 Welcome to the Hindu News Analysis by Shankar Iyer's Academy. The list of topics chosen for today's discussion along with the page numbers is given here for your reference. Let us start today's news analysis with this article. This analysis is with reference to this news article which talks about goods and services tax, as well as GSTs and compensation payable to few states. Before going further, the relevant syllabus is given here for your reference. See firstly, in India, we have a few producers or manufacturing states like Maharashtra, Gujarat, Tamil Nadu where most of the production in India happens. So before the implementation of GST, these states used to collect tax on the produced goods which are transported to other states. But the GST is a destination based tax. It means the state where the goods are sold receives the tax. For example, if a good is manufactured in Tamil Nadu and sent to Andhra where the final sale is happening, that is the product is sold to final consumer, the tax is paid to Andhra government. So because of this, the manufacturing states would lose out while consuming states would benefit. So in order to convince the manufacturing states to agree with the implementation of GST, the central government came up with constitutional amendment bill in 2014. So why constitution has to be amended? Because the tax jurisdiction of center and states is given in 7th schedule of Indian constitution. As GST changes entire tax structure, this schedule needs to be amended. So a constitution amendment bill was introduced in 2014 with two important provisions. First, it provided for a 1% tax on interstate trade which would be given to supplying state. In our example, Tamil Nadu. Second, it made provisions for parliamentary law to provide compensation to states for loss of revenue for a period of 5 years. Later, the compensation was guaranteed for a period of 5 years in the parliamentary law and the provision of 1% tax on interstate trade was removed. So thus, the GST Act 2017 came into being. So according to this Act, the projected nominal growth rate of revenue during the transition period shall be 14%. And section 4 of this Act says that 2015-16 is taken as the base year for calculating compensation amount payable to the states. It means that if a state collects less tax than this projected growth rate, it would be compensated for the shortfall or reduction. For example, if Tamil Nadu got a revenue of 100 rupees in the last financial year, according to the Act, it is estimated that Tamil Nadu would get 114 rupees this year, that is 14% growth rate. If Tamil Nadu gets only 110 rupees, then this 4 rupees will be given by central government. So this 5 years means from 2017 to 2022. So for giving this compensation, a compensation says is levied and the proceeds of this says shall be credited to a non-lapsable fund known as GST Compensation Fund. This is part of public account of India. See, we all know that there are three important funds, that is Consolidated Fund of India, Public Account of India and Contingency Fund of India. Dear viewers, here is a question for you. Under which article of Indian Constitution, the public account of India is set up? You have to find out under which article of Indian Constitution. Post your answers in the comment section. Here author says that in the first two years of the scheme, the sales collected is much higher than the shortfall of the states. But in the third year, that is last financial year, 2019-20, the fund fell significantly short of the requirement. To be precise, total compensation payable to states in the 2019-20 was around 1,65,000 crores while compensation says collected was just 95,000 crores. This means a short of around 70,000 crores. And central government paid this shortfall of 70,000 crores from the collections of the previous years, that is 17-18 and 18-19. And talking about the present, the author expects a negative real GDP, a nominal GDP to be close to last year's level. So what is this nominal GDP and real GDP? See, if GDP is calculated at the current prices in the market, it is called nominal GDP. If the GDP is calculated by removing the inflation, what we get is real GDP. For example, if we are calculating the GDP with the current prices, that is 2020 prices, we would get the nominal GDP. But if we remove the inflation and if we calculate the prices, what we get is real GDP. But if you see the indirect taxes, that is GST, is levied on the nominal value of transactions. Hence, we are going to face a significant shortfall in tax collection because of COVID-19. Because of this significant shortfall in tax collection, the state's revenue is further going to reduce. As we just said, if state's revenue is going to reduce, the central government has to pay because under the GST Act, the shortfall for the manufacturing states will be paid by central government up to 2022. So according to author, the 14% growth rate is overambitious and not achievable in this year. See, this 14% nominal growth rate is inclusive of government's inflation target of 4 to 5% and a real GDP growth plus tax buoyancy of 9 to 10%. This 4% of inflation plus 9 to 10% of GDP plus tax buoyancy growth, you would get around 14% nominal growth. So what is this tax buoyancy? See, generally the economic growth and government's tax