Anoushka Saha

[anoushkasaha08]

Forest Cover in India - with special focus on 5 states

India's forests are both diverse and stunning, covering approximately 21% of the nation's total land area. They represent more than mere green spaces; they are ecological treasures, cultural icons, and vital economic assets. These forests have been deeply connected to India's history, providing habitats for countless species and supporting the livelihoods of numerous communities. The biodiversity found in India's forests is truly remarkable, housing over 7% of the world's known species. Among the notable residents are the Royal Bengal Tiger, Indian rhinoceros, elusive snow leopard, and the playful Asiatic lion. These species find refuge in various national parks and wildlife sanctuaries throughout the country.

Owing to the vast forest cover, the timber and wood industry is flourishing, supplying essential materials for construction and furniture. Additionally, forests serve as a treasure trove of medicinal plants, which are fundamental to the ancient Ayurvedic system of medicine. Non-timber forest products such as honey, bamboo, and resins provide economic opportunities for communities that rely on these resources.

A notable aspect of the Indian forest narrative is the harmonious relationship between tribal communities and the forests. Indigenous knowledge and sustainable practices have allowed these communities to utilize forest resources without causing harm. Their methods not only promote sustainability but alsooffer valuable insights for the conservation and preservation of forest ecosystems.

Benefits of Forest Cover

Unique diversity of the forests in India is as below:

The diversity of India's forests reflects the country's varied topography and climate. In the Western Ghats, vibrant tropical rainforests abound with life, while the deciduous forests of central India showcase the stunning beauty of seasonal changes. Along the coastlines, unique mangrove forests, such as the Sundarbans, protect against coastal erosion and support a rich ecosystem. The towering Himalayan range is home to alpine forests, whereas arid regions feature dry forests, each hosting distinct flora and fauna.

Extent of Forest Cover across 5 identified Indian states

According to the latest India State of Forest Report (ISFR) 2021, India's total forest cover is 713,789 square kilometers, which accounts for 21.71% of the country's geographical area. This represents an increase of 1,540 square kilometers compared to the ISFR 2019 assessment. The report provides detailed information on forest cover across various states and Union Territories in India.

Further detailing in terms of forest classification is as follows:

The classification of the Forest cover can be understood as follows:

The % change in forest cover in the year 2021 as compared to 2019:

have lower forest cover at 5% and 4% respectively. 

Notably, neither Rajasthan nor Punjab has any areas classified as 'very dense' forest. 

Additionally, Punjab has experienced a reduction in its forest cover between 2019 and 2021. This decline can be linked to various factors, including developmental activities, the harvesting of short-rotation plantations, urbanization, overexploitation, overgrazing, and the conversion of forest land for other uses.

Measures adopted by State/ Central Governments

Various initiatives are being undertaken by the Central and State Governments, as well as Union Territory Administrations, to enhance forest and tree cover across the country. Key among these are the National Afforestation Programme (NAP) and the Green India Mission (GIM), both of which are managed by the Ministry of Environment, Forest and Climate Change. The NAP is a Centrally Sponsored Scheme aimed at regenerating degraded forests and surrounding areas. Recently, the NAP has been merged with the GIM.

The National Mission for a Green India (GIM) is one of eight missions outlined in the National Action Plan on Climate Change. Its objectives include protecting, restoring, and increasing India’s forest cover while addressing climate change through plantation activities in both forested and non-forested areas.

Afforestation efforts are also undertaken through various programs and funding sources, including the Compensatory Afforestation Funds managed by the Compensatory Afforestation Fund Management and Planning Authority (CAMPA), afforestation initiatives under the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGA), the National Agroforestry Policy and Sub-mission on Agroforestry (SMAF), the National Bamboo Mission, and the National Mission for Sustainable Agriculture. Additionally, forest protection is prioritized under the Forest Fire Protection & Management Scheme (FFPM).

In addition to the aforementioned initiatives, State and Union Territory Governments have their own afforestation and reforestation programs. Nearly every state engages in social forestry activities, which primarily concentrate on tree planting in areas outside of designated forests. Furthermore, the State Governments in the Northeastern region conduct awareness programs to educate communities about the drawbacks of shifting cultivation.

 The Green India Mission aims to achieve several key objectives:

Greening and afforestation of degraded forest areas and the enhancement of open forests to significantly reduce the impact of climate change on communities living near forest fringes.

Improving forest cover density, focusing on degraded forests, open forests, grasslands, wetlands, under-stocked forests, and urban landscapes.

Enhancing the productivity of dense and very dense forests.

Establishing institutional frameworks for effective implementation of the program, along with comprehensive monitoring and evaluation systems.Village Forest Committees formed for the National Afforestation Programme will play a crucial role in this process.

Emphasizing carbon sequestration and multiple ecosystem services, particularly in areas such as biodiversity, water, and biomass.

Promoting fuel-use efficiency and alternative energy sources for households within project areas.

Improving the livelihoods of community households living in and around forest regions.

In accordance with the Forest (Conservation) Act, 1980, as well as its associated rules and guidelines, efforts are made to plant a mixture of local indigenous species whenever possible, avoiding monoculture practices. States are also focused on planting native species in areas designated for compensatory afforestation to maintain biodiversity.

