1. Four new corals recorded from Indian waters
The species newly found off Andaman and Nicobar Islands belong to same family
Scientists have recorded four species of corals for the first time from Indian waters. These new species of azooxanthellate corals were found from the waters off the Andaman and Nicobar Islands.
The azooxanthellate corals are a group of corals that do not contain zooxanthellae and derive nourishment not from the sun but from capturing different forms of planktons.
They are deep-sea representatives with the majority of species being reported from depths between 200 metres and 1,000 metres. They are also reported from shallow waters unlike zooxanthellate corals that are restricted to shallow waters.
The details of the new species have been published in Thalassas: An International Journal of Marine Sciences.
The Zoological Survey of India (ZSI) scientist behind these new findings, Tamal Mondal, said all the four groups of corals are from the same family, Flabellidae.
Truncatoflabellum crassum (Milne Edwards and Haime, 1848), T. incrustatum (Cairns, 1989), T. aculeatum (Milne Edwards and Haime, 1848), and T. irregulare (Semper, 1872) under the family Flabellidae were previously found in Japan, the Philippines and Australian waters, while only T. crassum was reported with the range of Indo-West Pacific distribution.
Mr. Mondal said azooxanthellate corals are a group of hard corals and the four new species recorded are not only solitary but have a highly compressed skeletal structure. “Most studies of hard corals in India have been concentrated on reef-building corals while much is not known about non-reef-building corals. These new species enhance our knowledge about non-reef-building solitary corals,” he added.
Dhriti Banerjee, director of ZSI, said coral reefs are one of the most productive ecosystems in oceans. “Hard corals are the prime and intrinsic part of the coral reef ecosystem. ZSI has given special emphasis on the exploration of the coastal and marine biodiversity of India in recent times. It has come out with several new discoveries,” she said.
The new species enhance the national database of biological resources of India and also define the expansion of scope to explore these unexplored and non-reef building corals, she said.
Coral reefs are the colonies of tiny living creatures that are found in oceans. They are the underwater structures that are formed of coral polyps that are held together by calcium carbonate. Coral reefs are also regarded as the tropical rainforest of the sea and occupy just 0.1% of the ocean’s surface but are home to 25% of marine species. They are usually found in shallow areas at a depth less than 150 feet. However, some coral reefs extend even deeper, up to about 450 feet.
Coral polyps are the individual corals that are found on the calcium carbonate exoskeletons of their ancestors. Corals can be found in all the oceans but the biggest coral reefs are mostly found in the clear, shallow waters of the tropics and subtropics. The largest of these coral reef systems, The Great Barrier Reef in Australia, the largest coral reef is more than 1,500 miles long.
This article will discuss the different characteristics of Coral reefs and its types. The topic, ‘Coral Reefs’ is an important topic for the IAS Exam as it is included in the Geographical subject that is an important part of both UPSC Prelims and Mains. Candidates can also download the notes PDF at the end of this article.
Factors affecting Coral Reefs
- Extreme climate conditions: High temperature of water leads to the declination of these corals as they cannot survive in high temperature. As estimated by scientists, most of the coral reefs of the world will soon decline with the increasing rates of ocean warming.
- Overfishing: It is another major concern as it is leading to an ecological imbalance of the coral reefs.
- Coastal development: Development of coastal infrastructure and tourist resorts on or close by these coral reefs causes significant damages.
- Pollution: The toxic pollutants which are dumped directly into the ocean can lead to the poisoning of the coral reefs as it increases the nitrogen level of the seawater leading to an overgrowth of algae.
- Sedimentation: Construction along the coasts and islands lead to soil erosion increasing the sediments in the river. As a result, it can smother corals by depriving them of the light needed to survive.
Growth conditions for Coral Reefs
- The temperature of the water should not be below 20°C. The most favourable temperature for the growth of the coral reefs is between 23°C to 25°C. The temperature should not exceed 35°C.
- Corals can survive only under saline conditions with an average salinity between 27% to 40%.
