CURRENT AFFAIRS – 16/09/2023

CURRENT AFFAIRS – 16/09/2023

CURRENT AFFAIRS – 16/09/2023

Government notifies GST Appellate Tribunal

(General Studies- Paper III)

Govt. notifies 31 Benches of GST Appellate Tribunal

31 Benches of GST Tribunals notified

Source : TH

The Finance Ministry has taken a significant step in resolving taxpayer disputes with the Revenue Department by notifying the constitution of 31 Appellate Tribunals across 28 States and eight Union Territories for the Goods and Services Tax (GST).

  • This move comes after obtaining clearance from the GST Council and addresses a growing backlog of appeals from taxpayers regarding central GST levies.

Key Highlights

  • The establishment of these tribunals was initially envisaged during the implementation of the GST regime on July 1, 2017.
  • As of June 30, the number of pending appeals from taxpayers concerning central GST levies had surged to over 14,000, marking a 20% increase compared to the number of pending cases on March 31 of the same year.
  • Tribunals in States
    • While States had proposed 50 tribunal benches to the GST Council, the Union government decided to establish them in a phased manner.
    • The first set of tribunals is expected to become operational between November and January 2024.
  • Benefits of GST Appellate Tribunals: The constitution of GST Appellate Tribunals (GSTATs) is expected to bring several benefits:
    • Expedited Adjudication:
      • GSTATs will expedite the process of adjudication, providing tax certainty, especially in recurring litigative issues.
    • Enhancing Business Sentiments:
      • Speedier and economically efficient resolution of cases by specialized GSTATs is anticipated to boost business sentiments and ease of doing business in the country.

What is GST Appellate Tribunal?

  • The Goods and Services Tax Appellate Tribunal (GST Appellate Tribunal) serves as the second-level forum for appeals in the context of GST laws in India.
  • It holds the distinction of being the first common forum for dispute resolution between the Central and State governments.
  • Importantly, the GST Appellate Tribunal is a common forum under both the Central GST (CGST) and State GST (SGST) Acts.
    • This means that it handles appeals arising from both central and state tax matters, ensuring uniformity in dispute resolution procedures and the implementation of GST throughout the country.
  • Legal Framework:
    • The legal framework for the GST Appellate Tribunal is provided in Chapter XVIII of the CGST Act.
    • Section 109 of this chapter grants the Central Government the authority to constitute the GST Appellate Tribunal.
    • This establishment is done based on the recommendation of the GST Council and through a notification.
  • Appeals and Review:
    • The GST Appellate Tribunal has the power to hear and decide appeals against orders issued by the Appellate Authority or the Revisional Authority.
    • Taxpayers can approach the tribunal to review these orders, and the tribunal’s decisions are generally considered final unless challenged on points of law in higher courts.
  • The appeal against the Appellate Authority or the Revisional Authority must be within 3 months from the date of judgement.
  • The constitution of the National Appellate Tribunal under the Goods and Services Tax (GST) regime in India is structured as follows:
    • National Bench (at Delhi):
      • Headed by a National President.
      • Comprises one Technical Member from the Central government.
      • Comprises one Technical Member from the State government.
    • Regional Benches:
      • Each Regional Bench consists of:
        • A Judicial Member.
        • One Technical Member from the Central government.
        • One Technical Member from the State government.
      • State Benches:
        • One Bench for each State.
        • Each State Bench is headed by a State President.
      • Area Benches under State Benches:
        • Area Benches operate under the jurisdiction of State Benches.
      • Composition of Members:
        • Each State and Area Bench will consist of both judicial and technical members representing both the Central Goods and Services Tax (CGST) and the State Goods and Services Tax (SGST) authorities.
      • The qualifications, eligibility criteria, and appointment processes for the National President, Judicial Members, and CGST Members will be as per the provisions specified in the GST Act and in line with the recommendations of the GST Council.

