GST Council introduces major process reforms in its 57th meeting
The GST Council met for the 57th time to unveil several process reforms aimed at overhauling how the indirect tax is administered in India.
The meeting was chaired by Union Finance Minister Nirmala Sitharaman in New Delhi, attended by state finance ministers and senior tax officials.
The meeting marked the 57th session of the GST Council since the tax regime's inception more than nine years ago.
Having resolved major rate-related complications in previous meetings, the Council shifted focus to long-term administrative and process-related reforms as revenues have largely stabilized.
Connects to Article 279A of the Indian Constitution, which establishes the GST Council as a joint forum of the Centre and the States.
GST Council proposes five percent rate for electric vehicle transport services
The GST Council recommended a 5% GST option for passenger transport and rental services utilizing electric vehicles, subject to input tax credit restrictions.
The recommendation was made by the GST Council during its 57th meeting in New Delhi to support the expanding electric mobility sector.
The proposed rate is set at 5% and applies to bundled services where battery charging costs are included in the overall price.
The proposal aims to clarify tax treatments for EV operators, especially where charging costs are bundled with the passenger transport or vehicle rental service.
Connects to India's FAME scheme and broader electric vehicle transition policies aimed at reducing carbon emissions in the transport sector.
Key definitions
GST Council: A constitutional body established under Article 279A to make recommendations to the Union and State Governments on issues related to Goods and Service Tax.
Input Tax Credit: The tax that a business pays on a purchase and that it can use to reduce its tax liability when it makes a sale.
Prelims Facts
The GST Council is chaired by the Union Finance Minister and includes representatives from all States and Union Territories.
The proposed 5% GST rate for EV passenger transport is subject to restrictions on input tax credit (ITC).
The 57th GST Council meeting focused primarily on process and administrative reforms rather than broad rate revisions.
Mains Framework
The 57th GST Council meeting marks a transition from rate-setting stabilization to deep administrative and process reforms, alongside targeted incentives for green sectors like electric mobility.
Dimensions
Administrative Rationalization
Shifting focus from frequent rate changes to long-term process reforms to simplify compliance.
Promoting Green Technology
Utilizing targeted tax slabs (5% GST on EV rentals) to incentivize sustainable transport solutions.
Cooperative Federalism
Balancing central revenue objectives with state-level concerns through the consensus-driven GST Council framework.
Way forward
To sustain revenue growth, the GST Council must continue simplifying compliance, resolving input tax credit anomalies, and leveraging technology to prevent tax evasion.
India and fourteen global economies sign pact to tackle manufacturing excess capacity
The statement was released by the Office of the US Trade Representative following G20 Trade Ministers' discussions in Milwaukee, Wisconsin.
A total of 15 signatories, including India, the US, and the EU, backed the joint call to eliminate market-distorting industrial practices.
Structural excess capacity occurs when an economy's production capacity consistently exceeds global demand, often driven by government interventions that concentrate manufacturing in specific markets.
Connects to World Trade Organization (WTO) rules on industrial subsidies, countervailing duties, and fair trade practices under global trade agreements.
Fourteen nations call for dedicated sectoral platforms to curb industrial overproduction
India and 13 other nations called for global action to eliminate structural excess capacity by establishing new, dedicated sectoral platforms to address market distortions.
The joint statement was issued on the sidelines of the Organisation for Economic Co-operation and Development (OECD) Trade Committee deliberations in Washington.
Major G20 members including China, Brazil, Indonesia, Russia, Saudi Arabia, and South Africa did not sign the joint statement.
The signatories argue that non-market policies and structural overproduction hurt domestic industries, discourage market-based investments, and widen global supply-demand imbalances.
Connects to the concept of protectionism, tariff barriers, and the role of the OECD in coordinating international economic policies.
Key definitions
Structural Excess Capacity: A situation where an economy's capacity to produce goods consistently remains higher than global demand, often driven by government subsidies or interventions.
Non-market Policies: Government interventions, subsidies, or regulations that distort free-market competition and resource allocation in favor of domestic industries.
Prelims Facts
The joint statement on structural excess capacity was signed by 15 economies, including India, the US, Germany, and Japan.
Major G20 members such as China, Brazil, Russia, and South Africa did not sign the joint statement.
The statement was initiated following discussions at the G20 Trade Ministerial held in Milwaukee, Wisconsin.
Mains Framework
India's alignment with 14 major economies to address global structural excess capacity highlights growing concerns over non-market policies that distort international trade and threaten domestic manufacturing.
