{"id":909,"date":"2018-06-04T15:56:21","date_gmt":"2018-06-04T10:26:21","guid":{"rendered":"https:\/\/triumphias.com\/blog\/?p=909"},"modified":"2018-06-04T15:56:21","modified_gmt":"2018-06-04T10:26:21","slug":"mains-focus-4-june-2018","status":"publish","type":"post","link":"https:\/\/triumphias.com\/blog\/mains-focus-4-june-2018\/","title":{"rendered":"Mains Focus-4 June 2018"},"content":{"rendered":"

Paper-3 :Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment.<\/i><\/strong><\/em><\/span><\/h3>\n

Fuel under GST<\/strong><\/span><\/h3>\n

Why in news?<\/strong><\/span><\/h3>\n

Union government is planning to bring petrol and diesel under GST to check prices.<\/span><\/em><\/p>\n

Current taxation process for fuels<\/strong><\/span><\/h3>\n
    \n
  • In the current structure, both the central and state governments levy a tax on petrol, diesel, crude, and natural gas.<\/em><\/span><\/li>\n
  • The Centre charges excise duty, while each state has its own Value Added Tax (VAT).<\/em><\/span><\/li>\n
  • Added to these are the dealer commissions, all of which inflates the price that consumers pay at the retail pumps.<\/em><\/span><\/li>\n<\/ul>\n

    Advantages of bringing fuel prices under GST<\/strong><\/span><\/h3>\n
      \n
    • Bringing petroleum products under GST would mean a single rate (18% or 28%) in place of excise duty and state VAT, which will lower fuel prices at pumps.<\/em><\/span><\/li>\n
    • Reduced fuel prices will lead to lower transport costs for industries who benefit from increased production and competitiveness.<\/em><\/span><\/li>\n
    • Idea of a \u2018single nation, single tax\u2019, will be implanted firmly which is aimed at improving production and employment while taxing consumption.<\/em><\/span><\/li>\n
    • Disadvantages caused to firms due to exclusion of fuel prices under GST will be resolved and the firms can claim input tax credit.<\/em><\/span><\/li>\n<\/ul>\n

      Concerns with bringing fuel prices under GST<\/strong><\/span><\/h3>\n
        \n
      • Since, petroleum products are huge revenue earners, the state and union government will be at a loss of revenue.<\/em><\/span><\/li>\n
      • Therefore, revenue considerations, will likely drive the decision on bringing petroleum products under GST.<\/em><\/span><\/li>\n
      • The decision will be taken by the GST Council, in which states have a major say.<\/em><\/span><\/li>\n
      • And if they agree to have petrol, diesel and other products under GST, they will still have the autonomy to levy an additional or top-up tax, which can vary across states.<\/em><\/span><\/li>\n
      • Even in this case, the union government would have to compensate states for any shortfall in revenues for five years.<\/em><\/span><\/li>\n
      • Thus, the governments must be well equipped to handle the consequences of bringing fuel prices under GST.<\/em><\/span><\/li>\n<\/ul>\n

        If not GST ,What can be done to curb high prices.<\/strong> <\/span><\/h3>\n
          \n
        • Need to reduce excise duties that were raised between November 2014 and January 2016 when global crude oil had gone down.<\/em><\/span><\/li>\n
        • Need to fix the method which has been used by the State Government to impose tax on fuel products ,for example Maharashtra Government impose\u00a0 valorem duties which is about 39.27% ,with value added tax on the fuel price inclusive of central excise duties ,not on the base price ,leading to double taxation<\/span>.<\/em><\/li>\n<\/ul>\n
          \n

          National Bio-Fuel Policy<\/strong><\/span><\/h3>\n

          Why in News<\/strong><\/span><\/h3>\n

          The Union cabinet has approved the National Bio fuels policy that will help India\u2019s efforts to cut energy imports and carbon emissions.<\/em><\/span><\/p>\n

          What is the current scenario?<\/span><\/h3>\n
            \n
          • The government estimates that ethanol supply of around 150 crore litres in 2017-18 could save foreign exchange worth over Rs. 4,000 crore.<\/em><\/span><\/li>\n
          • Sugar industry is the key ethanol supplier for fuel blending at present, but prices offered to them for ethanol isn\u2019t attractive.<\/em><\/span><\/li>\n
          • Hence, they\u2019ve preferred to sell off their stock to better remunerative alcohol and other industries, which has been constraining supply for blending.\u00a0<\/em><\/span><\/li>\n
          • In this backdrop, the government has mooted the new \u201cNational Bio-fuel policy\u201d for encouraging Ethanol use, which gives some solace.<\/em><\/span><\/li>\n
          • The policy\u2019s focus has been in addressing the supply side issues involving bio-fuels, which has long been a constraint in domain.\u00a0<\/em><\/span><\/li>\n<\/ul>\n

