{"id":63840,"date":"2025-09-17T11:12:08","date_gmt":"2025-09-17T05:42:08","guid":{"rendered":"https:\/\/vajiramandravi.com\/current-affairs\/?p=63840"},"modified":"2025-10-07T13:02:14","modified_gmt":"2025-10-07T07:32:14","slug":"daily-editorial-analysis-17-september-2025","status":"publish","type":"post","link":"https:\/\/vajiramandravi.com\/current-affairs\/daily-editorial-analysis-17-september-2025\/","title":{"rendered":"Daily Editorial Analysis 17 September 2025"},"content":{"rendered":"<h2><strong>GST 2.0 \u2014 Short-Term Pain, Possible Long-Term Gain<\/strong><\/h2>\n<h3><strong>Context<\/strong><\/h3>\n<ul>\n<li>The <strong>Goods and Services Tax (GST),<\/strong> introduced with the objective of creating a destination-based tax system, sought to improve efficiency by ensuring that the incidence of taxation fell on final consumers while input taxes were rebated.<\/li>\n<li>Despite its transformative intent<strong>, the GST system initially suffered from multiple rates<\/strong>, inverted duty structures, and high compliance costs.<\/li>\n<li><strong>The new rate structure, effective from September 22, 2025, represents a significant overhaul, with implications<\/strong> for consumption, production, government revenue, and macroeconomic stability.<\/li>\n<\/ul>\n<h3><strong>Evolution of the New GST Structure and Its Revenue Implications<\/strong><\/h3>\n<ul>\n<li>\n<h4><strong>Evolution of the New GST Structure<\/strong><\/h4>\n<ul>\n<li>The 2025 reform <strong>eliminated the 12% and 28% slabs<\/strong>, consolidating most goods and services under 0%, 5%, and 18%, while introducing <strong>a 40% demerit rate <\/strong>for luxury and sin goods.<\/li>\n<li>Special <strong>concessional rates below 5% were retained<\/strong> for certain essential commodities.<\/li>\n<li>These changes <strong>particularly benefit employment-intensive sectors<\/strong> such as textiles, automobiles, consumer electronics, healthcare, and food products.<\/li>\n<li><strong>On the production side<\/strong>, agriculture-related industries, fertilisers, machinery, and renewable energy, <strong>stand to gain from lower input costs.<\/strong><\/li>\n<li>Out of 546 goods subjected to revision, <strong>80% experienced rate reductions, reflecting a pro-consumer and pro-growth stance. <\/strong><\/li>\n<li>However, <strong>the economic consequences extend beyond lower prices<\/strong> and higher demand; they also challenge fiscal stability.<\/li>\n<\/ul>\n<\/li>\n<li>\n<h4><strong>Revenue Implications<\/strong><\/h4>\n<ul>\n<li><strong>GST revenue (R) is determined as the product of the tax rate (r) and the tax base (E),<\/strong> which itself depends on pre-tax prices and quantities consumed.<\/li>\n<li><strong>Rate reductions lower post-tax prices<\/strong>, encouraging higher demand, but the increase in quantity demanded is not proportionate to the fall in tax rates. As a result, overall revenue tends to decline.<\/li>\n<li>Calibrations suggest that across realistic demand elasticities, <strong>revenues will fall.<\/strong> For zero-rated goods, revenues vanish altogether.<\/li>\n<li>Even <strong>for goods shifted to the 40% bracket, the apparent increase largely reflects the integration of the compensation cess<\/strong>, rather than a genuine hike.<\/li>\n<li>Estimates of revenue loss vary, with the Ministry of Finance projecting \u20b948,000 crore annually, while other assessments suggest higher figures.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h3><strong>Shortcomings of of GST Reform<\/strong><\/h3>\n<ul>\n<li>\n<h4><strong>Income and Consumption Effects<\/strong><\/h4>\n<ul>\n<li>A key implication of the reform is the <strong>redistribution of benefits to consumers.<\/strong><\/li>\n<li>Lower GST translates into higher disposable incomes, especially for those consuming necessities in the 5% bracket.<\/li>\n<li><strong>Since demand elasticity for such goods is low<\/strong>, households may divert additional income toward higher-rated categories (18% and 40%), such as comforts and luxuries.<\/li>\n<li><strong>Over time, this could augment revenues<\/strong>, but in the short run, the government faces a pronounced revenue shortfall.