Content
- GST Council approves two-rate tax slab effective September 22
- Less than 40% of disabled persons have ID needed for benefits
- Should reservations exceed the 50% cap?
- How bail hearings take on the garb of a trial
- Indians’ spending on foreign studies hitting a seven-year low
GST Council approves two-rate tax slab effective September 22
Basics
- GST Council: Apex federal body chaired by Union Finance Minister with state finance ministers as members.
- Meeting: 56th meeting held in September 2025.
- Objective of reforms: Rate rationalisation → simplify GST structure, boost compliance, support common man, and ensure buoyancy.
- Proposed structure:
- 5% (essential/common goods & services)
- 18% (standard rate for majority of goods & services)
- 40% “special rate” (sin goods & luxury items like tobacco, big cars, yachts, helicopters).
Relevance :GS III (Taxation, Inclusive Growth, Economy) + GS II (Federalism & Governance – Centre–State fiscal relations).
Key Tax Rate Changes
- Household & Middle-Class Items: Hair oil, soap, shampoo, toothbrush, toothpaste, bicycles, tableware, kitchenware → shifted to 5% from 12%/18%.
- Packaged Food Items: Namkeens, sauces, pasta, instant noodles, chocolates, coffee, butter → now at 5%.
- Agriculture & Labour-intensive:
- 12 bio-pesticides, bio-menthol → reduced to 5%.
- Handicrafts, marble, granite blocks, leather goods → shifted to 5%.
- Cement: From 28% to 18% → major boost to construction & infrastructure.
- Essential Food Products: Milk (UHT), paneer, all Indian bread (roti, chapati, paratha) → 0% tax.
- Insurance Services: Life & health insurance → 0% from 18%.
- Medicines: 33 life-saving drugs → 0% from 12%.
- Electric Vehicles (EVs): Retained at 5%.
Implications for Economy & Society
- Consumer Relief: Reduced tax burden on essential & middle-class goods → boosts disposable income.
- Healthcare Support: 0% GST on health insurance + life-saving medicines → strengthens social protection.
- Agriculture & MSME boost: Bio-pesticides, handicrafts, intermediate leather goods → lower costs, better competitiveness.
- Housing & Infrastructure: Cement rate cut to 18% → lower construction cost, supports PM Awas Yojana & infra push.
- Sustainability Push: EVs kept at 5% → consistent with green mobility goals.
Fiscal Impact
- Estimated revenue loss = ₹48,000 crore annually (based on 2023–24 consumption).
- Officials expect buoyancy effect (higher compliance + wider tax base) to offset loss.
- Real impact will depend on current consumption data.
Governance & Policy Significance
- Citizen-Centric Reform: Prioritises common man & middle class.
- Simplification: Moves away from 5-rate structure (0%, 5%, 12%, 18%, 28%) → towards 2 broad slabs + 1 special rate.
- Federal Cooperation: Reflects consensus-building between Centre & States in GST Council.
- Equity Principle: Differentiates essentials vs. luxuries/sin goods.
Challenges & Criticisms
- Revenue Stress for States: Rate cuts may strain state finances unless buoyancy materialises.
- Compliance Burden: Frequent rate changes create transitional confusion for businesses.
- Distortion Risks: 40% special rate may incentivise evasion in luxury/sin goods.
- Exemptions Expansion: More 0% items → narrows tax base, complicates GST credit chain.
Way Forward
- Monitor revenue trends → adjust compensation mechanism for states if needed.
- Improve GST compliance architecture (AI-based fraud detection, invoice matching).
- Phase out unnecessary exemptions over time to keep tax base broad.
- Balance between equity (supporting poor) and efficiency (stable revenue for states).
- Regular periodic reviews by GST Council to plug loopholes.
Less than 40% of disabled persons have ID needed for benefits
Basics
- PwDs in India: ~2.68 crore as per Census 2011 (~2.2% of population; real number likely higher).
- UDID Scheme:
- Launched by the Department of Empowerment of Persons with Disabilities (DEPwD).
- Aim: Create a national database of PwDs; issue Unique Disability ID (UDID) cards.
- Benefits:
- Access to welfare schemes (ADIP for assistive devices).
