India, China agrees to resume Mansarovar Yatra, border trade after talks in Beijing
Syllabus:
Preliminary Examination: Current events of national and international importance.
Mains Examination: General Studies II: Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests.
What’s the ongoing story: Moving to repair bilateral ties that headed south after Chinese incursions in 2020 triggered a military standoff along the Line of Actual Control in eastern Ladakh, India and China agreed Wednesday on a set of “six consensus” including resumption of the Kailash Mansarovar Yatra, trans-border river cooperation and Nathula border trade.
Key Points to Ponder:
• Map Work-Nathula Pass, Lipulekh pass, Lake Manasarovar and Mount Kailash
• What is the importance of Kailash-Mansarovar Yatra?
• ‘The India-China border dispute remains a major challenge in bilateral relations’-Discuss
• What is Confidence-Building Measures (CBMs)?
• How Confidence-Building Measures (CBMs) can be effective in India-China relations?
• Discuss the cultural, economic, and strategic implications of Kailash Mansarovar Yatra and Nathula border trade
• As India and China approach the 75th anniversary of their diplomatic ties, evaluate the progress made in bilateral relations.
Key Takeaways:
• The Ministry of External Affairs, in a statement, said the Special Representatives (SRs) “provided positive directions for cross-border cooperation and exchanges including resumption of the Kailash Mansarovar Yatra, data sharing on trans-border rivers and border trade”.
• This was the first meeting of the SRs “since frictions emerged in the Western Sector of the India-China border areas in 2020”, the MEA said the SRs “positively affirmed the implementation of the latest disengagement agreement of October 2024, resulting in patrolling and grazing in relevant areas”.
• Both SRs underlined the importance of maintaining peace and tranquillity in the border areas to promote overall development of the India-China bilateral relationship.
• The first of the six consensus — of taking measures for peace on the border and development of bilateral relations — points to efforts to mend ties damaged by China’s incursions in Ladakh. The meeting of the leaders in Kazan, Russia, in October set the ball rolling.
• It said the SRs reiterated the importance of “maintaining a political perspective of the overall bilateral relationship while seeking a fair, reasonable and mutually acceptable framework for settlement of the boundary question, and resolved to inject more vitality into this process” – referring to the larger question of resolving the boundary dispute.
• It said next year will usher in the 75th anniversary of the establishment of diplomatic relations between China and India.
Do You Know:
The India and China agreed on a set of “six consensus” and they are:
• The first consensus, it said, was that “both sides positively evaluated the solution reached between the two countries on border issues, reiterated that the implementation work should continue, and believed that the border issue should be properly handled from the overall situation of bilateral relations so as not to affect the development of bilateral relations.
• The second consensus, it said, was that the two sides “reaffirmed their commitment to continue seeking a fair, reasonable and mutually acceptable package solution to the boundary issue in accordance with the political guidelines agreed upon by the special representatives of the two countries on resolving the boundary issue in 2005, and to take positive measures to promote this process”.
• The third consensus was that the two sides “agreed to further refine the management and control rules in the border area, strengthen the building of confidence-building measures, and achieve sustainable peace and tranquility on the border”.
• The fourth consensus, it said, was that the “two sides agreed to continue to strengthen cross-border exchanges and cooperation, and promote the resumption of Indian pilgrims’ pilgrimage to Tibet, China, cross-border river cooperation and Nathula border trade”.
• The fifth consensus, it said, was that the “two sides agreed to further strengthen the construction of the special representatives’ meeting mechanism, enhance coordination and cooperation in diplomatic and military negotiations, and require the China-India Working Mechanism for Consultation and Coordination on Border Affairs (WMCC) to carry out follow-up implementation of this special representatives’ meeting”.
• The sixth consensus, it said, was that the “two sides agreed to hold a new round of special representatives’ meetings in India next year, and the specific time will be determined through diplomatic channels”.
• Mount Kailash is situated near the sacred lakes of Mansarovar and Rakshastal. It is the source of four major rivers: the Indus, Sutlej, Brahmaputra, and Karnali, which originate in the surrounding region. Revered in Hinduism, Buddhism, Jainism, and the Bon religion, the mountain attracts pilgrims from India, China, Nepal, and other nearby countries. The pilgrimage typically involves trekking to Lake Mansarovar and performing a circumambulation of Mount Kailash.
Other Important Articles Covering the same topic:
📍Jaishankar, Wang discuss next steps: Resuming Man Sarovar Yatra, flights
Previous year UPSC Prelims Question Covering similar theme:
1. The Nathula Pass, connects India to which of the following regions in China?
a) Xinjiang
b) Tibet
c) Inner Mongolia
d) Yunnan
Previous year UPSC Mains Question Covering similar theme:
📍‘China is using its economic relations and positive trade surplus as tools to develop potential military power status in Asia’, In the light of this statement, discuss its impact on India as her neighbour. (UPSC CSE GS2, 2017)
📍With respect to the South China sea, maritime territorial disputes and rising tension affirm the need for safeguarding maritime security to ensure freedom of navigation and over flight throughout the region. In this context, discuss the bilateral issues between India and China. (UPSC CSE GS2, 2014)
GOVT & POLITICS
Modi to visit Kuwait on Dec 21-22, first Indian PM to do so in 43 years
Syllabus:
Preliminary Examination: Current events of national and international importance.