- Coral reefs grow better in shallow water having a depth less than 50 m. The depth of the water should not exceed 200m.
Types of Coral Reefs
Coral Reefs are differentiated into three categories based on their shape, nature and mode of occurrence.
- Fringing Reef: The coral reefs that are found very close to the land and forms a shallow lagoon known as Boat Channel are called Fringing Coral Reefs. The Fringing Reefs develop along the islands and the continental margins. They grow from the deep bottom of the sea and have their seaward side sloping steeply into the deep sea. Fringing Reefs are the most commonly found coral reefs among the three. For example Sakau Island in New Hebrides, South Florida Reef.
- Barrier Reef: Barrier Reefs are considered as the largest, highest and widest reefs among the three coral reefs. They develop off the coast and parallel to the shore as a broken and irregular ring. Being the largest reef among the all, they run for 100kms and is several kilometres wide. One example of Barrier Reef is the Great Barrier Reef of Australia which is 1200 mile long.
- Atolls: An atoll can be defined as a reef that is roughly circular and surrounds a large central lagoon. This lagoon is mostly deep having a depth of 80-150 metres. The atolls are situated away from the deep sea platforms and are found around an island or on a submarine platform in an elliptical form. For example Fiji Atolls, Suvadivo in Maldives and Funafoothis Atoll of Ellice.
Importance of Coral Reefs
Coral Reefs play an important role in the following ways.
- They protect coastlines from the damaging effects of wave action and tropical storms.
- They provide habitats and shelter for many marine organisms.
- They are the source of nitrogen and other essential nutrients for marine food chains.
- They assist in carbon and nitrogen-fixing.
- They help with nutrient recycling.
- The study of coral reefs is essential for scientifically testable records of climatic events over the past million years.
- The fishing industry depends also on coral reefs. Many fish spawn there, and juvenile fish spend time there before making their way to the open sea. The Great Barrier Reef generates more than 1.5 billion dollars annually for the Australian economy from fishing and tourism.
- Coral reefs are also key indicators of global ecosystem health. They serve as an early warning sign of what may happen to other less sensitive systems, such as river deltas if climate change is not urgently addressed.
2. ‘Goal is preservation of Tibetan culture, not Independence’
Dalai Lama says he is not trying to propogate Buddhism
The political goal is not independence for Tibet, but the preservation of Tibetan culture, the Dalai Lama said via a recorded message released on Wednesday. The video of the 86-year-old spiritual head of the Tibetans was played before a group of parliamentarians and other supporters of the Tibetan cause, gathered in Washington DC for the 8th World Parliamentarians Convention on Tibet (WPCT).
“Politically we are not seeking Independence for Tibet. What most concerns us is the importance of preserving and safeguarding our culture and language,” he said.
“And the reality today is that there are growing numbers of Chinese people taking interest in Buddhism. Under such circumstances, if we can revive and extend Tibetan culture of warm heartedness and ethics, it will help not only Tibetans, but others with a Buddhist background to such as the Mongolians and on a larger scale the people of China,” the Dalai Lama said.
He emphasised that he was not propagating Buddhism. “We are not trying to propagate Buddhism, cultivating a warm heart and becoming good human being is of benefit whether you are religious or not,” he said.
Others who spoke at the opening session of the convention included Speaker of the U.S. House of Representatives, Nancy Pelosi, and actor Richard Gere.
- Tibet is a region on the Tibetan Plateau in Asia, spanning about 2.4 million km2 – nearly a quarter of China’s territory.
- It is the traditional homeland of the Tibetan people as well as some other ethnic groups. Tibet is the highest region on Earth, with an average elevation of 4,900 metres.
- The highest elevation in Tibet is Mount Everest, Earth’s highest mountain, rising 8,848m above sea level.
- The People’s Republic of China asserts that Tibet has been a part of China since the Mongol-led Yuan dynasty
- In 1951 Tibetan leaders were forced to sign a treaty dictated by China.
- The treaty, known as the “Seventeen Point Agreement”, professes to guarantee Tibetan autonomy and to respect the Buddhist religion but also allows the establishment of Chinese civil and military headquarters at Lhasa (Tibet’s capital).
