What’s in Today’s Article?

• Gold Monetisation Scheme Latest News
• Gold Monetisation Scheme (GMS): An Overview
• Government and RBI on Gold Monetisation Scheme Closure
• Gold Mobilised Under the Gold Monetisation Scheme
• Status of Other Gold Schemes in India
• Gold Monetisation Scheme FAQ’s

Gold Monetisation Scheme Latest News

• The government has discontinued the Gold Monetisation Scheme’s medium- and long-term deposits from March 26, citing market conditions and scheme performance. 
• However, short-term deposits will continue at the discretion of banks based on commercial viability.

Gold Monetisation Scheme (GMS): An Overview

• Introduced in November 2015, the GMS aimed to make idle gold productive by allowing individuals and institutions to sell or deposit gold with banks. 
• The goal was to integrate gold into the formal economy, reduce gold imports, and lower the current account deficit. 
• It was a revamped version of the earlier Gold Deposit Scheme.

Key Features

• Allowed deposits from households, trusts, and institutions.
• Minimum deposit: 10 gm of raw gold (bars, coins, jewellery without stones/metals).
• No maximum deposit limit.

Three Deposit Categories

• Short-term bank deposits (1-3 years) – Managed by banks.
• Medium-term government deposits (5-7 years) – Managed by the government.
• Long-term government deposits (12-15 years) – Managed by the government.

Gold Monetisation Scheme: Interest Rates

• Short-Term Deposits
  • Interest rates were determined by banks based on international lease rates, market conditions, and other costs.
  • Interest was borne by the banks.
• Medium- and Long-Term Deposits
  • Interest rates were set by the government in consultation with the RBI.
  • Interest was paid by the Central government.
  • Medium-term deposits (5-7 years): 2.25% per annum
  • Long-term deposits (12-15 years): 2.5% per annum

Government and RBI on Gold Monetisation Scheme Closure

• Discontinuation of the Scheme
  • The Ministry of Finance announced the discontinuation of Medium- and Long-Term Government Deposits (MLTGD) under the GMS from March 26, 2025.
  • Only short-term deposits managed by banks will continue.
  • From March 26, 2025, no new deposits will be accepted at collection centers, testing agents, or designated bank branches.
• Impact on Existing Deposits
  • Existing medium- and long-term deposits remain unaffected and will continue until maturity unless withdrawn prematurely.
  • The RBI has not issued a separate release but has updated the scheme details on its website.
• RBI Guidelines
  • The RBI will issue detailed guidelines regarding the scheme’s closure.
  • It confirmed that the renewal of medium- and long-term deposits has been discontinued from March 26, 2025.

Gold Mobilised Under the Gold Monetisation Scheme

• Total Gold Collected - As of November 2024, a total of 31,164 kg of gold was mobilised under the scheme.
• Breakdown by Deposit Type
  • Short-term deposits: 7,509 kg
  • Medium-term deposits: 9,728 kg
  • Long-term deposits: 13,926 kg
• Depositor Participation - Total depositors: 5,693
• Gold Collection from Different Sources
  • From individuals/HUFs (FY 2016-17 & 2017-18): 1,134 kg
  • From temples, trusts, mutual funds, gold ETFs, and firms: 10,872 kg

Status of Other Gold Schemes in India

• Gold Monetisation Scheme (GMS) Closure
  • The GMS is the second gold-related scheme to be discontinued after the halt on sovereign gold bonds.
  • The decision comes amid a sharp rise in gold prices, which increased by 41.5% from ₹63,920 per 10 gm (Jan 1, 2024) to ₹90,450 per 10 gm (March 25, 2025).
• Sovereign Gold Bonds (SGB) Discontinued
  • The government stopped fresh issuance of sovereign gold bonds and did not announce any new tranche in Budget 2025-26.
  • Reason: SGBs were considered a high-cost borrowing for the government.
• Government’s Gold Strategy
  • Officials had earlier stated that SGBs aimed to boost gold investment, but the cut in gold import duty (Budget 2024-25) already aligned with this goal and helped increase demand.

