ARAB LEAGUE
1. Context
The Arab League on May 7 voted to reinstate Syria's membership after its suspension more than 10 years ago, underlining the thawing relations between Damascus and other Arab countries.
The decision was taken at a closed-door meeting, attended by foreign ministers from 13 out of 22 member states of the organisation, held in Cairo, Egypt.
2. Key points
- Syria was ousted from the Arab League in 2011 following President Bashar al-Assad's brutal crackdown on pro-democracy protests, which led to the ongoing civil war in the country.
- The conflict has since killed around half of a million people and displaced about 23 million.
- Sunday's ruling, which allows Assad to attend the upcoming Arab League Summit in Saudi Arabia on May 19, has also called for a resolution of the Civil war and the resulting refugee and drug smuggling crises.
- A committee involving Egypt, Saudi refugees and drug smuggling crises.
- A committee involving Egypt, Saudi Arabia, Lebanon, Jordan and Iraq will soon be created to ensure Syria achieves these goals.
3. Syria's readmission
- Syria's readmission does not mean that the Syria crisis has been resolved, on the contrary... But it allows the Arab states for the first time in years to communicate with the Syrian government to discuss all the problems.
- Aboul Gheit also said the decision does not mean all Arab nations have normalised relations with Damascus.
- While countries like the United Arab Emirates have lobbied for Assad's and Syria's rehabilitation, others, including Jordan, Kuwait and Qatar have remained opposed to full normalisation before a conclusive political solution to the Syrian conflict.
- The United States has also criticised the latest move, saying "Syria did not deserve to be reinstated but that the US supported the Arab League's long-term objective of solving the crisis in Syria".
4. About Arab League
- The Arab League, formally known as the League of Arab States, was established in 1945 with initially just six nations: Egypt, Iraq, Jordan, Lebanon, Saudi Arabia and Syria.
- Currently, 22 member states have pledged to cooperate on economic and military affairs, among other issues.
- According to the Council on Foreign Relations, an American think tank, The League makes decisions on a majority basis, but there is no mechanism to compel members to comply with resolutions.
- It has been criticised for its internal conflicts and collective inaction on important international issues.
5. Reasons for reinstating Syria's membership
- The Arab League's decision is the culmination of Assad's diplomatic efforts to return to the fold, which gained momentum after this February's massive earthquake in Turkey and Syria.
- The devastating disaster that killed thousands helped the president rebuild ties, seeking humanitarian aid, with rival Arab countries and gain their support while pushing for an end or ease of sanctions imposed on Syria by the Western Nations.
- Assad, long shunned as a pariah in the region, has received a favourable response from several Arab nations like Egypt and Oman not just because they wanted to help the earthquake victims.
- Experts believe these countries have realised they need to end Damascus' isolation for the stability of West Asia.
- Moreover, they want some sort of repatriation of refugees back into Syria and a curb on the trade of captagon, a highly addictive amphetamine produced in the country according to the reports, nations such as Saudi Arabia and Jordan are facing a big addiction problem due to Syria's sprawling multi-billion dollar drug industry.
- There is a vacuum and this is where the regional powers have come in.
- If nothing is going to change, if there is not going to be a real political process then we as a region cannot afford to ignore Syria. It's too big and significant a country.
- Another catalyst in Syria's rehabilitation is the China-brokered re-establishment of diplomatic relations between regional powerhouse Saudi Arabia and its archenemy, Iran, that took place in March this year.
- Analysts say the ease in tensions between Tehran and Riyadh has benefited Syria, which has been reliably supported by the former since the outbreak of the civil war.
- The restoration of Syria's membership in the Arab League is a huge victory for Assad but it remains largely a symbolic one.
- Given that Western sanctions against Assad's government remain in place and the return to the Arab League is not expected to lead to a quick release of reconstruction funds in the war-battered country.
- A further normalisation in relations and ease of sanctions can be expected if Damascus successfully resolved its civil war and curtail the drug trade.
- It remains to be seen what steps Assad and his government will take to fulfil these goals.
- Many experts and regional nations like Kuwait and Jordan, however, fear that the Arab League's move will set a dangerous precedent.
- They say that reinstating Syria in the organisation without holding it accountable for carrying out atrocities such as indiscriminate barrel bombing and poison gas attacks against its civilians sends the wrong message.
