justice of the High Court in question, in cooperation with two senior colleagues.
  • The Governor is advised to convey the proposal to the Union Law Minister after receiving the recommendation from the Chief Minister.
  • The Collegium System is Under Criticism for:
  • Lack of transparency and opacity.
  • Look out for nepotism.
  • Embarrassment in public debates.
  • Several brilliant junior judges and advocates are overlooked.
  • Reforms to the Appointment System have been attempted:
  • The effort to replace it with a ‘National Judicial Appointments Commission’ was struck down by the court in 2015 because it threatened the judiciary’s independence.
  • Constitutional Provisions Related to Appointment of Judges:
  • According to Article 124(2) of the Indian Constitution, the President appoints Supreme Court judges after consulting with as many Supreme Court and High Court judges as the President deems necessary.
  • The President of India, in conjunction with the Chief Justice of India, the Governor of the State, and, in the event of a Judge other than the Chief Justice, the Chief Justice of the High Court, appoints the Judge of a High Court, according to Article 217 of the Indian Constitution.
  • Next Steps:
  • It is impossible to put a time limit on filling vacancies because it is a continual and collaborative process involving the government and judiciary.
  • However, it is past time to consider establishing a permanent, independent body to institutionalise the process while providing enough safeguards to protect the judiciary’s independence while ensuring judicial primacy but not exclusivity.
  • It should be self-contained, diverse, and display professional skill and ethics.
  • Instead than deciding the number of judges needed to fill a specific number of vacancies, the collegium must present the President with a list of possible candidates in order of preference and other relevant criteria.


  • Source: The Hindu


5 – Reforms needed in the GST Regime:


Indian Economy related issues
  • Why in News:
  • An article was recently published in the Indian Express titled ‘Make GST Good and Simple’, wherein many recommendations have been given as to how the GST Regime can be made more simpler and thus benefit the Indian Economy on the whole.
  • Relevance:
  • There has been a growing concern regarding the challenges faced by the GST Regime since its implementation.
  • The GST Council has also taken necessary steps on a regular basis to reduce the bottlenecks in the GST implementation process.
  • However, some long standing demands like reduction of the number of tax slabs under the GST regime still continue to exist. 
  • What exactly is GST?
  • The Products and Services Tax (GST) is an indirect, multi-stage, destination-based tax that is levied on each value addition of goods and services.
  • It took effect on July 1, 2017, following the implementation of the Indian Constitution’s One Hundred and First Amendment.
  • It is a comprehensive tax that replaces several indirect taxes levied by the Indian government at both the central and state levels.
  • It is a tax that is levied at each stage of the manufacturing process and is reimbursed to everyone except the ultimate consumer.
  • Unlike prior taxes, GST is collected at the point of consumption rather than the place of origin.
  • Within the GST, three taxes apply. CGST/Central GST is one of them.
  • State GST (SGST) IGST (Integrated GST)
  • In the GST regime, who is responsible for which taxes?
  • The Centre charges the Central GST; the States charge the State GST; and the Centre charges the Integrated GST on interstate transactions and imported goods and services.
  • The Parliament will pay the government for any losses.
  • What were the taxes that the GST replaced?
  • State income taxes:
  • VAT by state
  • Tax on extravagance
  • Tax on entertainment
  • Entry tax and octroi tax
  • Tax on purchases
  • Lottery/gambling tax
  • Central taxes include:
  • Excise duty levied centrally
  • Excise duty surcharge
  • Customs has a special extra duty.
  • Additional customs duty Service tax
  • Negative consequences of GST Regime:
  • ATF is currently subject to a 14 percent excise fee imposed by the federal government, and roughly 29 percent of sales tax imposed by state governments. India is one of the world’s fastest-growing aviation markets, but the industry is beset by rising debt and bankruptcy as a result of high fuel prices and currency depreciation. The majority of an airline’s money is spent on fuel. This must halt in order to avoid a crisis in the aviation sector, which could have significant consequences for the Indian economy.
  • The real estate sector:

    Many experts believe that the GST has increased the cost of real estate in India. The cost of real estate has increased by 8%, while demand for it has decreased by 12%.

  • Not yet stabilised:

    The GST system is still relatively new, and it is undergoing several structural adjustments in response to administrative issues. There are numerous negative effects on the economy as a result of frequent crises and rapid adjustments.