Gold Monetisation Scheme FAQs

Q1. What is the Gold Monetisation Scheme?

Ans. A scheme launched in 2015 to allow individuals and institutions to deposit gold with banks for interest.

Q2. Why was the Gold Monetisation Scheme discontinued?

Ans. The government cited market conditions and low participation, leading to the scheme’s closure from March 26, 2025.

Q3. Will existing gold deposits be affected?

Ans. No, existing medium- and long-term deposits will remain valid until maturity unless withdrawn prematurely.

Q4. What happens to short-term deposits?

Ans. Short-term gold deposits will continue based on banks’ commercial viability and interest rates.

Q5. How much gold was mobilized under the scheme?

Ans. As of November 2024, 31,164 kg of gold was mobilized through various deposit categories.

Source: IE

What’s in Today’s Article?

• Goods and Services Tax Latest News
• Background
• Compensation to States Remains a Key Concern
• Compliance Complexities and Technical Glitches
• Delays in Refunds and Their Economic Impact
• Need for Institutional Reforms
• Way Forward: Recommendations for GST 2.0
• Conclusion
• GST 2.0 and PAC Observations FAQs

Goods and Services Tax Latest News

• In a report to Parliament, its Public Accounts Committee (PAC) has sought a comprehensive review of the Goods and Services Tax (GST) framework.

Background

• India's Goods and Services Tax (GST), introduced in 2017, was envisioned as a game-changer to unify India’s fragmented indirect tax system. 
• However, nearly eight years later, a Parliamentary report has highlighted deep-rooted issues in GST implementation that impact businesses, State finances, and the overall efficiency of the tax system.
• The Public Accounts Committee (PAC), in its latest report to Parliament, has called for a comprehensive overhaul of the GST system, a “GST 2.0”, to reduce complexity, improve transparency, and enhance ease of compliance.

Compensation to States Remains a Key Concern

• One of the biggest concerns flagged by the PAC is the lack of transparency and audit in the disbursal of GST compensation to States. 
• The Comptroller and Auditor General (CAG) has not audited the GST Compensation Fund for over six years, reportedly due to the non-submission of proper financial data by the Ministry of Finance.
• This has hampered the release of compensation amounts to several States that heavily rely on these funds, especially industrial States like Tamil Nadu and Karnataka, which feared revenue loss under GST.
• Further, a review of 10,667 cases showed 2,447 inconsistencies, and around ₹32,577 crore remains pending, underscoring the urgency for better fund management and auditing mechanisms.

Compliance Complexities and Technical Glitches

• The PAC noted that several procedural inefficiencies continue to plague GST compliance, leading to either delayed revenue inflow to the government or cash flow constraints for businesses.
• Key issues include:
  • Confusion over tax jurisdictions delaying refund.
  • Unjustified cancellation of GST registrations: Of 14,998 cases studied, show-cause notices were not issued in 6,353 instances, violating legal norms
  • Registration challenges: Taxpayers are not allowed to withdraw or modify applications, and in some cases, registrations were rejected without clear reasons
  • Delays in Input Tax Credit (ITC) refunds, affecting MSMEs and exporters who rely on regular cash flows
• The Ministry claimed that some processes have been automated, but the Committee expressed concern over the lack of robust documentation and limited manual oversight, questioning the effectiveness of the automated systems.

Delays in Refunds and Their Economic Impact

• The report specifically emphasised the inadequacy of the refund mechanism, with businesses experiencing long waiting periods, affecting working capital and daily operations, especially for Micro, Small, and Medium Enterprises (MSMEs) and exporters.
• The Finance Ministry responded by promising improvements, including clearer timelines for refund processing and more real-time updates on the status of refund applications. 
• The upcoming ‘Antarang Portal’ is expected to centralise filing, tracking, and documentation to enhance transparency.

Need for Institutional Reforms

• The report also highlighted the absence of a functional GST Appellate Tribunal, causing legal bottlenecks and prolonged pendency in dispute resolution. 
• As of March 2022, over 19,730 cases involving tax implications of ₹1.45 lakh crore were pending investigation.
• Legal experts argue that these unresolved cases, many of which have been pending for more than two years, hamper both compliance and business confidence.