State governments have initiated several programs in this regard. For example, Odisha has launched the Trees Outside Forests in India (TOFI) program, developed by the state's Forest, Environment, and Climate Change Department in collaboration with the U.S. Agency for International Development (USAID). The initiative aims to enhance carbon sequestration, support local communities, and strengthen agricultural resilience to climate change. TOFI seeks to unite farmers, businesses, and other private organizations to rapidly increase tree coverage outside traditional forest areas within the state.

The Karnataka Forest Department launched the 'Krushi Aranya Protsaha Yojane (KAPY)' program in 2011-12 to encourage farmers and the general public to increase forest and tree cover. The program provides subsidized seedlings to farmers for planting on their lands. Farmers are paid an incentive of Rs 35 for every surviving seedling at the end of the first year, Rs 40 after the completion of the second year, and Rs 50 after the completion of the third year. This is done to encourage the farmers to nurture the seedlings for at least three years. The incentive is quite substantial when the farmer plants more seedlings. In addition to the financial incentive, the farmers are entitled to get handsome returns from the grown-up trees in the form of fruits, seeds, fodder, firewood, pole, timber, and other useful products.

To enhance green cover in Rajasthan, the government has announced plans to plant 70 million trees as part of a large-scale plantation initiative. An investment of ₹4,000 crore will be made over five years under the Mission Hariyalo Rajasthan. Additionally, to mitigate pollution and carbon emissions in tiger reserves like Ranthambore and Sariska, the government will implement an electric vehicle (EV) transport system. A budget of ₹20 crore has been allocated for tiger habitats across five tiger project areas, and ₹40 crore will be dedicated to establishing a forest and wildlife training and management institute in Jhalana, Jaipur.

Similarly, the Punjab Forest Policy 2019 emphasizes minimizing commercial exploitation of forest resources on state forest land while enhancing intangible benefits such as environmental, ecological, socio-cultural, and regulatory functions. The Green India Mission in Punjab focuses on protecting, restoring, and increasing forest cover while addressing climate change through plantation activities in both forested and non-forested areas. Significant funds have been allocated to Punjab for afforestation activities under various programs and schemes from the Line Ministry, including the Mahatma Gandhi National Rural Employment Guarantee Scheme, National Bamboo Mission, and Sub-Mission on Agroforestry. The Crop Diversification through Agroforestry (CDAF) scheme has the potential to be a major initiative in a state facing declining groundwater levels of 80-90 cm annually in many areas. This scheme allows farmers to convert part of their land to agroforestry, which can significantly conserve groundwater essential for their livelihoods.

Impact of Initiatives taken in India to conserve Forests-

India’s forest cover is likely to increase over the next 20 years and enhance the country’s capacity to absorb earth-warming carbon dioxide by 11 per cent. India appears to have already stabilised its forest cover despite pressures from human and livestock population and low per capita forest cover. The researchers have attributed India’s stabilisation of forest cover to the Forest Conservation Act of 1980 that was designed to reduce indiscriminate diversion of forest land for non-forestry activities and regulate land under forests.

Conclusion

Forests supply water, provide livelihoods, mitigate climate change and are essential for sustainable food production. Yet deforestation and forest degradation continue at alarming rates. It is essential to reverse the loss of forests and their biodiversity for the benefit of current and future generations.

[anoushkasaha08]

The Cuban Healthcare System: Socialistic Approach

Cuba's healthcare system stands as a prominent example of a socialist system in action, providing universal healthcare for all. One of the core principles of socialism is the concept of social welfare – prioritizing the well-being of all citizens, promoting the belief that healthcare is a right of all, not a privilege for a few. This is evident in Cuba's healthcare system, which provides universal access to free medical care for all Cubans, regardless of their employment status or income level. The government funds the healthcare system through taxes and budgetary allocations.

Structure and Key Features:

Preventive Care Focus: Cuban healthcare emphasizes preventive care, with a network of community doctors providing regular checkups and vaccinations. This proactive approach aims to identify and address health concerns early enough for immediate intervention.

Focus on Primary Care: A network of polyclinics staffed by general practitioners serves as the first point of contact for most medical needs. Patients can be referred to specialists within the system, if necessary.

Emphasis on Public Health: The Cuban government prioritizes public health initiatives like hygiene education, sanitation programs, and epidemic control measures. These efforts aim to improve overall population health.

Strong Emphasis on Medical Education: Cuba invests heavily in medical education, producing a large number of doctors. This ensures adequate staffing for the healthcare system and allows for the temporary export of medical professionals, generating revenue for the government. With so much focus on solidarity-driven healthcare for all, the system produces physicians committed to public health, not private wealth.

Achievements and Merits:

Impressive Health Outcomes: Despite its economic limitations, Cuba boasts of impressive health outcomes. The country has low infant mortality and overall mortality rates, and a high life expectancy. This is attributed to the emphasis on preventive care and public health initiatives.

Equity and Accessibility: Universal healthcare ensures all Cubans have access to medical care, regardless of their financial situation. This promotes social equality and removes a potential barrier to well-being.

Focus on Community Health: The system prioritizes community-based care, fostering a sense of collective responsibility for health. This can lead to better support networks and improved health outcomes for the community as a whole.

Challenges and Demerits:

Limited Resources: Cuba's socialist economy faces resource constraints. This can lead to shortages of medicine, equipment, and other supplies, impacting the quality of care available.

Brain Drain: Highly skilled doctors may be tempted to leave Cuba for better opportunities elsewhere, leading to a shortage of qualified medical professionals within the system.

Limited Innovation: The centralized nature of the system can stifle innovation in medical research and treatment options.