- The Chinese government regards the Seventeen Point Agreement as a legal contract that was mutually welcomed by both governments and by the Tibetan people.
- However, the Tibetan people – including the 14th Dalai Lama – consider it invalid and as having been signed under duress.
- Tibet has been occupied and ruled over by China and the Chinese People’s Liberation Army (PLA) since 1951 in “a calculated and systematic strategy aimed at the destruction of their national and cultural identities” according to the 14th Dalai Lama.
- This has often been described by the Tibetan people as a cultural genocide (Goldstein, 1998).
- Eight years of occupation and repression led to the Tibetan Uprising of 1959, in which Tibetans rebelled in an attempt to overthrow the Chinese government; instead, the uprising led to the fleeing of HH the Fourteenth Dalai Lama into India, where he has lived in exile ever since.
- A few hundred Tibetans initially followed the 14th Dalai Lama into exile, and since then hundreds of thousands have followed.
3. Israel uncovers remains of mosque
Discovery sheds light on region’s transition from Christianity to Islam, say officials
Israeli archaeologists on Wednesday unveiled a rare ancient mosque in the country’s south that the antiquities officials said sheds light on the region’s transition from Christianity to Islam.
The remains of the mosque, believed to be more than 1,200 years old, were discovered during works to build a new neighbourhood in the Bedouin city of Rahat, the Israel Antiquities Authority said in a statement.
The mosque located in the Negev desert contains “a square room and a wall facing the direction of Mecca”, with a half-circle niche in that wall pointing to the south, the IAA said.
“These unique architectural features show that the building was used as a mosque,” the authority said, noting it probably hosted a few dozen worshippers at a time.
A short distance from the mosque, a “luxurious estate building” was also discovered, with remains of tableware and glass artefacts pointing to the wealth of its residents, officials of the IAA said.
Three years ago, the authority unearthed another mosque nearby from the same era of the seventh to eighth century AD, calling the two Islamic places of worship “among the earliest known worldwide”.
The mosques, estate and other homes found nearby illuminate “the historical process that took place in the northern Negev with the introduction of a new religion — the religion of Islam, and a new rulership and culture in the region,” the IAA said.
4. Digital wearables can expose users to cyberattacks: IEEE
‘Users perceive wearables as having low cybersecurity risk’
Digital wearables, smartwatches and fitness trackers pose unique threats to the security and privacy of customer data, warned the Institute of Electrical and Electronics Engineers (IEEE), a global outfit for technical professionals.
“By connecting a wearable to an extended ecosystem, one is exposing a larger attack surface,” cautioned Aiyappan Pillai, Senior Member of IEEE.
“Cybersecurity experts look at this as a supply chain that includes a data generator, an analytics engine and a service provider. Each link in the chain, including the connecting networks, presents a potential risk.”
As per a document shared by the IEEE, most criminal intrusions of computer networks have a financial motive. That may lead people to conclude that wearables have a low cybersecurity risk. But wearables data, especially in healthcare settings, is often tied to financial information.
“Depending on the organisation from which it was obtained, stolen health data can be extremely valuable because it often includes so much personally-identifiable information – including birthdays, email addresses and other login information, that can be used for identity- theft purposes,” said Kevin Curran, Senior Member of IEEE.
India has been witnessing a massive adoption of wearable technology in the recent years.
The wearables market in India had clocked a record-breaking, double-digit growth in the first quarter of 2022, with shipments surpassing 13.9 million devices, as per IDC.
5. Editorial-1: The role of caste in economic transformation
The divergent outcomes in structural transformation in the global South, i.e., India, China and S.E. Asia, are illustrative
India has been in a phase of jobless growth for at least two decades now, coupled with rising poverty and discontent in rural areas. The ongoing protests against the Agnipath programme, agitations against farm laws a year before, and agitation for reservation by agriculture castes are all arguably an outcome simmering discontent due to this jobless economic growth. Why could India not generate a pattern of growth that produces jobs and inclusive development in the way most of the East Asian countries have done? Caste, which is mostly confined to politics, could be among the answers, a structural factor that impedes economic transformation in India.