Way Forward: Recommendations for GST 2.0

• The Public Accounts Committee has recommended the government undertake a comprehensive stakeholder consultation to roll out GST 2.0, focusing on:
  • Simplifying compliance by removing unnecessary procedures
  • Ensuring timely audits and release of compensation to States
  • Establishing the long-awaited GST Appellate Tribunal
  • Improving digital platforms for registration, refunds, and returns
  • Prioritising ITC refund processing, especially for MSMEs and exporters
• A tiered approach could be explored to allow differentiated compliance requirements for large corporates, mid-sized firms, and small traders to make the system more inclusive.

Conclusion

• GST was introduced as India’s biggest indirect tax reform, but implementation gaps and systemic inefficiencies have created avoidable hurdles for businesses and State governments alike. 
• While digital initiatives like the Antarang Portal and automation of notices are steps in the right direction, only a comprehensive revamp backed by regular audits, robust grievance redressal, and stakeholder consultation can unlock GST’s true potential.

GST 2.0 and PAC Observations FAQs

Q1. What is GST 2.0?

Ans. GST 2.0 is a proposed overhaul of the current GST framework to simplify compliance and improve efficiency.

Q2. Why is the GST Compensation Fund under scrutiny?

Ans. The fund has not been audited for over six years, affecting timely compensation to States.

Q3. What problems do businesses face with GST?

Ans. They face delays in refunds, issues with registration, and unjustified cancellation of GST numbers.

Q4. Who is most affected by GST inefficiencies?

Ans. MSMEs and exporters are particularly affected due to refund delays and complex documentation.

Q5. What reforms has the PAC recommended?

Ans. The PAC has called for GST 2.0 with simplified procedures, timely audits, better digital tools, and quicker dispute resolution mechanisms.

Source: TH

What’s in Today’s Article?

• Judicial transfers Latest News
• Transfer of High Court Judges: Constitutional Framework and Judicial Interpretation
• Criticisms of Judicial Transfers in India
• Striking Down of the NJAC: Reasons and Judicial Verdict
• Judicial transfers FAQ’s

Judicial transfers Latest News

• The Union government has notified the repatriation of Justice Yashwant Varma to the Allahabad High Court, following the Supreme Court Collegium’s recommendation. 
• His transfer comes amid allegations of charred currency notes being recovered from his residence after a fire, prompting Delhi High Court Chief Justice D.K. Upadhyaya to seek an in-house inquiry.

Transfer of High Court Judges: Constitutional Framework and Judicial Interpretation

• Article 222(1) of the Constitution empowers the President, in consultation with the Chief Justice of India (CJI), to transfer a judge from one High Court to another.

Judicial Evolution of Transfer Process

• First Judges Case (1981): The Supreme Court held that the President's consultation with the CJI did not require concurrence, affirming the executive’s primacy in judicial transfers.
• Second Judges Case (1993): Overturned the earlier ruling, institutionalizing the collegium system and granting the CJI primacy in transfer decisions. The Court emphasized that transfers must serve the public interest and enhance judicial administration.
• Third Judges Case (1998): Further refined the collegium system, mandating consultation with the four seniormost judges and seeking inputs from Supreme Court judges familiar with the concerned High Court.

Process of Transfer

• The collegium recommends the transfer.
• The Law Minister reviews and advises the Prime Minister.
• The Prime Minister forwards the recommendation to the President.
• Upon presidential approval, the transfer is formalized through a gazette notification.

Key Considerations

• The CJI must consult relevant judges and legal experts to prevent arbitrariness.
• A judge’s consent is not required for transfer.
• Judicial review of transfer decisions is limited to prevent external interference.