Wait Times: Due to high demand and limited resources, patients may experience long wait times for non-emergency care and access to specialists.

A System in Perspective:

Cuba's healthcare system serves as a real-world example of a socialist approach to healthcare. This commitment to accessible, people-centred medicine reflects Cuba’s broader philosophy: that healthcare is not a privilege, but a fundamental human right. This social healthcare system is extremely expansive and inclusive, unlike the profit-driven healthcare models that dominate much of the world.

Cuba has set a global benchmark in healthcare management by balancing technical efficiency with social accountability, and clinical precision with human solidarity. By embracing the principles of social medicine, Cuba has built health systems that are not only more effective, but also more just.

Following Cuba’s example, policymakers worldwide are encouraged to integrate social metrics into national health performance indicators, invest in interdisciplinary training for health managers, and create institutional frameworks for community co-governance. Ultimately, it is important to understand that investing in socially integrated healthcare management is not just ethically right but also economically viable for the nation.

The socialistic healthcare system seems the way forward definitely for third world economies that need to prioritise healthcare for its poor but dense population in order to ensure that its potential workforce is optimally utilised to build the economy.

[anoushkasaha08]

Electric Vehicles - The Future of the Automobile Industry

The auto sector is moving quickly towards an electric future. According to the Economic Survey 2022–2023, the yearly sales of electric vehicles in India are predicted to surpass one crore units by 2030, as EVs are viewed as a cleaner and more effective form of transportation than conventional fuel-powered vehicles.

Most attractive proposition of EVs for the end consumer:

Along with being an environment-friendly sustainable proposition, EVs have much lower running costs, which is the promise that is the driving force behind their popularity. To demonstrate this, a simulation of the cost of running an EV car vs an Internal Combustion Engine (ICE) car in India is presented below:

Thus, it is proven that the running cost of an EV is nearly 25-30% lower than that of a traditional fuel car, assuming:  a. 5 years Distance Travel is 60,000 km  b. Cost of Petrol: Rs. 100/ Ltr  c. Cost of Diesel: Rs. 90/ Ltr  d. Cost of Electricity: Rs. 7 / Unit (Home charging).

In addition, a consumer's decision to buy a new automobile is largely influenced by the cost of maintenance, which is significantly lower in an EV. This is because:

In electric vehicles (EVs), an electric motor, controller, and battery pack replace the intricate greasy components like the engine, gasoline lines, and tank. Since there are fewer moving parts in an electric drivetrain than in an ICE car, it is much easier to maintain.

The usual EV motors require minimal to no maintenance because the bearing on the outside bears the majority of the load.

A fluid-based thermal management system is typically used in EV battery packs to prevent the battery from becoming too hot or cold. During maintenance, it will be made sure that the vehicle has the ideal level of thermal fluid for the system to function.

The majority of EVs feature brake regeneration technology, which slows the vehicle down when braking by using the electric motor. As a result, EV brake pads last longer.

An EV requires relatively little effort and money to maintain.

Important Concerns related to EVs

Although the facts stated above make EVs appear to be the seemingly obvious choice, however, there are certain issues with EVs. To start with:

Although driving an EV may be more environment-friendly than a petrol or diesel substitute, more greenhouse gases are released during their manufacture. Additionally, certain electric vehicles might be less environment-friendly than their gasoline-powered equivalents because they are only as green as their fuel sources.

An EV cannot provide the flexibility that a gas or diesel vehicle offers. Since the rated range in this scenario is only 312 km, intercity travels will necessitate adding buffer time to fast charge along the way, which also reduces the EV's value proposition. The primary function of any automobile, anxiety-free transportation in any circumstance, is still way off.

Time required for a Single Charge: A standard electric vehicle typically needs 5-8 hours to get 100% charge. Traditional automobiles, on the other hand, can be refuelled in 2 to 3 minutes.

Accessibility to Charging Stations: It is challenging to maintain an electric vehicle (EV) on long distance journeys in India due to the nearly non-existent availability of charging stations on highways and in towns.

To compete with their ICE counterparts, EV producers must further reduce car costs. Due to the cost centre in EV manufacturing, EV costs are currently on the rise. All EV components will experience economies of scale as consumer demand increases, but a strong supply chain is required to allow production lines to operate more efficiently. When EV production reaches levels comparable to that of ICE vehicles, it has the potential to considerably increase domestic manufacturing, provide new job possibilities. However, in contrast to conventional ICE vehicles, the supply chain of EVs is young and prone to bottlenecks. One of the many difficulties facing the EV supply chain is a lack of R&D. Other problems include safety and quality issues.

To reach its full commercial potential, the EV business faces numerous obstacles. There is now no requirement more urgent than the need for a strong EV supply chain, not just in India but all across the world.

Demand High, but Supply a Concern

The demand for EVs may increase as a result of their decreased cost, but their supply remains constrained. It has been difficult to adapt currently available battery technology to the use of EVs. Although it has been around for a while, the current industry standard lithium-ion technology is nowhere near the sizes or usage cycles required in an EV. Another issue is the lack of an easily accessible global supply chain for the lithium, nickel, and cobalt rare earth metals these batteries require, especially at the scale required for increased EV adoption.

An EV is less appealing when compared to other vehicles in terms of up-front costs, but this is mostly due to the difficulty in obtaining batteries, which has prevented many suppliers from entering the market.