revenue are interrelated. So when economy achieves faster growth, the tax revenue of government also goes up. So this tax buoyancy refers to responsiveness of growth in tax revenue to the changes in GDP. Simply put, without changing in tax rate, that means without increasing the tax rate, the tax revenue will increase with the rise of GDP growth. So 2017 GST Act envisages a 14% growth rate of GST every year. But as we just said, due to fall in GDP, a 14% growth rate cannot be achieved. If 14% growth rate is not achieved, the central government has to pay money to the state governments. That is compensation. But this year, even central government is facing huge economic crunch because of extensive lockdowns. On one side, it is investing more money in health and economic crisis of COVID-19. So central government may not be in a position to pay compensation to states. So this is going to be a very big problem for center as well as states. And in this OPEC column, other gives a few sessions to resolve this issue. First one, the constitution can be amended to reduce the period of guarantee to 3 years. That is from 2022, we can reduce this compensation payable only to 2020. But this would be very difficult because the state governments are not going to agree with this amendment. It could also be seen as going back on the promise made to states when they agreed for the implementation of GST. On the second one, the central government could fund this shortfall from its own revenue. As we already said, the center's finances are already stretched. This is due to shortfall in tax collection combined with the extra expenditure to manage health and economic crisis. So center may not be in a position to give further support to states. Third, the center could borrow on behalf of the SES fund. And the tenure of SES could be extended beyond 5 years until the SES collected is sufficient to pay compensation to the states. This means the SES will be levied for few more years until the center gets enough money to pay the states. And the fourth one, center could convince states that 14% growth rate is not possible. The author believes that this target should have been linked to nominal growth rate. So these are the four options given by the author. So the GST council, a constitutional body with representation of center and all the states will have to find a practical solution in the coming days. So this is all about the discussion of this news article wherein we talked about GST, the GST compensation and GST compensation sets. And what are the options available to central government to pay compensation to the states? The displayed practice question will be discussed at the end of session. Let us move ahead with this news article. Let us take up this news column from today's editorial page which is about certain important ethical values in civil services. This news column is written by a former CBI director. Before going further, the relevant syllabus is given here for your reference. So this news column has been written in the wake of recent civil services exam result which was published by the UPSC in last week. This means UPSC has chosen about 900 candidates to be inducted into higher bureaucracy. When we say higher bureaucracy, it means IIS, IPS, IFS, IRS, etc. These chosen candidates are soon going to be at the helm of complex challenges of administration in critical sectors like policing, education, healthcare, transportation, land management, infrastructure, rural development, etc. Which means they are going to have a say in almost every sphere of the India. But question is, are these chosen candidates suitable for the above mentioned roles? And will they do it perfectly? For these questions, the author tries to answer. First, why do these questions arise? This is because due to existing bureaucratic delays, corruption, and misplaced compassion in these services. There is a negative power of abuse of authority through flagrant violation of law. Here and there, even a petty tyranny also exists. This results in poor performance of public services or bureaucracy. Because of this, they are blamed for India's dismal record in economic and social development. Due to this under-efficiency and malfunctioning of bureaucracy, there is a common misconception that administrative machinery is not designed to provide people-friendly services. To clearly explain this, author focuses on two higher civil services, which are obviously IIS and IPS. These two services are the two powerful and visible symbols of administration. This means that district collector and district SP have to be more easily available to common man in distress. Since they are the ones who offer official assistance on a daily basis to needy citizens. Here, author is trying to say that the collector and SP of a district should be more easily available to the common man so that their problems can be easily addressed. But unfortunately, these services are also infamously known for their insensitivity towards the poor citizens and corruption. But there are also few exceptions wherein the IIS and IPS officers are leading the districts with people-friendly measures. This unfortunate situation is further aggravated by the fact that officials at the lower levels of bureaucracy are also insensitive or demand illegal gratification to provide