Criticisms of Judicial Transfers in India

• Concerns Over Judicial Independence
  • The International Commission of Jurists (ICJ) has raised concerns about increasing executive interference in judicial appointments and transfers, undermining judicial independence.
• Lack of Transparency and Accountability
  • Judicial transfers, often carried out without the affected judge’s consent, are justified on vague grounds like “public interest” and “better administration of justice.” 
  • This ambiguity makes it difficult to differentiate between legitimate and punitive transfers.
• Recommendations for Reform
  • The ICJ has suggested the establishment of a Judicial Council to oversee appointments and transfers based on transparent, objective, and predetermined criteria. 
  • It recommends that the council be composed mainly of judges, aligning with international standards of judicial independence.

Striking Down of the NJAC: Reasons and Judicial Verdict

• In 2014, the then government introduced the 99th Constitutional Amendment and the NJAC Act to replace the opaque collegium system for judicial appointments. 
• The NJAC was designed as an independent body to appoint Supreme Court and High Court judges.

Composition of the NJAC

• The NJAC was to be chaired by the CJI and included:
  • Two senior-most Supreme Court judges
  • Union Law Minister
  • Two eminent civil society members (one from SC/ST/OBC or a woman)
  • These members were nominated by a panel consisting of the CJI, Prime Minister, and Leader of the Opposition.

Political and Legal Challenges

• The amendment passed almost unanimously in Parliament and was ratified by 16 State legislatures.
• However, it was challenged in the Supreme Court, with critics arguing that the veto power granted to any two NJAC members—potentially including the Law Minister—could undermine judicial independence.

Supreme Court Verdict (2015)

• In October 2015, a five-judge Bench ruled (4:1) that the NJAC was unconstitutional, stating that it violated the basic structure of the Constitution, particularly judicial independence.
• The majority held that the Law Minister and non-judicial members could interfere with judicial appointments, compromising autonomy.
• Dissenting opinion by Justice Jasti Chelameswar: He criticized the collegium’s lack of transparency, arguing that NJAC could have prevented "unwholesome trade-offs" and "incestuous accommodations" between the judiciary and executive.
• The verdict restored the collegium system, reinforcing the judiciary’s primacy in appointments but leaving concerns over transparency unresolved.

Judicial Transfers FAQs

Q1. What is the process for transferring High Court judges?

Ans. The collegium recommends transfers, reviewed by the Law Minister, PM, and President before final approval.

Q2. Why was the NJAC struck down?

Ans. The Supreme Court ruled that NJAC violated judicial independence by allowing executive interference in appointments.

Q3. What are the criticisms of judicial transfers?

Ans. Lack of transparency, arbitrary decisions, and potential executive interference undermine judicial independence.

Q4. What role does the collegium system play?

Ans. The collegium, led by the Chief Justice of India, selects and transfers judges without government intervention.

Q5. What reforms have been proposed for judicial transfers?

Ans. Experts suggest a Judicial Council to ensure transparent, merit-based appointments and transfers.

Source: TH | CoI

What’s in Today’s Article?

• India-US Civil Nuclear Deal Latest News
• Key Developments in the India-US Civil Nuclear Deal
• Conditions and Safeguards of the Recent Deal
• Strategic and Diplomatic Significance
• Geopolitical and Economic Factors
• Future Prospects
• India’s Strategic Vision for SMRs
• Conclusion
• India-US Civil Nuclear Deal FAQs

India-US Civil Nuclear Deal Latest News

• The India-US civil nuclear deal, signed two decades ago, has taken a significant step forward with regulatory approval from the US Department of Energy (DoE).
• The approval allows US-based Holtec International to transfer Small Modular Reactor (SMR) technology to Indian private firms.

Key Developments in the India-US Civil Nuclear Deal

• US DoE authorisation:
  • Regulation involved: "10CFR810" (Part 810 of Title 10, US Atomic Energy Act, 1954).
  • Authorised recipients:
    • Holtec Asia (Holtec's Indian subsidiary).
    • Tata Consulting Engineers Ltd (TCE).
    • Larsen & Toubro Ltd (L&T).
• Excluded entities (pending Non-proliferation assurances):
  • Nuclear Power Corporation of India Limited (NPCIL).
  • National Thermal Power Corporation (NTPC).
  • Atomic Energy Regulatory Board (AERB).