- Scholarships, reservations in jobs/education.
- Recognition of disability uniformly across states.
- Earlier system: State-specific disability certificates at district/taluka level → fragmented, not portable.
Relevance : GS II (Governance – Welfare Schemes, Rights of Persons with Disabilities Act, Digital Divide) + GS II (Federalism – Centre–State implementation gaps).
Current Status
- Coverage: Less than 40% of projected PwDs have UDID cards.
- Only 4 states (TN, Odisha, Meghalaya, Karnataka) crossed 50% coverage.
- West Bengal: ~6% coverage (lowest).
- Pending Applications: Over 11 lakh, with 60% pending for 6+ months.
- High pendency: Himachal Pradesh (80%+), Ladakh, Mizoram.
Causes of Low Coverage
- Implementation Delays: Staggered rollout, weak ground-level communication.
- Digital Divide:
- Applications only via website.
- Need to upload scanned documents → barrier for digitally illiterate.
- Govt survey: Only 60% of Indians above 15 yrs can use basic digital tools (copy-paste); lower among women.
- Administrative Bottlenecks: Processing delays at state/district levels.
- Funding Constraints: While overall PwD schemes saw higher allocation, UDID sub-scheme funding declined.
- Political Marginalisation: PwDs (~2.68 crore) form a small vote bank, hence low political priority.
Implications
- Exclusion from Welfare: PwDs without UDID denied assistive devices, scholarships, reservations.
- Inequity in Access: State-specific disparities widen inequalities.
- Trust Deficit: Long pendency erodes faith in institutions.
- Digital Inequality: Exposes systemic exclusion of vulnerable groups in “Digital India” push.
Governance & Policy Concerns
- Rights Perspective: PwDs’ rights enshrined in Rights of Persons with Disabilities Act, 2016.
- Failure of Convergence: UDID intended as a universal identity for seamless access → failing due to weak implementation.
- Centre–State Gaps: Execution uneven, states vary widely in outreach & processing.
- Data Reliability Issues: Projections based on 2011 Census & NSSO → outdated, underestimates real PwD population.
Global Comparisons
- US: Americans with Disabilities Act (ADA) ensures rights + central database integration with welfare programs.
- EU: European Disability Card → mutual recognition across member states.
- India: Still struggling with universal coverage, digital barriers, and fragmented implementation.
Way Forward
- Administrative Efficiency: Clear deadlines to process applications; reduce pendency backlog.
- Offline/Hybrid Access: Allow UDID applications at CSCs, panchayat offices, PHCs → bridge digital divide.
- Awareness Campaigns: Grassroots communication on benefits of UDID.
- Digital Literacy Training: Special modules for PwDs and caregivers.
- Updated Data: Use NFHS/updated census for realistic PwD numbers.
- Enhanced Funding: Increase UDID-specific allocation, not just general PwD schemes.
- Political Mainstreaming: Recognise PwDs as a rights-based constituency, not just a welfare target.
Should reservations exceed the 50% cap?
Basics
- Constitutional Provisions:
- Article 15: Prohibits discrimination; allows special provisions for socially & educationally backward classes, SCs, STs.
- Article 16: Equality of opportunity in public employment; allows reservations for backward classes inadequately represented.
- Current Reservation at Centre:
- OBCs – 27%
- SCs – 15%
- STs – 7.5%
- EWS – 10%
- Total = 59.5% (varies across states).
- Judicial Ceiling: 50% limit (Balaji, Indra Sawhney), unless extraordinary circumstances.
- Creamy Layer Concept: Introduced in Indra Sawhney (1992) for OBCs; excludes advanced sections to ensure benefits for the truly backward.
- SC/ST Debate: No creamy layer exclusion yet; pending before SC (Davinder Singh, 2024).
Relevance : GS II (Polity – Constitutional Provisions: Articles 15 & 16, Judiciary, Social Justice, Reservation Policy).
Recent Developments
- Bihar Opposition Promise: Tejashwi Yadav pledges 85% reservation if voted to power.
- SC Notice to Centre: On demand for introducing creamy layer in SC/ST reservations.
Judicial Evolution
- Balaji v. State of Mysore (1962): Reservations must be “reasonable,” capped at 50%.
