The Hindu Editorial Analysis- 19th August 2025 | Current Affairs & Hindu Analysis: Daily, Weekly & Monthly - UPSC PDF Download

Required Reforms

Why in News?

 Sacrificing a portion of revenue to increase consumption can strengthen the economy. 

Introduction

The central government’s proposed GST reforms are bold, timely, and aimed at benefiting the middle class and businesses. By rationalising tax slabs, reducing rates, and simplifying procedures like registration, returns, and refunds, the government seeks to ease the tax burden, curb evasion, and make the system more efficient, marking 2025 as a pivotal year for tax reform.

Bold and Timely GST Reforms

• The central government’s proposals to reform the GST system are both bold and timely.
• Intended beneficiaries include the middle class and the business community.
• Key rate changes:
  •  99% of items in the 12% slab to move to 5%. 
  • 90% of items in the 28% slab to move to 18%.
  •  These changes aim to substantially reduce the tax burden on most consumers. 

Rationalisation and Procedural Improvements

• Rationalising slabs and aligning similar products reduces ambiguity and litigation.
• Procedural reforms are equally important:
  •  Simplifying registration. 
  • Streamlining return filing.
  •  Accelerating refunds. 
• Goal: Make GST easier, quicker, and less time-consuming for taxpayers.

Economic and Revenue Implications

• Combined with the Income Tax Bill and revised income-tax slabs, 2025 could be a watershed year for tax reform.
• No official estimate yet for revenue impact; government expects some revenue hit.
• RBI estimated the average GST rate at 11.6% two years ago; it is expected to fall substantially.
• Government expects increased consumption and widened tax base to offset most revenue loss.
• Lower rates (5%) reduce incentives for input tax credit scams and tax evasion.

Impact on Domestic Economy and State Relations

• Accepting some revenue loss could boost domestic consumption, especially amid slowing exports.
• Reaction of State governments remains uncertain:
• States have lobbied for a higher share of central taxes.
• Petroleum products unlikely to enter GST soon due to potential revenue loss.
• Politically, States may not oppose rate cuts directly but could seek compensation.
• The Centre will engage States in discussions to address their concerns.

Conclusion

The proposed GST changes promise to boost domestic consumption and improve compliance, even if they entail some revenue risk. Engagement with State governments will be crucial to ensure coordination and equity. If implemented effectively, these reforms could strengthen the economy, reduce tax disputes, and make India’s tax system simpler, fairer, and more growth-oriented.

Familiar impasse

 Why in News? 

 Global efforts to address plastic pollution are facing ongoing challenges, particularly regarding the need to reduce plastic production. Despite the clear environmental and health risks posed by plastic, especially microplastics, efforts such as recycling and banning single-use items have had limited effectiveness. The core issue revolves around finding a balance between practical considerations, economic interests, and the urgent necessity for sustainable waste management. 

 Global Resistance to a Plastic Pollution Treaty 

• Ongoing Opposition: Efforts to establish a global treaty on plastic pollution are met with strong resistance. 
• UNEP's Challenge: The United Nations Environment Programme (UNEP) faces challenges in uniting member nations, as there are significant disagreements. 
• Key Disagreement:. major point of contention is whether reducing plastic production is essential for effectively addressing plastic pollution. 

 The Plastic Crisis: A Global and Indian Perspective 

• Global Context: Over 430 million tonnes of plastic are produced annually, with two-thirds being short-lived and quickly becoming waste. Waste Management Issues: 46% of plastic waste is landfilled, while 22% is mismanaged, entering the environment. Environmental Impact: In 2019, plastic production contributed 1.8 billion metric tonnes of greenhouse gases, accounting for about 3.4% of the global total. 
• India's Plastic ChallengePlastic Waste Generation: India generates approximately 3.4 million tonnes of plastic waste each year, with only around 30% being recycled. Increasing Consumption: Plastic consumption in India has risen significantly, from 14 million tonnes in 2016-17 to over 20 million tonnes in 2019-20, reflecting a compound annual growth rate (CAGR) of 9.7%. 
• Government InitiativesBan on Single-Use Plastics: The Indian government has implemented bans on approximately 20 single-use plastic items, such as cups, straws, and spoons. Shift in Material Use: There is a noticeable shift towards using paper and cloth bags, but this has not substantially improved waste management and recycling efforts. 
• Civic Crisis of Polythene BagsGlobal Issue: Polythene bags, while convenient and low-cost, have escalated into a civic crisis worldwide due to their environmental impact.

 Challenges in Managing Plastic Waste 

• Waste Management Problem: Plastic pollution is primarily a waste management issue, and improving collection and recycling incentives could be part of the solution. 
• Historical Efforts: Past decades of efforts to improve plastic collection and recycling have shown limited success in addressing the problem. 
• Food System Contamination: There is growing evidence that plastic is entering the food systems of humans, animals, and marine life, raising serious health concerns. 
• Impact on Island Nations: Island nations and coastal areas are particularly overwhelmed by plastic waste that washes ashore, exacerbating the crisis. 
• Microplastics Risk: Microplastics, due to their small size and widespread presence, pose additional risks as they infiltrate various ecosystems. 

 The Debate on Production Reduction 

• Need for Source Reduction: Reducing plastic at the source is widely regarded as the only viable long-term solution to plastic pollution. 
• Disagreements Among Nations: Nations are divided on the issue of production cuts, primarily due to concerns about trade barriers and tariff uncertainties. 
• Stalled Negotiations: Treaty negotiations are hindered by a lack of trust and a reluctance to consider opposing viewpoints openly. 
• Shift in Environmental Governance: The previous era of assuming a shared “common good” in enforcing environmental resolutions is no longer applicable.

 Conclusion 

• Urgency of Action: Plastic pollution represents a critical environmental and health crisis that requires immediate and decisive action. 
• Role of Waste Management: While improving waste management practices is beneficial, it is not a sufficient long-term solution on its own. 
• Importance of Production Reduction: Reducing plastic production at the source is essential for addressing the root cause of the problem. 
• Need for Trust and Cooperation: Global treaties aimed at combating plastic pollution are likely to be ineffective without mutual trust and cooperation among nations. 
• Essential Elements for Success: Collective commitment, open dialogue, and equitable policies are crucial for curbing plastic pollution and protecting ecosystems, human health, and future generations.