GOODS AND SERVICES TAX (GST) COMPLETES EIGHT YEARS
TOPIC: (GS3) ECONOMY: THE HINDU
As the Goods and Services Tax (GST) completes eight years since its launch on July 1, 2017, there is renewed focus on unresolved area to strengthen tobacco taxation for better public health and revenue outcomes.
GST Achievements:
- Helped create a unified national tax structure under the “One Nation, One Tax” goal.
- Boosted economic efficiency through input tax credit and removal of tax-on-tax.
- Digitized tax administration (e-way bills, GSTN), reducing tax evasion.
- Enhanced logistics by eliminating inter-State check posts, cutting transport time by up to 20%.
- Achieved high revenue collections—over ₹22 lakh crore in 2024–25.
Unfinished Business: Tobacco Taxation
Public Health Impact:
- Tobacco causes over 3,500 deaths daily in India.
- Economic loss due to tobacco use is much higher than the revenue earned from it.
- Nearly 29% of adults and 8.5% of teens (13–15 years) use tobacco.
Tax Burden Gaps:
- WHO recommends 75% tax share in retail price for tobacco, but India falls short: Bidis: 22%, Cigarettes: 54%, Smokeless: 65%.
- Since GST, no major tax hikes unlike the pre-GST period that saw reduced tobacco use.
Structural Flaws in Tax Design:
- GST relies mostly on ad valorem (value-based) taxes, allowing price manipulation.
- Specific excise duties (fixed per unit) have dropped sharply.
- Bidis, though widely consumed, are not even taxed under the GST compensation cess.
Expiry of Compensation Cess:
- The GST compensation cess, crucial for tobacco taxation, ends in March 2026.
- If not extended, it could reduce tobacco prices, making them more affordable and harmful.
Way Forward:
- Raise GST on tobacco to 40% (legal peak rate).
- Reintroduce/strengthen specific excise duties.
- Adopt a mixed tax system (value-based + fixed) to reduce consumption and boost revenue.
- Implement WHO Protocol to prevent illicit tobacco trade.
GST (GOODS AND SERVICES TAX)
Basic Details
- GST launched on: 1st July 2017
- Introduced by: 101st Constitutional Amendment Act, 2016
- Type: Indirect tax system
- Motto: “One Nation, One Tax”
What is GST?
- A single tax on the supply of goods and services from manufacturer to consumer.
- It replaces multiple indirect taxes like VAT, service tax, excise duty, etc.
- Destination-based tax (collected where goods/services are consumed).
Types of GST
- CGST – Central Goods and Services Tax
- SGST – State Goods and Services Tax
- IGST – Integrated Goods and Services Tax (on inter-state supply)
- UTGST – Union Territory Goods and Services Tax
GST Council
- Created under Article 279A
- Headed by: Union Finance Minister
- Members: Union Minister of State (Finance), and State Finance Ministers
- Decides tax rates, exemptions, rules, etc.
Conclusion:
Reforming tobacco taxation under GST is vital for protecting public health and improving revenue. As GST evolves, this presents a key opportunity to fix policy gaps and meet developmental goals.
VOTER VERIFICATION DRIVE IN BIHAR
TOPIC: (GS2) INDIAN POLITY: THE HINDU
The Election Commission of India (ECI) has initiated a Special Intensive Revision of Electoral Rolls in Bihar from July 1 to July 31, 2025, requiring a massive number of voters to prove their citizenship within a short time. This has raised concerns about the potential disenfranchisement of millions, especially the poor and less educated.
Scale of the Issue:
- Bihar’s voting-age population is about 8.08 crore.
- Roughly 59% (4.76 crore) are aged 40 and below and must now submit proof of citizenship.
- After removing the dead and migrated individuals, around 3.16 crore voters from 2003 rolls remain; others need to prove eligibility again.
- Therefore, approximately 4.74 crore people need to complete the verification process in just one month.
Challenges with Document Requirements:
- ECI has listed 11 acceptable documents, but most are rare among Bihar’s poorer population.
- Examples:
- Only 2.4% have passports.
- Birth certificates are extremely rare for those born before 2001.
- Matriculation certificate is now the de facto key document, but less than 50% of the 18–40 age group possess it.
- Caste certificates are held by only 1 in 4 households.
- Commonly held documents like Aadhaar or ration cards are not accepted.
Risk of Disenfranchisement:
- Over 2.5 crore poor and underprivileged individuals without key documents may lose voting rights.
- Those above 40 who were left out of the 2003 roll or have name mismatches may also be affected.