            How this Policy will help our economy and needs<\/span><\/h3>\n
              \n
            • The policy will also help improve farmer income and has expanded the scope of raw material for ethanol production to include sugarcane juice, sugar beet, sweet sorghum and starch containing materials such as corn, cassava, and damaged grains.<\/em><\/span><\/li>\n
            • The policy, which aims to provide financial and fiscal incentives specific to a bio-fuel type, categorized bio-fuels as first generation (1G), second generation (2G) and third generation (3G) fuels.<\/em> <\/span><\/li>\n
            • It indicates a viability gap funding scheme for 2G ethanol bio-refineries of Rs5,000 crore in six years in addition to additional tax incentives, higher purchase price as compared to 1G bio-fuels.<\/em><\/span><\/li>\n
            • There will be reduced import dependency, given that 10 million litres of E10 (which contains 10% ethanol) saves Rs28 crore of foreign exchange at current rates.with 10 million litres of E10 helping cut carbon dioxide emissions by 20,000 tonnes.<\/em><\/span><\/li>\n
            • India, the biggest emitter of greenhouse gases after the US and China, plans to reduce its carbon footprint by 33-35% from its 2005 levels by 2030, as part of its commitments to the United Nations Framework Convention on Climate Change adopted by 195 countries in Paris in 2015.<\/em><\/span><\/li>\n
            • The other benefits include a reduction in 62 million metric tonnes of municipal solid waste generated in the country, infrastructure investment in rural areas and job creation.<\/em><\/span><\/li>\n<\/ul>\n

              \u00a0Way Ahead<\/strong><\/span><\/h3>\n
                \n
              • The government should also take steps to remove policy barriers that have discouraged private investment in building supply chains.<\/em><\/span><\/li>\n
              • Any bio-fuel policy must be strongly backed by sufficient technology and production scale in order to be financially feasible and implementable.\u00a0<\/em><\/span><\/li>\n<\/ul>\n
                \n

                Paper-3 : Agriculture<\/strong><\/span><\/h3>\n

                Why are Indian farmers taking to Horticulture?<\/span><\/h3>\n

                Why in news?<\/strong><\/span><\/h3>\n

                India\u2019s production of perishable horticulture crops like fruits and vegetables touched a record 307 million tonnes in 2017-18. This is a good 27 million tonnes more than the quantity of food grains harvested last year.<\/em><\/span><\/p>\n

                Between 2013-14 and 2017-18 horticulture production grew at a compound annual growth rate (CAGR) of 2.6%, double the annual growth in food grain output.<\/em><\/span><\/p>\n

                Reasons for Growing Preference<\/strong><\/span><\/h3>\n
                  \n
                • The reason for the growing preference of horticulture crops for the Indian farmer is that vegetables are short duration crops that are mostly grown on small patches of land by marginal farmers, often in less than an acre of land.<\/em><\/span><\/li>\n
                • As land holdings become increasingly fragmented, production of vegetables ensure quick returns to farmers, compared to say, some pulse varieties that take up to six months to harvest.<\/em><\/span><\/li>\n
                • Farmers continue to grow perishables despite recurrent price fluctuations shows that returns are better for these compared to traditional food grains.<\/em><\/span><\/li>\n
                • Better incomes, urbanization and higher consumption of fruits and vegetable seem to be driving demand<\/em><\/span><\/li>\n<\/ul>\n

                  Still Few Gaps?<\/span><\/strong><\/h3>\n
                    \n
                  • First, prices crashing during peak harvest season and peaking during lean months means India needs to invest more in food processing units that are located close to the farm gate. <\/em><\/span><\/li>\n
                  • A better cold chain network with pack houses and access to refrigerated transport can also help prolong the shelf life of fresh produce and earn better value for farmers.<\/em><\/span><\/li>\n
                  • Second, there seems to be little coordination between state horticulture departments who promote crops within their state without any information on what other states may be pushing their farmers to grow.<\/em><\/span><\/li>\n
                  • Thirdly ,Indian farmers need market intelligence\u2014a clearer idea on future demand and supply to make better crop choices.<\/em><\/span><\/li>\n
                  • The reality on the ground is that poor marginal farmers sell their produce at low prices, but small and medium processors purchase it at a higher price.<\/em><\/span><\/li>\n<\/ul>\n

                    Way Ahead<\/span><\/h3>\n
                      \n
                    • A positive for India\u2019s horticulture story is that it is spread across the country from West Bengal to Tamil Nadu, unlike food grains where successes post green-revolution were largely limited to northern states like Punjab, Haryana and western Uttar Pradesh.<\/em><\/span><\/li>\n
                    • Examples of farmers of Tamil Nadu and Maharashtra needs to be considered for future as they\u00a0 are exporting bananas and grapes to other states, respectively. These success stories can be repeated elsewhere if farmers are made aware of export markets and how to access them.<\/em><\/span><\/li>\n
                    • Better access to markets, technology and intelligence can help translate the higher perishable production to higher earnings for farmers.<\/span> <\/em><\/li>\n
                    • The government and the private sector can come together for better crop planning and reducing wastage.<\/em> <\/span><\/li>\n<\/ul>\n

                       <\/p>\n","protected":false},"excerpt":{"rendered":"

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