Mains Examination: General Studies II: Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests.
What’s the ongoing story: Prime Minister Narendra Modi will visit Kuwait on December 21-22, the first Indian Prime Minister to do so in 43 years.
Key Points to Ponder:
• Map Work-Middle Eastern Region and Kuwait
• India and Kuwait share historical and multifaceted ties-Know in detail
• Why is Kuwait significant in India’s relations with Gulf countries?
• How is energy and oil cooperation shaping India-Kuwait relations?
• ‘The Indian community is the largest expatriate group in Kuwait’-Discuss
• Examine the role of the Indian diaspora in enhancing India-Kuwait relations.
• Kuwait is a significant trading partner and investor for India. Assess the potential for diversifying trade and attracting investments from Kuwait to boost India’s economic growth.
Key Takeaways:
• Announcing the visit on Wednesday, the Ministry of External Affairs said that Kuwait’s Amir, Sheikh Meshal Al-Ahmad Al-Jaber Al-Sabah, had extended the invitation and during the visit, the Prime Minister will hold discussions with the leadership of Kuwait. Modi will also interact with the Indian community in Kuwait.
• “The visit will provide an opportunity to further strengthen the multifaceted ties between India and Kuwait,” the MEA statement said.
• “India and Kuwait share traditionally close and friendly relations which are rooted in history and have been underpinned by economic and
strong people-to-people linkages. India is among the top trading partners of Kuwait. The Indian community is the largest expatriate community in Kuwait,” the statement said.
• Recent high-level meetings include that of Prime Minister M Modi with Kuwait’s Crown Prince on the sidelines of UNGA in September 2024.
• In 2024, the foreign ministerial visits from India to Kuwait include that of External Affairs Minister S Jaishankar on August 18. Similarly, the Foreign ministerial visits from Kuwait to India include that of Abdullah Ali Al-Yahya, Minister of Foreign Affairs, from December 3-4 during which he also called on Prime Minister Modi and extended Kuwaiti leadership’s invitation to visit Kuwait.
Do You Know:
• Kuwait is among India’s top trading partners, with bilateral trade valued at USD 10.47 billion in FY 2023-24. It is India’s 6th largest crude supplier, meeting 3% of the country’s energy needs. Indian exports to Kuwait reached USD 2 billion for the first time, while investments by the Kuwait Investment Authority in India exceed USD 10 billion.
• India and Kuwait have institutionalised their cooperation through mechanisms such as the Joint Commission for Cooperation (JCC) that was established during the visit of Kuwaiti Foreign Minister to India in December 2024, which is headed at the Foreign Minister level, seven new Joint Working Groups (JWGs) have been established in the areas of trade, investment, education, technology, agriculture, security, and culture.
• Kuwait remains a reliable energy partner, ranking as India’s 6th largest supplier of crude oil and 4th largest of LPG.
• Over the years, there have been several high-level visits between the two nations, including Indian leaders such as Vice President Dr Zakir Husain (1965), Prime Minister Indira Gandhi (1981) and Vice President Shri Hamid Ansari (2009).
• The VVIP visits from Kuwait to India were of Crown Prince and Prime Minister Sheikh Sabah Al-Salem Al-Sabah (1964); Amir Sheikh Jaber Al-Ahmed Al-Jaber Al-Sabah (1980) and again in 1983 (for the NAM Summit); Amir Sheikh Sabah Al-Ahmed Al-Jaber Al-Sabah (2006); Prime Minister Sheikh Jaber Al-Mubarak Al-Hamad Al-Sabah (2013).
• Amir Sheikh Sabah Al Ahmed Al Jaber Al Sabah visited India on a private visit in July 2017. The last high-level visit from either side was that of the Prime Minister of Kuwait to India in 2013.
Other Important Articles Covering the same topic:
📍What Indian PM’s first visit to Kuwait in four decades means for diplomacy in Middle East
Previous year UPSC Prelims Question Covering similar theme:
2. Which of the following is not a member of ‘Gulf Cooperation Council’? (2016)
a) Iran
b) Saudi Arabia
c) Oman
d) Kuwait
EXPRESS NETWORK
SC asks Centre to form policy for managing sacred groves
Syllabus:
Preliminary Examination: Current events of national and international importance.
Mains Examination: General Studies III: Conservation, environmental pollution and degradation, environmental impact assessment.
What’s the ongoing story: The Supreme Court Wednesday asked the Centre to create a comprehensive policy for the governance and management of sacred groves across the country while underlining their ecological importance.
Key Points to Ponder:
• What is meant by sacred groves?
• Map Work– Prominent sacred groves in India
• What is the role of sacred groves in biodiversity conservation?
• What role do sacred groves play in the culture of the region?
• Why Piplantri village in Rajasthan’s Rajsamand district is in news?
• Why Justice Mehta lauded the Piplantri village in Rajasthan’s Rajsamand district?
• What is Piplantri model?
• ‘The Supreme Court bench pointed out that the Piplantri model has helped eliminate harmful practices like female foeticide’-How?