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For Prelims: Arab League, Egypt, Iraq, Jordan, Lebanon, Saudi Arabia and Syria
For Mains:
1. What is Arab League? Explain why the Arab League reinstated the membership of Syria after more than a decade of suspension. (250 Words)
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Previous Year Questions
1. Consider the following pairs: (UPSC 2018)
Which of the pairs given above are correctly matched? (a) 1 and 2 (b) 1 and 4 (c) 2 and 3 (d) 3 and 4 2. Which one of the following countries of South-West Asia does not open out to the Mediterranean Sea? (UPSC 2015) (a) Syria (b) Jordan (c) Lebanon (d) Israel Answer: B 3. The area known as ‘Golan Heights’ sometimes appears in the news in the context of the events related to (UPSC 2015) (a) Central Asia (b) Middle East (c) South-East Asia (d) Central Africa Answer: B 4. Yom Kippur War was fought between which sides/ countries? (UPSC 2008) (a) Turkey and Greece (b) Serbs and Croats Answer: C |
Source: The Indian Express
BAN ON DIESEL VEHICLES
1. Context
A panel formed by the Ministry of Petroleum and Natural Gas has recommended a ban on the use of diesel-powered four-wheel vehicles by 2027 in cities with a population of more than 1 million, and instead transition to electric and gas-fuelled vehicles. The Energy Transition Advisory Committee, headed by former petroleum secretary Tarun Kapoor, has also recommended that city transport should be a mix of Metro trains and electric buses by 2030.
2. What is the background of this proposal?
- The panel’s recommendations come from the government’s stated aim to reduce greenhouse gas emissions and produce 40% of its electricity from renewables as part of its 2070 net zero goal.
- Diesel currently accounts for about 40% of India’s petroleum products consumption, according to Petroleum Planning & Analysis Cell estimates.
- The proposed ban will have a significant footprint many cities in India have more than 1 million people, including not just the metropolitan centers, but also smaller towns and cities such as Kota, Raipur, Dhanbad, Vijayawada, Jodhpur, and Amritsar.
3. Who makes diesel cars in India?
- Maruti Suzuki, the country’s largest passenger vehicle manufacturer, stopped making diesel vehicles on April 1, 2020 and has signaled that it does not have plans to re-enter this segment.
- The diesel engine is, however, part of models sold by Hyundai and Kia, and Toyota Motor’s Innova Crysta range.
- Tata Motors, Mahindra, and Honda have discontinued production of 1.2-liter diesel engines; diesel variants are available only for 1.5-liter or higher engine capacity.
- Since 2020, most carmakers have taken significant steps toward deleveraging their diesel portfolios.
- As a result, the contribution of passenger vehicles to overall diesel vehicle demand has fallen to just 16.5%, compared to 28.5% in 2013.
4. Issues with the Proposal
- It is not yet clear how the proposal for a ban, if accepted, will unfold and how practical it would be to implement.
- This is especially true in the case of medium and heavy commercial vehicles that are used for the transport of goods on highways and for buses playing in most Indian cities, where diesel is the mainstay.
- Even if the ban on diesel for commercial vehicles were to have a longer transition time, significant disruption could still happen.
- Around 87% of diesel fuel sales are in the transport segment, with trucks and buses accounting for about 68%.
- Uttar Pradesh, Maharashtra, and Haryana make up almost 40% of the diesel sold in India. While it seems easier at the moment to convert diesel trucks to compressed natural gas (CNG), there are certain limitations including CNG being used for shorter distances, and its lower tonnage carrying capacity.
- Also, many auto industry players argue that carmakers who have a presence in the diesel segment are already in compliance with current emission norms and have invested heavily to transition their diesel fleet from BS-IV to BS-VI emission norms.
5. What is the reason people prefer diesel vehicles?
- The higher fuel economy of diesel engines over petrol powertrains is one factor.
- This stems from the greater energy content per litre of diesel and the inherent efficiency of the diesel engine.
- Diesel engines do not use high-voltage spark ignition (spark plugs), and thus use less fuel per kilometer, as they have higher compression ratios, making it the fuel of choice for heavy vehicles.
- Also, diesel engines offer more torque (rotational or turning force) and are less likely to stall as they are controlled by a mechanical or electronic governor, thereby proving to be better for haulage.
6. Why are carmakers moving away from diesel?
- The higher compression ratio of diesel engines means there are increased emissions of oxides of nitrogen (NOx), which is one of the main drawbacks of diesel engines versus petrol.
- The biggest blow for diesel, though, has been an external trigger the Volkswagen emissions scandal, which led to an increase in the negative perception of diesel across markets, including India.
- Also, the reason why Maruti Suzuki and other carmakers announced an exit from the diesel segment was the rollout of the new BS-VI emission norms from April 1, 2020, and the prohibitively high cost of upgrading diesel engines to meet the new standard.