Although EVs are a superior option due to the lower taxes and levies the government imposes, as compared to the gasoline types. For example, for an EV, one pays Rs 5,000 in RTO fees as opposed to Rs 1.45 lakh for the petrol. However, this substantial gain is diminished by the EV's unexpectedly high insurance premium. In comparison to the Rs 56,000 required for the petrol, the Nexon EV's insurance costs Rs 1.07 lakh. Again, the battery, which adds between 30 and 40% to the cost of an EV, is to blame for this hefty premium.

Due to their high starting prices, EVs suffer a significant drawback, which is particularly detrimental in a value-driven market like India. This serves as a deterrent for many providers as well.

Conclusion

India requires a revolution in transportation. In addition to clogging already crowded cities, adding more vehiclesin India using imported gasoline raises pollution levels and reliance on foreign oil. EVs have significant drawbacks, but with a growing need for transportation options, a large-scale adoption of EVs may be a sensible step in the right direction.

[anoushkasaha08]

Assessing the economic viability of hosting the 2036 Olympics in India

The Olympic Games are often referred to as one of the world’s most significant and historical sporting events. These Games originated in Ancient Greece and were reestablished in 1896, currently featuring more than 30 sports in which more than 200 countries participate. They not only provide audiences with entertainment, but also promote unity and cross-cultural communication, while also providing athletes with a platform to showcase their excellence. The core values of these games according to the Olympics website are excellence, respect, and friendship.

However, these games go beyond their massive cultural significance. They hold immense economic and political significance for their host country. Hosting these games is an opportunity for a nation to show their global standing. They may lead to strengthened international relations of a country, and attract mainstream international attention, which has significant economic benefits. Some of these are increased tourism, creation of infrastructure, and the creation of jobs on a large scale. These benefits also extend to the long term, impacting nations for the foreseeable future due to various factors. On the other hand, hosting these games requires cautious planning and execution due to the challenges involved, such as the enormously high cost of organising, as well as the risk of infrastructure not being used after the games. When a city wins the bid to host the Olympics, it is regarded as a major accomplishment. But behind all of the glamour and elegance however, is a financial reality that even the world's largest cities struggle to deal with.

Cost-Benefit Analysis of hosting Olympics in 2036:

Benefits of hosting the Olympics:

Employment in the short as well as the long term may increase as a result of the Olympics. The boost that local businesses get during the games may help them expand their business, leading to growth in the economy and more employment opportunities.

Over the period of the event, there is a surge in tourism to the host city. Millions of tourists head to the city during this time. This stimulates the hospitality industry, while also benefiting local businesses around the Olympic Village. The revenue of local businesses around the host city has shown to improve by 20-40%. This leads to an inflow of foreign exchange.

Hosting the games could attract a substantial amount of FDI inflows focused towards upgradation of airports, the metro system, and 'smart city projects'.

The construction of world-class sports facilities will open the door for other major national and international sporting events to be held. Hosting the games would directly affect Indian athletes in terms of better training infrastructure, coaching expertise, and exposure to high-level competition, so that they could compete at par with other global competitors.

Olympic standard stadiums, training facilities and a state-of-the-art sports complex have huge potential to be beneficial in the long term if marketed right and not left unused.

The creation and upgradation of non-sports infrastructure like public transport, housing and other utilities will have long term benefits. For India, Olympic preparations could lead to expansions in metro networks, roadways, and airports.

Goodwill generated during the event and an improved image would attract repeated visits by international tourists. Due to exposure to Indian art, music, and traditions, a global interest would be fostered in the country.

A well organised Olympics can lead to a lifestyle of fitness and sportsmanship in society. This may promote people to take up physical activity and sports as a lifestyle activity that would tackle many lifestyle-related health issues, improving standard of living as a whole.

Costs of hosting the Olympics:

The monetary costs of hosting the Olympic Games have shown a trend of ballooning and surpassing their budget by extravagant amounts.

Bidding to host the games alone sets most countries back by around 20 million USD. Additionally, until the outcome is known, the bidding process ties up real estate in the host-to-be urban cities. This can cause millions of dollars of lost revenue.

Development of infrastructure forms the bulk of the cost. It includes expenditure on the development of stadiums, transport, hotels, the Olympic Village, etc. If given the opportunity, apart from building state-of-the-art sports facilities and infrastructure, India will also have to develop important non-sports infrastructure like public transport and accommodations for thousands of athletes and tens of thousands of international tourists. The biggest infrastructure related problem is not its extravagant cost, but the risk of it being left unused and vacant post the games, while still racking up hefty maintenance costs, thus becoming a burden on the country and the taxpayer.

Strong IT infrastructure will also be required for ticketing systems and event tracking. Investment in cyber security is expected too.

According to Times of India, if India does host the 2036 Olympics, the opening and closing ceremonies will be held at Narendra Modi Stadium, Ahmedabad, while the Sardar Vallabhai Patel Sports Enclave is projected to be the Olympic Village. Gujarat has formulated a 6000 crore INR (710 million USD) plan to prepare Ahmedabad as the host city for 2036. The Gujarat Olympic Planning and Infrastructure Corporation Ltd has planned to construct six sports complexes for events like football, swimming, tennis and basketball, as well as media centres in the SVP Sports Enclave. They will have to spend on creating accommodation as well as transportation.

The costs of hosting the Olympics go beyond monetary values. In order to acquire land for the ambitious infrastructure projects, a large population in the host city may get displaced. For example, Rio 2016 displaced over 77000 people. In addition, as mentioned earlier, funds have to be reallocated from other sectors. These may be crucial sectors like healthcare and education which already need more funds. This will be detrimental to the citizens of the nation. Clearing of greenery for venues and construction of infrastructure have a harmful impact on the environment.