- N.M. Thomas (1975): Substantive equality → reservations as a continuation of equality, not exception.
- Indra Sawhney (1992):
- Upheld 27% OBC quota.
- Affirmed 50% cap (except in extraordinary cases).
- Introduced creamy layer exclusion for OBCs.
- Janhit Abhiyan (2022): Upheld 10% EWS quota; clarified that the 50% ceiling applies only to backward classes, not EWS.
- Davinder Singh (2024): Judges urged Centre to extend creamy layer to SCs/STs; Centre rejected.
Competing Principles of Equality
- Formal Equality: Equal treatment; reservations are exceptions → hence capped.
- Substantive Equality: Unequal groups need differential treatment → justifies affirmative action beyond 50%.
- Constituent Assembly View (Ambedkar): Reservations necessary but should remain a minority share to protect equality of opportunity.
Key Issues in Current Debate
- Reservation Expansion (85%):
- Pros: Reflects caste demographics, addresses historic exclusion.
- Cons: May violate equality principle, reduce open competition to negligible share.
- Creamy Layer for SC/ST:
- Pros: Prevents dominant sub-castes from cornering benefits; ensures justice for most deprived.
- Cons: Large vacancies remain unfilled; exclusion may weaken protection for SCs/STs facing stigma.
- Backlog & Representation Gaps:
- 40–50% of reserved seats for SCs/STs/OBCs remain unfilled in Central govt jobs.
- Rohini Commission: Found concentration of OBC benefits in ~25% castes; ~1,000 OBC communities had zero representation.
- Political Economy: Demands for caste census and quota hikes are tied to electoral mobilization.
Implications
- Legal: Exceeding 50% quota will face constitutional scrutiny; may require amendment or new precedent.
- Social: Heightened caste competition; intra-caste divisions (sub-categorisation).
- Political: Reservation demand becoming a central plank (Maratha, Patidar, Jat, OBC mobilisation).
- Administrative: Rising quota share may reduce general/open seats, fuelling resentment.
Way Forward
- Caste Census (2027): Empirical basis for rationalising reservation levels.
- Sub-Categorisation: Implement Rohini Commission recommendations within OBCs; explore 2-tier system for SC/STs.
- Creamy Layer Expansion: Debate extension to SCs/STs while ensuring no dilution of protection against stigma/discrimination.
- Skill Development & Jobs: Reservation alone insufficient; need parallel focus on employability, private sector absorption.
- Balanced Approach: Blend of substantive equality with merit protection to avoid social fracture.
How bail hearings take on the garb of a trial
Basics
- UAPA (Unlawful Activities [Prevention] Act, 1967):
- India’s primary anti-terror legislation.
- Allows extended detention without bail.
- Bail provision: Courts cannot grant bail if, on the basis of police documents, accusations appear prima facie true.
- Bail Principle (Criminal Law):
- Accused is presumed “innocent until proven guilty.”
- Bail should be denied only if there is flight risk, chance of evidence tampering, or intimidation of witnesses.
- Problem in UAPA cases:
- Bail hearings mimic mini-trials.
- Courts rely only on the prosecution’s version (police reports), while defence is restricted.
- Given long trials (10+ years), denial of bail ≈ de facto conviction.
Relevance : GS II (Polity – Fundamental Rights: Article 21, Judiciary, Criminal Justice Reforms) + GS III (Internal Security – UAPA, Counterterrorism Laws).
Judicial Precedents
- NIA v. Zahoor Ahmad Shah Watali (2019):
- SC restricted lower courts from scrutinising prosecution evidence deeply during bail.
- Effectively made bail nearly impossible in UAPA cases.
- Bail Hearings as Trials:
- Courts reproduce police allegations without cross-examination or defence evidence.
- Defence limited to pointing out contradictions, not disproving accusations.
Systemic Issues
- Delayed Trials:
- UAPA trials often exceed 10 years.
- Low conviction rate (< 3%).
- Denial of bail = prolonged incarceration without proof of guilt.
- Procedural Imbalance:
- Police narrative dominates.
- Defence cannot meaningfully contest charges.
- Violates principle of natural justice and Article 21 (right to life and liberty).