- The government’s decision to leapfrog directly from BS-IV to BS-VI is the reason carmakers such as Maruti Suzuki cite the unavailability of retaining diesel in their portfolio.
7. The upshot of this proposal
- Most governments are moving towards phasing out diesel and petrol vehicles.
- India may face difficulties implementing a total ban on diesel due to heavy investments in transitioning to BS-VI and high diesel penetration in commercial vehicles.
- Liquifies Natural Gas (LNG) has the potential to replace diesel and CNG in heavy-duty vehicles, which could be a game-changer for the Indian logistics market, alongside an EV push and leveraging hydrogen as a motive fuel.
- Automakers suggest that the government's approach should be technology-agnostic, with stringent operational standards, and phasing out technologies that do not meet the standards rather than proposing a complete ban.
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For Prelims: Ministry of Petroleum and Natural Gas, The Energy Transition Advisory Committee, Compressed natural gas (CNG), BS-IV to BS-VI emission norms, oxides of nitrogen (NOx), Liquifies Natural Gas (LNG).
For Mains: 1. What does the total ban on diesel vehicles could mean in India. Discuss?
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Source: The Indian Express
STORM SHADOW CRUISE MISSILE
1. Context
The United Kingdom will provide long-range Storm Shadow cruise missiles to Ukraine, which it has been requesting in a bid to push back invading Russian forces, British Defense Secretary Ben Wallace told Parliament
The weaponry is the latest addition to the long list of military aid given to Kyiv by its Western allies. Ukraine has so far received a wide variety of weapons and ammunition, including anti-tank missiles, anti-aircraft systems and artillery, since Russia invaded it in February 2022
Source: BBC
2. About Storm Shadow cruise missile
- Storm Shadow is a long-ranged, air-launched, conventionally armed, deep-strike missile, which is manufactured by the France-based MBDA Missile Systems
- It was first produced after the “UK Ministry of Defence (MoD) placed a €1.13bn contract with MBDA Systems for the development and production of the Storm Shadow long-range missile in 1997.,”
- The same year, France also commissioned MBDA to develop and manufacture Storm Shadow for its forces
- The demand for the missile quickly rose as in the following years other countries like Italy and Greece placed orders for the missile
- It has a range of more than 250 km, Storm Shadow weighs 1,300 kg and is 5.10m long
- It’s capable of being operated day and night in all weathers and designed to destroy high-valued stationary targets such as airbases, radar installations, communications hubs and port facilities
- Storm Shadow, equipped with the fire and forget technology, also offers high precision deep strike capability as it features a sophisticated navigation system that includes inertial navigation (INS), global positioning system (GPS) and terrain reference navigation for better control over the path
- The missile features the BROACH (Bomb Royal Ordnance Augmented CHarge) warhead a high-technology warhead, which first cuts the surface of the target, penetrates into it and then explodes
- According to MBDA, Storm Shadow is operated from Eurofighter Typhoon, Rafale, Mirage 2000 and Tornado
3. Way forward
Experts suggest Storm Shadow missiles could bolster Ukraine’s much anticipated counter-offensive
An analysis published in The Telegraph said owing to the long range of the weapon it would enable Ukrainian forces to strike targets virtually anywhere across Russia
Most significantly, however, the Ukrainians could use Storm Shadow to destroy the Kerch Bridge that connects Crimea to the Russian mainland.
Source: indianexpress
GST COMPLIANCE MEASURES
1. Context
In two significant measures to curb tax evasion and increase compliance under the Goods and Services Tax (GST) regime, the government has decided to lower the threshold for businesses to generate e-invoices for business-to-business (B2B) transactions, from Rs 10 crore to Rs 5 crore, and has rolled out the automated return scrutiny module for GST returns in a backend application for central tax officer.
2. What is the automated return scrutiny model?
- It aims to enhance tax compliance, reduce manual intervention and increase tax administration efficiency by using data analytics.
- The Automated Return Scrutiny Module, integrated into the ACES-GST backend application, leverages data analytics to identify risks and discrepancies in GST returns.
- Tax officers can scrutinize GST returns of Centre Administered Taxpayers selected based on data analytics and risks detected by the system. The module automatically generates alerts in cases of non-compliance.
- The Automated Return Scrutiny Module’s implementation has begun with the scrutiny of GST returns for the financial year 2019-20
- It was implemented by The Central Board of Indirect Taxes and Customs (CBIC).