a service. We are talking about corruption. This has reached a certain level that there is an accepted fact that in India, bribe has to be offered to compel the public servant to do something which he is prescribed by the law to do. Here, author makes an interesting comparison, which is in foreign countries generally bribes are offered to stop the public servant from doing something. But in India, we have to pay the public servant to do something which they are legally bound to do. This is the misery of administration in our country. For example, we already know about the Satankulam custodial deaths which shook the entire country. We could see the police brutality here and additionally, we always hear how many of the police officers are adapted to ill-treat the poor. This is mostly attributed to the colonial legacy of police administration. So this is where the bureaucrats role comes in. The IPS officers have to bring the qualitative improvement in policing. For example, as the author puts it, wherever the officer sees injustice or violence against unsuspecting citizens, they have to protest and object it. By doing so, they can instill a sense of equality before law to their juniors as well as to the seniors also. By this, author means that the newly recruited officers by UPSC should firmly handle search and ethical practices. So what is ethical practice? First, what is ethics? See, ethics is a set of standards a society plays on itself and which helps to guide behavior, choices and actions. Simply, ethics is a set of standards which helps us to guide our conduct or day-to-day decisions. For example, when a police officer is given bribe, he has to reject it because it is not just illegal but also unethical. So what ethical values should be inculcated in the public servants? With respect to today's focus of area, the ethical values suggested by the author are compassion and integrity. So what do you mean by compassion and integrity? See, by compassion, author means passion for serving people with special care for the marginalized and disadvantaged sections. It also means being approachable, welcoming, caring and rising above all bias when interacting with people. So, your author means that a civil servant should be compassionate in his service. And coming to integrity, it means that the public servant should consistently behave in an open, fair and transparent manner and to uphold the public service values. In simple words, civil servants should be guided only by public interest in their official decision making and not by any financial or other consideration either in respect of themselves, their families or their friends. Simply, the public service or public interest should be the top priority. Finally, author concludes that government should use existing enlightened senior officers to help in moulding the character of new entrants or recruits for inculcating the above values. Dear viewers, you might be thinking how this news article is going to help you. First, the values of integrity, compassion can be used in your GS4 paper, that is ethics paper and this entire discussion can be used in your GS2. Generally, we see questions like whether we need any reforms in Indian administration. We are also having a contentious issue of bringing lateral entry to civil services because of the poor performance of IAS officers. So, if a question appears in this context like reforms or generalist versus specialist approach or general recruitment versus lateral entry, you can talk about all these points. This is all about the discussion of this news article. Let us move on to next news article discussion. Now we have this lead column from editorial page which is authored by former national security advisor who also worked as governor of West Bengal. So, in this column, the former NSJ MK Narayan talks about the influence secured by China in the global geopolitical scenario and also how nations are bullied by China but still no one is ready to directly confront China. He further talks about the implications of rising China to India's interest. So, in this analysis, let us see what author is trying to say. The relevant syllabus is given here for your reference. As we said in this article, the former NSJ talks about the aggressive policies of China across the world. Firstly, with respect to India, we have seen the Galvan clash and also the fatalities caused due to aggression of Chinese army. And the recent talks between military commanders of both sides did not produce any major results. Even though China had shown the willingness to abandon its position of territories occupied beyond its 1960 claim line, it has not happened yet. We also know how China has been interfering in the internal affairs of India by talking about the changes made in the Jammu and Kashmir and Ladakh region. And this is not just limited to India. We also know how China is claiming a part of Bhutanese territory. And talking about South China Sea, China claimed parasol islands from Vietnam. It occupied mischief reef in the Spratly Islands from Philippines and Scarborough Shoal confrontation in 2012 and the aggression of China won't end there. We also know how China virtually took over Hong Kong by enacting new national security law. This law won't respect the One Nation Two Systems which is present in Hong