- Impact on Rights:
- Pre-trial incarceration undermines “innocent until proven guilty.”
- Denial of bail becomes equivalent to punishment.
- Selective targeting (e.g., activists vs. hate speech perpetrators) raises concerns of misuse.
Broader Criminal Justice Concerns
- Overdependence on Harsh Laws:
- UAPA bypasses ordinary safeguards.
- Encourages investigative laxity (police can rely on prolonged detention without needing to secure early convictions).
- International Standards:
- ICCPR (International Covenant on Civil and Political Rights) protects liberty and presumption of innocence.
- India’s UAPA framework risks violating these obligations.
Way Forward
- Short Term:
- SC to “read down” UAPA bail restrictions, allow deeper scrutiny of police reports.
- Fast-track UAPA cases with statutory timelines for trial completion.
- Medium Term:
- Introduce sunset clauses or periodic review of UAPA cases.
- Incorporate proportionality test: extended detention only if justified by specific threats.
- Long Term:
- Comprehensive criminal justice reform (investigation, trial efficiency).
- Balance security needs with fundamental rights.
- Consider alternatives: surveillance, house arrest, bail with strict conditions.
Indians’ spending on foreign studies hitting a seven-year low
Basics
- Liberalised Remittance Scheme (LRS):
- RBI scheme allowing Indian residents to remit up to USD 250,000 per financial year abroad for permissible current/capital account transactions (education, travel, medical, investments).
- Introduced in 2004; liberalised over time.
- Trend (Jan–Jun 2025):
- Outward remittances for foreign studies = USD 11.6 billion.
- Decline = 22% lower than same period in 2024.
- Lowest in 7 years.
- Spending on education abroad forms a large share of total LRS transfers, especially in first half of year (admission season).
Relevance : GS II (Governance – Education Policy, NEP 2020, Internationalization of Education) + GS III (Economy – Forex, LRS, Higher Education as Infrastructure) + GS II/III (International Relations – Mobility & Migration Policies).
Reasons for Decline
- US Visa Troubles & Policy Tightening:
- Delays, stricter eligibility, and new restrictions on “duration of status” for international students.
- Rising political sensitivity around immigration in the US (precedent: Harvard-Trump legal tussle).
- Rising Entry Barriers in Other Countries:
- Canada: Proof of funds requirement more than doubled to CAD 22,895.
- Australia: Higher IELTS thresholds for English proficiency.
- UK: Tightening admission norms and visa regulations.
- High Costs & Domestic Alternatives:
- Inflation and rising cost of living abroad.
- Strengthening of Indian higher education institutions under NEP 2020, attracting students to stay in India.
- Shift in Destination Choices:
- From US-dominated preference to alternative geographies like Germany and other European countries.
- But transition still limited by language and structural constraints.
Economic & Social Impact
- Banking & Financial Sector:
- Education loan disbursements impacted.
- June 2025: Indian banks’ outstanding education loans = up 14% YoY, but slower than last year’s 27% growth.
- Reduced overseas remittances → lower forex outflow.
- Families & Aspirants:
- Students face higher financial burden (proof of funds, visa costs).
- Anxiety due to policy unpredictability in host countries.
- Push for local or alternative destinations with lower barriers.
- Education Ecosystem:
- Demand for quality Indian institutions may rise.
- Private universities, tie-ups with foreign institutions in India may see growth.
Geopolitical & Policy Dimensions
- Global Trends:
- US, UK, Canada, Australia increasingly adopting restrictive immigration policies.
- Rising populism and job protection politics influencing student visa policies.
- India’s Position:
- Need to strengthen domestic higher education (NEP 2020, international campuses in India, collaborations).
- Encourage Indian universities to offer globally accredited degrees to reduce outflow.
Way Forward
- Policy Measures:
- Expand scholarships, credit support for students studying abroad.
- Attract global campuses (as proposed under NEP 2020, e.g., IIT campuses abroad and foreign universities in India).
- Invest in domestic quality institutions to make India an education hub.
- Strategic Approach:
- Monitor foreign policy developments affecting student visas.
- Negotiate bilateral agreements to secure education pathways.
- Promote alternative destinations (Germany, East Asia, Middle East) with lower costs and friendlier visa norms.