Conclusion

Keeping the above in mind, India must be conscious of the financial risks before volunteering to host the 2036 Olympics. It may be an extravagant and impulsive investment, racking up huge bills to be dealt with after the games are over. On the other side of the glitz and glamour of the Games are India’s rural poor, who are still lacking access to basic healthcare and education. It is extremely critical for India to focus on strengthening its core, rather than falling prey to showcasing a spectacle, which may be only for the short term, plunging the country further into debt and slower growth in real terms.

[anoushkasaha08]

Impact of GST on the economy

Introduction

An indirect tax imposed on the provision of goods and services is the Goods and Services Tax (GST). The 29th of March 2017 saw the passage of this Act in the Parliament, and the 1st of July 2017 saw its implementation. The GST is India's largest tax overhaul since Independence. It represents a significant shift in the country's indirect tax system, which now includes more than a dozen federal and state taxes like the excise tax, the value-added tax, the services tax, etc. GST symbolises the idea of "one nation, one tax, one market" by bringing the $2 trillion economy and 1.3 billion citizens of the nation together into one market.

Indirect taxation in India has undergone a significant transition thanks to the Goods and Services Tax (GST). In the past six years since its start, it has had a considerable impact on the Indian economy. Additionally, the industry that collects the tax, the federal and state governments to whom it is transferred, and the taxpaying public are its three main stakeholders. Here is how everyone has been impacted by GST, with its effects over the past six years becoming clear.

Analysis

Impact on the Indian economy - Benefits of introducing GST 

The introduction of GST has a favourable effect on the country's Gross Domestic Product (GDP). The following bullet points provide a summary of the main factors that contributed to the nation's GDP growing after the implementation of the GST:

One Nation, One Tax

The idea of a single national tax implies that each state applies the same rate to a certain good or service. Since the central government sets the tax rates and regulations, tax administration is made simpler. Common laws are established, such as e-way bills for the transportation of products and e-invoicing for the reporting of transactions. Since all of the major indirect taxes have been combined into one under the GST, tax compliance is also improved because taxpayers are not burdened by numerous return forms and due dates. It is an integrated method for complying with indirect taxes overall. 

Eliminated the cascading effect of taxes  

Previously, taxpayers were unable to offset the tax credits from one tax against another due to disparate indirect tax legislation. For instance, the VAT due during the sale may not be offset by the excise charges paid during manufacture. Taxes began to increase as a result. Only the net value added at each stage of the supply chain is taxed under the GST system. Due to this, input tax credits for both products and services are now flowing smoothly and the cascading effect of taxes has been reduced.

Curbed tax evasion

Invoices posted by their respective suppliers are the only ones on which taxpayers under GST may claim an input tax credit. This minimises the possibility of collecting input tax credits on fictitious invoices. E-invoicing was introduced, which has strengthened this goal even further. Additionally, because GST is a federal tax with a centralised surveillance system, it is far quicker and more effective to crack down on defaulters.

Increased the taxpayer base

Since the GST is a combined tax applied on both goods and services, the number of firms that are tax-registered has expanded. In addition, new regulations governing input tax credits have helped bring some unorganised industries, including the construction sector, into the tax net.

Promoted competitive pricing and increased consumption

Under the previous administration, the cascading impact of taxes led to greater costs for goods in India than on international markets. Even within states, there was an imbalance in purchases in some areas as a result of lower VAT rates.

The uniformity of GST rates has helped to keep prices competitive both inside India and internationally. As a result, more products and services were produced domestically, increasing net exports. With a high level of manufacturing output and a trade surplus, India has seen a surge in employment. A rise in export volume has been made possible by a reduction in customs duties on commodities. Following the implementation of the GST, production facilities have also been making financial savings while creating items. 

With this, India may also start the flow of money into the economy, promoting economic expansion. This improved currency exchange rates, which in turn increased consumption and raised revenues. 

Supported small and medium enterprises

The GST payment amount is determined by the firm's annual revenue and size. These small and medium-sized businesses have benefited from this. GST has been successful in lowering the overall taxable income, which has increased the amount of money available for production. Additionally, there has been an increase in activity across all of India as a result of the simpler transit of commodities due to the single, unified tax system. 

Additionally, online payment and return submission are essential for GST compliance. When the GST was first established, many small firms lacked a strong technological foundation. They lacked the funding necessary for fully computerised compliance. Over time, though, this shift has prepared the country for going digital, which is also a significant step for a growing country like India. 

Impact on Industry

According to Deloitte's "GST @6 Survey," 94% of business executives said the switch to GST would be beneficial. The consumer, energy, and technology industries as well as the financial services and healthcare industries all shared this perception. The GST has lowered the burdens of compliance on trade and industry by integrating the largely fragmented indirect tax framework and incorporating a number of taxes, cesses, and levies. GSTN makes online taxpayer services including registrations, returns, assessments, refunds, payments, etc. available through IT systems, making compliance simple and transparent.

The cost of products and services decreased after the cascading impact of various taxes was eliminated. Because checkpoints at state and city borders were eliminated as a result of the elimination of tax arbitrage and octroi, this resulted in supply chain optimisation. Additionally, this sped up the flow of commodities and cut back on logistics expenses.