Goods and Services Tax (GST): A brief History

  • Kelkar Task Force (2000):
    • The idea of GST was initially proposed by the Kelkar Task Force on Indirect Taxes in 2000.
    • It aimed to streamline the tax system and promote economic integration.
  • First Discussion Paper (2009):
    • The Empowered Committee of State Finance Ministers prepared a design and roadmap for GST, releasing the First Discussion Paper in 2009.
  • Constitution Amendment Bill (2011):
    • The Constitution Amendment Bill for enabling GST implementation was introduced in 2011 but faced challenges related to compensation to states and other issues.
  • Passage of Constitution Amendment Bill (2014-2016):
    • After years of deliberation and negotiations, the Constitution (122nd Amendment) Bill, 2014, was introduced in Parliament.
    • It was passed by the Lok Sabha in May 2015 and, with certain amendments, passed in the Rajya Sabha in August 2016.
    • It was ratified by the required number of states and received presidential assent on September 8, 2016, becoming the 101st Constitution Amendment Act.
  • Establishment of GST Council (2016):
    • The GST Council, comprising the Union Finance Minister and representatives from all states and Union Territories, was established in September 2016.
    • It played a crucial role in making decisions on GST aspects such as tax rates, exemptions, and administrative procedures.
  • Implementation of GST (July 1, 2017)
    • Tax Slabs:
      • GST laws were implemented on July 1, 2017, replacing a complex web of central and state taxes.
      • Goods and services were categorized into different tax slabs, including 5%, 12%, 18%, and 28%, with certain essential commodities being exempted, and specific items like gold and job work for diamonds attracting lower rates.
      • Compensation cess was introduced for demerit goods and luxury items.
    • Technological Infrastructure:
      • Extensive efforts were made to build the necessary technological infrastructure, and GST Network (GSTN), a not-for-profit company, was created to provide the IT backbone for the GST system.
      • This included functions like taxpayer registration, return filing, and tax payments.

Salient Features of Goods and Services Tax (GST) in India

Goods and Services Tax (GST) is a comprehensive indirect tax system in India that has several distinctive features:

  • One Nation, One Tax:
    • GST replaced multiple indirect taxes levied by both the Central and State Governments, simplifying the tax structure and eliminating the cascading effect of taxes.
  • Dual Structure:
    • GST operates under a dual structure with Central GST (CGST) levied by the Central Government and State GST (SGST) levied by State Governments.
    • For inter-state transactions, Integrated GST (IGST) is applicable, collected by the Central Government and apportioned to the respective states.
  • Import of goods or services is subject to IGST, in addition to customs duties.
  • Destination-Based Tax:
    • GST is a destination-based tax, levied at each stage of the supply chain from the manufacturer to the consumer.
  • Input Tax Credit (ITC):
    • Businesses can claim credit for the tax paid on inputs used in the production or provision of goods and services, preventing double taxation and reducing overall tax liability.
  • Tax Coverage:
    • GST applies to all goods and services, except for alcohol for human consumption.
    • Five specified petroleum products (Crude, Petrol, Diesel, ATF & Natural Gas) are subject to GST from a date recommended by the GST Council.
    • Tobacco and tobacco products are subject to GST, with the Central Government having the power to levy Central Excise duty on these products.
    • Exports are zero-rated, ensuring goods and services exported do not suffer input taxes.
  • Threshold Exemption:
    • Small businesses with a turnover below a specified threshold are exempt from GST, reducing compliance burdens.
    • Special category states may have different thresholds.
  • Composition Scheme:
    • Small taxpayers with limited turnover can opt for the composition scheme, paying a fixed percentage of their turnover as GST and enjoying simplified compliance requirements.
  • Online Compliance:
    • The Goods and Services Tax Network (GSTN) provides an online portal for registration, filing returns, tax payments, and compliance activities, streamlining processes for taxpayers.
  • Anti-Profiteering Measures:
    • The National Anti-Profiteering Authority (NAA) was established to ensure businesses do not engage in unfair pricing practices due to GST.
    • All GST anti-profiteering complaints are now handled by the Competition Commission of India (CCI).
  • Sector-Specific Exemptions:
    • Certain sectors, such as healthcare, education, and essential commodities like food grains, enjoy either GST exemption or reduced tax rates to ensure affordability and accessibility.