Dimensions
Impact on Domestic Industry
Cheap imports from economies with excess capacity undercut domestic manufacturers, threatening initiatives like 'Make in India'.
Geopolitical Trade Alignments
The exclusion of countries like China and Russia from the pact reflects deepening divisions in global trade governance.
Multilateral Reform
The call for dedicated sectoral platforms highlights the perceived inadequacy of existing WTO mechanisms to address modern subsidy regimes.
Way forward
India must balance its participation in global anti-distortion pacts with robust domestic manufacturing support, utilizing trade remedial measures like anti-dumping duties within WTO norms.
Government launches JOSH teams to accelerate youth-led community action against tuberculosis
The Union Health Ministry launched JOSH (Joint Squad for Health) teams to engage youth volunteers in finding missing tuberculosis cases and raising community awareness.
The initiative was launched by Union Health Minister J.P. Nadda at a national event held at Bharat Mandapam, New Delhi.
India has recorded a 21% decline in TB incidence, treatment coverage has reached 92%, and 67,933 Panchayats across 697 districts were recognized as TB Mukt in 2026.
The JOSH teams, comprising NCC cadets and MY Bharat volunteers, will conduct household-level outreach in 55 districts across 11 States and Union Territories in the first phase.
Connects to the National Strategic Plan for TB Elimination and the Sustainable Development Goal (SDG) 3.3 of ending the TB epidemic by 2030.
Key definitions
JOSH Teams: Joint Squad for Health teams comprising NCC cadets and MY Bharat volunteers deployed for household-level outreach to identify missing TB cases.
TB Mukt Bharat Abhiyaan: A national campaign launched by the Government of India to eliminate tuberculosis through community participation, early detection, and treatment support.
Prelims Facts
India has recorded a 21% decline in tuberculosis incidence as of 2026.
The JOSH teams initiative is being implemented jointly by the Ministries of Health, Youth Affairs and Sports, and Defence.
In 2026, 67,933 Panchayats across 697 districts in India have been recognized as 'TB Mukt'.
Mains Framework
The launch of JOSH teams under the TB Mukt Bharat Abhiyaan represents a paradigm shift from a conventional clinical health program to a youth-led, community-driven public health movement.
Dimensions
Community-Led Surveillance
Utilizing grassroots youth networks (NCC and MY Bharat) to bridge the gap in active case finding.
Stigma Reduction
Leveraging youth volunteers to conduct household-level awareness, thereby reducing social stigma associated with TB.
Inter-Ministerial Collaboration
Demonstrating effective governance through joint implementation by Health, Youth Affairs, and Defence ministries.
Way forward
To achieve complete elimination, the JOSH model must be scaled nationwide, backed by robust digital tracking tools and sustained nutritional support for patients.
MMDR Amendment Act 2026 establishes uniform fiscal framework for mineral sector
The MMDR Amendment Act, 2026 was enacted to restrict State Governments from levying fresh taxes on mineral rights and mineral-bearing lands outside Central guidelines.
The legislation amends the principal Mines and Minerals (Development and Regulation) Act, 1957, which regulates the mining sector across all Indian states.
The amendment aims to bring uniformity to mineral taxation to prevent varying state-level levies from eroding the viability of domestic mining.
Unregulated state levies have raised costs across industries, prompting the Centre to step in to protect critical mineral supply chains and ensure national energy security.
Connects to Seventh Schedule of the Indian Constitution, specifically Entry 54 of the Union List and Entry 23 of the State List regarding mineral regulation.
Key definitions
Mineral Rights: The legal right to exploit, mine, or produce minerals from a specific tract of land.
District Mineral Foundation (DMF): A non-profit trust set up in mining-affected districts to work for the interest and benefit of persons and areas affected by mining-related operations.
Prelims Facts
The MMDR Amendment Act, 2026 restricts State Governments from levying fresh taxes on mineral rights except under conditions prescribed by the Centre.
Mining in India is primarily regulated under the principal Mines and Minerals (Development and Regulation) Act, 1957.
The amendment aims to bring predictability and uniformity to the taxation of minerals to protect the viability of the domestic mining sector.
Mains Framework
The MMDR Amendment Act, 2026 introduces a centralized fiscal framework for mineral taxation, aiming to balance the revenue needs of mineral-rich states with the national objective of industrial competitiveness and energy security.
Dimensions
Federal Balance
Restricting states' power to levy independent taxes on mineral rights raises critical questions about state fiscal autonomy.