- The process could exclude genuine citizens due to lack of documentation, not because they are illegal migrants.
Unrealistic Timeline and Administrative Burden:
- Around 1.95 lakh people per constituency must be verified.
- One Electoral Registration Officer (ERO) per constituency cannot reasonably verify all documents, hold inquiries, and update rolls in 62 days.
Way Forward:
- Broaden the list of acceptable documents (include Aadhaar, ration cards).
- Extend the timeline for verification.
- Ensure no citizen is denied the constitutional right to vote due to administrative limitations.
Conclusion:
This voter verification drive, if not reformed, risks excluding millions of legitimate voters, particularly the poor and marginalised. A more inclusive and realistic approach is necessary to uphold democratic principles.
UNSAFE CANCER DRUGS AND GLOBAL DRUG SAFETY CONCERNS
TOPIC: (GS2) INDIAN POLITY: THE HINDU
A recent global investigation revealed that substandard cancer medicines have been supplied to over 100 countries, raising serious concerns about drug safety, especially in low- and middle-income nations. The report highlights failures in quality checks and lack of oversight during production and distribution stages.
How Unsafe Cancer Drugs Reach Patients:
- Cancer drugs go through multiple stages: raw material sourcing, manufacturing, packaging, global shipping, and local distribution.
- At every step, strict quality control is needed to avoid contamination or degradation.
- Small lapses—such as improper temperature or poor hygiene—can affect drug safety.
Risks in Manufacturing
- Contamination is a major threat.
- Manufacturing facilities must maintain sterile environments; even small human errors can introduce bacteria.
- Inadequate cleaning, poor water filtration, or untested raw materials can make life-saving drugs dangerous.
Drug Safety Measures in Developed Countries:
United Kingdom’s System (NHS Model)
- Every batch undergoes two quality checks — at production and upon arrival in the UK.
- 20+ quality parameters are tested, and only qualified experts are allowed to certify drug batches.
- The MHRA (Medicines and Healthcare products Regulatory Agency) inspects manufacturing sites globally.
- This model represents the gold standard in drug safety.
Challenges in Low- and Middle-Income Countries:
- Lack of testing infrastructure, trained professionals, and drug tracking systems.
- In countries like Nepal, drug imports often go unverified.
- Porous borders and corruption increase the entry of fake or low-quality drugs.
Real-world Consequences:
- Contaminated drugs have caused illness and deaths in countries like Saudi Arabia, Colombia, Yemen, and Brazil.
- In Yemen, methotrexate tainted with bacteria led to the death of 10 children in 2022.
- Poor-quality medicines especially threaten vulnerable cancer patients.
WHO’s Role and Tools for Safety:
- Global Alert System – Issues warnings after harmful drugs are identified.
- Global Benchmarking Tool – Rates countries’ regulatory strength (1 to 4); most are at weak levels (1–2).
- Essential Medicines List – Helps prioritize safe, vital medicines.
- Prequalification Program – Lists approved labs and drug sources vetted by WHO.
- GMP Certification – Confirms quality manufacturing standards.
- WHO Certification Scheme (CoPP) – Like a medicine passport confirming a drug’s safety for export/import.
Conclusion:
While WHO and national regulators have frameworks for drug safety, many countries lack enforcement capacity, letting unsafe cancer medicines slip through. Strengthening oversight and testing systems is essential to protect global public health.
CAN A GI TAG PREVENT CULTURAL MISAPPROPRIATION?
TOPIC: (GS1) INDIAN CULTURE: THE HINDU
On June 25, 2025, luxury fashion house Prada showcased a shoe design inspired by Kolhapuri chappals (a GI-tagged Indian product) at a fashion event in Milan. This led to accusations of cultural misappropriation and raised questions on the protection of Geographical Indications (GIs) at the global level.
What is a Geographical Indication (GI)?
- A GI is a type of intellectual property that indicates a product’s origin from a specific region, where its unique quality or reputation is closely linked to that location.
- In India, GIs are protected under the Geographical Indications of Goods (Registration and Protection) Act, 1999 (effective from 2003).
- Currently, India has 658 GI-tagged products, including Darjeeling tea, Madhubani paintings, Pashmina shawls, and Chanderi sarees.
Importance of GI Tags:
- Help preserve traditional knowledge and cultural heritage.
- Promote rural development and exports by ensuring product authenticity.
- Build consumer trust by preventing fake imitations.
- GI rights belong to the producer communities, not individuals or companies.
Legal Protection and Limits:
- GI owners can act against those falsely using GI names, causing confusion or unfair competition.
