MAINS DAILY QUESTIONS & MODEL ANSWERS
Q1. It is important for India to widen and simplify its direct tax net. Analyze in context of measures taken by the government in this regard.
GS III – Indian Economy
Introduction:
- Direct taxes are levied on a person’s or a firm’s income or wealth. Social objective of direct tax is the distribution of income. Direct tax collections, which include corporate tax and personal income tax, have exceeded the Budget estimates for FY’22, indicating economic recovery. As per the Budget document, the government has revised upwards the direct tax collection estimates for 2021-22 fiscal from Rs 11.08 lakh crore in Budget estimates (BE), to Rs 12.50 lakh crore in revised estimates (RE).
- Despite the government’s several attempts at simplifying direct taxes, much more needs to be achieved in this direction in comparison to developed countries.
Importance of widening and simplifying direct tax net in India:
- India is trapped between the very poor countries that get a lot of foreign aid and the wealthy ones with very strong tax collections;
- the tax collected for every unit of economic output in India was minuscule compared to other countries;
- The overall boost to tax collections helps in decreasing income inequalities and the Indian state will be in a better position to perform its key duties without running into repeated fiscal crises.
- A further increase in the share of direct taxes will help the government to lower regressive indirect taxes that impose a significant burden on the poor.
- This means a shift from a regressive to a progressive tax system.
- As of 2021, Gross tax to GDP in India is around 10.2% in 2021. A greater tax to GDP ratio indicates that the government can cast a wider fiscal net.
- A widening tax pool means the current system in which efficient firms are taxed at a high rate because inefficient firms manage to slip outside the tax system will end.
- Higher direct taxes could provide space for significant cuts in indirect taxes such as the goods and services tax, which in effect means a shift from a regressive to a progressive tax system.
- Direct taxes constitute an important source of government revenue. Their collection charges are also low.
- A direct tax increases the civic sense of the people. When the people are fully aware of the payment of taxes, they are also conscious of the way the government spends the money.
- Better socio-economic fabric leads to decrease in crime rates and productive communities leading to overall prosperity and economic growth.
Way forward:
- The share of direct taxes in total tax collections must go up as indirect taxes are relatively regressive.
- Making compliance easy and taking tough action against evaders.
- The government must raise the income threshold for the maximum marginal income tax rate of 30%, rather than lower the tax rate.
- India’s corporate tax rate must come down to below 20%, to ASEAN levels if it wants to maintain its stature as an attractive investment destination.
- It will create an incentive for individuals to incorporate their businesses and become more transparent.
- Reforms must aim at doubling the tax collections by the Centre and the states combined.
- The government must address the delay in drafting direct tax code.
Q2. What do you understand by ‘Hybrid warfare’? Elaborate on the measures that are needed to be put in place to tackle this form of warfare by adversarial nations.
GS III – Security related issues
Introduction:
- Hybrid warfare or the 5th generation warfare refers to the use of unconventional methods as part of a multi-domain warfighting approach. In Hybrid warfare, apart from conventional military tactics, non-military tools are used to achieve dominance or damage, subvert or influence. It is conducted primarily through non-kinetic military action, such as social engineering, misinformation, cyber-attacks, along with emerging technologies such as artificial intelligence and fully autonomous systems. Fifth generation warfare has been described by Daniel Abbot as a war of “information and perception”.
- Several Ukrainian computers and websites faced cyberattacks by a destructive data-wiper malware hours before Russia began its military assault in the country
Characteristics of hybrid warfare:
- Hybrid or Fifth-generation warfare is typified by its “omnipresent battlefield”, and the fact that people engaged in it do not necessarily use military force, instead employing a mixture of kinetic and non-kinetic force.
- Unlike the earlier generations of warfare, which relied on the might of military, speed, stealth and surprise, in the latest, the fifth generation, the lines between war and politics, military and civilian are blurred.
- The lives of common citizens might be more directly and intricately linked compared to even the forces at ground zero.
- In the fifth generation wars, patience and time emerge as powerful weapons.
Measures to tackle hybrid warfare:
- Governments must institute a process to develop a national methodology of self-assessment and threat analysis.
- Institutionalizing a process concerning threat and vulnerability information will enhance hybrid warfare early warning efforts, assist resiliency efforts, and may even have a deterrent effect.
- Hybrid warfare is an international issue, so should be the retort.
- National governments must coordinate a rational approach amongst themselves to understand, identify and react to hybrid warfare to their collective interests.
- Multinational structuresshould be established to enable cooperation and collaboration across borders.
- Modern hybrid war which simultaneously combine conventional, irregular, and terrorist components is a multifaceted challenge that requires a compliant and versatile military to overcome.
- Conducting self-assessments of critical functions and vulnerabilities across all sectors and ensuring regular maintenance. For example, regularly upgrading critical Fintech systems in the country.
- Armed forces needs to upgrade itself by training in special battle techniques, as well as conditioning to overcome urban combat stress.
- Training armed forces in use of technological tools such as smart robots, Unmanned Aerial Vehicles (UAVs)
- Deploying Intelligence tools like Real Time Situational Awareness (RTSA) for precise operations.
- The perception of hybrid war is not new, but its means are increasingly sophisticated and deadly, and require a response in similar fashion.
- Investing in journalism will indirectly help citizens in understanding the hybrid threats in a better way.
Conclusion:
- The proliferation of different tools of warfare and resultant expansion of the battle-field means that no particular service can guarantee victory. The modern battlefield needs not just military but political, psychological, electronic, technological warriors too. To win today’s ‘wars’, one needs a whole-of-government (WOG) approach with elements of Comprehensive National Power as part of the action/response system.
- The Armed Forces should be prepared to take threats in all domains, as also take offensive actions in those domains. A synergistic, multi-domain, WOG approach may prove to be the decisive factor in battle-field dominance.