• How Piplantri model demonstrates community-driven initiatives effectively?
Key Takeaways:
• The Supreme Court judgment came on applications dealing with the protection of sacred groves of Rajasthan.
• A bench of Justices B R Gavai, S V N Bhatti and Sandeep Mehta directed that as part of this policy the Union Ministry of Environment, Forest and Climate Change “must also develop a plan for a nationwide survey of sacred groves, by whatever name they are identified in each State.”
• “This survey should identify their area, location, and extent, and clearly mark their boundaries. These boundaries should remain flexible to accommodate the natural growth and expansion of these forests while ensuring strict protection against any reduction in size due to agricultural activities, human habitation, deforestation, or other causes.”
• While pronouncing the judgement, the Supreme Court also cited a verse from the Bhagavad Gita to underscore the importance of the environment. “Nature is the source of all material things: the maker, the means of making, and the things made. Spirit is the source of all consciousness which feels pleasure and feels pain,” the court cited Verse 20 from Chapter 13 of the Bhagwad Gita.
• Writing for the bench, Justice Mehta lauded the Piplantri village in Rajasthan’s Rajsamand district, which under the leadership of its Sarpanch Shyam Sundar Paliwal, started the initiative to plant 111 trees for every girl child born.
Do You Know:
• Sacred groves, sacred woods, or sacred forests are groves of trees that have special religious importance within a particular culture.
• In India, sacred groves are scattered all over the country, and do enjoy protection. Prior to 2002, these forest regions were not recognized under any of the existing laws. But in 2002 an amendment was brought in Wildlife Protection Act, 1972 to include Sacred Groves under the act.
• “The Piplantri model has had many positive effects. Environmentally, over 40 lakh trees have been planted, which has helped raise the water table by 800-900 feet and cooled the climate by 3-4°C. These efforts have improved local biodiversity and protected the land from soil erosion and desertification. Economically, the planting of indigenous species of trees like gooseberry, aloe vera, and bamboo has created sustainable jobs. Aloe vera processing, furniture making, and other businesses have increased local incomes, providing work, especially for women, through self-help groups,” said the bench.
• The Supreme Court recently said “The Piplantri model has had many positive effects. Environmentally, over 40 lakh trees have been planted, which has helped raise the water table by 800-900 feet and cooled the climate by 3-4°C. These efforts have improved local biodiversity and protected the land from soil erosion and desertification. Economically, the planting of indigenous species of trees like gooseberry, aloe vera, and bamboo has created sustainable jobs. Aloe vera processing, furniture making, and other businesses have increased local incomes, providing work, especially for women, through self-help groups,”
• The Supreme Court bench also pointed out that the model has helped eliminate harmful practices like female foeticide. “The village now has a rare distinction of a higher female population ratio i.e. 52 per cent and ensures that all girls receive education. Financial support through the Kiran Nidhi Yojna 18 has empowered girls and their families, creating a community that celebrates and rejoices on the birth of a girl child rather than resenting it,” the bench added.
• The bench said the Piplantri model “demonstrates how community-driven initiatives can effectively address social, economic, and environmental challenges in a cohesive manner.” “Active measures are required at the Governmental level to ensure that such ideas are implemented/replicated in other parts of the country to promote sustainable development and gender equality. The Central and State Governments should support these models by providing financial assistance, creating enabling policies, and offering technical guidance to communities,” added the bench.
Other Important Articles Covering the same topic:
📍Why ‘protected’ areas are seeing faster biodiversity decline
UPSC Practice Prelims Question Covering similar theme:
3. Match the following sacred groves with their corresponding regions:
| Sacred Grove | Region |
| 1. Orans | A. Meghalaya |
| 2. Mawphlang Sacred Grove | B. Rajasthan |
| 3. Devrais | C. Maharashtra |
| 4. Sarpa Kavu | D. Kerala |
a.) 1-B, 2-A, 3-C, 4-D
b.) 1-A, 2-B, 3-D, 4-C
c.) 1-C, 2-D, 3-A, 4-B
d.) 1-D, 2-C, 3-B, 4-A
MP plans new home for cheetahs, relocate leopards
Syllabus:
Preliminary Examination: General issues on Environmental ecology, Bio-diversity and Climate Change
Mains Examination: General Studies III: Conservation, environmental pollution and degradation, environmental impact assessment.
What’s the ongoing story: Analysing the lineage of cheetahs to “create a strong genetic foundation”, relocating leopards from the predator-proof fenced areas, and augmenting the number of prey animals are part of the Cheetah Action Plan for Gandhi Sagar Wildlife Sanctuary in Madhya Pradesh, ahead of the plans to introduce a batch of cheetahs there next year, The Indian Express has learnt.
Key Points to Ponder:
• Map Work-Gandhi Sagar Wildlife Sanctuary
• What exactly action plan devised by the National Tiger Conservation Authority (NTCA), the MP wildlife department and Wildlife Institute of India (WII) says?
• Why leopards will be relocated?