Industrial Viability
Uniform taxation prevents cascading costs in key downstream sectors like steel, cement, power, and electronics.
Strategic Resource Management
Ensuring a stable domestic supply of critical minerals to shield India's economy from global supply chain shocks.
Way forward
The Centre must collaborate with states to ensure that the restriction on independent levies is compensated by fair royalty sharing and robust funding through District Mineral Foundations.
Government caps trade margins on non-scheduled cancer drugs to thirty percent
The Union government decided to cap trade margins on all non-scheduled anti-cancer drugs to make cancer treatment more affordable for patients.
The decision was announced in New Delhi, with an expert committee under the Directorate General of Health Services tasked with finalizing the drug list.
The trade margin is capped at 30% of the MRP, down from average mark-ups of 170% (reaching 700% in some cases), saving patients ₹2,500 crore annually.
The measure covers branded, generic, domestically manufactured, imported, patented, and non-patented anti-cancer products to ensure comprehensive relief.
Connects to the National Pharmaceutical Pricing Authority (NPPA) and the Drug Prices Control Order (DPCO) issued under the Essential Commodities Act, 1955.
Key definitions
Trade Margin: The difference between the price at which a manufacturer sells a drug to a distributor/retailer and the final maximum retail price (MRP) paid by the consumer.
Non-scheduled Drugs: Medicines that are not included in the National List of Essential Medicines (NLEM) and are not subject to direct price ceilings by the government.
Prelims Facts
The trade margin cap on non-scheduled anti-cancer drugs is set at 30% of the Maximum Retail Price (MRP).
The policy is expected to result in cumulative annual savings of ₹2,500 crore for cancer patients.
The expert committee under the Directorate General of Health Services (DGHS) is responsible for finalizing the list of covered medicines.
Mains Framework
The Union government's decision to cap trade margins on non-scheduled cancer drugs at 30% is a critical intervention to address the high cost of oncology care and reduce catastrophic out-of-pocket health expenditure.
Dimensions
Healthcare Affordability
Slashing retail prices by up to 70% directly benefits vulnerable patients facing high treatment costs.
Market Regulation
Addressing market failures where trade mark-ups reached up to 700% due to asymmetric information and lack of competition.
Universal Health Coverage
Aligning drug pricing policies with the broader goal of providing equitable and accessible healthcare to all citizens.
Way forward
The government must ensure strict enforcement of the cap through the NPPA, expand the National List of Essential Medicines, and promote domestic manufacturing of active pharmaceutical ingredients (APIs).
MoSPI releases five-year strategy to measure India's natural wealth and ecosystems
The Ministry of Statistics and Programme Implementation released a five-year roadmap to measure India's natural resources and ecosystem services alongside conventional economic indicators.
The strategy document was released by MoSPI in New Delhi, succeeding the previous 2022-2026 strategy framework.
The 2026-2030 strategy prioritizes 10 areas, including forests, water, soil, minerals, carbon stock, and biodiversity, to evaluate 40 global indicators across 9 SDGs.
The strategy aligns with the UN's System of Environmental-Economic Accounting (SEEA) and the updated System of National Accounts (SNA) 2025 to correct growth-first policymaking.
Connects to the concept of Green GDP, environmental accounting, and India's commitments under the United Nations Sustainable Development Goals.
Key definitions
System of Environmental-Economic Accounting (SEEA): An international statistical framework that integrates environmental and economic data to provide a comprehensive view of the relationships between the economy and the environment.
Ecosystem Services: The direct and indirect contributions of ecosystems to human well-being, including provisioning, regulating, cultural, and supporting services.
Prelims Facts
The Strategy for Environmental Economic Accounts in India 2026–2030 was released by the Ministry of Statistics and Programme Implementation (MoSPI).
The roadmap helps evaluate around 40 global indicators across nine Sustainable Development Goals (SDGs).
The strategy is aligned with the UN's System of Environmental-Economic Accounting (SEEA) and the System of National Accounts (SNA) 2025.
Mains Framework
MoSPI's Strategy for Environmental Economic Accounts in India 2026–2030 marks a vital shift toward 'Green Accounting', integrating ecological capital into national economic planning to ensure sustainable development.
Dimensions
Correcting Growth-First Policymaking
Moving beyond GDP to account for resource depletion, soil degradation, and carbon loss.
Global Alignment
Implementing the UN's SEEA framework to enhance India's credibility in international climate and sustainability forums.