The GST Council and its Working

  • Composition:
    • The GST Council is composed of members from both the Central Government and the State Governments. It includes:
    • The Union Finance Minister, who serves as the Chairperson of the Council.
    • The Union Minister of State in charge of Revenue or Finance.
    • Finance Ministers or Ministers in charge of Finance/Taxation from each of the 28 states and 8 Union Territories with legislatures.
    • The Council members work together to discuss, deliberate, and make decisions on various GST-related matters.
  • Decision-Making:
    • Decisions of the GST Council require a consensus. In other words, all members must agree on a decision for it to be approved.
    • If a consensus cannot be reached, the Chairperson may call for a vote, and a decision will be taken by a three-fourths majority of the weighted votes of the members present and voting.
    • The Central Government’s vote has one-third of the total weightage, while all the State Governments together have two-thirds of the weightage.

A GM crop decision

(General Studies- Paper III)

A GM crop decision that cuts the mustard

Source : TH

Genetic engineering and genetically modified (GM) crops are essential tools to combat global food and nutritional security challenges amid changing climates.

  • Achieving the ‘Zero Hunger’ target by 2030, as per the global Food Security and Nutrition Report, 2019, remains a formidable task.
  • The focus must be on accelerating genetic crop improvements to increase food production, self-reliance, and resource efficiency.

Key Highlights

  • Role of GM Crops in Agriculture
    • GM crops, in conjunction with traditional farming, have been instrumental in enhancing productivity and ensuring global food, feed, and fiber security.
    • A report by the International Service for the Acquisition of Agri-biotech Applications (ISAAA) 2020 reveals that 72 countries have adopted GM crops, benefiting over 1.95 billion people.
    • Argentina, Brazil, Canada, India, and the United States have collectively seen economic advantages from GM crops, particularly Bt cotton in India.
    • GM technology has expanded beyond major crops like maize, soybean, cotton, and canola, encompassing economically important food crops for various traits.
    • Global economic gains from GM crops between 1996-2018 amounted to $224.9 billion, benefiting over 16 million farmers, primarily in developing countries.
    • GM crops have demonstrated biosafety over the past 25 years.
  • Addressing Edible Oil Deficit with GM Mustard
    • India faces a significant deficit in edible oils, with 60% of demand met through imports.
    • Mustard is crucial to India’s edible oil production, but its per-hectare yield lags behind the global average.
    • Genetic engineering research at the Centre for Genetic Manipulation of Crop Plants (CGMCP), University of Delhi South Campus, has focused on developing a high-yielding GM mustard hybrid, DMH-11.
    • DMH-11 utilizes the barnase/barstar system, altering male fertility in one parent and restoring it in offspring.
      • It also incorporates herbicide tolerance for selection.
    • Landmark Approval for GM Mustard
      • On October 25, 2022, the Genetic Engineering Appraisal Committee (GEAC) approved the release of DMH-11 and its parental line for cultivation.
      • This decision promises to bolster genetic engineering research in India and facilitate the creation of new crop varieties with improved traits.
      • Given the narrow genetic base of mustard varieties in India, GEAC’s approval opens avenues for mustard hybrid breeding, enhancing yields, disease resistance, and oil quality.
      • The release of DMH-11 is expected to increase farmers’ incomes and reduce edible oil import burdens.
    • Advancing Self-Reliance and Sustainability in Agriculture
      • India’s edible oil imports reached approximately 13 million tonnes, valued at ₹1.17 lakh crore.
      • Cultivating GM mustard hybrids can enhance farmers’ incomes and contribute to achieving self-reliance in edible oil production.
      • The environmental release of DMH-11 marks a significant step toward self-reliance and sustainability in agriculture.
      • Further research and development of improved GM food crops are essential to boost Indian farmers’ profitability and ensure food security.

What is a GM crop?

  • A genetically modified (GM) crop, also known as a genetically engineered (GE) crop, is a plant whose DNA has been altered using genetic engineering techniques.
  • This involves the insertion of genes from other organisms (typically unrelated species) into the plant’s genome to confer specific desirable traits or characteristics.
  • These traits can include resistance to pests, tolerance to herbicides, improved yield, nutritional enhancements, and more.
  • Brief History of GM Crops in India
    • Early Research (1990s):
      • India initiated research on GM crops in the early 1990s.
      • The first GM crop trials involved the development of Bt cotton, a cotton variety engineered to produce a protein toxic to certain insect pests.
      • These trials showed promising results.
    • Commercialization of Bt Cotton (2002):
      • In 2002, Bt cotton was officially commercialized in India.
      • This marked the first approval and adoption of GM crops in the country.
      • Bt cotton quickly gained popularity among Indian cotton farmers due to its effectiveness in reducing pest damage and increasing yields.
    • BtBrinjal Controversy (2009):
      • In 2009, India faced a significant controversy over Btbrinjal, a genetically modified eggplant.
      • The Genetic Engineering Appraisal Committee (GEAC) approved Btbrinjal for commercial cultivation, but this decision was overruled by the government following protests and concerns about safety.
    • Other GM Crops in India:
      • Besides cotton, India has conducted research on other GM crops like mustard, rice, and chickpeas.
      • However, commercialization has been slow and often subject to regulatory and public scrutiny.

