GST COUNCIL DID NOT DISCUSS COMPENSATION FOR STATES
TOPIC: (GS3) ECONOMY: THE HINDU
During the 56th GST Council meeting (September 2025), several States including Kerala and Telangana raised concerns over revenue losses from the recent GST rate cuts.
Background
- The GST Compensation Scheme (valid till June 2022) assured 14% annual growth in States’ revenue for 5 years post-GST rollout (2017).
- With GST 2.0 rate cuts in 2025, many States fear further decline in tax revenues.
- States argue they bear most expenditure but receive less share of revenues.
Concerns Raised by States
Reduced Revenue Growth
- The Centre promised 14% annual revenue growth after GST.
- Actual growth seen: 7–8%, much below expectations.
- Result: States face funding gaps for development projects.
Expenditure-Revenue Mismatch
- As per 15th Finance Commission:
- States’ share in total government spending: ~64%.
- Centre’s share in total revenue: ~63–64%.
- Hence, States spend more but earn less, leading to fiscal stress.
Cesses and Surcharges
- Around 20% of Centre’s revenue comes from cesses/surcharges, which are not shared with States.
- Actual tax devolution is around 30–32%, below the 41% recommended by the Finance Commission.
Lack of Consultation and Transparency
- Kerala’s Finance Minister said no detailed study or rate rationalisation report was shared before the rate cuts.
- Decision was mainly based on Union Government’s proposal, not a joint analysis.
Absence of Discussion on Compensation
- States had requested a compensation mechanism to offset revenue loss.
- Though listed in the agenda, the topic was not discussed during the meeting.
Impact on States
- Kerala estimates a loss of ₹8,000–₹10,000 crore.
- Similar losses expected in other States due to tax reductions.
- Increased financial dependence on the Centre may weaken fiscal federalism.
Way Forward
- Revisit GST compensation framework post-rate cuts.
- Limit cesses and surcharges to ensure fair revenue sharing.
- Institutionalise consultative mechanisms in GST Council decisions.
- Strengthen States’ fiscal autonomy for balanced development.
Conclusion
The absence of a clear compensation plan amid GST 2.0 reforms has reignited debate over Centre-State fiscal relations. For true cooperative federalism, States’ revenue needs must be addressed alongside tax simplification goals.
THE TURMOIL IN KATHMANDU: THE ROAD AHEAD FOR NEPAL
TOPIC: (GS2) INTERNATIONAL RELATIONS: THE HINDU
Mass Gen Z-led protests in Kathmandu (September 2025) forced Prime Minister K.P. Sharma Oli to resign.
Background
- The protests were sparked by youth frustration over corruption, nepotism, and economic stagnation.
- Harsh police response intensified public anger.
- The Nepal Army mediated, leading to the formation of an apolitical interim government and dissolution of Parliament.
Reasons Behind the Unrest
- Youth Unemployment: Over 20% youth unemployment despite only 4–5% overall unemployment. Lack of job creation and economic reforms.
- Political Instability: Since the 2015 Constitution, Nepal has seen 7 governments with the same few leaders rotating power. Cronyism and corruption amid outward political churn.
- Disillusionment with Parties: Traditional parties (UML, Maoists, NC) seen as self-serving. Protests reflect widespread frustration beyond party lines.
- Governance Deficits: Weak institutions, slow justice, and misuse of coalition politics. Delay in reforms, especially in economy and federalism.
Current Situation
- Interim PM Sushila Karki’s priorities:
- Conduct free and fair elections by March 5, 2026.
- Investigate police excesses and protest violence.
- Expose corruption in political offices.
- Challenges:
- Infiltration of protests by political gangs.
- Weak judicial system for fast-track prosecutions.
Debates on Constitutional Reform
- Some propose:
- Directly elected executive,
- Reducing proportional representation,
- Diluting federalism.
- Risks:
- May provoke ethnic groups (Madhesis, Janjatis, Tharus).