• Cheetah in India- Know the Background
• Extinction of Cheetah from Indian Landscape-know the reasons
• Action Plan for Introduction of Cheetah in India-Important Highlights
• Know the difference between cheetah and Leopard and African cheetah and Asiatic cheetah
• Supreme Court of India on Translocating Animals-know in detail
• Trans-continental translocation of Animals-know the Issues and Challenges
Key Takeaways:
• According to an action plan devised by the National Tiger Conservation Authority (NTCA), the MP wildlife department and Wildlife Institute of India (WII), 6-8 cheetahs will be released into a 64 sq km predator-proof enclosure within the sanctuary’s West Range in the initial phase.
• Spread across 2,500 sq. km landscape straddling Madhya Pradesh and Rajasthan, the Gandhi Sagar Wildlife Sanctuary’s mix of grasslands, dry deciduous forests, and riverine evergreen patches is meant to offer an ideal habitat for the cheetahs to thrive.
• This area, characterised by savannah grasslands, supports an “adequate” prey base, with chinkara populations reaching 7.4 individuals/sq m and nilgai at 4.4 individuals/sq km. The sanctuary’s other prey species include chital, wild pig, peafowl, and hare, although their densities are significantly lower.
• According to the action plan, the Gandhi Sagar Wildlife Sanctuary currently has a capacity of 10 cheetahs. “In order to sustain 6-8 cheetahs inside the predator proof fenced area, annual requirement is 1,560-2,080 prey animals per annum or 26-35 prey animals per sq km.
• According to the plan, the sanctuary has an estimated population of 70 leopards in the West Range, and they pose a significant threat to cheetahs, particularly cubs and juveniles, and compete for similar prey.
• This research aims to shed light on “resource separation amongst carnivore communities”, which include hyenas, wolves, jackals, and sloth bears, the plan says. A network of 200 infrared camera traps will be deployed to monitor these populations, while scat analysis will provide insights into dietary preferences.
• A senior wildlife official says the translocation of leopards “is a crucial step in creating a safer environment” for cheetahs. “The competition with the stronger, more adaptable leopards could jeopardise the fragile population of the newly introduced predators,” the official says.
Do You Know:
• Cheetahs are among the oldest of the big cat species, with its ancestors going back about 8.5 million years. It is listed as “vulnerable” by the World Conservation Union (IUCN) Red List of Threatened Species. Two subspecies, the Asiatic cheetah and the Northwest African cheetah, are listed as “critically endangered”.
• A population of 12-14 wild cheetahs, including 8-10 males and 4-6 females, would be imported from suitable parks or reserves in African countries to establish a new cheetah population in India. These cheetahs would be selected from a “genetically diverse, disease-free, and reproductively viable age group”. Behavioural suitability — such as being predator-wary, capable of hunting wild prey, and socially tolerant — would also be critical. The selection criteria would ensure minimal human imprinting while maintaining tolerance to human presence.
• To create a strong genetic foundation, the cheetahs’ lineage and conditions would be evaluated in the source country to “avoid excessive inbreeding”. Individuals would be chosen based on “known life histories and lineages monitored by supplying agencies, experts, or donors”. These selections would consider ecological factors like “genetic relatedness, social behaviour, and overall compatibility with the population’s needs”.
• Genetic analysis of the cheetahs would be carried out using “micro-satellite and genomic” techniques, on all founder individuals to “establish a wide gene pool”.
• Introducing cheetahs into Gandhi Sagar is expected to trigger ecological ripple effects, influencing prey species behaviour and habitat use. To anticipate and mitigate these impacts, key prey species such as blackbuck, chital, and nilgai may be supplemented as needed.
• Radio-collaring prey animals will provide additional data on how they adapt to the presence of a new predator. The fenced area “would be fostered as a cheetah source area to supplement populations of cheetah in areas outside after habitat restoration”
• Gandhi Sagar’s restoration is envisioned as part of a broader cheetah conservation initiative, with Rajasthan’s Bhainsrorgarh Wildlife Sanctuary and Mukundara Hills Tiger Reserve also identified as potential sites for population expansion. These areas, like Gandhi Sagar, will undergo extensive habitat restoration and prey augmentation to support sustainable cheetah populations.
• There are currently 24 cheetahs, including 12 cubs, at Kuno National Park. After spending over a year inside protective enclosures, two cheetahs — Agni and Vayu — were released into the open forest area.
Other Important Articles Covering the same topic:
📍Project Cheetah: Where things stand after two years
Previous year UPSC Prelims Question Covering similar theme:
4. Consider the following: (2012)
1. Black-necked crane
2. Cheetah
3. Flying squirrel
4. Snow leopard
Which of the above are naturally found in India?
(a) 1, 2 and 3 only
(b) 1, 3 and 4 only
(c) 2 and 4 only
(d) 1, 2, 3 and 4
In a first, image of active underwater hot spring captured in Southern Indian Ocean
Syllabus:
Preliminary Examination: Current events of national and international importance.
Mains Examination: General Studies III: Achievements of Indians in science & technology; indigenization of technology and developing new technology.
What’s the ongoing story: In a first, Indian oceanographers have captured the image of an active hydrothermal vent located 4,500 metres below the surface of the Indian Ocean. This site holds potential for mineral exploration as part of the Rs 4,000-crore Deep Ocean Mission under the Ministry of Earth Sciences.