About The Genetic Engineering Appraisal Committee (GEAC)

  • The Genetic Engineering Appraisal Committee (GEAC) is a regulatory body in India responsible for assessing and approving genetically modified organisms (GMOs), including GM crops, for environmental release and commercial cultivation.
  • It operates under the Ministry of Environment, Forest, and Climate Change, Government of India.
  • Role and Functions:
    • GEAC’s primary role is to evaluate the safety of genetically modified organisms and their potential environmental and ecological impacts.
    • It assesses applications for the environmental release, field trials, and commercial cultivation of GM crops and other GMOs.
    • The committee conducts risk assessments, reviews scientific data, and consults experts to make informed decisions regarding GMO approvals.
  • Composition:
    • GEAC is composed of various experts, scientists, and officials representing relevant government departments.
    • It includes members from the Ministry of Environment, Forest and Climate Change (MoEFCC), Department of Biotechnology (DBT), Department of Agriculture and Cooperation (DAC), Indian Council of Agricultural Research (ICAR), and other stakeholders.
    • GEAC may also invite external experts and organizations for consultations and assessments.
  • Regulatory Framework:
    • GEAC operates within the framework of the Environment Protection Act, 1986, and the Rules for the Manufacture, Use, Import, Export, and Storage of Hazardous Microorganisms/Genetically Engineered Organisms or Cells (1989).
    • India also has guidelines and protocols for the risk assessment and management of GMOs.

DAC clears proposal to buy 12 Su-30 MKI fighter jets

(General Studies- Paper III)

DAC gives nod to buy 12 Su-30 jets, other military equipment

Source : TH

The Defence Acquisition Council (DAC) has approved proposals totaling Rs 45,000 crore, encompassing various platforms and weapon systems for the Indian armed forces.

Key Highlights

  • Acquisition of Su-30 MKI Fighter Aircraft
    • The DAC granted Acceptance of Necessity (AoN) to procure 12 Su-30 MKI fighter aircraft along with associated equipment from Hindustan Aeronautics Limited (HAL).
    • Su-30 MKI is a Russian-origin fighter jet and has a good flight safety record.
    • The Indian Air Force (IAF) has inducted 272 of these jets since 1998.
    • The procurement aims to replace lost aircraft over the years and bring the IAF’s Su-30 fleet back to planned levels.
  • Indigenous Dhruvastra Air-to-Surface Missile
    • The DAC approved AoN for the procurement of Dhruvastra short-range air-to-surface missiles, designed to be fired from HAL-made Advanced Light Helicopters Mk-IV.
    • These precision-guided missiles were developed by the Defence Research and Development Organisation (DRDO).
  • Emphasis on Indigenous Content
    • Defence Minister Rajnath Singh urged the DAC to prioritize indigenization efforts.
    • He suggested raising the minimum indigenous content threshold from 50% to 60-65% for indigenously designed, developed, and manufactured (IDDM) projects.
    • The Ministry aims to promote ‘Aatmanirbhar Bharat’ (self-reliant India) through these procurements.

About Defence Acquisition Council (DAC)