- However, GI rights are territorial, i.e., they apply only within the country of registration.
- There is no single international GI law, but cross-border protection is possible by applying in individual countries after recognition in the country of origin.
Global Misuse of Indian Traditional Knowledge:
- Basmati rice (1997): U.S. patent to Ricetec Inc. later withdrawn.
- Turmeric (1995): Patent for wound healing revoked after Indian challenge.
- Neem (2000): European patent for neem extract revoked due to Indian traditional use.
Way Forward:
- Expand Traditional Knowledge Digital Library (TKDL) to cover more indigenous cultural expressions.
- Create searchable databases to help brands check the origin and work with local artisans ethically.
- Encourage global cooperation to recognize and protect GIs beyond national borders.
Kolhapuri Chappal?
- Handcrafted leather sandals known for durability, flexibility, and traditional design
- Traditionally made from buffalo hide and thread, with no use of nails or metal
- Originates from Kolhapur region of Maharashtra
Conclusion:
While GI tags help protect traditional products domestically, international protection is limited. To prevent cultural misuse, India must invest in stronger global recognition mechanisms and promote collaborative practices.
FASHION INDUSTRY AND SLOW CLIMATE ACTION
TOPIC: (GS3) ENVIRONMENT: THE HINDU
A recent global study revealed that many fashion brands are failing to support their suppliers in reducing greenhouse gas emissions, despite pledging net-zero goals. This creates a financial burden on factories, especially in developing countries like India, Bangladesh, and Cambodia.
Fashion’s Environmental Impact
- The fashion industry contributes nearly 8% of global carbon emissions, as per the United Nations.
- While brands have set climate targets for 2050 or earlier, actual action is limited, particularly in supply chains.
Gaps in Implementation
- A Stand.earth report (2025) found that: Only one-third of brands reduced emissions by at least 10%. About 40% of brands increased their emissions since their baseline year.
- Few brands are investing in cleaner technologies for their suppliers.
- Most support is limited to carbon audits or small pilot projects, not large-scale transformation.
Financial Burden on Suppliers
- Many garment factories cannot afford the high cost of clean technology, like heat pumps or renewable energy systems.
- In Bangladesh, 83% of emissions come from fossil fuel use in garment factories.
- The investment gap in Bangladesh to halve emissions by 2030 is estimated at $4.8 billion.
India and Other Countries Face Similar Challenges
- Indian and Vietnamese clothing manufacturers also struggle to reduce emissions from processes like dyeing and fabric finishing.
- Suppliers need long-term purchase contracts and price incentives from brands to justify green investments.
Limited Brand Financing
- Only six global brands, including H&M, offer project financing for supplier decarbonisation.
- H&M is testing energy-efficient thermal systems in India, China, and Vietnam.
Way Forward
- Brands must share the cost of transitioning to low-emission production.
- Climate action should include direct financial support, price premiums, and partnership-based approaches.
- Industry-wide change needs collective responsibility between brands and suppliers.
Conclusion
Without meaningful investment from fashion brands, climate goals risk becoming unrealistic demands on poor suppliers, undermining sustainability and fair business practices.
INDIA’S EXTERNAL DEBT
TOPIC: (GS3) ECONOMY: THE HINDU
India’s external debt increased to $736.3 billion by the end of March 2025, rising from $668.8 billion in the previous year. This increase has raised concerns over the country’s external financial vulnerability amid global economic uncertainty.
What is External Debt?
- It refers to the money borrowed from foreign sources such as foreign governments, international institutions (like the IMF), and private lenders.
- It is classified into:
- Long-term debt (maturity over one year)
- Short-term debt (maturity within one year)
Current Trends in India’s External Debt (FY25)
- Total External Debt: $736.3 billion (19.1% of GDP)
- Long-term debt: $601.9 billion (increased by $60.6 billion from FY24)
- Short-term debt: Share declined to 18.3% (from 19.1%)
- However, short-term debt to forex reserves ratio rose to 20.1%, indicating increased rollover risk.
- Debt Components:
- Loans: 34% (highest share)
- Currency and deposits: 22.8%
- Trade credit and advances: 17.8%
- Debt securities: 17.7%
- Currency Composition: USD-denominated debt: 54.2% of total
Key Concerns
- Currency Fluctuation Risk: High share of USD debt increases repayment pressure if rupee weakens.
- Short-term Vulnerabilities: Higher short-term debt ratio to reserves makes India exposed during global financial stress.
- Creditworthiness Impact: Rising debt without export or GDP growth may hurt India’s sovereign credit rating.