Kong. And this is not limited just to Asian continent. It also bullied Australia for talking against China with respect to Corona pandemic. So with these examples, you can infer that how China is bullying nations across the world. So what were the responses of different nations towards Chinese aggression? Before that, let us see the current geopolitical setting across the world. We see that a new bipolar world is emerging where China is taking the place of Russia. The erstwhile US Russia thirst for global supremacy is now continuing by US and China. And both these countries are not enjoying good relationships. And both these countries are trying to seek allies to join their respective camps. In this regard, other notes that this resembles the Cold War era of 20th century. So this scenario places several countries especially in Asia in a difficult position. This is because hardly any country in Asia is willing to openly confront China and side with US. Even though US is a global power for the last one century, now China has emerged with an economic and military stronghold to counter the US hegemony of the world. And many nations in Asia and beyond are trapped by China through its economic relations as well as checkbook diplomacy. For example, the Belt and Road Initiative is trying to put many countries of Asia and Europe in a dead trap of China. And not just that, China through its checkbook diplomacy has pulled Sri Lanka and Maldives into its dead trap. So Asian nations are not willing to confront China directly. Next author talks about the nations beyond Asia. For example, he takes the case of Australia. We know that Australia is a member of Quad Grouping which is perceived to be a countermeasure against China's rise. But Australia made it clear that China is very important for it and it will not do anything contrary to China's interest. Same is the case of UK. Even the UK has banned Huawei and other Chinese companies from 5G Technologies. It made clear that the economic ties with China are strategically important. The same is with the case of ASEAN countries. See we know that many of the ASEAN countries are bullied by China by claiming or grabbing their maritime resources. Still no ASEAN country is willing to confront China directly. This is mainly because the ASEAN Group is one of the biggest trading partners of China. So author tells that the economic ties are proving way more stronger than military and strategic ones. And to put it precise, the author tells that China is more feared by the world than loud. So China seems more confident that its triangle hold on global economy ensures that it does not face any real challenge from any nation. So what is the case of India? Here author notes that India is not finding its traditional friends helpful. If you see the India's relations with Nepal, Sri Lanka and Bangladesh or even Iran have suffered a setback in the recent past. And moreover India's presence standoff with China has provided Pakistan with yet another opportunity to trouble India. This includes the frequent incursions across LOC and even a fake map of Pakistan including the parts of Indian territories such as Siachen, Jammu and Kashmir and even Gujarat. And to upset India more, China has proposed new plans with Nepal, Afghanistan and Pakistan in the form of an economic corridor styled as Trans-Himalayan multi-dimensional connectivity network. This also includes the expanding the current China-Pakistan economic corridor to Afghanistan as well. And not just that, the recent fallout of India-Iran diplomatic relations is mainly because of China. We know that China and Iran are currently pursuing an economic and security partnership which would involve massive Chinese investments in Iran. This is happening at the expense of India's interest in Iran. So author concludes by saying that India must understand these lessons well before planning our future strategy. In this regard, we should try to improve our relations with our neighbors and traditional friends so that we can effectively confront an aggressive China. So this means nothing but strengthening our neighborhood first policy, act-ist policy and even forest policy of India. With this, we come to end of discussion of this news article. The displayed practice question will be discussed at the end of session. Let us move on to next news article. These two news articles discuss the newly released draft environment impact assessment notification of 2020. So before going further, what is environment impact assessment or in short EIA? See, every human activity has some impact on the environment which is often more harmful than beneficial to the environment. So these developmental activities carried out by humans are done for food security and other needs of human community. So as a result, there is a need to harmonize these developmental activities with environmental concerns. And so EIA is one of the tools available with the planners to achieve this goal of sustainable development. So simply put, EIA is a planning tool and an integral component of sound decision making when it comes to developmental activities. Its objective is to foresee and address the potential environmental problems or concerns at an early stage of project planning and design. So EIA assists planners and government authorities in the