Indeed, there is a link between economic transformation and caste in India, which is often missed by academics. In contemporary literature too, caste enters as a post-facto category in understanding inequalities in economic and social outcomes when the fact is that caste is central to economic transformation itself. Caste through its rigid social control and networks facilitates economic mobility for some and erects barriers for others by mounting disadvantages on them. Caste also shapes the ownership pattern of land and capital and simultaneously regulates access to political, social, and economic capital too.
Ways it impedes
There are three ways in which caste impedes the economic transformation in India: ownership and land inequality related to productivity failure within the farm sector; elite bias in higher education and historical neglect of mass education, and caste-based entry barriers and exclusive networks in the modern sector.
If Arthur Lewis, a Nobel Prize winner for development economics, emphasised accumulation of physical capital for economic transformation in the developing world, Theodore William Schultz, an American economist who shared the prize with him the same year in 1979, underscored the need for human capital for better transition to modern sectors. For him, an educated workforce enhances productivity while entrepreneurship ability is increased through education, training, experience and so on.
Hence, the divergent outcomes in structural transformation between countries in the global South, particularly India, China and South East Asia, is due to these three factors. All the nations which succeeded in achieving inclusive growth in the Global South had land reforms combined with human capital, invested in infrastructure by promoting capitalism from below and began industrialisation in the rural sector. Only India lost on all three counts.
Land ownership, productivity
India has one of the highest land inequalities in the world today. Unequal distribution of land was perpetuated by British colonial intervention that legalised a traditional disparity. Some castes were assigned land ownership at the expense of others by the British for its administrative practices. The British inscribed caste in land governance categories and procedures that still underpin post-colonial land ownership pattern in India. They made an artificial distinction between proper cultivators who belong to certain castes and those labourers — lower caste subjects who cultivated granted/gifted lands (Panchami, etc.) that have institutionalised caste within the land revenue bureaucracy. The prescribed categories and practices have entrenched caste inequality in land ownership. Even the subsequent land reform that took place after India’s independence largely excluded Dalits and lower castes. It emboldened and empowered mainly intermediate castes at the expense of others in rural India.
Even the Green Revolution that brought changes in the farm sector did not alter land inequality as it was mostly achieved through technological intervention. Though India has certainly seen surplus food production since then, the castes that were associated with this land pattern and benefited from the Green Revolution tightened their social control over others in rural India. Land still defines social status and pride in many parts of rural India.
While land has lost its productive capacity since the 1990s, thanks to the real estate and construction turn in the Indian economy, it still works as a source of inheritance, family lineage and speculative capital. In that sense, the economic reforms of the 1990s were a watershed moment. The farm lobby lost its power. Even those who made surplus in farm sectors could not transform their status from cultivators to capitalist entrepreneurs in the modern sectors, except a few castes in western and southern India. Those castes that had a stake in agriculture did not benefit from the economic reforms for two reasons — historical neglect of education and the entry barriers erected by the upper castes in modern sectors. The recent agitations by the Jats in Haryana and Punjab, the Marathas in Maharashtra and the Patels in Gujarat, demanding, among other things, reservation for their castes in higher education and formal jobs exemplify this new trend.
Neglect of education
If strong growth in productivity within the farm sector is crucial for sustained economic growth, an educated workforce is equally necessary to move to the modern sectors. India failed on both accounts. The Indian education system has been suffering from an elite bias since colonial times. British colonialists educated tiny groups of elites, largely from upper castes, for their own administrative purpose.
As political scientist Myron Weiner had argued, India suffered from caste bias in education. Although the Indian Constitution guaranteed free and compulsory education under its directive principles, it was hardly translated into practice. Instead, attention was given to higher education for the elites. Hence, inequality in access to education got translated into inequality in other economic domains including wage differentials in India. Indian elites in fact sustained their position at the top by denying education to a substantial proportion of the population till positive-discrimination policies were implemented in higher education. India’s turn toward service growth — particularly its claims of emerging as a leader in software development and a natural inheritor of soft power — is arguably an outcome of this historic elite bias in education.