Key Points to Ponder:
• What is meant by hydrothermal vents?
• What is Samudrayaan Mission?
• Why is the ability to image underwater hot springs a significant advancement for Indian oceanographers?
• Discuss the significance of hydrothermal vents for deep-sea exploration.
• ‘India’s Deep Ocean Mission, including the Samudrayaan project, is crucial for ensuring resource security’-Evaluate
• Discuss the role of policies like the Deep Ocean Mission in advancing India’s blue economy and securing its maritime interests.
Key Takeaways:
• The National Centre for Polar and Ocean Research (NCPOR) in Goa has performed multiple geophysical surveys along the Central and Southern Ridge of the Indian Ocean since 2012 on the lookout for hydrothermal vents. In the process, they look for temperature anomalies and turbidity of water columns along potential areas where hydrothermal vents could be populated.
• In April this year, the NCPOR team, assisted by an automatic underwater vehicle (AUV), narrowed their search for a specific site along the Central Indian Ridge.
• A joint exploration team from NCPOR and the National Institute of Ocean Technology (NIOT) in Chennai carried out the high-resolution imaging. This collaboration focused on high-resolution deep-sea exploration and imaging of hydrothermal sulfide fields at the Central and Southwest Indian Ridges in the Southern Indian Ocean.
• Senior scientists John Kurian from NCPOR and NR Ramesh from NIOT led the hydrothermal exploration programme and the AUV campaign. During the recent observation campaign a few days ago, an Indian AUV launched from the research vessel Sagar Nidhi captured a historic image. The observations lasted for 12 to 15 hours.
• According to Kurian, hydrothermal venting can remain active for a few hundred to as long as 30,000 years. This makes them essential for exploration from both economic and biological perspectives. The deposits formed from hydrothermal venting are believed to be rich in valuable minerals and metals, including copper, zinc, gold, silver, platinum, iron, cobalt, and nickel.
Do You Know:
• Hydrothermal vents, largely found near tectonic plates, are underwater springs where cold water (about 2 degrees Celsius) prevailing near the seabed comes in close contact with magma (molten rock formed in very hot conditions inside the earth) in a tectonically active region. When this cold water trickles through cracks and fissures on the ocean crust and admixtures with magma, it gets heated up. It can turn into superhot water (up to 370 degrees Celsius) and later emerge as plumes, rich in minerals and gases, through chimneys and vents.
• The deposits from hydrothermal venting are generally rich in copper, zinc, gold, silver, platinum, iron, cobalt, nickel and other economically-beneficial minerals and metals. According to senior NCPOR scientist John Kurian, they could remain active from a few hundred years to as long as 30,000 years, making them vital.
• This discovery could significantly enhance India’s Deep Ocean mission, especially the Samudrayaan mission, focusing on mineral exploration from inactive vents
Other Important Articles Covering the same topic:
📍India building its largest research vessel to explore deep oceans
Previous year UPSC Prelims Question Covering similar theme:
5. Consider the following statements: (2021)
1. The Global Ocean Commission grants licences for seabed exploration and mining in international waters.
2. India has received licences for seabed mineral exploration in international waters
3. ‘Rare earth minerals’ are present on the seafloor in international waters.
Which of the statements given above are correct?
(a) 1 and 2 only
(b) 2 and 3 only
(c) 1 and 3 only
(d) 1, 2 and 3
Previous year UPSC Mains Question Covering similar theme:
📍Critically evaluate the various resources of the oceans which can be harnessed to meet the resource crisis in the world. (GS3, 2014)
THE EDITORIAL PAGE
MORE MONEY, LESS PROBLEMS
Syllabus:
Preliminary Examination: Economic and Social Development-Sustainable Development, Poverty, Inclusion, Demographics, Social Sector Initiatives, etc.
Mains Examination: General Studies III: Inclusive growth and issues arising from it.
What’s the ongoing story: Arun Kumar Writes: The reason wealth tax failed earlier is because it was deliberately made complicated by allowing concessions, loopholes, etc. Now, with digital records, it should be easier to implement.
Key Points to Ponder:
• What is Wealth Tax?
• What is the difference between property tax and wealth tax?
• How can more revenue be raised for development?
• Why wealth tax failed earlier?
• What Concerns Drive India’s Need to Enact an wealth Tax?
• Analyse the role of taxation in addressing income and wealth inequality in India.
• Discuss the feasibility of reintroducing a wealth tax in India.
• What impact wealth Tax will have on tax revenue, inequality, and economic growth while addressing concerns like capital flight and administrative challenges?
Key Takeaways:
• As per the Union Budget 2024-25, the Centre’s tax collection according to the estimated GDP would be 11.78 per cent with direct taxes contributing 7 per cent. Additional taxes are collected by the states and the local bodies, taking the total tax to GDP to around 17 per cent. This is low compared to most other countries, which means inadequate expenditure on social sectors like education and health leading to low productivity and low incomes for a majority, resulting in weak demand and slowdown of growth.