<\/li>\n<\/ul>\n<\/li>\n<li>\n<h4><strong>Efficiency and Cascading Effects<\/strong><\/h4>\n<ul>\n<li>While GST was designed to eliminate cascading, <strong>the revised structure does not fully achieve this aim. <\/strong><\/li>\n<li>Exempt goods, <strong>by disallowing input tax credits (ITC),<\/strong> embed input taxes into final prices.<\/li>\n<li><strong>Even in the 5% category, inputs taxed at 18% create administrative bottlenecks<\/strong> in claiming ITC.<\/li>\n<li><strong>Such inefficiencies undermine the reform\u2019s ability<\/strong> to fully rationalise resource allocation and improve competitiveness.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h3><strong>Macroeconomic and Fiscal Challenges<\/strong><\/h3>\n<ul>\n<li>The reforms also intersect with India\u2019s broader fiscal position.<\/li>\n<li>Nominal GDP growth in the first quarter of 2025-26 stood at 8.8%, below the budgeted 10.1%. With inflation subdued, achieving revenue targets becomes harder.<\/li>\n<li><strong>Direct taxes contracted by 4.3% in the early months of the year<\/strong>, contrasting sharply with robust growth in the previous period.<\/li>\n<li>The <strong>Union Budget had already anticipated a revenue forgone figure of \u20b91 lakh crore<\/strong>, largely due to personal income tax reforms.<\/li>\n<li><strong>Additional GST revenue losses<\/strong> could push gross tax receipts <strong>significantly below projections.<\/strong><\/li>\n<li>While higher Reserve Bank of India dividends may provide partial relief, <strong>the government faces the difficult choice between curbing expenditure and widening the fiscal deficit.<\/strong><\/li>\n<li>States, too, will encounter similar dilemmas, with potential recourse to borrowing or expenditure cuts, both of which could stifle growth.<\/li>\n<li><strong>Monetary interventions<\/strong>, through repo rate cuts or liquidity injections, <strong>risk fuelling inflation and forcing monetisation of deficits, a path fraught with limitations.<\/strong><\/li>\n<\/ul>\n<h3><strong>Growth Prospects and Structural Limits<\/strong><\/h3>\n<ul>\n<li>Although tax rate reductions may temporarily stimulate demand, <strong>this strategy cannot sustainably drive long-term growth. <\/strong><\/li>\n<li><strong>India\u2019s potential growth rate ultimately depends on investment and savings<\/strong>, alongside the efficiency of capital use (incremental capital-output ratio).<\/li>\n<li>Thus, <strong>while GST reforms may provide short-term relief to consumers <\/strong>and production sectors, <strong>enduring growth requires structural improvements in investment capacity and productivity<\/strong>.<\/li>\n<\/ul>\n<h3><strong>Conclusion<\/strong><\/h3>\n<ul>\n<li>The 2025 GST reforms <strong>represent a bold attempt to simplify the tax structure<\/strong> and stimulate economic activity.<\/li>\n<li>They promise lower prices, higher disposable incomes, and sectoral gains, particularly in employment-intensive industries, <strong>however, the fiscal cost is substantial,<\/strong> with immediate revenue shortfalls threatening both central and state budgets.<\/li>\n<li>Moreover, <strong>unresolved inefficiencies such as cascading and ITC bottlenecks continue to limit the system\u2019s effectiveness.<\/strong><\/li>\n<li>Ultimately, <strong>GST reforms can complement but not substitute for broader strategies centred on savings,<\/strong> investments, and productivity growth.<\/li>\n<\/ul>\n<h3><strong>GST 2.0 \u2014 Short-Term Pain, Possible Long-Term Gain FAQs<\/strong><\/h3>\n<p><strong>\u00a0<\/strong><strong>Q1. <\/strong>What was the main objective of introducing GST in India?<br \/>\n<strong>Ans. <\/strong>The main objective of introducing GST was to create a destination-based tax system that reduced cascading, ensured taxes fell on final consumers, and promoted efficiency in consumption and production.<\/p>\n<p><strong>Q2.<\/strong> Which sectors are expected to benefit most from the 2025 GST reforms?<br \/>\n<strong>Ans. <\/strong>Employment-intensive sectors such as textiles, automobiles, consumer electronics, healthcare, and food products are expected to benefit most.