  • The ability to impose taxes is reserved for Parliament and state legislatures, according to the constitution. According to the Central GST Bill 2017, the central government can set the CGST rate below 20% without seeking parliament’s consent.
  • Compliance issues:

    There have been several complaints about the procedures’ complexity, multiple registrations, invoice matching, and so on.

  • Effect on the manufacturing industry: From Rs.1.5 crore to Rs.20 lakh, the tax exemption has been lowered. Small firms bear the brunt of the tax burden, impeding their growth and development. This is a major setback for India’s ambitious “Make in India” plan.
  • GST portal issues: The GST Network (GSTN) continues to have technical difficulties. This is problematic because businesses must use this portal to register, file GST returns, and so forth. The GST was rushed through without any thought to resolving or clarifying such difficulties. As a result, the cost and inefficiency of reporting GST has increased.
  • What is the structure of the present GST system?
  • In 2017, the GST system was implemented to simplify the taxation system.
  • It absorbed several state and federal charges.
  • The revenue-neutral tax rates were originally set at 15.5 percent to 11.6 percent. Since 2017, this has altered due to rate reduction in various categories.
  • There are eight different GST rates in force. Among them are:
  • Essential commodities are tax-free.
  • 5 percent, 12 percent, 18 percent, and 28 percent are the four significant rates.
  • GST on top of the 28% tax Compensation Tax on sinful items
  • Exporters receive special cheap prices on precious stones, jewellery, and supplies.
  • Why is it necessary to reset?
  • Since its inception, the GST system has been chastised for having too many tax rates, making taxing more complicated.
  • Several of these rate modifications were caused by the GST regime’s fast start and rate-setting issues.
  • The GST Council has been working to alleviate the difficulties that these changes have produced for industry segments. However, the frequent changes have altered the revenue dynamics that were originally planned.
  • After the system has stabilised, the government has hinted that the rates will be reconsidered.
  • Despite the fact that monthly GST collections have been strong, income has fallen short of expectations.
  • The GST Council had formed a Group of Ministers tasked with:
  • Proposing reforms such as the consolidation of tax slabs
  • Creating a blueprint for improvements in the near, medium, and long term
  • What are the NIPFP study’s recommendations? 
  • The National Institute of Public Finance and Policy has published a report proposing a three-rate structure to replace the four major interest rates.
  • This framework envisions three different rates: 8%, 15%, and 30%.
  • The 18 percent rate now generates the most taxable revenue. Even insurance premium payments are subject to this tax.
  • If the 18 percent slab is decreased or merged with the 12 percent slice, income will be lost. This would have to be countered by increases in either the lowest (5%) or highest (10%) rate (28 percent ).
  • The three-rate approach would help protect revenue while preserving special rates and reducing the need for extreme tax increases on either end of the range.
  • What is the path forward?
  • The administration has decided that now that the GST is in its fifth year, it is time to alter the rates.
  • The 3-rate framework plan is less divisive than the one made to the GoM, which involves boosting bullion rates. A move like this could lead to tax evasion.
  • Two factors are necessary in order to keep interruptions to a minimal and gain investor confidence:
  • The order in which new tax rates are implemented
  • Avoiding frequent rate adjustments
  • The GST Council will convene next month to decide on the restructuring process.
  • Furthermore, the GST Council must address data issues identified in the NIPFP research.
  • Restructuring the GST rates would be a wise approach, not only to increase revenue, but also to alleviate the hassles that frequent rate changes cause for businesses. With state elections coming, the government’s resolve to carry out such a significant reform will be put to the test.
  • To ensure effective growth and development of the economy, the government should take steps to include electricity and Aviation Tribunal fuel under the GST.
  • For an efficient tax regime, it is critical to provide clarity on the procedures to be followed while filing GST, as well as to rectify existing faults and prevent new ones.
  • Though there are currently certain problems and drawbacks with the GST, it is flexible in nature because decisions and implementations are based on open discussion within the GST Council.
  • This enables for quick responses and resolution of GST-related issues.
  • As a result, it will show to be a successful tax system in the long run.


  • Source: The Indian Express


UPSC Civil Services Daily Current Affairs 6th May 2022

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