{"id":52988,"date":"2025-07-01T15:56:53","date_gmt":"2025-07-01T10:26:53","guid":{"rendered":"https:\/\/vajiramandravi.com\/current-affairs\/?p=52988"},"modified":"2025-10-08T11:56:26","modified_gmt":"2025-10-08T06:26:26","slug":"daily-editorial-analysis-1-july-2025","status":"publish","type":"post","link":"https:\/\/vajiramandravi.com\/current-affairs\/daily-editorial-analysis-1-july-2025\/","title":{"rendered":"Daily Editorial Analysis 1 July 2025"},"content":{"rendered":"<h2 class=\"feed_item_title\"><strong>GST Reform and Unfinished Business in Tobacco Control<\/strong><\/h2>\n<div class=\"feed_item_content\">\n<h3><strong>Context<\/strong><\/h3>\n<ul>\n<li>As India commemorates the\u00a0<strong>eighth anniversary of the Goods and Services Tax (GST) on July 1, 2025,<\/strong>\u00a0it is timely to evaluate this transformative tax reform.<\/li>\n<li>Launched in 2017 under the banner of\u00a0<strong>\u2018One Nation, One Tax,\u2019<\/strong>\u00a0the GST\u00a0<strong>replaced a complex web of indirect taxes, establishing a unified national market<\/strong>\u00a0and harmonising tax structures across states.<\/li>\n<li>While\u00a0<strong>its economic and administrative efficiencies are undeniable,\u00a0<\/strong>its shortcomings, especially in tobacco taxation, reveal a critical blind spot that calls for urgent corrective measures.<\/li>\n<\/ul>\n<h3><strong>Goods and Services Tax (GST): A Landmark in Tax Reform<\/strong><\/h3>\n<ul>\n<li>By replacing multiple indirect taxes such as VAT, service tax, and excise duties,\u00a0<strong>GST streamlined tax collection and reduced the compliance burden for businesses.<\/strong><\/li>\n<li>The\u00a0<strong>creation of a common national market<\/strong>\u00a0significantly improved the ease of doing business and enabled more seamless inter-state trade.<\/li>\n<li>Notably,\u00a0<strong>the digitisation of processes, through instruments like the e-way bill, enhanced transparency<\/strong>\u00a0and curtailed tax evasion.<\/li>\n<li>These\u00a0<strong>measures collectively contributed to improved logistics efficiency<\/strong>, cutting transportation time by up to 20% and lowering associated costs.<\/li>\n<li>The\u00a0<strong>gross GST collections for 2024\u201325 soared to an unprecedented \u20b922.08 lakh crore,\u00a0<\/strong>registering a year-on-year growth of 9.4%. This consistent revenue generation underscores GST\u2019s role as a cornerstone of India\u2019s fiscal architecture.<\/li>\n<\/ul>\n<h3><strong>The Fault Lines in GST\u2019s Structure<\/strong><\/h3>\n<ul>\n<li><strong>Tobacco Taxation and Public Health<\/strong>\n<ul>\n<li>Tobacco usage in India\u00a0<strong>remains a catastrophic public health concern,<\/strong>\u00a0accounting for over 3,500 deaths daily and imposing an\u00a0<strong>annual economic burden of \u20b92,340 billion<\/strong>, equivalent to 1.4% of GDP in 2017.<\/li>\n<li>However,\u00a0<strong>the GST regime has failed to meaningfully escalate taxation on tobacco products<\/strong>, a proven strategy for reducing consumption.<\/li>\n<li><strong>Pre-GST (2009\u20132017), regular hikes in excise duties<\/strong>\u00a0and VAT contributed to\u00a0<strong>a 17% decline in tobacco use.<\/strong><\/li>\n<li>In contrast,\u00a0<strong>post-GST stagnation in tax hikes has made tobacco increasingly affordable.<\/strong><\/li>\n<li>Average GST revenues from tobacco over the last five years stood at \u20b9551 billion, substantially lower than the associated health and economic costs.<\/li>\n<li><strong>The overall tax burden on tobacco products remains below the World Health Organisation (WHO) recommended threshold<\/strong>\u00a0of 75% of retail prices: just 22% for bidis, 54% for cigarettes, and 65% for smokeless tobacco.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Structural Flaws: The Ad Valorem Trap<\/strong>\n<ul>\n<li>The structural design of GST heavily relies on ad valorem taxation, levies based on product value, which,\u00a0<strong>while integral to GST, is poorly suited for curbing harmful product consumption.<\/strong><\/li>\n<li>Fixed specific excise taxes, levied per unit of product, are\u00a0<strong>internationally acknowledged as more effective in reducing tobacco use<\/strong>\u00a0because they resist industry manipulation of retail prices.