- Could delay elections and deepen mistrust.
India’s Role
- India maintained restraint, avoiding interference.
- PM Narendra Modi’s call to Ms. Karki conveyed support and condolences, reinforcing goodwill.
Way Forward
- Priority should be peaceful, inclusive, and transparent elections.
- Avoid hasty constitutional changes lacking consensus.
- Empower youth participation and ensure accountable governance.
Conclusion
Nepal stands at a critical juncture. Only fair elections and institutional accountability can restore trust and uphold the gains of democracy achieved since 2006. Any deviation risks undoing decades of progress towards an inclusive federal republic.
CUSTODIAL DEATHS IN INDIA
TOPIC: (GS2) INDIAN POLITY: THE HINDU
The Supreme Court reprimanded the Madhya Pradesh government and CBI for failing to arrest two police officers linked to the custodial death of a 25-year-old, highlighting ongoing concerns over police accountability in India.
Overview
- According to the NHRC, 11,650 custodial deaths occurred in India between 2016–2022.
- Uttar Pradesh has the highest incidence with 2,630 deaths.
- Magisterial inquiries are rare: only 345 conducted between 2017–2022, leading to 123 arrests.
- 71% of victims belong to poor or vulnerable groups, indicating socio-economic bias.
Reasons for High Custodial Deaths
- Colonial Policing Legacy: Police operate under the Police Act, 1861, prioritizing control over service.
- Weak Accountability: Police often investigate their own colleagues, creating bias.
- Use of Torture: Third-degree methods are used due to poor forensic facilities and training.
- Vulnerable Populations: Poor detainees lack legal knowledge and resources.
- Poor Implementation of Safeguards: Constitutional provisions (Article 21 & 22), D.K. Basu guidelines, and NHRC directives are frequently ignored.
Implications
- Erosion of Rule of Law: Violates fundamental rights and undermines public trust in justice.
- Human Rights Image: India faces criticism in UNHRC and reports by Human Rights Watch.
- Police-State Perception: High death rates project an authoritarian image.
- Weak Criminal Justice: Shows inefficiency in modern policing and forensic methods.
International Frameworks for Protection
- UN Charter (1945), UDHR (1948), ICCPR (1966) prohibit torture and protect life.
- Nelson Mandela Rules (2015) set minimum standards for prisoner treatment.
- European Convention on Human Rights (1950) ensures dignity and justice access.
Legal Safeguards in India
- Supreme Court Guidelines (D.K. Basu, 1997): Inform relatives, maintain arrest memo, medical exams, legal counsel, produce detainee before magistrate.
- CrPC Section 176: Mandates judicial inquiry in custodial deaths.
- NHRC: Requires reporting deaths within 24 hours and monitoring state compliance.
- CCTV Directives (2020): Police stations and prisons must have CCTV; independent monitoring committees established.
- Criminal Law Reforms (BNSS, BNS, BSA, 2023): Promote forensic-based investigations, transparency, and citizen-focused procedures.
Recommendations
- Implement Law Commission suggestions, including anti-torture laws.
- Enforce Prakash Singh police reforms: separate investigation from law & order, establish Police Complaints Authorities.
- Use technology: CCTV, body cameras, digital interrogation records.
- Judicial reforms: Fast-track courts and strict penalties for complicit officials.
Conclusion
Custodial deaths challenge India’s democratic and constitutional values. Strong enforcement of legal safeguards, adoption of technology, police reforms, and judicial accountability are essential to reduce incidents and protect human rights.
TRUMP IMPOSES NEW TARIFFS ON DRUGS, TRUCKS, AND FURNITURE TO PROTECT U.S. INDUSTRIES
TOPIC: (GS2) INTERNATIONAL RELATIONS: THE HINDU
U.S. President Donald Trump has announced a fresh set of tariffs on imported goods, including 100% on branded drugs and 25% on heavy-duty trucks, citing large-scale import “flooding.”