• Low tax collection is a result of black income generation. According to Oxfam estimates, the top 1 per cent on the income ladder earn 22 per cent of the national income. Projecting that further, the top 5 per cent may be earning about 40 per cent of the income. This means income tax collection from this 5 per cent should be about 10 per cent of GDP at an average tax rate of 25 per cent. Much more tax could potentially be collected if black income generation by the top 3 per cent in the income ladder could be checked.
• Despite tax reforms, there are only 90 million (6.5 per cent of the population) taxpayers. But, only about 15 million are effective taxpayers. About half of the 90 million file nil returns and the rest pay negligible tax. So, the tax base remains narrow and the distribution of income is highly skewed. Even if agriculture incomes are taxed, the numbers will not rise much. The real problem is the taxation of services — the dominant sector of the economy.
Do You Know:
• According to Investopedia, a wealth tax is a tax based on the market value of assets currently owned by a taxpayer, as opposed to taxes on asset sales, income, or real estate. Some developed countries choose to tax wealth.
• According to Investopedia, a wealth tax, also called capital tax or equity tax, is imposed on the wealth possessed by individuals. The tax usually applies to a person’s net worth, which is assets minus liabilities. These assets include (but are not limited to) cash, bank deposits, shares, fixed assets, personal cars, real property, pension plans, money funds, owner-occupied housing, and trusts.
• After Indian independence in 1947, the Indian Income Tax Act 1922 was the principal legislation governing the levy of direct taxes. With the Nehru-led Government in power, the trend in the economy in the initial years after independence was towards greater socialism.
—There was a progressive taxation regime with higher taxes being levied on the rich. There were many problems in the Indian direct tax system resulting in heavy tax evasion.
—The Government of India set up the Kaldor Committee in 1955 to rationalise the tax system and bring about affirmative reforms.
—Pursuant to the suggestions made by the Kaldor Committee, the Government delineated a plan for a composite and integrated tax structure to ensure that no income or wealth escaped assessment. —Thus, the Wealth Tax Act (WTA) was introduced in 1957 as a permanent measure. It was abolished in 2015 due to several procedural difficulties such as extensive litigation, increased compliance burdens, heavy administration costs and generation of inadequate revenues.
Other Important Articles Covering the same topic:
📍French economist Thomas Piketty calls for more detailed income tax data from India
Previous year UPSC Prelims Question Covering similar theme:
6. There has been a persistent deficit budget year after year. Which of the following actions can be taken by the government to reduce the deficit? (2015)
1. Reducing revenue expenditure
2. Introducing new welfare schemes
3. Rationalizing subsidies
4. Expanding industries
Select the correct answer using the code given below:
(a) 1 and 3 only
(b) 2 and 3 only
(c) 1 only
(d) 1, 2, 3 and 4
ECONOMY
After Mexico, Canada, and China, Trump trains the tariff gun on India
Syllabus:
Preliminary Examination: Current events of national and international importance.
Main Examination: General Studies II: Effect of policies and politics of developed and developing countries on India’s interests.
What’s the ongoing story: Weeks after threatening to raise tariffs on America’s top three trade partners—Mexico, China, and Canada—US President-elect Donald Trump on Tuesday turned his attention to India, criticising its high tariffs and warning that Washington would impose reciprocal taxes on Indian products.
Key Points to Ponder:
• What exactly US President-elect Donald Trump said on India’s tariffs policy?
• Why US President-elect Donald Trump criticising India’s high tariffs?
• Why does Trump have a problem with India’s tariff structure?
• Are India’s tariffs high compared to other countries?
• Why large steel producers are pressing the government to significantly raise tariffs on steel?
Key Takeaways:
• This marks the first time Trump has threatened tariffs on Indian goods since winning the election in November. However, during his campaign, Trump frequently referred to India as a “very big (trade) abuser.” Trump is set to assume control of White House on January 20.
• Speaking to reporters at Mar-a-Lago, Trump criticised India’s tariff regime, pointing to 100 per cent tariffs on certain US products. “The word ‘reciprocal’ is important because if somebody charges us—India, for example—we don’t have to talk about our own. If India charges us 100 per cent, do we charge them nothing for the same? They send in a bicycle, we send them a bicycle, and they charge us 100 or 200 per cent,” Trump said.
• When asked about a potential trade agreement with China, Trump redirected the conversation to India and Brazil, both of which he accused of imposing high tariffs. “India charges a lot. Brazil charges a lot. If they want to charge us, that’s fine, but we’re going to charge them the same thing,” Trump said at the briefing.
• He further claimed that US products are heavily taxed by other nations, while American administrations have failed to respond in kind. “Reciprocal. If they tax us, we tax them the same amount. They tax us. We tax them. And they tax us,” he added.
Do You Know:
• The US remains India’s largest trade partner, with bilateral trade reaching nearly $120 billion in FY24, slightly surpassing India’s trade with China. Unlike China, though, India enjoys a favourable trade relationship with the US, making it a critical source of foreign exchange.
• Think tank Global Trade Research Institute (GTRI) reported that India was the sixth-largest beneficiary of the US-China trade war, with a $36.8 billion increase in exports driven by growth in electronics, pharmaceuticals, and engineering goods.
• Mexico’s exports to the US increased by $164.3 billion between 2017 and 2023, followed by Canada with $124.0 billion, and Vietnam in third with $70.5 billion. South Korea ($46.3 billion) and Germany ($43.0 billion) rounded out the top five.