<\/p>\n<p><strong>Q3. <\/strong>Why are GST revenues expected to decline after the rate reductions?<br \/>\n<strong>Ans. <\/strong>GST revenues are expected to decline because the fall in tax rates reduces post-tax prices, but the resulting increase in demand is not large enough to compensate for the revenue loss.<\/p>\n<p><strong>Q4. <\/strong>How might lower GST rates affect consumers\u2019 disposable incomes?<br \/>\n<strong>Ans. <\/strong>Lower GST rates increase consumers\u2019 disposable incomes, allowing them to spend more, especially on higher-taxed goods such as comforts and luxuries.<\/p>\n<p><strong>Q5. <\/strong>What long-term factor is more important for India\u2019s growth than tax rate reductions?<br \/>\n<strong>Ans. <\/strong>In the long term, India\u2019s growth depends more on investment and savings rates, along with the efficient use of capital, than on tax rate reductions.<\/p>\n<p><strong>Source: <\/strong><a href=\"https:\/\/www.thehindu.com\/opinion\/lead\/gst-20-short-term-pain-possible-long-term-gain\/article70057932.ece#:~:text=The%20way%20GST%20evolved%20in,for%20some%20categories%20of%20goods.\" target=\"_blank\" rel=\"nofollow noopener\">The Hindu<\/a><\/p>\n<hr \/>\n<h2><strong>\u2018Judicial Experimentalism\u2019 Versus the Right to Justice<\/strong><\/h2>\n<h3><strong>Context:<\/strong><\/h3>\n<ul>\n<li>In July 2025, in <strong><em>Shivangi Bansal vs Sahib Bansal<\/em><\/strong>, the Supreme Court upheld Allahabad High Court\u2019s 2022 guidelines in <strong><em>Mukesh Bansal vs State of U.P.<\/em><\/strong> to curb misuse of Section 498A IPC (now Section 85 of the Bharatiya Nyaya Sanhita).<\/li>\n<li>The guidelines mandate a two-month \u2018cooling period\u2019 after an FIR or complaint, during which cases are referred to a Family Welfare Committee.<\/li>\n<li>However, critics argue this delays victims\u2019 access to justice and undermines the autonomy of criminal justice agencies.<\/li>\n<li>This article highlights the Supreme Court\u2019s 2025 ruling in <em>Shivangi Bansal vs Sahib Bansal<\/em>, its endorsement of a \u2018cooling period\u2019 for Section 498A cases, the statutory and judicial safeguards already in place, and why critics argue the ruling undermines victims\u2019 timely access to justice.<\/li>\n<\/ul>\n<h3><strong>The Basis of Safeguards under Section 498A<\/strong><\/h3>\n<ul>\n<li>Section <strong>498A was enacted to punish cruelty against women in matrimonial settings<\/strong>, but courts have noted its misuse through frivolous FIRs and indiscriminate arrests.<\/li>\n<li>To address this, safeguards were introduced. In <em>Lalita Kumari<\/em>, the Supreme Court placed matrimonial disputes under \u2018preliminary inquiry\u2019 before FIR registration, a principle later reinforced in recent criminal law reforms.<\/li>\n<li>Further, to curb arbitrary arrests, two measures were established:\n<ul>\n<li>the 2008 CrPC amendment, which mandated the \u2018principle of necessity\u2019 in arrests; and\n<ul>\n<li>The <strong>principle of necessity<\/strong> in arrests dictates that an arrest should only be made when it is absolutely necessary to do so.<\/li>\n<\/ul>\n<\/li>\n<li>the Supreme Court\u2019s ruling in <em>Arnesh Kumar<\/em> (2014), which required police to follow a checklist and issue a \u2018notice for appearance\u2019 instead of immediate arrests.<\/li>\n<\/ul>\n<\/li>\n<li>Later, in <em>Satender Kumar Antil<\/em> (2022), the Court directed that arrests made in violation of these safeguards must lead to bail.<\/li>\n<li>Together, these measures aim to balance protection for women with safeguards against misuse.<\/li>\n<\/ul>\n<h3><strong>Section 498A as an \u2018Arrest Offence\u2019<\/strong><\/h3>\n<ul>\n<li>The NCRB report <em>Crimes in India<\/em> shows Section <strong>498A was among the top five \u201chighest arrest\u201d offences until 2016, later moving to the top 10<\/strong>.<\/li>\n<li>While cases rose from 1,13,403 in 2015 to 1,40,019 in 2022, arrests declined from 1,87,067 to 1,45,095.