3. What are the changes for e-invoicing?
- The government has also lowered the threshold for businesses to generate e-invoices for business-to-business (B2B) transactions to Rs 5 crore from Rs 10 crore under GST.
- The changes will come into effect from August 1.
- In a notification dated May 10, the Finance Ministry announced a lowering of the threshold for e-invoicing. At present, businesses with a turnover of Rs 10 crore and above are required to generate e-invoices for all B2B transactions.
4. What does e-invoicing envisage?
- The GST Council in its 37th meeting in September 2019 approved the standard of e-invoice with the primary objective to enable interoperability across the entire GST ecosystem.
- Under this, a phased implementation was proposed to ensure a common standard for all invoices, that is, an e-invoice generated by one software should be capable of being read by any other software, and through machine readability, an invoice can then be uniformly interpreted.
- With a uniform invoicing system, the tax authorities can pre-populate the return and reduce reconciliation issues.
- With a high number of cases involving fake invoices and fraud availing of the input tax credit, GST authorities have pushed for the implementation of this e-invoicing system which is expected to help to curb the actions of tax evaders and reduce the number of frauds as the tax authorities will have access to data in real-time.
- E-invoicing was initially implemented for large companies with turnover of over Rs 500 crore, and within three years the threshold has now been lowered to Rs 5 crore.
- E-invoicing for B2B transactions was made mandatory for businesses with a turnover of over Rs 500 crore from October 1, 2020.
- Then it was extended to businesses with a turnover of over Rs 100 crore from January 1, 2021, after which it was extended to businesses with a turnover of over Rs 50 crore from April 1, 2021, and then the threshold was lowered to Rs 20 crore from April 1, 2022.
- It was further reduced to Rs 10 crore from October 1, 2022.
5. Goods and Service Tax
- The GST aims to streamline the taxation structure in the country and replace a gamut of indirect taxes with a singular GST to simplify the taxation procedure.
- It has been established by the 101st Constitutional Amendment Act.
- It is an indirect tax for the whole country on the lines of "one nation one tax to make India a unified market.
- The Goods and service tax (GST), rolled out in July 2017, marked a major shift from the traditional production-linked tax to a consumption-based tax.
- The new regime subsumed state levies such as VAT, sales tax, and Octroi/entry tax together with central levies such as central excise and service tax.
- States gave up some of their taxation rights instead of the Centre passing on their revenue share under GST and also compensating them for potential revenue losses in the first five years.
- It is levied on the value addition and provides set-offs. As a result, it avoids the cascading effect of tax on tax which increases the tax burden on the end consumer.
| For Prelims: Goods and Service Tax (GST), business-to-business (B2B) transactions, The Central Board of Indirect Taxes and Customs (CBIC), e-invoicing, Value added tax( VAT). |
Previous year questions
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1. Consider the following items: (UPSC 2018)
1. Cereal grains hulled
2. Chicken eggs cooked
3. Fish processed and canned
4. Newspapers containing advertising material
Which of the above items is/are exempted under GST (Goods and Services Tax)?
A. 1 only
B. 2 and 3 only
C. 1, 2, and 4 only
D. 1, 2, 3 and 4
Answer: C
2. What is/are the most likely advantages of implementing 'Goods and Services Tax (GST)'? (UPSC 2017)
1. It will replace multiple taxes collected by multiple authorities and will thus create a single market in India.
2. It will drastically reduce the 'Current Account Deficit' of India and will enable it to increase its foreign exchange reserves.
3. It will enormously increase the growth and size of the economy of India and will enable it to overtake China shortly.
Select the correct answer using the code given below:
A. 1 only
B. 2 and 3 only
C. 1 and 3 only
D. 1, 2 and 3
Answer: A
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Source: The Indian Express
ECONOMICS OF CLIMATE CHANGE
1. Context
Over the past few weeks and months(2023 Summer), there have been several stories about how extreme weather events (Such as unexpected rainfall or unusually high temperatures) have disrupted normal life in India.
There is also a constant reminder that more of the same can be expected with each passing year.
2. Global Climate Risk Index
- The Global Climate Risk Index 2021 ranked India seventh in the list of most affected countries in terms of exposure and vulnerability to climate risk events.
- In its latest report on currency and finance, the RBI (India's central bank) has a chapter dedicated to answering many of these questions and explaining the macroeconomic effects of climate change in India.
3. The evidence of climate change
- The most obvious signs of climate change are anomalies in temperature and precipitation (rain, hail, snow etc.)