Exporters also profited from GST. Exports are now practically zero-rated, and refunds are processed more quickly. GST has improved Indian industry's competitiveness and supported Atmanirbhar Bharat as a concept. 

Impact on tax revenue for Government of India

For the Government of India, the average tax receipts were around Rs 1.5 lakh crore last year, up from less than Rs 90,000 crore in the year of its founding and 22% higher than the year before. Revenues reached a record high of Rs 1.87 lakh crore in April 2023. One could argue that this increase was inevitable because taxes depend on the size of the economy and are predicted to rise as GDP increases. But from 2018–19 to 2022–2023—the post–GST period—the tax buoyancy is only 1.2. This suggests that tax collections increased more quickly than average nominal GDP, at 12.3% pa compared to GDP's 9.8% pa. The quicker growth rate can be attributed to improvements in tax collection efficiency with the introduction of the GST.  Even more encouraging is the tax buoyancy of 1.40 over the past two years.

Win-win for consumers

The most significant stakeholders are consumers. If a reform doesn't help people, it is pointless. The open and consistent tax structure of the GST enables customers to make wise purchasing decisions. Prior to the introduction of the GST, it was challenging for customers to determine the exact tax paid because of a number of hidden taxes that were incorporated into the costs of products and services. Lower prices for products and services for customers were the result of the elimination of these cascading taxes and the lowering of logistics costs due to the GST.

This lowering of prices due to the introduction of GST has been clearly explained in the illustration below:

Additionally, as the tax base has grown from 64 lakh in September 2017 to more than 140 lakh in June 2023 and taxpayers' compliance behaviour has improved, tax collection efficiency has increased.

The opportunity for corruption and black money has significantly decreased after the introduction of GST, protecting the ordinary man's money in India.  

Conclusion

GST’s benefits are near universal and across stakeholders is clear. As we enter its seventh year of being operational, we must consolidate these gains and work on building a modern, world-class, technology-led indirect taxation system based on principles of equity, efficiency, certainty, and convenience.

[anoushkasaha08]

EL NINO AND THE INDIAN ECONOMY

What is El Nino? 

During Christmas season, the Eastern Pacific, or coastal waters closest to South America (Peru and Ecuador), are typically colder than the Western Pacific, or coastal waters closest to Australia, which are typically warmer. This causes the ground-level winds, sometimes known as the easterly trade winds, flow from east to west.  Due to a warmer surface, it travels above Australia, where it produces precipitation. However, in El Nino years, the trade winds weaken and adversely impact the precipitation above Australia, also thereby adversely impacting the southwest monsoon winds in India.

El Nino is sporadic, occurring every two to seven years; the most recent instance was in 2018–2019. Prior to then, India experienced seven El Nino years, of which four (2003, 2005, 2009–10, and 2015–16) saw droughts. Some consequences of the El Nino as observed over the years:

Drought and famine cause agricultural losses and starvation deaths.

Inflation is fuelled in these years by a drop in kharif, or summer-sown farm output, which accounts for more than half of the nation's annual food supply. The crops that are most susceptible to a severe El Nino are paddy - a water guzzler, groundnuts and pulses. Crops of cotton and sugarcane also suffer.

Government agencies restrict food grain exports.

Manufacturing and service sectors suffer greatly, other industries such as FMCG, auto (two-three wheelers and tractors), and agrochemicals also experience the heat of weak rural demand.

All the above together adversely impact the growth of GDP. In India specifically, the El Nino effect turns out to be more harmful because the nation lacks significant reservoirs of food supplies.

How close is the correlation between El Nino and Monsoon Rain? 

The relationship between El Nino and Indian monsoon rainfall is considerable. The last four El Nino years, however, have shown a pattern, with India routinely experiencing drought conditions and rainfall that is less than 90% of the long-term average.

Government intervention to counter the El Nino impact

Since El Nino is inevitable, it is critical for the government to take steps to reduce the adverse impact on the economy, since it cannot be completely eliminated. Certain steps taken are as follows:

The government is taking initiatives to generate income from non-agricultural sector. The thrust on and attention to the tourism industry is anticipated to increase non-farm employment, in order to raise rural income and reduce the negative effects of El Nino on rural demand and India's GDP.

The government is building infrastructure to ensure a sufficient buffer stock of staple foods including wheat, rice, and legumes. There is focus on monitoring of food supply procurement and additional support through importats to close the supply-demand gap.

The government has started providing farmers with consultation services to assist them in strategizing their farming operations and assisting them in preparing for such climatic issues.

In order to sustain the flow of loans to farmers, the government is also making sure that banks are aware of the potential problem so that adequate credit facilities can be extended to the rural sector.

With El Nino being a reality and having observed its catastrophic impact, the Indian government is definitely putting its best foot forward to keep its economy geared to take on the challenge head-on.

[anoushkasaha08]

Is India ready to be a cashless economy?

A cashless economy is one in which traditional payment methods like cash or coins are replaced by cards, payment wallets and other digital modalities.

Some digital payment modes, such as Vodafone’s m-pesa, enable us to transfer money to any cell phone number associated with a bank account. These are called ‘open wallets’. Whereas, there are some ‘semi-open wallets’ that enable one to only transfer a pre-loaded amount, for example Ola Money. Additionally, there are some merchant-specific wallets or ‘closed wallets’ in which we can keep money locked for payment at the particular merchant outlet only, such as Book My Show wallet, which could be used as a gift card too. Or there could be ‘semi-closed wallets’ where financial transactions can happen only among these who are registered for the specific wallet, such as Paytm. Then ofcourse, there are credit cards, debit cards, bank transfers, payments through QR codes etc. that allow financial transactions without any tangible cash exchange. All these methods are approved by our central bank, the RBI.