<\/li>\n<li>This reflected the effect of statutory and judicial safeguards, which balanced protecting the accused\u2019s liberty without undermining victims\u2019 access to justice.<\/li>\n<\/ul>\n<h3><strong>Concerns Over the \u2018Cooling Period\u2019<\/strong><\/h3>\n<ul>\n<li>The recent <strong>introduction of a two-month \u201ccooling period<\/strong>\u201d with referral to a Family Welfare Committee (FWC) may appear ambitious but lacks statutory authority and jurisdictional clarity.<\/li>\n<li>It delays action even after FIRs are filed, worsening the victim\u2019s plight and undermining prompt justice.<\/li>\n<li>This approach mirrors the Supreme Court\u2019s <em>Rajesh Sharma<\/em> (2017) ruling, which mandated FWCs and delayed proceedings for a month.<\/li>\n<li>These directions were criticised as regressive and beyond judicial competence, leading to their reversal in <em>Social Action Forum for Manav Adhikar<\/em> (2018).<\/li>\n<li>That three-judge Bench restored victims\u2019 immediate access to justice and reaffirmed the role of criminal justice agencies in handling matrimonial cruelty cases.<\/li>\n<\/ul>\n<h3><strong>Need to Revisit the Ruling<\/strong><\/h3>\n<ul>\n<li>The Supreme Court must reconsider its ruling, as concerns over misuse of Section 498A and police excesses have already been addressed through statutory amendments and judicial safeguards.<\/li>\n<li>Forwarding complaints to Family Welfare Committees goes beyond legislative intent, undermines the autonomy of criminal justice agencies, and most importantly, delays and weakens the victim\u2019s access to timely justice.<\/li>\n<\/ul>\n<h3><strong>\u2018Judicial Experimentalism\u2019 Versus the Right to Justice FAQs<\/strong><\/h3>\n<p><strong>Q1.<\/strong> What was the Supreme Court\u2019s ruling in Shivangi Bansal vs Sahib Bansal (2025)?<\/p>\n<p><strong>Ans. <\/strong>The Court upheld Allahabad High Court\u2019s guidelines mandating a two-month \u201ccooling period\u201d in Section 498A cases, with referral to a Family Welfare Committee.<\/p>\n<p><strong>Q2.<\/strong> Why was Section 498A enacted originally?<\/p>\n<p><strong>Ans. <\/strong>Section 498A was introduced to punish cruelty against women in marriages, but its misuse through false FIRs and indiscriminate arrests prompted judicial and statutory safeguards.<\/p>\n<p><strong>Q3.<\/strong> What safeguards were introduced against misuse of Section 498A?<\/p>\n<p><strong>Ans. <\/strong>Key safeguards include preliminary inquiry before FIR registration (Lalita Kumari), the 2008 CrPC amendment requiring necessity in arrests, and Arnesh Kumar (2014) guidelines.<\/p>\n<p><strong>Q4.<\/strong> How did arrests under Section 498A change between 2015 and 2022?<\/p>\n<p><strong>Ans. <\/strong>While cases increased from 1,13,403 to 1,40,019, arrests fell from 1,87,067 to 1,45,095, reflecting the impact of judicial and statutory safeguards.<\/p>\n<p><strong>Q5.<\/strong> Why do critics oppose the \u2018cooling period\u2019?<\/p>\n<p><strong>Ans. <\/strong>Critics argue it lacks statutory authority, delays justice, mirrors the regressive Rajesh Sharma ruling of 2017, and undermines victims\u2019 right to immediate remedies.<\/p>\n<p><strong>\u00a0<\/strong><strong>Source:<\/strong> <a href=\"https:\/\/www.thehindu.com\/opinion\/op-ed\/judicial-experimentalism-versus-the-right-to-justice\/article70057963.ece\" target=\"_blank\" rel=\"nofollow noopener\">TH<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Daily Editorial Analysis 17 September 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":20,"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-63840","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\/63840","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\/20"}],"replies":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/comments?post=63840"}],"version-history":[{"count":0,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/63840\/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=63840"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/categories?post=63840"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/tags?post=63840"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}