Trump’s New Tariff Measures
Scope of Tariffs:
- 100% on branded pharmaceuticals, unless the company is building U.S.-based manufacturing.
- 25% on heavy-duty trucks to shield domestic truck manufacturers.
- 50% on kitchen cabinets and bathroom vanities.
- 30% on upholstered furniture.
Justification:
- Claimed as a response to excessive imports from other countries.
- Aims to safeguard U.S. manufacturers and jobs from “unfair competition.”
Implementation:
- Effective from October 1, 2025.
- Unclear if tariffs will be added on top of existing duties.
- No explicit mention of exemptions for trade partners like the EU or Japan.
Strategic and Legal Context
- Trade Tool: Tariffs are being used as a foreign policy instrument to renegotiate trade deals, gain concessions, and exert diplomatic pressure.
- Revenue Implications: Treasury estimates suggest potential revenue collection of up to $300 billion by year-end.
- Legal Safeguards: Moves aim to rely on well-established legal authorities after challenges to earlier global tariffs reached the Supreme Court.
Industry and Economic Impact
- Pharmaceutical Sector: Industry warns that tariffs may disrupt planned investments in U.S. manufacturing. Companies are investing hundreds of billions to localize production.
- Automotive Sector: Protection for U.S.-based truck manufacturers like Peterbilt, Kenworth, and Freightliner.
- Broader Implications: Could affect supply chains, increase import costs, and potentially trigger trade disputes with affected countries.
Ongoing Trade Probes
- National Security Review:
- Dozens of probes are ongoing into imports such as wind turbines, semiconductors, airplanes, copper, timber, and critical minerals.
- Recent probes include PPE, medical devices, robotics, and industrial machinery to assess national security risks of imports and justify future tariffs.
Conclusion
The new tariffs aim to protect U.S. industries and generate revenue, but they may increase import costs, disrupt investments, and trigger trade tensions globally.
LISTEN TO LADAKH: DEMANDS AND GOVERNANCE CHALLENGES
TOPIC: (GS2) INDIAN POLITY: THE HINDU
Since the grant of Union Territory (UT) status to Ladakh in 2019, local discontent has grown over governance, ecological protection, and constitutional safeguards.
Background
- Ladakh has historically symbolized loyalty, sacrifice, and national integration.
- Soldiers from the region have defended India in wars, including 1947–48, 1962, and the 1999 Kargil War.
- Cultural diversity, with monasteries, mosques, and local traditions, reflects Ladakh’s unique identity.
Timeline of Discontent
- 2019: UT status granted post-Article 370 abrogation; initially welcomed in Leh, resisted in Kargil.
- 2020–21: Concerns about land alienation, demographic change, and ecological degradation emerge; Sixth Schedule inclusion demanded.
- 2021: Formation of Leh Apex Body (Buddhist leaders) and Kargil Democratic Alliance (Muslim leaders), highlighting inter-community collaboration.
- 2022–23: Protests demand empowered Hill Councils, job reservation, and land protection.
- 2024–25: Buddhist–Muslim solidarity strengthens; calls grow for legislative assembly or statehood.
Reasons for Discontent
- Loss of Legislative Power: UT status reduced local governance, centralizing authority.
- Fear of Marginalisation: Concerns over jobs, land rights, and ecological protection without Sixth Schedule safeguards.
- Geostrategic Sensitivity: Proximity to Chinese and Pakistani borders increases stakes of dissatisfaction.
Community Mobilization
- Leh Apex Body and Kargil Democratic Alliance represent first cross-community political cooperation.
- Shared goals: Strengthening Hill Councils, ensuring local representation, and protecting culture and environment.
- Grassroots engagement: Movements actively seek dialogue with the Centre.
Challenges for Delhi
- Triangular Balance: Development, ecological protection, and local empowerment must be reconciled.
- Prudent Engagement: Timely, quiet consultations with local stakeholders to prevent alienation.