decision making process by identifying the key impacts and by formulating mitigation measures or impact reduction measures. So EIA is a process used to identify the environmental impacts of project prior to its approval. So it means even before the project is approved, the EIA is carried out to identify the harmful environmental impacts of the project. It systematically examines both beneficial and adverse consequences of proposed project. It ensures that these environmental impacts and mitigation measures are taken into account during project design that is early stages of project planning. So thereby it provides benefits such as protection of environment, optimum utilization of resources and saving overall time and cost of project as well as sustainable development. So as of now, the current EIA regime is based on EIA notification of 2006 and now government came up with a draft EIA of 2020. And on 1st August 2020, we discussed the issues regarding public consultation and other contentious issues in the draft EIA. For example, on the day we talked about the public consultation process wherein many of the large projects are exempted from the new EIA policy. Likewise, the linear projects like roads, pipelines in border areas are also exempted. The border area is defined as an area of falling within 100 kilometers of distance from line of actual control with bordering countries of India. So this 100 kilometer means it would cover much of northeast which is repository of country's richest biodiversity. So thus this exemption of draft EIA threatens environment. Today we shall also see one more contentious problem that is post environmental clearance monitoring. See under existing norms of 2006 notification, it is mandatory for the project management to submit half yearly compliance reports with respect to environmental clearance terms and conditions to the regulatory authority. So they have to submit on 1st June and 1st December every year. So this post environmental clearance means so after project is approved, this monitoring process ensures that all the mitigation measures planned in the design stage are correctly being implemented. Now this submission of compliance reports has been reduced to once a year by the draft EIA of 2020. It means the project proponent has to submit the compliance reports only once a year. So this clause is a pure dilution of monitoring system as it reduces the check on industries and their impact on our environment. So environmentalists and even opposition parties are protesting this new draft of 2020. And this news article says that the chairman of Parliamentary Standing Committee on Science and Technology asked environmental minister to keep the draft EIA notification in abeyance or pending until the committee examines it in detail. So this parliamentary committee is asking environmental ministry to keep the draft EIA on hold until the detailed scrutiny of this new notification is completed. And in this news article, the current environmental minister Mr. Prakash Javadekar has said that the protest against the new EIA is needless because it is still in draft stage. And he further said that and the feedback from all quarters of public will be taken and a final notification will be prepared. So this is all about this news article discussion wherein we talked about the process of EIA, the EIA notification of 2006 and the contentious issues of new draft EIA. The displayed practice question will be discussed at the end of session. Let us move on to next news article. Let us take up this news article which says that the nationwide lockdown had a significant negative impact on inpatient care utilization under Pradhan Mantri Jan R R R G E O J N O. So the reasons for this include both supply side as well as demand side problem. In case of supply side, hospitals are already preoccupied with COVID-19 cases due to which only fewer resources are available for non-COVID-19 cases. On the demand side, the PMJAY or Pradhan Mantri Jan R R G E O J N O beneficiaries might delay or forego treatment due to fear of getting infected by coronavirus at the hospital and also due to public transport shutdowns. So in this context, let us see what is this Pradhan Mantri Jan R R G E O J N O. See, it is one of the two components of Ayushman Bharat which was launched in 2018 budget. The two components are Health and Wellness Centers and the second one Pradhan Mantri Jan R R G E O J N O. So what is the aim of this scheme? See, know that the aim of this scheme is to provide health cover to over 10 crore poor and vulnerable families who form the bottom 40% of Indian population. So this program aims to reach around 50 crore beneficiaries and so it is the largest health assurance scheme in the world. So under this scheme, a health cover of Rs 5 lakhs per family per year for secondary and tertiary care hospitalization will be provided. And the beneficiaries are based on deprivation and occupational criteria of socio-economic cost sensors of 2011. And this program is fully funded by the government and cost of implementation is shared between central and state governments. So it is a centrally sponsored scheme. So coming to its implementation, National Health Authority is the apex body responsible for implementing this Ayushman Bharat scheme. So this is an attached office of Ministry