Conditions and Safeguards of the Recent Deal

• Duration: 10 years (subject to 5-year reviews).
• Restrictions:
  • No retransfer of technology to other Indian entities or foreign countries without US consent.
  • Use only for peaceful nuclear activities under International Atomic Energy Agency (IAEA) safeguards.
  • No access to enrichment technology or Sensitive Nuclear Technology.
  • Prohibition on military or naval propulsion use.
• Reporting requirements: Holtec to file quarterly reports to DoE.

Strategic and Diplomatic Significance

• Revival of the 123 Civil Nuclear Agreement:
  • The agreement, signed in 2007, aimed at full civil nuclear cooperation, including enrichment and reprocessing.
  • Despite diplomatic progress, operational hurdles delayed implementation.
• India’s nuclear sector implications:
  • Technological advancements:
    • India’s civil nuclear programme has primarily relied on Pressurised Heavy Water Reactors (PHWRs).
    • Holtec’s SMRs use Pressurised Water Reactor (PWR) technology, which dominates global nuclear energy.
    • Opportunity to modernize India’s nuclear energy capabilities.
  • Private sector involvement:
    • Holtec’s collaboration with Indian firms could boost domestic manufacturing of SMR components.
    • The potential to position India in the global SMR supply chain.

Geopolitical and Economic Factors

• US-India collaboration vs. China’s SMR expansion:
  • China is aggressively expanding in the SMR domain, leveraging it for diplomatic influence in the Global South.
  • India-US collaboration could provide a counterbalance to China’s dominance in nuclear technology.
• Impact on US-India trade relations: Despite protectionist policies under previous US administrations, this deal signifies a commitment to technology transfer and economic cooperation.
• Challenges in implementation:
  • India’s Civil Liability for Nuclear Damage Act (2010) has deterred foreign investment due to liability concerns.
  • Amendments to the Atomic Energy Act (1962) needed to allow private sector participation in nuclear power generation.

Future Prospects

• Next steps for Holtec in India - Possible collaborations:
  • TCE for engineering expertise.
  • L&T for manufacturing nuclear components.
• Potential entry of NPCIL and NTPC: Government may provide necessary assurances to include state-owned enterprises in future agreements.
• Holtec’s expansion plans: Holtec Asia’s facility in Dahej, Gujarat, could see workforce expansion if manufacturing is approved.

India’s Strategic Vision for SMRs

• Clean energy transition: SMRs are seen as a viable option for reducing carbon emissions and meeting energy demands. Key part of India's renewable energy strategy.
• Global nuclear competitiveness: India’s engagement in SMR development could enhance its standing in the international nuclear energy market.

Conclusion

• The US regulatory approval for Holtec marks a milestone in operationalizing the India-US civil nuclear deal.
• This development aligns with India’s goals for energy security, technological advancement, and geopolitical positioning.
• However, regulatory and legal challenges need resolution to fully leverage the deal’s potential.

India-US Civil Nuclear Deal FAQs

Q1. Discuss the significance of the recent US Department of Energy’s approval under “10CFR810” for India’s civil nuclear sector.

Ans. The approval allows Holtec International to transfer Small Modular Reactor (SMR) technology to private Indian firms.

Q2. What are Small Modular Reactors (SMRs), and why are they important for India's energy sector?

Ans. SMRs are nuclear reactors with a capacity of 30MWe to 300MWe, offering advantages such as scalability, cost-effectiveness, and suitability for clean energy transitions.

Q3. Analyze the geopolitical implications of India-US collaboration in nuclear technology.

Ans. The partnership enhances India’s technological and strategic position in the global nuclear energy market, countering China's growing dominance in SMRs.

Q4. What legal and regulatory hurdles have delayed the full implementation of the India-US civil nuclear agreement?

Ans. Key challenges include India's Civil Liability for Nuclear Damage Act (2010), which deters foreign investment due to supplier liability concerns.

Q5. How can India leverage the latest US regulatory clearance to strengthen its domestic nuclear manufacturing capabilities?

Ans. India can enhance its nuclear supply chain and position itself as a key player in the global SMR market.

Source: IE