- Interest Outflows: Larger external debt means higher interest payments, increasing the current account deficit.
Way Forward
- Promote Rupee-Based Borrowing: Encourage instruments like Masala Bonds and bilateral currency swaps.
- Debt Transparency: Improve tracking of private sector foreign borrowings and currency risks.
- Monitor ECBs Closely: Especially for NBFCs and startups borrowing abroad.
- Boost Forex Reserves: Strengthen export-led growth to generate foreign currency.
- Stick to Fiscal Discipline: Follow FRBM targets to avoid over-reliance on external borrowing.
Conclusion
India’s rising external debt shows greater global integration but also brings risks. A balanced and resilient debt strategy is essential — one that ensures sustainability, safeguards the economy, and avoids over-dependence on foreign funds.
ARTIFICIAL RAIN IN DELHI
TOPIC: (GS3) ENVIRONMENT: THE HINDU
Delhi is preparing to conduct its first cloud seeding experiment to trigger artificial rainfall in a bid to reduce extreme air pollution levels. The project is led by IIT Kanpur and IMD Pune.
What is Artificial Rain?
- Artificial rain is a technique where chemicals are sprayed into clouds to stimulate rainfall.
- The process, called cloud seeding, helps form water droplets around particles, leading to precipitation.
Common Chemicals Used
- Silver iodide (AgI)
- Potassium iodide
- Sodium chloride (salt)
- Dry ice (solid carbon dioxide)
These act as condensation nuclei to gather moisture in clouds.
Conditions Needed for Success
- Presence of moisture-laden clouds
- Adequate humidity and unstable atmosphere
- Favourable wind patterns and temperature levels
Benefits of Cloud Seeding
- Reduces Air Pollution: Helps wash down dust and harmful particles in the air, especially during smog episodes.
- Fights Drought: States like Maharashtra and Karnataka have used it to enhance rainfall during dry spells (e.g., Project Meghdoot, Varshadhari).
- Tackles Forest Fires: By increasing rainfall, it can lower fire risk in dry forest regions.
- International Use: Countries such as China, UAE, Thailand, and parts of the USA (like Nevada and Texas) use this for weather control and water management.
Concerns and Limitations
- Not a Long-Term Fix: Doesn’t solve root causes like vehicle pollution, crop burning, or poor urban design.
- Environmental Risk: Excess chemicals may pollute water bodies, soil, and groundwater.
- Health and Ecology Issues: Chemical build-up can harm plants, reduce soil quality, and affect food chains.
- Ethical Questions: Changing weather patterns raises moral concerns and legal challenges.
Way Forward
- Use Only in Emergencies: Should be done when AQI reaches hazardous levels.
- Back with Science: Must use radar data, satellite imagery, and models for better targeting.
- Focus on Sustainable Solutions:
- Promote electric vehicles (EVs)
- Expand green spaces like urban forests
- Implement bio-decomposers for crop residue management
Conclusion
Artificial rain can temporarily reduce pollution, but it is not a substitute for long-term environmental planning. India must adopt it carefully, only when needed, while working on permanent pollution solutions.
BIHAR BECOMES FIRST STATE TO USE MOBILE APP FOR VOTING
TOPIC: (GS2) INDIAN POLITY: THE HINDU
Bihar has made history by becoming the first Indian state to introduce mobile app-based e-voting in its municipal and by-election processes. This is aimed at helping citizens who cannot physically visit polling stations.
About the Initiative
- Bihar has launched e-voting through a mobile app called E-SECBHR.
- This system is being used in 6 Nagar Panchayats and 36 other urban local bodies during current elections.
- The feature is currently available only for Android phone users.
Who Can Use It?
- The mobile voting system is available for:
- Senior citizens
- Pregnant women
- Persons with disabilities
- It aims to make the electoral process more inclusive and accessible.
Security Measures
To ensure the safety and authenticity of e-voting, multiple checks have been introduced:
- Mobile number limit: Only two registered voters can use one mobile number.
- Voter verification: Voters must provide their Voter ID number to log in.
- Facial recognition: Face matching is done for identity confirmation.
- Blockchain technology: Used to secure votes, making them tamper-proof and unchangeable.
- Secure storage: Each vote is stored in a digital ledger that prevents fraud.
Significance
- Enhances voter convenience and participation.
- First step towards digitising the voting process in India.
- Could become a model for future elections, especially for people with mobility or accessibility challenges.
Conclusion
Bihar’s step into mobile app-based voting reflects the use of technology to improve governance. If successful, this pilot could pave the way for broader digital electoral reforms across India.