- Strategic Imperative: Addressing demands safeguards a sensitive frontier region.
National and Strategic Significance
- Security: Decisions impact the Line of Actual Control and Pakistan frontiers.
- Democratic Ethos: Empowering Ladakh demonstrates India’s capacity for federalism with strategic caution.
- Symbolism: The Centre’s response sets precedent for other regions seeking autonomy.
Conclusion
Ladakh has remained loyal to India, but its current grievances require careful handling. By combining development, ecological conservation, and democratic empowerment, Delhi can reinforce trust and secure this strategically important frontier.
AGNI-PRIME MISSILE: INDIA’S ADVANCED RAIL-MOBILE BALLISTIC CAPABILITY
TOPIC: (GS3) SEQURITY: THE HINDU
The Defence Research and Development Organisation (DRDO) and Strategic Forces Command (SFC) successfully test-fired the Agni-Prime missile from a rail-mobile launcher, marking India’s first operational test of this type and demonstrating strategic mobility.
About Agni-Prime Missile
- Family & Development: Sixth missile in the Agni series, developed under the Integrated Guided Missile Development Programme (IGMDP).
- Design: Two-stage, solid-propellant, canisterised surface-to-surface ballistic missile.
- Range & Payload: 1,000–2,000 km, capable of targeting both China and Pakistan; payload up to 1.5 tonnes (1,500–3,000 kg).
- Guidance & Maneuverability: Dual-redundant navigation system; Maneuverable Re-entry Vehicle (MaRV) with delta fins to evade missile defense systems.
- Deployment: Already in road-mobile canisterised form; now successfully tested on rail-based mobile launcher.
Global Context: Rail-Based Missile Systems
- Soviet Union: RT-23 Molodets ICBM on rail; dismantled post-START Treaty.
- Russia: Barguzin rail-mobile ICBM project shelved for hypersonics.
- United States: Rail-mobile Minuteman and Peacekeeper ICBMs explored but later cancelled.
- China: DF-41 rail-mobile ICBM tested in 2016.
- North Korea: Short-range rail-based ballistic missile tested in 2021.
Significance of Rail-Based Launch
- Mobility & Concealment: Railcars can move across the network, hide in tunnels, and evade satellite detection.
- Survivability: Less vulnerable to pre-emptive strikes compared to silos.
- Rapid Response: Enables faster deployment and shorter reaction time.
- Strategic Deterrence: Strengthens India’s credible second-strike nuclear capability.
- Technological Showcase: Demonstrates India’s advanced missile development and operational readiness.
IGMDP AND AGNI SERIES
- IGMDP Launch: 1983, led by Dr. A.P.J. Abdul Kalam to achieve missile self-reliance.
- Missile Family: Prithvi (SRBM), Agni (strategic ballistic), Trishul (SR SAM), Nag (ATGM), Akash (MR SAM).
- Agni Evolution:
- Agni-I: 700–1,200 km (2007)
- Agni-II: 2,000–3,000 km (2010)
- Agni-III: 3,500 km (2007)
- Agni-IV: 4,000 km (2011)
- Agni-V: 5,000+ km, MIRV-capable
- Agni-P: 1,000–2,000 km, lighter, rail and road mobile
- Agni-VI: 6,000–10,000 km, MIRV, submarine launch under development
Strategic Importance
- Forms the backbone of India’s nuclear triad.
- Enhances deterrence against regional adversaries (China, Pakistan) and global threats.
- Rail-based mobility adds survivability, credibility, and rapid response to India’s strategic arsenal.
URANIUM ENRICHMENT
TOPIC: (GS3) SCIENCE AND TECHNOLOGY: THE HINDU
Iran’s Supreme Leader recently stated that Tehran has enriched uranium up to 60% U-235 but will not pursue weapons-grade enrichment (~90%). This has drawn international attention due to proliferation concerns.
What is Uranium Enrichment?
