Current Affairs by Abhishiekh Saxena Sir

Model Answer

Question #1. What do you understand by strategic autonomy?  Discuss the evolution and challenges of strategic autonomy of India.

Approach:

• Introduce by providing a definition of Strategic Autonomy and its five pillars (40 Words)
• Give a brief background of how the non-alignment movement helped India in heaping its strategic autonomy. (50 Words)
• List evolution of Strategic Autonomy Post Cold War era (60 Words)
• Enumerate the present context in which strategic autonomy is discussed (60 Words)
• Conclusion (40 Words)

Hints:

Autonomy means relative independence in decision making. Strategic autonomy denotes the ability of a state to pursue its national interests and adopt its preferred foreign policy without being constrained in any manner by other states. Thus, it is a dynamic concept as no state can be entirely free from structural constraints of world politics. But, there can be huge differences between the degree of autonomy of superpowers and other nation states.

Five pillars for Strategic Autonomy for Indian diplomacy are:

• avoid extreme strategic and political behavior
• multipolar focus
• actions as an international force multiplier for the Government
• a force for global good
• Looks towards the future

Strategic Autonomy and Non-alignment:

• The Non-Aligned Movement (NAM) was conceived at a time when bipolarity was emerging as a marked feature in international politics. The world was divided between two polar ideologies, i.e., capitalism and communism.
• The NAM allowed countries like India to remain autonomous and maintain ‘strategic autonomy’.

Strategic Autonomy in 1990s:

• In the 1990s, India’s strategic autonomy was about fending off US political pressure on India specifically on the issue of nuclear disarmament.
• On the one hand, it had to actively seek the cooperation of the US and the West to make a success of its economic reform and reorientation. India needed Western capital as well as technology and better access to its markets.
• On the other hand, Delhi had to protect some of its core national interests, like the Jammu and Kashmir Issue and Nuclear weapons, from the pressure of US intervention.

Strategic Autonomy for India in present context

• Atmanirbhar Bharat: The quest for “strategic autonomy” today, is the natural external complement to the new economic strategy, described as “Atmanirbharata” or “self-reliance”.Thus, strategic autonomy also means being less and less dependent of foreign supplies specially high tech and energy resources.
• Independent engagement through various multilateral organisations: India, for its national interests, maintains its relations with countries having opposing interests through various multilateral platforms like SCO, QUAD, BRICS.

Challenges to strategic autonomy:

• India is actively seeking the cooperation of the US but it has to protect its core national interests from the pressure of the US. For example- USA pressurizing India of CAATSA (Countering America’s Adversaries Through Sanctions Act) in relation with Chahbahar port and S-400 deal with Russia.
• Chinese aggression is the biggest test for autonomy at present for Indian foreign policy. It may result in security threats like Doklam standoff, clashes in Galwan valley across LAC. A possibility of China, Pakistan, Russia, Iran axis.
• Dependence on other developed countries for economic growth: India needs technology, capital, markets, skills, defence equipment, international networking, and global cooperation to resolve global issues. Sensitive technology can come only at the behest of compromising strategic autonomy.
• Complete dependence on the US will impact ties with Russia, Iran as well as defense indigenization.

Conclusion:

Today, more than ever we need to strengthen our autonomy while working with all the major powers and cooperating harmoniously with our neighbours. Strategic Autonomy will help in boosting India’s confidence and in the long-run bring wealth and prosperity to its citizens.

Question #2. "GST has been a milestone in the economic landscape of India. It has decreased the number of taxes, compliance burden & overall tax burden on common man while significantly increasing transparency, compliance and overall  collection".In the light of this statement critically evaluate the performance of the Goods and Services Tax since its implementation.

Approach:

• Briefly introduce theGST .(40 words)
• Discuss achievements of GST regime.(80 words)
• Discuss the Challenges in implementations of GSTregime.(60 words)
• Discuss the Way forward for GST regime.(30)
• Conclusion ( 40 words)

Hints:

The nationwide GST regime was rolled out in 2017 to subsume and replace 17 local levies like excise duty, service tax and VAT and 13 cesses. The GST regime follows a four-rate structure that exempts or imposes a low rate of tax 5 per cent on essential items and levies the highest tax rate of 28 per cent tax on luxury and sin goods. The other two tax slabs are 12 and 18 per cent. In the pre-GST era, the total of VAT, excise, CST and their cascading effect led to 31 per cent as tax payable, on an average, for a consumer.

Achievements of GST regime:

• Businesses dealing in goods with an annual turnover of up to ?40 lakh are exempt from the tax. Additionally, those with a turnover up to ?1.5 crore can opt for the Composition Scheme and pay only 1 per cent tax.
• Services providers with turnover up to ?20 lakh in a year are exempt from GST. Business in the service sector with turnover up to ?50 lakh in a year can opt for composition scheme for services and pay only 6 per cent tax.
• Over the last four years, 1.3 crore taxpayers have been registered under the GST network, while 66 crore tax returns have been filed.
• The revenue neutral rate as recommended by the RNR Committee was 15.3 per cent. Compared to this, the weighted GST rate at present is only 11.6 per cent. It lessens the tax burden on consumers.
• E-invoicing system helps weeding out the rampant menace of fake invoicing, but would also usher the taxpayers into a fully automated compliance regime wherein the computation of tax liabilities and matching of input tax credit would become very simple.
• Simplification of compliance activities by undertaking various initiatives viz. linking the customs portal with GST portal for credit availability on imports, making available proper means for matching input tax credit, increased automation of the refund procedure to seamless operation of the Invoice Registry Portal, there has been a drastic change, overall.
• The GST Council and ensuring Centre-State partnership in the decision-making process.

Challenges in implementations of GST:

• The 15th Finance Commission, in its report, has also highlighted several areas of concern in the GST regime relating to multiplicity of tax rates, shortfall in GST collections vis-à-vis the forecast, high volatility in GST collections, inconsistency in filing of returns, dependence of States on the compensation from Centre and so on.
• The pandemic-led economic contraction caused slowdown in GST collection causing loss to exchequer and causing centre state conflict due to shortfall in GST compensation to the states by the centre.
• The fact that state governments have been given a guaranteed revenue growth under the GST framework has created a moral hazard for the GST Council. There are repeated demands for reducing GST rates on all kinds of commodities from time to time, which have the effect of lowering the weighted average GST rate and therefore overall revenue collections.
• GST is increasingly becoming the main tax game in town as far as providing relief to the masses is concerned (the demand for waiving off GST on pandemic related commodities being a case in point) would suggest that it has created a big, and perhaps difficult to reconcile problem.

Way forward:

• There is a need to include petroleum and related products within the GST net to control the increasing oil prices.
• Constitution of GST Appellate Tribunal may lessen the burden of taxpayers as they lack financial resources to approach the High Court in every GST related difficulty.
• There is a need for streamlining of anti-profiteering measures and simplification of compliance procedures so that the common man can benefit most from GST implementation.

Conclusion:

Although it is important that the shortcomings be swiftly resolved, it needs to be understood that it takes time to reap benefits of such a mammoth structural change. The law is still a ‘work-in-progress’ and the process of evolution, in such a complex journey, cannot be eliminated. The new India is confident that the Government will continue to take measures to deliver on its promise of a Good & Simple Tax’ in the times to come.