<\/li>\n<li>Since GST&#8217;s inception,\u00a0<strong>the share of specific central excise duties in tobacco taxation has plummeted: from 54% to 8% for cigarettes,\u00a0<\/strong>17% to 1% for bidis, and 59% to 11% for smokeless tobacco.<\/li>\n<li>This decline is compounded by glaring inconsistencies.<\/li>\n<li><strong>Although bidis are the most widely consumed smoked tobacco product in India and equally harmful as cigarettes,<\/strong>\u00a0they are under-taxed and exempt from the GST compensation cess.<\/li>\n<li>This\u00a0<strong>omission disproportionately benefits low-cost tobacco products consumed by the economically disadvantaged,<\/strong>\u00a0amplifying both health inequity and fiscal inefficiency.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h3><strong>The Way Forward<\/strong><\/h3>\n<ul>\n<li><strong>Dual Strategy for Reform<\/strong>\n<ul>\n<li>Addressing the deficiencies in tobacco taxation requires\u00a0<strong>a recalibrated strategy that integrates public health priorities with fiscal policy.<\/strong><\/li>\n<li><strong>Raising GST rates on tobacco to the statutory maximum of 40%,<\/strong>\u00a0as permitted under current law, coupled with a substantial increase in specific excise duties, represents a powerful dual-pronged approach.<\/li>\n<li><strong>Such a mixed tax structure, combining ad valorem and specific components, has demonstrated greater effectiveness globally<\/strong>, both in reducing consumption and bolstering revenues.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Debunking the Illicit Trade Argument<\/strong>\n<ul>\n<li>A recurring counterargument by the tobacco industry is that\u00a0<strong>higher taxes fuel illicit trade.<\/strong><\/li>\n<li>However,\u00a0<strong>empirical studies refute these claims<\/strong>. Independent estimates suggest that illicit cigarettes account for merely 2.7% to 6.6% of India\u2019s market, far below the industry\u2019s inflated claim of 25%.<\/li>\n<li><strong>Factors like regulatory enforcement and border control play a far greater role\u00a0<\/strong>in curbing illicit trade than pricing alone.<\/li>\n<li>India,\u00a0<strong>having ratified the WHO Protocol to Eliminate Illicit Trade\u00a0<\/strong>in Tobacco Products,\u00a0<strong>must now focus on its rigorous implementation.<\/strong><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h3><strong>Conclusion<\/strong><\/h3>\n<ul>\n<li>As the GST Council considers rationalisation and structural reform,\u00a0<strong>public health must be brought to the forefront.<\/strong><\/li>\n<li>The\u00a0<strong>139th Parliamentary Standing Committee Report (September 2022) emphasised that India\u2019s tobacco products remain among the most affordable globally<\/strong>\u00a0and urged higher taxation as a corrective measure.<\/li>\n<li>The\u00a0<strong>eighth anniversary of GST offers more than a moment of celebration, it provides a critical opportunity to reinforce the GST regime<\/strong>\u00a0as a dynamic instrument not just of economic efficiency, but also of social responsibility.<\/li>\n<\/ul>\n<h2 class=\"feed_item_title\"><strong>GST Reform and Unfinished Business in Tobacco Control FAQs<\/strong><\/h2>\n<p><b>Q1.<\/b><span style=\"font-weight: 400;\"> When was GST implemented in India?<\/span><span style=\"font-weight: 400;\"><br \/>\n<\/span> <b>Ans.<\/b><span style=\"font-weight: 400;\"> GST was implemented in India on July 1, 2017.<\/span><span style=\"font-weight: 400;\"><br \/>\n<\/span><\/p>\n<p><b>Q2.<\/b><span style=\"font-weight: 400;\"> What major issue exists in GST\u2019s approach to tobacco taxation?<\/span><span style=\"font-weight: 400;\"><br \/>\n<\/span> <b>Ans.<\/b><span style=\"font-weight: 400;\"> The major issue is that GST has not significantly increased taxes on tobacco products, making them more affordable and undermining public health goals.<\/span><span style=\"font-weight: 400;\"><br \/>\n<\/span><\/p>\n<p><b>Q3.<\/b><span style=\"font-weight: 400;\"> What is the WHO&#8217;s recommended tax burden on tobacco products?<\/span><span style=\"font-weight: 400;\"><br \/>\n<\/span> <b>Ans.