  • The Defence Acquisition Council (DAC) is a top-level decision-making body within the Indian Ministry of Defence responsible for approving capital acquisitions for the armed forces.
  • It plays a crucial role in the procurement and modernization of the Indian armed forces.
  • Composition:
    • The DAC is headed by the Defence Minister of India.
    • It includes other key members such as the Chief of Defence Staff (CDS), the Chiefs of the Army, Navy, and Air Force, and the Defence Secretary.
    • The Secretary for Defence Production and Supplies and the Secretary for Defence Research and Development also participate as permanent members.
    • The Secretary for Expenditure and Secretary for Foreign Affairs may be invited to attend meetings if necessary.
  • Functions:
    • The primary function of the DAC is to grant approval for the procurement of weapons, military equipment, and other capital acquisitions for the armed forces.
    • This includes approving Acceptance of Necessity (AoN), which is the first step in the procurement process.
    • The DAC also formulates policies related to defence acquisitions and makes recommendations on various aspects of defence procurement.
  • Other key functions:
    • Provide ‘in principle’ approval for capital acquisitions in the Long Term Perspective Plan (LTPP), spanning 15 years.
    • Identify ‘Make’ projects within the Perspective Plan, especially those with long gestation periods.
    • Grant ‘in principle’ acceptance of necessity for each capital acquisition project, at least nine months before the start of a Five Year Plan.
    • Identify the nature of projects, including ‘Buy’ (outright purchase), ‘Buy and Make’ (purchase followed by licensed production/indigenous development), or ‘Make’ (indigenous production and R&D).
    • Monitor the progress of major projects based on feedback from the Defence Procurement Board.

About Su-30 MKI fighter aircraft

  • The Su-30 MKI fighter aircraft is a Russian-origin multirole fighter aircraft that has been in service with the Indian Air Force (IAF).
  • The Su-30 MKI is a variant of the Su-30 series of fighter aircraft developed by the Russian aerospace company Sukhoi.
  • The “MKI” stands for “ModernizirovannyiKommercheskiyIndiski” in Russian, which translates to “Modernized Commercial for India.”
  • India signed a contract with Russia in 1996 to acquire Su-30 MKI aircraft.
  • The aircraft were delivered to the IAF in phases, and the first Su-30 MKI squadron was formed in 2002.
  • Features:
    • The Su-30 MKI is a twin-seat, twin-engine fighter aircraft known for its versatility and combat capabilities.
    • It is capable of air superiority, ground attack, and maritime strike missions.
  • Variants:
    • The Su-30 MKI acquired by India is a highly customized variant with specific features and systems tailored to Indian requirements.
    • It is different from the standard Su-30 aircraft operated by other countries.

About DRDO

The Defense Research and Development Organization (DRDO) is an agency of the Indian government responsible for the research and development of technology and equipment for defense and security purposes.

  • DRDO was established in 1958, and it operates under the Department of Defense Research and Development within the Ministry of Defense, Government of India.
  • DRDO’s primary mandate is to develop cutting-edge technology, systems, and equipment to strengthen India’s defense capabilities.
    • It plays a crucial role in ensuring self-reliance in defense technology.
  • The organization is headed by a Secretary who reports to the Defense Minister of India.
  • Key Missiles developed by DRDO:
    • Agni Series: DRDO has developed multiple variants of the Agni ballistic missile, including Agni-I, Agni-II, Agni-III, Agni-IV, and Agni-V.
      • These missiles are designed for various ranges and are capable of carrying nuclear and conventional warheads.
    • Prithvi Series:
      • The Prithvi missile system includes short-range ballistic missiles like Prithvi-I and Prithvi-II.
      • They are designed for tactical use and can carry both conventional and nuclear payloads.
    • BrahMos Missile:
      • Developed in collaboration with Russia, the BrahMos missile is a supersonic cruise missile known for its precision and speed.
      • It can be launched from land, sea, and air platforms.
    • Nirbhay Cruise Missile:
      • Nirbhay is a subsonic cruise missile with the capability of flying at low altitudes.
      • It is designed for long-range precision strikes against a variety of targets.
    • Akash Missile:
      • Akash is a medium-range surface-to-air missile system designed for air defense.
      • It can engage multiple aerial targets simultaneously and has been inducted into the Indian Army and Air Force.
    • Nag Anti-Tank Missile:
      • The Nag missile is an anti-tank guided missile (ATGM) designed for use against armored vehicles.
      • It has fire-and-forget and top-attack capabilities.
    • Dhanush Missile:
      • Dhanush is a naval variant of the Prithvi missile and is deployed on Indian Navy ships.

Jal Jeevan Mission remains a pipe dream

(General Studies- Paper II)

Jal Jeevan Mission remains a pipe dream

Source : TH

In Mahoba district, Uttar Pradesh, nearly 98% of rural households (1,29,209 out of 1,31,821) have been reported as having water connections under the Jal Jeevan Mission (JJM).