- The average annual temperature in India. While annual average the temperature in India has been increasing gradually, the rise has been significantly sharper during the last vicennial (twenty years) than during any other 20-year time interval since 1901 finds the RBI paper.
4. RBI research on annual rainfall
- Similarly, the southwest monsoon, too, has been becoming more erratic.
- According to the RBI research, Notably, while the average annual rainfall at the all-India level during the last vicennial (2000-2020) saw a rise over that during 1960-1999, over a longer time horizon since 1901, annual average rainfall in India has gradually declined.
- Moreover, evidence suggests that while dry spells have become more frequent during the last several years, intense wet spells have also increased.
- Research about natural disasters since 1975 has shown that India is relatively more exposed to floods and storms (i.e. cyclones and hailstorms) than droughts and heatwaves.
- Such incidences pose significant risks to agricultural production and food price volatility.
Vulnerability of India's climate change There are two ways to analyse this.
- By looking at India's geographical attributes
- By looking at the structure of India's economy.
- India's diverse topography is not only exposed to different temperature and precipitation patterns but also makes it vulnerable to extreme weather events posing wide-ranging spatial and temporal implications for the economy.
- India's economic structure has undergone a considerable change since Independence.
- As such, the bulk of the economic activity now happens in the services sector as against the agriculture and allied sectors.
- This has significant implications for carbon emissions because services are "globally considered to be emission-light with the relatively lower energy intensity of output.
- The sectoral break-up shows that metal industries, electricity and transport are all highlighted are the highest emission-intensive sectors, together accounting for around 9 per cent of India's total GVA (gross value added) in 2018-19.
- The sectoral composition of the Indian economy helps reduce its carbon emissions.
- However, notwithstanding this, fossil fuels have an overwhelmingly large share in India's primary energy consumption and this fact needs to change.
5. The macroeconomic impact of climate change on India
- Climate change can adversely impact both the supply side (read the productive potential) as well as the demand side.
- It can stoke inflation, reduce economic output, trigger uncertainty and change consumer behaviour.
- Over the years, there have been several predictions and assessments made about the impact of climate change on India's economy.
1. According to Niti Aayog in 2019, around 600 million of India's population are facing severe water stress, with 8 million children below 14 years in urban India at risk due to poor water supply.
2. The World Bank in 2020 said that India could account for 34 million of the projected 80 million global job losses from heat stress-associated productivity decline by 2030.
3. The IPCC Working Group in 2022 stated that India is one of the most vulnerable countries globally in terms of the population that would be affected by the sea level rise. By the middle of the present century, around 35 million people in India could face annual coastal flooding, with 45-60 million at risk by the end of the century.
6. Categories of climate change
- Typically the risks from climate change are categorised in two main ways.
- One is the physical risks and these include chronic issues (such as a gradual and sustained change in temperature and precipitation) as well as acute events such as extreme weather occurrences).
- The second category of risks is called transition risks; simply put, these refer to economy-wide changes arising from the transition towards a low-carbon economy. This is best encapsulated by a paradox called "success is failure".
- If the shift towards becoming a low-carbon economy is too rapid, it could materially damage a country's financial stability.
7. Policy insights
- The Network of Central Banks and Supervisors for Greening the Financial System (NGFS) have created an analytical framework called the National Institute Global Econometric Model (NIGEM) "to produce policy insights".
- In this model, the researchers looked at how GDP growth rate and inflation would be affected under six different policy stances when compared to the baseline.
- However, global scenarios of "current policies" and "nationally determined contributions (or NDCs) have the highest negative impact on output, whereas rapidly moving towards Net Zero by 2050 will contain the hit to GDP.
- The impact on inflation. Here the story is slightly more complicated. Moving towards net zero by 2050 will spike inflation far more in the immediate future than continuing on current policies.
- Overall, these trade-offs will become sharper as India tries to achieve the twin goals of achieving net zero emissions by 2070 and becoming an advanced economy by 2047.
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For Prelims: Inflation, Climate Change, Net zero emissions, Global Climate Risk Index, IPCC, NIGEM, GDP, GNP, NGFS, RBI
For Mains: 1.What is the economic cost of climate change? How vulnerable is India’s economy to such climate change? Explain What will happen to our GDP and inflation if timely action is not taken to address climate concerns? (250 Words)
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Previous Year Questions
1. Gross Domestic Product (GDP) of a country is (SSC CGL 2022)
A. Total value of tradable goods produced in a year.
B. Total value of monetary and non-monetary goods and services within a year.
C. Total value of economic transactions done within a country within a year.
D. None of the above
Answer: D
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Source: The Indian Express