Such cashless transactions definitely offer convenience, ease and transparency, but it is restricted in the true sense only to a small fraction of our society. Our country, unfortunately, majorly grapples with challenges of cyber security, illiteracy and lack of digital infrastructure. Infact, in India, migration to ‘digital mode’ is majorly understood as withdrawing cash from ATMs using plastic! Statistically, over 85% (by volume) and 94% (by value) of all debit card usage occurs at ATMs for the purpose of cash withdrawals. So although, our country has over 600 million debit cards, the usage of this plastic money is only to withdraw cash. This clearly implies that Indians continue to use cash for financial transactions, although they are happy to not stand in bank queues to withdraw cash. This use of plastic money is not really a representation of India shifting towards a digital or cashless economy.

Challenges in transitioning to a Cashless society

Acceptance infrastructure and digital inclusion: Inadequate infrastructure is a significant barrier to establishing a cashless economy. Some of the problems that need to be solved include ineffective financial systems, weak digital infrastructure, inadequate internet access, a lack of a comprehensive digital payment interface, and a low penetration of PoS terminals. It is necessary to establish a safe, frictionless payments infrastructure, increase smartphone adoption, and increase internet connectivity in order to move towards a cashless society.

Changing habits and attitude Due to the low adoption of electronic payment systems, the digital illiteracy of electronic payment and cashless transaction techniques, and thirdly, the habit of handling cash for convenience, the Indian economy relies heavily on cash. The best course of action in this situation is to gradually encourage people to use e-payments while promoting awareness to start a change in behaviour.

Urban-Rural Divide – Semi-urban and rural locations lack reliable internet connections, but urban centres typically have high-speed connectivity. Because of this, even though India has over 200 million smartphones, it would be some time before rural India can do business easily over mobile phones. A considerable urban-rural split exists despite the availability of ATMs, Point of Sale terminals, and bank branches; closing this gap is necessary to enable a cashless economy.

Literacy – People are not entirely aware and educated about the cashless methods of payment. Making the people aware of the privacy and security under cashless transactions is another challenge for the government. As the cashless economy in India is also taking time to recover as people do not trust the privacy terms of the online portals, platforms and applications.

Access – Not more than 26% of our population has access to the internet.

In view of the above, although cashless economy is desirable, we have miles to go. The government must take on the monumental challenge of influencing consumer and business understanding of digital payments. It is critical to invest in creating the necessary financial and digital infrastructure. Moreover, the authorities must launch a national campaign to promote financial and digital literacy along with a medium-term plan to increase knowledge of and access to electronic payments. Only then, our dream of turning India into a ‘cashless economy’ will gradually come true.

[anoushkasaha08]

GDP or HDI - how to measure a nation’s development?

Economic development and human well-being are often assessed using two major indicators: Gross Domestic Product (GDP) and the Human Development Index (HDI). GDP, widely used as a benchmark for economic growth, measures the total monetary value of all goods and services produced within the national territory in a given time period. Whereas, Human Development Index (HDI) measures development more holistically and includes dimensions of health, education and income, thereby providing a more rounded perspective on human well-being and overall quality of life. 

While GDP reflects economic productivity, HDI includes social factors that contribute to human well-being. For example, countries with high GDP may not have high HDI if wealth is unequally distributed or if healthcare and education services are underdeveloped.

To illustrate the above, given below is a table comparing GDP and HDI of selected countries: United States, Germany, Brazil, India, and Nigeria. These countries represent a range of income levels and development standards.

World Bank. “World Development Indicators: GDP and GDP per capita.” Accessed 2023. https://data.worldbank.org. United Nations Development Programme. “Human Development Index (HDI) Data Center.” Accessed 2023. https://hdr.undp.org/data-center/human development-index.

Key Takeaways:

United States - has a high GDP and is one of the world’s leading economies, yet it ranks lower in HDI compared to countries with similar economic output. Issues like income inequality, limited healthcare access, and high living costs contribute to its lower HDI rank. This means that high GDP does not guarantee high quality of life as social services and equitable income distribution are essential. 

Germany - demonstrates balanced development with both high GDP and HDI. Its comprehensive social welfare programs, universal healthcare and quality education contribute to a high HDI. Germany’s HDI ranking illustrates that strong economic policies combined with social welfare result in higher quality of life.

Brazil - is an example of an emerging economy where GDP growth does not fully translate to high HDI. While Brazil has made significant progress, it faces challenges in reducing income inequality, improving public health, and enhancing education access. This implies that economic growth in emerging economies does not always lead to immediate improvements in HDI. 

India - has a growing GDP that reflects in its rising economic power, but its HDI remains low due to challenges in healthcare, education and uneven distribution income. Rapid urbanization has also created issues such as pollution and housing shortages. 

Nigeria -  has low GDP and HDI. These are attributed to factors like political instability, low income levels, limited access to healthcare and education. Despite being an oil-rich country, the benefits of this wealth are not evenly distributed, affecting human development. 

Conclusion:

Combined use of GDP and HDI is essential for understanding true development in a nation. This balanced approach allows governments to design policies that foster both economic and social progress, ensuring improved quality of life for all citizens. Only when both GDP and HDI are focal points, will the economy experience sustainable development.