<\/b><span style=\"font-weight: 400;\"> The World Health Organization recommends that the total tax burden on tobacco products should be at least 75% of the retail price.<\/span><span style=\"font-weight: 400;\"><br \/>\n<\/span><\/p>\n<p><b>Q4.<\/b><span style=\"font-weight: 400;\"> Why are specific excise taxes preferred for tobacco?<\/span><span style=\"font-weight: 400;\"><br \/>\n<\/span> <b>Ans.<\/b><span style=\"font-weight: 400;\"> Specific excise taxes are preferred because they are more effective in reducing tobacco consumption and are less vulnerable to industry price manipulation.<\/span><span style=\"font-weight: 400;\"><br \/>\n<\/span><\/p>\n<p><b>Q5.<\/b><span style=\"font-weight: 400;\"> What key reform is suggested for tobacco taxation under GST?<\/span><span style=\"font-weight: 400;\"><br \/>\n<\/span> <b>Ans.<\/b><span style=\"font-weight: 400;\"> It is suggested that the GST rate on tobacco products be raised to the peak rate of 40%, along with a substantial increase in specific excise duties.<\/span><\/p>\n<p><strong>Source: <a href=\"https:\/\/www.thehindu.com\/opinion\/op-ed\/gst-reform-and-unfinished-business-in-tobacco-control\/article69756459.ece#:~:text=Increasing%20GST%20rates%20to%20the,use%20and%20strengthening%20fiscal%20consolidation.\" target=\"_blank\" rel=\"noopener nofollow\">The Hindu<\/a><\/strong><\/p>\n<hr \/>\n<h2 class=\"feed_item_title\"><strong>In a Perilous World, India Must Read the Tea Leaves Well<\/strong><\/h2>\n<div class=\"feed_item_content\">\n<h3><strong>Context<\/strong><\/h3>\n<ul>\n<li><strong>India\u2019s foreign policy<\/strong>, once celebrated for its strategic balance and nuanced diplomacy, is\u00a0<strong>now confronting a profound existential crisis.<\/strong><\/li>\n<li>From the intensifying China-Pakistan nexus to the escalating Israel-Iran conflict,\u00a0<strong>the assumptions that underpinned India\u2019s foreign policy for decades are now being severely tested.<\/strong><\/li>\n<li>Therefore,\u00a0<strong>it is important to examine the multiple dimensions of the current crisis<\/strong>, critique India&#8217;s recent foreign policy choices, and propose key recalibrations to secure its strategic future.<\/li>\n<\/ul>\n<h3><strong>Multiple Dimensions of the Current Crisis in India\u2019s Foreign Policy<\/strong><\/h3>\n<ul>\n<li><strong>The Breakdown of Strategic Equilibrium<\/strong>\n<ul>\n<li>India&#8217;s foreign policy was\u00a0<strong>traditionally designed to balance relationships across ideological and strategic divides.<\/strong><\/li>\n<li>However,\u00a0<strong>recent events have disrupted this delicate equilibrium.<\/strong>\u00a0The re-election of Donald Trump and his Make America Great Again doctrine, previously perceived as a boon for Indo-U.S. relations, has taken an unpredictable turn.<\/li>\n<li><strong>Trump\u2019s claim to have mediated a ceasefire<\/strong>\u00a0between India and Pakistan, endorsed publicly by Pakistan\u2019s military leadership but denied by India,\u00a0<strong>has placed New Delhi on a potential collision course with Washington.<\/strong><\/li>\n<\/ul>\n<\/li>\n<li><strong>Strategic Ambiguity in West Asia: A Failing Doctrine<\/strong>\n<ul>\n<li>India&#8217;s\u00a0<strong>policy of equidistance between Israel and Iran is another pillar now crumbling<\/strong>\u00a0under the weight of international realignments.<\/li>\n<li>The\u00a0<strong>recent Israel-Iran conflict<\/strong>, which escalated dramatically following Israel\u2019s targeted attacks on Iranian nuclear sites with American support,\u00a0<strong>represents a significant shift in the global security landscape.<\/strong><\/li>\n<li>The\u00a0<strong>use of the GBU-57 bunker-buster bombs<\/strong>\u00a0by the U.S. marks a\u00a0<strong>dangerous normalisation of the nuclear discourse in international politics.<\/strong><\/li>\n<li><strong>India\u2019s non-committal stance<\/strong>, issuing vague calls for restraint,\u00a0<strong>has rendered it largely irrelevant in the debate.<\/strong><\/li>\n<li><strong>Worse, it risks alienating both Israel and Iran,<\/strong>\u00a0undermining years of diplomatic effort aimed at preserving strategic autonomy in West Asia.