In contrast, Chinese and other East Asian countries invested in basic education and gradually shifted towards higher education. Their success in manufacturing is a direct outcome of the investment in human capital. One can find such trends even in the contemporary global labour market mirroring this skill spectrum; as South East Asia and China captured low-end manufacturing jobs, India largely concentrated in high-end technology jobs. China taking over India in manufacturing is due to this neglect in human capital formation. Here, a comparison with China is illustrative. Yasheng Huang, a Chinese economist, argues that rural entrepreneurship was able to grow out of the traditional agricultural sector on a massive scale. Rural India, in contrast, hampered by a poor endowment of human capital, could not start entrepreneurial ventures even remotely on the scale of the Chinese.
Barrier to entrepreneurship
India did not witness such capitalism from below except in a few cases. Caste shaped policy outcomes, including India’s highly unequal land reform and lack of public provision of education and health, which in turn erected barriers to economic diversification. Caste also worked in building social networks. Castes that were already in control of trading and industrial spaces resisted the entry of others. Even those who had economic surplus in farm sectors could not invest in non-farm modern sectors. Social inequalities have mounted barriers for economic transition. Agrarian capital could not move into modern sectors due to these roadblocks. Even the relative success in South India is being attributed to the ‘Vaishya vacuum’ — an absence of traditional merchant castes. In contrast such a transition took place in South East Asia, where diversification into urban enterprises by agrarian capitalists was possible.
Truncated transformation is partly an outcome of this interface between caste and economy. For caste is not a residual variable, but is an active agent which stifles economic transformation.
6. Editorial-2: Heal the nation before healing the rest of the world
Political or geopolitical expediency or cultural chauvinism should not be allowed to undercut India’s health interests
Bolstering health human resources has been a prime focus of many of the Union government’s recent initiatives and policy pronouncements. The Union health Budget 2022 made handsome appropriations for the same, much in line with the Fifteenth Finance Commission’s recommendations which laid a conspicuous emphasis on utilising existing capacities at the district and sub-district levels to train different cadres of health-care personnel. Much to the ecstasy of public health advocates, the Health Ministry recently released a set of implementation guidelines for a long over-due Indian public health cadre.
A more recent announcement, however, raises concerns over the coherence of India’s vision with respect to health human resources. The Centre under the Ayushman Bharat Digital Mission and the “Heal by India” initiative is reportedly developing an exhaustive online repository of all categories of health-care professionals in the country. Though such an innovation is much needed because of the currently fragmented nature of such data, one of its proposed primary purposes is to aid external stakeholders, viz. foreign employers and patients in finding a right Indian match for their respective needs. It is an atavistic return to the widely shunned principles of liberalisation in health care, which is not only gratuitous today but also menacing.
WHO forecast for India
The concerns are legitimised by the current estimates and future projections of health manpower in the country, which paint a not-so-salutary picture. A World Health Organization (WHO) 2020 report projected a requirement of nearly two million more doctors and nursing professionals for India in order to attain the minimum threshold ratio of health-care professionals to the population.
As per a study by WHO and the Public Health Foundation of India, over and above a veritable shortage of health-care personnel and their skewed skill-mix across a number of States, their current pace of growth is unlikely to result in any significant improvement in the density or skill-mix of health-care professionals by 2030. Such inadequacies are further compounded by the legions of health-care professionals who remain inactive and outside the labour force. In the face of these colossal challenges, the current measure which aims to subtly reinforce medical tourism and worsen the out-migration of health-care professionals from the country is utterly counter-intuitive.
Soft power projection
In the mid-1990s, the General Agreement on Trade in Services (GATS) aimed to create an unprecedented scope for cross-border trade in medical and health-care services. While the health equity implications of this neoliberal offshoot are well known and its central tenets have been widely criticised, health care particularly in the post-COVID-19 era has been a fertile ground for countries to project soft power — at times even at the expense of the nation’s own health interests. A crucial distinction must always be drawn between exporting products such as vaccines and that of health-care professionals.