Evidence-Based Policy
Providing precise data on water, forests, and pollination services to guide agricultural and industrial planning.
Way forward
India must build institutional capacity across states to collect high-quality environmental data and legally mandate the integration of green accounts into annual budget exercises.
Key terms
Environmental Economic AccountsSystem of National AccountsGreen GDPSustainable Development GoalsEcosystem Services
Acts & articles
Article 48A of the Constitution (Protection and improvement of environment and safeguarding of forests and wildlife)Biological Diversity Act, 2002
Union Cabinet approves ten thousand crore SME Growth Fund for equity investments
The Union Cabinet approved the creation of the SME Growth Fund to support small and medium enterprises through direct equity investments.
The fund will be jointly administered by the Ministry of Finance and the Ministry of Micro, Small and Medium Enterprises (MSMEs) across India.
The fund has a corpus of ₹10,000 crore and will operate as an Alternative Investment Fund (AIF) targeting manufacturing SMEs in tier II and tier III cities.
MSMEs in India have traditionally relied heavily on bank debt; the SGF aims to plug the equity funding gap to help these firms scale up and integrate into global value chains.
Connects to the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006, and SEBI regulations governing Alternative Investment Funds (AIFs).
Key definitions
Alternative Investment Fund (AIF): A privately pooled investment vehicle established in India that collects funds from sophisticated investors for investing in accordance with a defined investment policy.
Equity Capital: Funds raised by a business in exchange for an ownership interest in the company, rather than through borrowing.
Prelims Facts
The SME Growth Fund (SGF) has an approved corpus of ₹10,000 crore.
The fund is structured to operate as an Alternative Investment Fund (AIF) under SEBI guidelines.
SGF is designed to provide direct equity investments, specifically targeting manufacturing SMEs in tier II and tier III cities.
Mains Framework
The approval of the ₹10,000 crore SME Growth Fund (SGF) marks a strategic shift from debt-based financing to equity support for India's MSME sector, enabling them to scale up and compete globally.
Dimensions
Plugging the Equity Gap
Addressing the historical challenge where small businesses struggle to secure risk capital due to collateral requirements.
Regional Development
Prioritizing manufacturing units in tier II and tier III cities to promote balanced regional economic growth.
Global Integration
Providing the financial muscle required for technology adoption, capacity expansion, and integration into global value chains.
Way forward
The fund must ensure transparent, professional management under the AIF framework, minimizing bureaucratic delays to ensure timely capital deployment.
Key terms
SME Growth FundAlternative Investment FundEquity CapitalMSME SectorGlobal Value Chains
Acts & articles
Micro, Small and Medium Enterprises Development (MSMED) Act, 2006Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012
Editorial of the day
Monetary Policy and the Challenge of Supply-Side Inflation
“Adequate response: on the RBI and inflation”
The author argues that while the RBI's 25 bps repo rate hike is a necessary signal to curb demand and anchor inflation expectations, monetary policy alone cannot tackle supply-side inflation driven by high oil and food prices without central fiscal assistance.
Key arguments
The RBI raised interest rates by 25 bps as retail inflation is projected to rise to 6% in Q3 before easing to 5.7% in Q4.
Global oil prices crossing $100 a barrel and a deficient monsoon are driving supply-side inflation, which cannot be fully resolved by interest rate hikes alone.
The rate hike serves as an important signal to prevent second-round effects and anchor long-term inflation expectations.
The other side
Aggressive rate hikes could dampen economic growth and increase borrowing costs for businesses when global growth is already slowing.
Holding back fuel price pass-throughs by oil marketing companies shields consumers but creates severe fiscal pressures on these companies.
Way forward
The government must complement the RBI's monetary tightening with active supply-side interventions, such as managing food stocks and fiscal measures on fuel, to effectively curb inflation.
Use it inGS-3: Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment.
Mains practice questionCritically analyze the limitations of monetary policy in controlling supply-side inflation in India, and suggest fiscal measures required to complement the central bank's actions. (250 words)
Launched on September 17, 2015, to provide for the welfare of mining-affected areas and people.
Implemented by District Mineral Foundations (DMFs) using statutory contributions from mining lease holders.
Revised guidelines for the scheme were issued in January 2024 to update the project execution framework.
Technology
Project VeerAI
A joint project between the Technology Development Board (TDB) and BigEndian Semiconductors with ₹130 crore RDI support.
Aims to develop an indigenous, secure camera-focused AI Vision System-on-Chip (SoC) on a sovereign platform.