• The fresh threats are particularly concerning as India lost duty-free access under the decades-old Generalised System of Preferences (GSP) programme in 2019, during Trump’s first presidency. India, previously the largest beneficiary, saw tariff-free benefits on approximately $5.7 billion worth of exports to the US.
• Currently, India’s average tariff rate stands at around 17%, which is significantly higher than that of Japan, the US, and the EU — all of them have rates somewhere between 3% and 5%. However, when compared to emerging economies, India’s tariffs are not that high. For instance, Brazil’s average tariff rate is around 13% and South Korea’s is 13.4%
Other Important Articles Covering the same topic:
📍Trump plans tariffs on Canada, Mexico, China: What does it mean?
UPSC Practice Prelims Question Covering similar theme:
7. With reference to tariffs, consider the following statements:
1. Tariffs are taxes imposed only on exported goods to encourage domestic consumption.
2. Specific tariffs are calculated as a fixed amount per unit of the imported good.
3. Tariffs are often used as a tool to protect domestic industries.
Which of the statements given above is/are correct?
A. 1 and 2 only
B. 2 and 3 only
C. 1 and 3 only
D. 1, 2, and 3
EXPLAINED
How to secure entrance exams, stop leaks: expert panel’s ideas
Syllabus:
Preliminary Examination: Current events of national and international importance.
Mains Examination: General Studies II: Issues relating to development and management of Social Sector/Services relating to Health, Education, Human Resources.
What’s the ongoing story: A seven-member panel headed by former ISRO chairman K Radhakrishnan has made a set of 101 recommendations to the Ministry of Education for conducting national level entrance exams in a “transparent, smooth and fair” manner. The panel was constituted by the Ministry in June after the NEET-UG paper leak.
Key Points to Ponder:
• A seven-member panel headed by former ISRO chairman K Radhakrishnan has made a set of 101 recommendations to the Ministry of Education-what are those?
• What has the panel recommended for the NTA?
• What has the panel said about establishing links with State and district officials and what parallels have been drawn with conducting elections?
• What are the suggestions for the testing process and testing centres?
• What are the long-term measures the panel recommends?
• What is the National Testing Agency?
Key Takeaways:
Here are some key recommendations made by the panel, categorised thematically.
• Limit NTA’s scope: Noting that the NTA has “outstretched itself to accommodate diverse requests from many test indenting agencies” including taking up recruitment tests, the panel has suggested that the agency should primarily conduct entrance exams till its capacity is augmented.
—The panel has recommended that the NTA Director General be assisted by two additional directors general, and directors assigned to specific tasks.
—The agency should be staffed with “domain-specific human resources” and a “leadership team with domain knowledge”.
• Involve state, district officials: The panel has suggested that test centres be sealed in the presence of district administration and police before an exam, and that these centres be guarded till they are de-sealed for the exam — much like polling booths.
• Improving testing process: The panel has recommended multi-session testing, spread over a few days to a couple of weeks. For NEET-UG, it has suggested multi-stage testing (like JEE Main and Advanced).
—To verify the authenticity of a candidate, the panel has suggested a “Digi-Exam” system, much like DigiYatra,
• Long-term measures: The panel has suggested “harmonization and unification of tests” for admissions at the undergraduate level. This would include having a uniform eligibility and admission criteria, number of sessions, mode of testing, among other things.
Do You Know:
• The Education Ministry on June 22, had announced an expert committee under Radhakrishnan to look into exam reforms and review the NTA’s functioning after irregularities were reported in the conduct of National Eligibility cum Entrance Test- Undergraduate (NEET-UG) meant for admission to medical courses and UGC National Eligibility Test (NET) for appointment as college teachers.
• The Radhakrishnan committee comprises members from the government, government organisations, academia, and higher educational institutions, to make recommendations on reforms in the mechanism of the examination process, improvement in data security protocols, and structure and functioning of the National Testing Agency (NTA).
• The NTA faced heavy backlash for alleged paper leak of NEET UG 2024 in Bihar, Jharkhand, and other discrepancies in states such as Haryana, Gujarat. Following this, the NTA also had to cancel UGC NET and CSIR UGC NET due to fears of paper leak.
Other Important Articles Covering the same topic:
📍NEET, NET irregularities: Radhakrishnan committee seeks suggestions on NTA exam reforms, functioning
High cost of financing fiscal deficit: why the Gold Bond scheme could end
Syllabus:
Preliminary Examination: Current events of national and international importance.
Mains Examination: General Studies III: Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment.
What’s the ongoing story: The government is considering discontinuing the sovereign gold bond scheme due to the high cost of financing the scheme.
Key Points to Ponder:
• What is the Sovereign Gold Bond scheme?
• What are the concerns regarding sovereign gold bonds?
• How is the share of gold in the total foreign exchange reserves?
Key Takeaways:
• Officials are of the view that sovereign gold bonds were issued with the objective to boost investment in gold, but the recent announcement to cut the import duty on gold in Budget 2024-25 has already been made in line with that objective and has helped raise demand for gold.