- Definition: Process of increasing the proportion of U-235 isotope in uranium.
- Natural Uranium: Contains only 0.7% U-235, rest mostly U-238.
- Purpose: Enrichment allows uranium to be used in reactors or weapons depending on concentration.
Types of Uranium Enrichment
- Low-Enriched Uranium (LEU, 3–5% U-235):
- Used for civilian nuclear power reactors.
- Highly Enriched Uranium (HEU, >20% U-235):
- At 90%+, becomes weapons-grade.
- Can be used for efficient nuclear weapons.
Methods of Enrichment
- Gas Centrifuges: Physically separate U-235 from U-238.
- Technology Requirement: Advanced infrastructure and technical expertise needed.
Implications of Enrichment
- Low Enrichment: Safe for energy generation, minimal proliferation risk.
- High Enrichment: Increases nuclear weapon risks; shortens time to weapon-grade material.
Iran’s Uranium Enrichment Program
- Declared Program: Uranium enriched to 60%, claimed for peaceful purposes.
- Civilian Use Irrelevant: 60% enrichment is not suitable for reactors; mainly reduces “breakout time” to weapons-grade.
- IAEA Monitoring: Reports significant stockpiles at 60%, raising global concerns.
Geopolitical Context
- JCPOA (2015): Limited Iran to 3.67% enrichment; collapsed after U.S. withdrawal in 2018.
- Strategic Dimension: Iran maintains nuclear threshold capability for deterrence and negotiation leverage.
- International Concerns: Western nations see 60% enrichment as threatening, while Iran defends it as a bargaining and security tool.
MGNREGA AMENDED FOR WATER CONSERVATION IN SCARCITY ZONES
TOPIC: (GS2) INDIAN POLITY: THE HINDU
The Central Government has amended the Mahatma Gandhi National Rural Employment Guarantee Act (2005) to allocate a minimum share of MGNREGA funds for water conservation and harvesting projects.
Key Amendments under MGNREGA (2005)
- Objective: Prioritise preventive water management over reactive drought relief; focus on sustainable groundwater conservation.
- Provision Amended: Paragraph 4(2), Schedule I of the MGNREGA Act.
- Fund Allocation Based on Groundwater Status (CGWB Classification):
- Over-exploited / Critical (Dark Zones): 65% of funds for water works.
- Semi-critical Blocks: 40% allocation.
- Safe / Non-critical Areas: 30% allocation.
- Responsibility: District Programme Coordinators and Programme Officers must ensure compliance with the amended mandate.
- Earlier Provision: Gram Panchayats could prioritise works; 60% of funds were to be used for agriculture and allied activities, including water-related projects.
About MGNREGA
- Overview: A rights-based, centrally sponsored scheme launched in 2005 to provide legal entitlement to rural employment.
- Origins:
- Pilot in Maharashtra (MEGS) in 1965.
- National proposal in 1991 under PM P. V. Narasimha Rao; enacted in 2005.
- Employment Guarantee: 100 days of wage employment annually for rural adults willing to perform unskilled manual work.
- Legal Obligation: Government must provide work or pay compensation for non-compliance.
- Development Goals: Enhances livelihood security, promotes inclusive growth, and strengthens rural development.
Key Features of MGNREGA
- Statutory Right: Legal entitlement, not a welfare scheme.
- Eligibility & Access: All rural adults (18+) can apply; work to be offered within 15 days.
- Proximity & Wages: Work within 5 km; minimum wages with compensation for delays.
- Unemployment Allowance: Provided if employment is not given on time.
- Demand-Driven Approach: Government responds to worker-initiated requests.
- Transparency: Social audits and online monitoring ensure accountability.
- Local Implementation: Led by Gram Panchayats with block, state, and central support.
- Women’s Inclusion: At least one-third of beneficiaries are women.
- Sustainable Assets: Focus on durable rural infrastructure like ponds, roads, canals, plantations, and water harvesting structures.