  • This dramatic increase in tap connections has been recorded within four years, with only 1,612 households reported as having tap connections in 2019.
  • Mahoba is part of the Centre’s Jal Jeevan Mission, which aims to provide piped water to every rural household in India by 2024.

Key Highlights

  • Discrepancies Between Official Data and Ground Reality
    • Despite the high number of households being officially marked as having tap connections, the ground reality in many villages does not align with these claims.
    • In some villages, households don’t have taps, and in others, even if taps are present, they are not receiving any water.
    • According to JJM’s criteria, a functional household tap connection (FHTC) should provide at least 55 liters of potable water per person per day.
  • Official Data vs. Actual Water Supply
    • Official JJM data reports 100% household tap connections in all 385 villages in Mahoba district, but on-the-ground observations tell a different story.
    • Many households still rely on groundwater from handpumps for drinking water, and the promised tap water supply is often insufficient or non-existent.
    • While the district administration claims that 100 out of 398 villages have fully connected eligible FHTC households with running water supply, discrepancies persist.
  • Challenges in Providing Piped Water
    • Mahoba district faces water supply challenges due to its rocky sub-surface, making groundwater scarce.
    • The HarGhar Jal mission aims to provide piped water sourced from dams and rivers to reduce dependence on groundwater.
    • To achieve this, large water treatment plants have been commissioned to treat water from reservoirs and supply it as piped water to households.
    • The installation of pipes over challenging terrain and the need for regular testing and maintenance pose significant challenges in ensuring a continuous and clean water supply.
  • The State has set a deadline to resolve these issues and achieve full water supply by 2024.

About Jal Jeevan Mission (JJM)

  • Jal Jeevan Mission (JJM) is a flagship program of the Government of India aimed at providing piped water supply to all rural households in the country by 2024.
  • The mission’s primary goal is to ensure that every rural household has access to safe and potable drinking water on a regular and long-term basis.
  • JJM focuses on the sustainable management of water resources, ensuring water quality, and promoting community participation in water supply schemes.
  • The Ministry of Jal Shakti is the central ministry responsible for the implementation of the Jal Jeevan Mission.
    • At the state level, the Public Health Engineering Department (PHED) or equivalent agencies are responsible for implementing JJM schemes.
  • Key Components:
    • HarGhar Jal (Tap to Each Household):
      • This is the core component of JJM, which aims to provide piped water supply to every rural household.
    • Jal Shakti Abhiyan (JSA):
      • JSA is a campaign under JJM that focuses on water conservation and rainwater harvesting.
    • Community Participation:
      • JJM emphasizes community involvement in planning, implementation, and management of water supply schemes.
    • Capacity Building:
      • The mission includes capacity building programs for local communities, Panchayati Raj Institutions (PRIs), and implementing agencies.
    • Institutional Strengthening:
      • JJM aims to strengthen institutions responsible for water supply, such as the Public Health Engineering Department (PHED) in states and districts.

Wrong to assess economic activity on GDP alone: Finance Ministry

(General Studies- Paper III)

Wrong to assess economic activity on GDP alone: FinMin

Source : TH

The Finance Ministry of India has strongly defended the credibility of the country’s GDP data, countering criticism and doubts raised by certain sections regarding the reported 7.8% GDP growth in the first quarter of the year.

  • The Ministry emphasizes that Indian GDP data is not seasonally adjusted and is finalized three years later, making it inappropriate to judge underlying economic activity based solely on GDP indicators.

Key Highlights

  • Looking Beyond GDP
    • The Finance Ministry encourages critics to consider a range of other growth indicators to gain a more comprehensive understanding of the economy.
    • These indicators include Purchasing Managers’ Indices, bank credit growth, consumption trends, and increased government capital expenditure.
  • The Role of Higher-Frequency Data
    • The Ministry emphasizes the importance of higher-frequency data in assessing the strength of economic activity.
    • It argues that India’s growth numbers may actually understate the reality, particularly because the Index of Industrial Production (IIP) indicates lower manufacturing growth than what manufacturing companies are reporting.
  • Revision of Growth Forecasts
    • Many international agencies have revised their growth forecasts for India’s financial year 2023-24 upwards after the release of the first-quarter data.
    • The Ministry contends that these revisions would not have occurred if the underlying economic activity were weak.
  • Nominal GDP vs. Real GDP
    • Critics have pointed to nominal GDP growth being lower than real GDP growth, but the Ministry dismisses this argument.
    • It clarifies that India’s GDP deflator is dominated by the Wholesale Price Index (WPI), which spiked in the first quarter of 2022-23 due to factors like the Ukraine war and supply disruptions.
    • The Ministry anticipates a return to normalcy in nominal growth rates as the statistical base effect disappears.
  • Income vs. Expenditure Approach
    • The Ministry highlights that India consistently uses the Income Approach for calculating GDP growth.
    • The choice of approach does not fluctuate based on which one is favorable.
    • The Ministry asserts that arguments in favor of nominal GDP growth are unjustified and merely an attempt to find fault with the Indian economy.