While the first is characterised by a much simpler transactional math, training health-care manpower entails large subsidies (even a fraction of which is hardly recovered through remittances and skill transfers), thus entailing a net drain of resources from the native country.
A similar draw on scarce national health-care resources is laid through medical tourism which is almost always to the detriment of health equity, particularly in developing settings such as India. The magnitude of these could be somewhat attenuated by the use of telemedicine and virtual platforms, though the larger concerns shall persist. While neither medical tourism nor out-migration can or need to be dispensed with in their entirety, to pursue them actively when the country is reeling under acute shortages in an aspirational decade for health care is least warranted.
India needs a registry
It is also hard to justify an immediate need for this measure. While an online health-care professionals repository will certainly aid foreign stakeholders in finding their right choices, there is neither a strong demand-side desperation nor a significant supply-side scarcity preventing a market to function well in its absence. For instance, a recruiter from a developed country willing to hire Indian nurses and remunerate them handsomely will not be hard pressed to find suitable candidates regardless of the assistance rendered by an online repository, and the latter would only be marginally helpful.
Rather, it is at the national and sub-national levels that such an exhaustive and updated registry of health-care professionals is the need of the hour, for addressing the many challenges and disparities in health manpower availability, distribution, and skill mix. This would also come to strongly complement measures such as an integrated public health cadre and the initiatives to train, deploy and retain more local manpower.
In health care, which is characterised by perennially scarce resources and a surfeit of challenges, everything revolves around identifying the priorities right. And no amount of political or geopolitical expediency or cultural chauvinism should be allowed to undercut national health interests. It is time to go all out to address national health-care workforce challenges and heal the nation before embarking on a healing cruise of the world.
7. Editorial-3: Towards a single low tax regime
The Finance Minister should do away with all the confusing tax slabs in one fell swoop
In December 2018, the late Finance Minister, Arun Jaitley, announced that the 28% GST slab, which he called the “dying slab”, would be phased out, except for luxury items. India, he said, would eventually have just two slabs: 5% and a standard rate between 12% and 18% (apart from exempt items). Tragically, he passed away less than a year before fulfilling his assurances.
Simplicity is not easy to achieve. Great sages, artists and designers have preached simplicity. It was the mantra of Henry David Thoreau, who influenced Mahatma Gandhi.
The introduction of a uniform GST was a watershed moment in India since the country’s earlier regime of taxes and cesses, both at the Centre and the States, was a big barrier to free trade and economic growth and was a cesspool of corruption.
Complex and confusing
However, GST is still a complicated tax regime with different slabs. It is not easy to comprehend or comply with, and is open to interpretation, harassment and avoidable litigation. To simplify it, Finance Ministry officials must be reminded of KISS.
KISS (Keep It Simple, Stupid) is a well-known acronym and an accepted credo in business. Attributed to Lockheed aircraft engineer Kelly Johnson, it was meant to urge engineers to keep aircraft design so simple that even a stupid person would be able to repair the aircraft with ordinary tools on the combat field.
Bureaucracy, the world over, is usually oblivious to the KISS principle. An Amazon ad boasts that it sells more than a crore of different products, besides myriad services. More categories are added every day. In this context, asking bureaucrats to identify and categorise all products and services for differential tax slabs in the GST regime is the surest way to get into a muddle.
Empirical data from across the world on the benefits of a unified single tax is incontrovertible. So, an unambiguous directive to the bureaucracy is necessary from the ruling dispensation to come up with just two categories: goods eligible for zero tax and goods that will fall under a single rate, say 10% or 12%. That means everything except those specifically exempt, is taxed.