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Neutrality: A Strategic Liability<\/strong>\n<ul>\n<li>In the present geopolitical climate,\u00a0<strong>India\u2019s long-standing posture of neutrality is increasingly being viewed as indecision<\/strong>\u00a0or even weakness.<\/li>\n<li>With mounting threats on its borders and little global support during the India, Pakistan conflict,\u00a0<strong>New Delhi is discovering the limitations of non-alignment in a world leaning heavily toward hard power.<\/strong><\/li>\n<li>Despite its aspirations to lead the Global South, India has found few allies when needed most.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h3><strong>The China Factor<\/strong><\/h3>\n<ul>\n<li><strong>China-Pakistan Nexus: A Growing Threat<\/strong>\n<ul>\n<li>Perhaps the\u00a0<strong>most pressing threat\u00a0<\/strong>to India&#8217;s national security comes from the\u00a0<strong>deepening military and strategic ties between China and Pakistan.<\/strong><\/li>\n<li>The\u00a0<strong>India-Pakistan conflict in May should not be viewed as an isolated incident<\/strong>\u00a0but as a harbinger of deeper, more sustained pressure.<\/li>\n<li><strong>China&#8217;s infusion of advanced military technologies<\/strong>, such as the J-10C and JF-17 fighters into Pakistan\u2019s arsenal, and its integration into Pakistan\u2019s defence planning systems,\u00a0<strong>presents a complex and evolving challenge.<\/strong><\/li>\n<li>This\u00a0<strong>partnership is not merely transactional but strategically symbiotic<\/strong>, aiming to encircle and constrain India\u2019s regional influence.<\/li>\n<\/ul>\n<\/li>\n<li><strong>China&#8217;s Strategic Vision: Reading Between the Lines<\/strong>\n<ul>\n<li>China recently released white paper on\u00a0<strong>National Security in the New Era<\/strong>\u00a0which offers revealing insights into its strategic worldview.<\/li>\n<li>By framing development and security as two wings of a single bird,\u00a0<strong>China articulates a doctrine that places technological and supply chain security at the heart<\/strong>\u00a0of its national strategy.<\/li>\n<li>I<strong>ndia would do well to study these documents<\/strong>\u00a0with the same seriousness it reserves for overt military threats.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h3><strong>The Way Forward<\/strong><\/h3>\n<ul>\n<li><strong>Lessons from Global Military Strategy<\/strong>\n<ul>\n<li>India must\u00a0<strong>urgently assess its own preparedness<\/strong>\u00a0for protracted and technologically complex conflicts.<\/li>\n<li>Drawing lessons from the Russia-Ukraine war and the UK\u2019s defence capability audit,\u00a0<strong>India needs a comprehensive reassessment of its defence posture.<\/strong><\/li>\n<li>This\u00a0<strong>includes evaluating its ammunition reserves, modernising its cyber and electromagnetic warfare infrastructure<\/strong>, and prioritizing artificial intelligence, drone countermeasures, and loitering munitions.<\/li>\n<li>A\u00a0<strong>piecemeal or reactive approach will no longer suffice<\/strong>\u00a0in an era of hybrid warfare and high-speed escalations.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Recalibrating India\u2019s Foreign Policy: A Strategic Imperative<\/strong>\n<ul>\n<li>To navigate this uncertain terrain,\u00a0<strong>India must abandon outdated doctrines<\/strong>\u00a0and adopt a more pragmatic, assertive, and strategically consistent foreign policy.<\/li>\n<li>First, it\u00a0<strong>needs to move beyond moralistic calls<\/strong>\u00a0for restraint and actively engage in shaping regional security narratives.<\/li>\n<li>Second,\u00a0<strong>New Delhi must forge deeper security partnerships,<\/strong>\u00a0not only with Western powers but also with key Asian and African states, based on mutual defence, intelligence sharing, and technological cooperation.<\/li>\n<li>Third,\u00a0<strong>India must invest in credible hard power capabilities<\/strong>\u00a0while enhancing its diplomatic visibility in crisis zones like West Asia and the Indo-Pacific.