[anoushkasaha08]

Economic Impact of the Changing Demography of India & China – A comparative Analysis

China and India have the greatest populations worldwide, that have grown phenomenally in the last few decades. However, with all the population control measures, both countries are expected to lower their population in the near future, with China reducing its population far more effectively than India.

As can be seen in the table above, while the populations of the two nations are nearly the same now, India is expected to add almost 270 million more people by 2050, while China will actually see a 30 million decline in population.

An interesting observation is that the size of China's primary working-age population (25-64 age group) has already peaked, while India's labour force is anticipated to reach its peak in 2050. India's workforce age population is predicted to reach around 800 million, which is about the same as China's current working population.

It is only due to this expanding workforce population, both China and India's GDP growth appears certain to be unprecedented, going forward. Although India may take longer to reach China’s level in the near future, both countries will nevertheless achieve significant GDP growth by 2050, overtaking the growth rate of developed countries such as the USA.

India and China may have struggled with enormous problems due to their respective populations, but it is this very population that will be the reason for these countries to be the ‘rising powerhouses’ of the East.

[anoushkasaha08]

Rupee Depreciation & Its Effect on Common Man

The Indian rupee weakened to a lifetime low of 87.582 per US dollar on Thursday, Feb 6, 2025 before closing at 87.577/$1.  To a common man, this weaker rupee means that now one needs more rupees to buy a single dollar than he did earlier.

Source: https://wise.com/in/currency-converter/usd-to-inr-rate/history

In further clearer terms, if a year ago, it required ₹74 to purchase $1, now it will take ₹87.5 to buy the same dollar. This depreciation also means that the imported products will become costlier. So, an importer that brings in an item costing $100, will now have to shell out ₹8,750 compared to ₹7,400 a year ago. Therefore, a weak rupee increases the import bill of the country as a whole since importers pay in dollars. This causes the cost of importing edible oils, pulses, fertilisers, oil and gas. The most significant impact is on oil and gas imports, as India's import dependency on crude oil is nearly 88%. And unfortunately for the common man, costlier the crude oil (the raw material to create petrol and diesel), costlier is transportation, and therefore costlier are all other goods that need transportation across the country. Thus, the falling rupee causes overall inflation in the economy.

The effect of rupee fall can also be seen in specific ways. A few listed as below: Impact on expenses: Higher inflation ultimately means the household budget gets tighter due to reduction in purchasing power with increase in cost of living. One needs to pay more for everything, from groceries and clothing to transport. Even electronics such as phones and laptops will become costlier since most of the components for these devices are imported. Overseas education or even foreign trips need a bigger budget as one will have to pay more rupees for the same goods and services abroad.

Impact on business: A positive impact of currency depreciation is that exports become cheap. This is because export companies receive payments in dollars, which they exchange for more rupees. Hence, export-oriented sectors such as pharma, IT, auto, gems and jewellery will benefit from the depreciating rupee. On the other side, importers feel the heat from a falling rupee.

Drop in savings: Since most people tend to have fixed incomes, inflation can impact savings too. As one spends more funds on consumption and hoarding (in expectation of further inflation) of goods and services, savings become a smaller portion of income.

Increased interest rates: During inflation, there is an increase in the money supply circulating in the market. Thus, banks have to curb borrowing to reduce the money circulation. They do so by increasing interest rates, resulting in more expensive loans.

Increased income inequality: Inflation only widens the gulf between low and high-income individuals. Low-income households end up spending more money to acquire daily necessities. On the other hand, wealthy families or the producers benefit further and become wealthier due to their sales happening at higher prices during inflationary periods.

[anoushkasaha08]

Understanding Inflation

Inflation refers to the gradual decrease in purchasing power, which is evidenced by a widespread increase in the prices of goods and services over time. When prices rise, each unit of currency can buy fewer goods and services. High inflation indicates that prices are escalating rapidly, while low inflation signifies a slower rate of price increases.

Inflation can be categorized into two main types:

Demand-pull inflation arises when an increase in the money supply and credit availability boosts overall demand for goods and services, surpassing the economy's production capacity. This heightened demand results in price increases.

This graph showcases how the increase in quantity demanded increases from Q1 to Q2 (demand is shown through slopes D1 to D2), it leads to increase in price from P1 to P2

2. Cost-push inflation occurs when rising costs of production inputs lead to higher prices for finished products or services. When the prices of various intermediate goods increase, it contributes to rising consumer prices as these costs are passed along.

This graph showcases how the decrease in quantity supplied due to increased costs (shown through supply curves), leads to increase in price from right red dot to the left red dot.

In 2022, inflation rates surged globally to unprecedented levels. While no single factor can fully explain this sharp rise in prices worldwide, a combination of events contributed to this inflationary trend. The COVID-19 pandemic caused significant disruptions to global supply chains due to lockdowns and restrictions, resulting in factory closures and bottlenecks at ports, causing cost-push inflation. Following that, as vaccines became widely available and economies began to recover, demand surged beyond supply capabilities, triggering demand-pull inflation.

Additionally, Russia's invasion of Ukraine in early 2022 led to economic sanctions and trade restrictions that impacted the global supply of oil and gas, given Russia's status as a major fossil fuel producer. The inability to export Ukraine’s substantial grain harvests also drove up food prices. As energy and food costs increased, these higher expenses cascaded through supply chains, contributing to cost-push inflation.