This needs bold and clear reformist thinking at the political level. Imposing a high GST in some areas does not make sense. ‘Sin’ taxes, for instance, are at cross purposes with the government’s policy of generating growth and creating jobs under ‘Make in India’. A typical 300-room five-star hotel generates direct employment for around 500 people of whom 90% are waiters, housekeeping staff, front desk staff, security and concierge staff, besides cooks, financial and clerical staff. There are a host of others employed in associated services such as the spa, gift shops and swimming pool. The hotel also generates indirect employment in ancillary areas: it buys bed linen, furnishings, rugs and carpets, air conditioners, cutlery, electrical fittings and furniture, and consumes enormous quantities of food produce. All these generate jobs and income for farmers, construction contractors, artisans and other manufacturers. Five-star hotels also generate foreign exchange by attracting rich tourists and visitors. So, it’s unwise to tax these hotels to death.
Similarly, high taxes on air-conditioners, air conditioned restaurants, chocolates and luxury cars create an economic ripple effect downstream, in a complex web of businesses that have symbiotic relationships. The effect finally reaches down to the bottom of the employment pyramid.
The plan must be to figure out how to rev up the economy by making the rich and upper middle class spend and move more people up the value chain in order that more chocolates and ACs and automobiles are bought by them, instead of designing a tax system that keeps these products out of the new consumer class’s reach.
Instead, the current regime is plain confusing. At an Iyengar Bakery, GST on bread is zero, but the vegetable sandwich is in the 5% tax slab, hitting the vegetable grower directly. The GST on buns is zero, but buns with a few raisins fall in the 5% slab. The GST on masala peanuts, murukku and namkeen is 12%. And the GST on cakes and chocolates is 18%. The same lack of logic applies to taxes on wine, rum and beer, which generate large-scale employment and are the backbone of grape and sugarcane farming and the cocoa industry. The ancient art of toddy tapping in villages, a large employment generator and income booster in rural areas, was killed by unthinking politicians and bureaucrats and replaced with Indian-made foreign liquor. Imagine killing the wine industry in France? It would be sacrilege.
In the automobile sector, the GST on electric cars, tractors, cycles, bikes, low-end and luxury cars ranges anywhere from 5% to 50%. The sale of automobiles is the barometer of an economy.
The confusion has given rise to several disputes. ID Fresh Food, for instance, which makes ready-to-eat foods like chapatis, rotis, parotas and sells various types of idli and dosa batter, appealed against a GST ruling of the Authority for Advance Rulings (Karnataka bench). The ruling had called for a distinction between rotis and parotas and had subjected parotas to a higher GST rate of 18% since the food item did not fall under the category of “khakhra, plain chapati, or roti” (which fall under the 5% slab) and needed to be processed or heated for further consumption. Can a country aspire to be a $5 trillion economy if its taxmen turn gourmet chefs and get bogged down by researching the differences between various kinds of food items prepared with dough?
Then there are items that are exempt from GST. Petrol, diesel, aviation turbine fuel are not under the purview of GST, but come under Central excise and State taxes. Central excise duties and varying State taxes contribute over 50% of the retail price of petrol and diesel, probably the highest in the world barring banana republics. There is distrust between the States and the Centre on revenue sharing. There is also anger at the Centre for riding roughshod over the States’ autonomy and disregarding the federal structure of the Constitution. Opposition-ruled States point fingers at Prime Minister Narendra Modi, who ironically accused the United Progressive Alliance regime of trampling on the rights of the States while he was Gujarat Chief Minister.
Use the KISS principle
The low-cost airline model is successful because of the KISS principle. All the frills such as food, freebies and assigned seats are dispensed with. Single class seating, point-to-point travel with no code sharing, direct Internet booking, no middlemen. etc. have sustained this model. It’s an Udupi self-service hotel in the sky.
The Finance Minister should take a cue from the Prime Minister, who hinted at major reforms in the aftermath of COVID-19, and do away with all the confusing tax slabs in one fell swoop. She can then usher in a truly single low tax regime along with a list of exempt items. That will ensure compliance, widen the tax net, improve ease of doing business, boost the economy, create jobs, increase tax collections and reduce corruption as witnessed in many countries – a move that will be both populist and well-regarded by economists.