Designed to advance secure semiconductor technology from Technology Readiness Level 5 (TRL-5) to TRL-9.
Scheme
Electronics Component Manufacturing Scheme (ECMS)
Designed to deepen India's electronics ecosystem by supporting domestic manufacturing of components and sub-assemblies.
Aims to reduce import dependence on critical components like printed circuit boards, camera modules, and lithium-ion cells.
Supports capital goods and supply-chain products to increase domestic value addition in electronics.
Practice MCQs — Test Your Understanding
7 questions · UPSC Prelims pattern · Answer all, then check your score
ECONOMYReforms in Goods and Services Tax (GST)
GST Council proposes five percent rate for electric vehicle transport services
Q1With reference to the recommendations of the 57th GST Council meeting, consider the following statements:
1. The Council proposed a 5% GST rate for passenger transport and rental services using electric vehicles.
2. This 5% GST rate option is subject to restrictions on input tax credit (ITC).
Which of the statements given above is/are correct?
ECONOMYGlobal Action Against Structural Excess Capacity
India, 13 nations call for global action to curb excess industrial capacity
Q2Which of the following G20 member countries did NOT sign the joint ministerial statement on addressing structural excess industrial capacity in October 2026?
HEALTHYouth-Led Tuberculosis Elimination Drive
Government launches JOSH teams to accelerate youth-led community action against tuberculosis
Q3With reference to the JOSH (Joint Squad for Health) teams launched under the TB Mukt Bharat Abhiyaan, consider the following statements:
1. The teams comprise NCC cadets and MY Bharat volunteers.
2. Each team functions under a designated Class-I officer.
Which of the statements given above is/are correct?
ECONOMYFiscal Reforms in Mineral Taxation
MMDR Amendment Act 2026 establishes uniform fiscal framework for mineral sector
Q4The Mines and Minerals (Development and Regulation) Amendment Act, 2026 primarily aims to address which of the following issues?
HEALTHTrade Margin Cap on Non-Scheduled Cancer Drugs
Government caps trade margins on non-scheduled cancer drugs to thirty percent
Q5With reference to the Union government's decision on non-scheduled anti-cancer drugs, consider the following statements:
1. The trade margin on these drugs has been capped at 30% of the Maximum Retail Price (MRP).
2. The cap applies only to domestically manufactured generic drugs, excluding patented or imported medicines.
Which of the statements given above is/are correct?
ENVIRONMENTStrategy for Environmental Economic Accounts in India
MoSPI releases five-year strategy to measure India's natural wealth and ecosystems
Q6The 'Strategy for Environmental Economic Accounts in India 2026–2030' released by MoSPI is aligned with which of the following international standards?
ECONOMYSME Growth Fund for MSME Equity Support
Union Cabinet approves ten thousand crore SME Growth Fund for equity investments
Q7With reference to the SME Growth Fund (SGF) approved by the Union Cabinet in October 2026, consider the following statements:
1. It has a total approved corpus of ₹10,000 crore.
2. It is designed to operate as an Alternative Investment Fund (AIF) providing equity capital.
Which of the statements given above is/are correct?
0 of 7 answered
UPSC Prelims PYQs on today’s topics
Real questions UPSC has asked on these issues — attempt them after reading the topics.
6. Consider the following statements : I. India has joined the Minerals Security Partnership as a member. II. India is a resource-rich country in all the 30 critical minerals that it has identified. III. The Parliament, in 2023, has amended the Mines and Minerals (Development and Regulation) Act, 1957 empowering the Central Government to exclusively auction mining lease and composite license for certain critical minerals. Which of the statements given above are correct?
With reference to the management of minor minerals in India, consider the following statements : 1. Sand is a ‘minor mineral’ according to the prevailing law in the country. 2. State Governments have the power to grant mining leases of minor minerals, but the powers regarding the formation of rules related to the grant of minor minerals lie with the Central Government. 3. State Governments have the power to frame rules to prevent illegal mining of minor minerals. Which of the statements given above is/are correct?
1. With reference to investments, consider the following : I. Bonds II. Hedge Funds III. Stocks IV. Venture Capital How many of the above are treated as Alternative Investment Funds?
Consider the following statements with reference to India : 1. According to the ‘Micro, Small and Medium Enterprises Development (MSMED) Act, 2006’, the ‘medium enterprises’ are those with investments in plant and machinery between ₹15 crore and ₹25 crore. 2. All bank loans to the Micro, Small and Medium Enterprises qualify under the priority sector. Which of the statements given above is/are correct?