How GDP data is calculated?

  • Indian GDP data, which measures the economic performance of the country, is calculated using two main approaches: the Income Approach and the Expenditure Approach.
    • Income Approach:
      • In this method, GDP is calculated by adding up all the incomes earned in the country during a specific period.
      • This includes wages, salaries, profits, rents, and taxes minus subsidies.
      • Essentially, it looks at how much money is earned by everyone in the country.
    • Expenditure Approach:
      • This approach calculates GDP by adding up all the spending in the economy.
      • It considers the total spending on consumption (like buying goods and services), investment (such as businesses buying equipment), government spending (on services and infrastructure), and net exports (exports minus imports).
    • Both approaches should ideally give the same GDP figure, ensuring accuracy. However, the Income Approach is more commonly used in India.

Nominal vs Real GDP

  • Nominal GDP:
    • Nominal GDP is the total value of all goods and services produced in an economy, measured in current market prices.
    • It reflects the economic output of a country without considering the effects of inflation or price changes over time.
  • Real GDP:
    • Real GDP, on the other hand, is adjusted for changes in the price level, making it a measure of the actual physical output of the economy.
    • It represents the value of all goods and services produced in a country during a specific period, but the prices used in the calculation are held constant over time.
    • Real GDP helps to gauge the true growth of an economy by removing the effects of inflation.
  • Nominal GDP vs Real GDP:
    • Nominal GDP: It’s like counting the total revenue of a store without considering whether the prices of the products have changed.
      • For example, if the store sells more items this year at higher prices, nominal revenue goes up.
    • Real GDP: It’s like comparing the actual quantity of products sold in the store over time, keeping the prices constant.
      • This helps us understand if the store is producing more goods and services or if the increase in revenue is just due to higher prices.
    • GDP Deflator:
      • The GDP deflator is a measure that reflects the average change in prices (inflation or deflation) of all new, domestically produced, final goods and services in an economy.
      • It’s used to convert nominal GDP into real GDP.
      • Essentially, it helps economists and policymakers understand how much of the change in nominal GDP is due to changes in prices, as opposed to changes in the quantity of goods and services produced.
    • Here’s how you can calculate real GDP from nominal GDP using the GDP deflator:
      • Real GDP = (Nominal GDP / GDP Deflator) * 100

National Engineers’ Day

(General Studies- Paper I)

Source : The Indian Express

Engineers’ Day is observed annually on September 15 in India to honor and celebrate the birth anniversary of M Visvesvaraya.

  • M Visvesvaraya, full name MokshagundamVisvesvaraya, was a renowned engineer whose contributions to science and technology are recognized and celebrated on this day.
  • The day is also observed in Sri Lanka and Tanzania on September 15.

About M Visvesvaraya

  • MVisvesvaraya was born in 1861 into a Telugu family in Chikkaballapur, Karnataka, which is around 60 km from Bengaluru.
  • He pursued a diploma in civil engineering at the College of Science in Pune after initially studying BA at the University of Madras.
  • Visvesvaraya excelled in flood disaster management and irrigation techniques.
  • He patented and implemented an irrigation system with water floodgates at the Khadakvasla reservoir near Pune.
  • He served as the Diwan (Prime Minister) of Mysore and established the Bangalore Agricultural University during his tenure.
  • In 1917, he founded the Government Engineering College in Karnataka, now known as the University Visvesvaraya College of Engineering.
  • M Visvesvaraya was honored with the Bharat Ratna, India’s highest civilian award, in 1955 for his significant contributions.