• The Government of India finances its fiscal deficit through various instruments, including dated securities, the National Small Savings Fund (NSSF), provident funds, and Sovereign Gold Bonds (SGBs).
• These bonds offer a better alternative to holding gold in physical form due to lower risks and costs of storage. Investors are assured of the market value of gold at the time of maturity and periodical interest. While the tenor of bonds is eight years, it can be redeemed after five years.
• The internal view in the government is that the cost of financing the fiscal deficit through SGBs is quite high and does not align with the benefits accruing to investors from the scheme.
Do You Know:
• Sovereign Gold Bonds (SGBs) are debt securities issued by the Reserve Bank of India (RBI) on behalf of the government, with each unit denoting a gram of gold.
• These bonds offer the flexibility of trading in the secondary market and the interest in SGBs is fixed at 2.5 per cent per annum on the amount of initial investment.
• The quantity of gold for which the investor pays is protected, since he or she receives the ongoing market price at the time of redemption or premature redemption.
• Interest usually gets credited semi-annually to the bank account of the investor and the last interest is payable on maturity along with the principal.
• The key attractive feature of SGBs is that, on maturity, gold bonds get redeemed in Indian rupees and the redemption price is based on a simple average of closing price of gold of 999 purity of previous three business days from the date of repayment, as published by the India Bullion and Jewellers Association Ltd (IBJA).
Other Important Articles Covering the same topic:
📍Knowledge nugget of the day: Sovereign Gold Bonds Scheme (SGBs)
Previous year UPSC Prelims Question Covering similar theme:
8. What is/are the purpose/purposes of Government’s ‘Sovereign Gold Bond Scheme’ and ‘Gold Monetization Scheme’? (2016)
1. To bring the idle gold lying with Indian households into the economy.
2. To promote FDI in the gold and jewellery sector.
3. To reduce India’s dependence on gold imports.
Select the correct answer using the code given below:
(a) 1 only
(b) 2 and 3 only
(c) 1 and 3 only
(d) 1, 2 and 3
The ongoing transition in Syria
Syllabus:
Preliminary Examination: Current events of national and international importance.
Main Examination: General Studies II: Effect of policies and politics of developed and developing countries on India’s interests
What’s the ongoing story: Over the past 10 days, two broad developments have been unfolding in Syria. Prime Minister Mohammed al-Bashir has been trying to stabilise the country, consolidate its ethnic groups, and engage with the international community before the term of his transitional government ends on March 1 next year.
Key Points to Ponder:
• How has the so-called ‘transition’ in Syria progressed since the fall of Bashar al-Assad on December 8?
• What role has the Hayat Tahrir al-Shaam (HTS), the Sunni Islamist group that led the overthrow of the Baathist regime played so far?
• Map Work-Syria, and Kurdish-controlled Northwestern Syria (Rojava)
• There has been an effort to present a united Syria-How?
• Read about the history of the Syrian civil war.
Key Takeaways:
• Leaders of the HTS/ SSG have said that all armed factions that fought to oppose Assad would be brought under the new defence ministry. Mohammad Yasser Ghazal, who has been brought from Idlib to head the Damascus City Council, has said the Salvation Government will be disbanded under the new Syrian Republic
• The new regime has also taken over key apparatus of the Assad state, including the Syrian Arab News Agency (SANA) on December 15. The success in commandeering state institutions, albeit with the objective of reforming them, has enabled it to focus on the second, external, aspect.
• The caretaker administration has been working for the lifting of international sanctions on the groups that now run Damascus.
• Abu Mohammad al-Jolani, the leader of the HTS, has secured direct engagements with British, French, and German diplomats, as well as the UN Special Envoy for Syria Geir Pedersen.
Do You Know:
• The Syrian civil war began around the “Arab Spring” of 2010, dubbed so as many countries in the Middle East and North Africa saw uprisings against authoritarian governments that had been in power for decades. In some nations, such as Tunisia and Egypt, ruling governments were forced out. In most others, governments and militaries crushed the movements.
• The Internet and social media websites such as Twitter, which were then taking off, were believed to have played a role in the spread of pro-democracy ideas in the region. Foreign governments, such as the United States and Russia, also responded to the events based on their respective strategic interests.
• Hayat Tahrir al-Sham (HTS) is a former al-Qaeda affiliate previously known as Jabhat al-Nusra (Al Nusra Front) and designated a terrorist group by the US, Russia and Turkey, among other nations.
Other Important Articles Covering the same topic:
📍Explained: The state of the war in Syria, and the bloody battle for Idlib
Previous year UPSC Prelims Question Covering similar theme:
9. Consider the following pairs: (UPSC CSE 2018)
| Towns sometimes mentioned in news | Country | |
| 1. | Aleppo | Syria |
| 2. | Kirkuk | Yemen |
| 3. | Mosul | Palestine |
| 4. | Mazar-i-sharif | Afghanistan |
Which of the pairs given above are correctly matched?
(a) 1 and 2
(b) 1 and 4
(c) 2 and 3
(d) 3 and 4
|
PRELIMS ANSWER KEY |
| 1. (b) 2. (a) 3. (a) 4. (b) 5. (b) 6.(a) 7.(b) 8.(C) 9. (b) |
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