of Health and Family Welfare with full functional autonomy. And this authority is governed by a governing board which is chaired by Union Minister of Health and Family Welfare. So these are the basic details of PMJAY. So what are the important futures of Pradhan Mantri Jan R R G E O J N O. First, it provides cashless access to healthcare services for the beneficiary at the point of service. Here point of service means hospital. Second, it covers up to 3 days of pre-hospitalization and 15 days of post-hospitalization expenses which include diagnostics and medicines. Third, there is no restriction on family size, age or gender. It is also very important to note that this scheme covers all pre-existing conditions from day one. So it means if you are already having any existing ailments or diseases, this scheme covers those conditions as well. And finally, the benefits of this scheme are portable across the country which means a beneficiary can visit any empaneled hospital in India to avail this cashless treatment. So this is all about the discussion of this news article. We talked about Aishman Bharat, Pradhan Mantri Jan R R G E O J N O and the Implementing Agency National Health Authority which is an autonomous body under Ministry of Health and Family Welfare. The displayed practice question will be discussed at the end of session. Let us begin the practice questions discussion session. First question, consider the following statements with reference to South China Sea. Two statements are given and we are supposed to identify incorrect statements. Statement one, some of the Asian nations which border South China Sea include Philippines, Malaysia, Brunei, Indonesia and Laos. This statement is incorrect since Laos is a landlocked country. As you can see in this picture, Laos is landlocked by China, Vietnam, Cambodia, Thailand, etc. So statement one is incorrect. Statement two, Paracel Islands, Pratas Islands, Neel Islands and the Spratly Islands are located in South China Sea. This statement is also incorrect since Neel Island is a part of Andaman and Decobra Islands. So therefore statement two is also incorrect. So the correct answer is option C both one and two since we are supposed to identify incorrect statements. Question number two, consider the following statements with reference to Pradhan Mantri Jain Aragiyavjana. Three statements are given and we are supposed to identify correct statements. Statement one, it covers only secondary and tertiary care hospitalization expenses and not primary care expenses. Yes, statement one is correct because the PMJAI covers only secondary and tertiary care. The primary care is already free in government hospitals. So statement one is correct. Statement two, it does not cover pre-existing health conditions of a new beneficiary. This statement is incorrect because the Jain Aragiyavjana covers even pre-existing health conditions of a new beneficiary. Statement three, it is implemented by National Health Authority. Yes, this statement is correct. As we said before, the National Health Authority is an attached office under Ministry of Health and Family Welfare with functional autonomy. Therefore, the correct answer is option B one and three only. Question number three, consider the following statements regarding the goods and services tax compensation to the states. Under the GST Compensation to States Act of 2017, the projected nominal growth rate of revenue subsumed for a state shall be 14%. Yes, this statement is correct. At present, the projected nominal growth rate is 14% for the transition period of five years. Statement two, the proceeds of the SES imposed on items such as palm masala, tobacco products, aerated waters and coal shall be credited to non-lapsable GST Compensation Fund. Yes, this statement is also correct. The Act says that the proceeds of the SES leviable and such other amounts as may be recommended by the GST Council shall be credited to non-lapsable fund known as GST Compensation Fund. And this fund is part of public account of India. As I said before, find out under which article the public account of India was set up and post the answer in comment section. So, the question demands us to find correct statements. Therefore, the correct answer is option C both one and two. Question number four, consider the following statements. Environment impact assessment aims to foresee and address the potential environmental problems or concerns at an early stage of project planning and design. Yes, this statement is correct. Statement two, according to EIA notification of 2006, it is mandatory for project management to submit yearly compliance reports to concerned regulatory authority for post environmental clearance monitoring. No, this statement is incorrect since according to EIA notification of 2006, it is mandatory for project management to submit half yearly compliance reports. And this provision is amended to yearly compliance reports in draft EIA. Therefore, statement two is incorrect. Since we are supposed to identify incorrect statements, the correct answer is option B two only. With this, we conclude today's news analysis. If you find this session resourceful, click on the like button, show your appreciation in the comment section and don't forget to subscribe to our YouTube channel. Stay home, stay safe.