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h3><strong>Conclusion<\/strong><\/h3>\n<ul>\n<li>The\u00a0<strong>continued reliance on non-alignment and neutrality has rendered India vulnerable\u00a0<\/strong>and strategically sidelined.<\/li>\n<li><strong>In the face of an aggressive China-Pakistan alliance,<\/strong>\u00a0a transactional and unpredictable United States, and rapidly shifting regional fault lines,\u00a0<strong>India must evolve its foreign policy from one rooted in moral posturing to one grounded in strategic realism.<\/strong><\/li>\n<li><strong>A clear-eyed recognition of global power dynamics<\/strong>\u00a0and a recalibration of its defence and diplomatic strategies are not just advisable,\u00a0<strong>they are essential for safeguarding India\u2019s sovereignty and global standing in the years to come.<\/strong><\/li>\n<\/ul>\n<h2 class=\"feed_item_title\"><strong>In a Perilous World, India Must Read the Tea Leaves Well FAQs<\/strong><\/h2>\n<p><b>Q1. <\/b><span style=\"font-weight: 400;\">What major threat does India face from its neighborhood?<\/span><span style=\"font-weight: 400;\"><br \/>\n<\/span><b>Ans. <\/b><span style=\"font-weight: 400;\">India faces a significant threat from the growing military and strategic partnership between China and Pakistan.<\/span><\/p>\n<p><b>Q2. <\/b><span style=\"font-weight: 400;\">Why is India&#8217;s neutrality in the Israel-Iran conflict criticised?<\/span><span style=\"font-weight: 400;\"><br \/>\n<\/span><b>Ans. <\/b><span style=\"font-weight: 400;\">India&#8217;s neutrality is criticized because it has made the country appear indecisive and has weakened its influence in West Asia.<\/span><\/p>\n<p><b>Q3. <\/b><span style=\"font-weight: 400;\">How has Donald Trump&#8217;s foreign policy affected India?<\/span><span style=\"font-weight: 400;\"><br \/>\n<\/span><b>Ans.<\/b><span style=\"font-weight: 400;\"> Donald Trump&#8217;s foreign policy has disrupted India\u2019s diplomatic balance by favoring Pakistan and challenging India\u2019s version of recent regional events.<\/span><\/p>\n<p><b>Q4. <\/b><span style=\"font-weight: 400;\">What lesson should India learn from the UK and Ukraine?<\/span><span style=\"font-weight: 400;\"><br \/>\n<\/span><b>Ans.<\/b><span style=\"font-weight: 400;\"> India should learn the importance of assessing its defense readiness and modernizing its military infrastructure to prepare for future conflicts.<\/span><\/p>\n<p><b>Q5.<\/b><span style=\"font-weight: 400;\"> What is the key recommendation for India&#8217;s foreign policy?<br \/>\n<b>Ans. <\/b>The key recommendation is that India should shift from moral posturing to a more pragmatic and strategically realistic foreign policy approach.<br \/>\n<\/span><\/p>\n<p><strong>Source: <a href=\"https:\/\/www.thehindu.com\/opinion\/lead\/in-a-perilous-world-india-must-read-the-tea-leaves-well\/article69756492.ece\" target=\"_blank\" rel=\"noopener nofollow\">The Hindu<\/a><\/strong><\/p>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Daily Editorial Analysis 1 July 2025 by Vajiram &#038; Ravi covers key editorials from The Hindu &#038; Indian Express with UPSC-focused insights and relevance.<\/p>\n","protected":false},"author":11,"featured_media":50653,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[138],"tags":[141,882,909],"class_list":{"0":"post-52988","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-daily-editorial-analysis","8":"tag-daily-editorial-analysis","9":"tag-the-hindu-editorial-analysis","10":"tag-the-indian-express-analysis","11":"no-featured-image-padding"},"acf":[],"_links":{"self":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/52988","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/users\/11"}],"replies":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/comments?post=52988"}],"version-history":[{"count":0,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/52988\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media\/50653"}],"wp:attachment":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media?parent=52988"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/categories?post=52988"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/tags?post=52988"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}