Context: The “one state one vote” structure under GST Council is a flawed one. It needs to be replaced with a proportional representation of voting in the GST Council. This system should be based on the size of states or their revenue contribution to the GST pool.

• The article highlights the issues with the one state one vote system adopted in the GST Council decision making.

Background

• In the recent GST Council meeting, there is a debate going on, whether to tax or not to tax on products essential to fighting Covid-19.
• 12 states, representing nearly 70% of India’s population, agree to make such products tax-free.
• But,19 states, representing the remaining 30% of the population, want to continue to levy GST on these products.
• The lack of consensus can largely be explained by the distorted design and incentive structure of the GST itself.

Distribution methodology for taxes collected under GST

• The GST Council has representatives from all states. According to “one state one vote” all the representative have equal voting rights in GST Council.
• The taxes collected under GST (from states) are accumulated by the Union government and a portion is transferred back to each state under a formula.

States contribute maximum to the GST pool

• Four states: Maharashtra, Tamil Nadu, Karnataka, and Gujarat contribute nearly as much (~45%) of the total GST pool

Source of revenue for the states in India
Every state in India has two major components of revenues. These are,

• State’s own revenues
• Transfers from the Union government, consisting of both share of taxes collected by the Union and grants.
• How the source of revenue differs for bigger and smaller states?
• Only about 30% of the overall revenue of the 4 big states, namely, Maharashtra, Tamil Nadu, Gujarat, and Karnataka, comes from the Union government.
• But for the remaining 27 states, roughly 60% of their revenues are obtained through transfers from the Union government.
• For the smaller Northeastern states, these transfers from the Union government constitute 80-90% of their total revenues

Negative trends in the revenue collection & distribution in India

• Imbalance in collection & distribution of taxes between states: As mentioned above,
• While four big states contribute around 45% to the GST pool, they are the least dependent on the Union government for their revenue needs.
• Whereas smaller states which contribute less to the GST pool are more dependent on the Centre’s transfers for their revenues.

So,

• States that are more dependent on transfers from the Union want to maximize GST collections. This is why they are in support of taxation on Covid-related products.
• Whereas bigger states that are less dependent can afford to be more sensitive to citizens’ concerns and are against taxing Covid related products.

With time, net transfers from center should decrease as states come at par in development relative to each other. But in India over the past few years, these net transfers have increased.

• States are getting a lower share of revenues: States’ revenue has declined owing to unfair taxation practices by the Center. For instance,
• Increase in cesses: The Union has shifted a large proportion of taxation (roughly 18% of its overall revenues) into cesses. This remains outside the GST pool and hence do not have to be shared with the states
• So, the GST model based on “one state one vote” causes grave injustice to the developed states.

Road Ahead

• A system of proportional representation, instead of one state one vote model, would not have resulted in this lack of consensus. A proportional representation of voting in the GST Council either as a proportion of the size of a state or by its contribution to the GST revenue pool is the ideal way forward.

Context: Advanced economies making up the G7 grouping have reached a “historic” deal on taxing multinational companies.

Key Highlights

• The first decision that has been ratified is to force multinationals to pay taxes where they operate.
• The second decision in the agreement commits states to a global minimum corporate tax rate of 15% to avoid countries undercutting each other.
• The G7 commit to reaching an equitable solution on the allocation of taxing rights, with market countries awarded taxing rights on at least 20% of profit exceeding a 10% margin for the largest and most profitable multinational enterprises.
• The deal will provide for appropriate coordination between the application of the new international tax rules and the removal of all Digital Services Taxes.

About G7 corporate tax deal

• The finance ministers meeting in London agreed to counter tax avoidance through measures to make companies pay in the countries where they do business.
• They also agreed in principle to ratify a global minimum corporate tax rate to counter the possibility of countries undercutting each other to attract investments.
• The deal announced involving the US, the UK, Germany, France, Canada, Italy and Japan, is likely to be put before a G20 meeting in July.

Reasons for minimum corporate tax rate

• The decision to ratify a 15% floor rate follows from a declaration of war on low-tax jurisdictions around the globe announced by US Treasury Secretary.
• She had urged the world’s 20 advanced nations to move in the direction of adopting a minimum global corporate income tax.
• The move to put a minimum rate in place attempted to reverse a “30-year race to the bottom” in which countries have resorted to slashing corporate tax rates to attract multinational corporations.

Concerns associated with G7 corporate tax deal

• It impinges on the right of the sovereign to decide a nation’s tax policy apart from the challenges of getting all major nations on the same page.
• A global minimum rate would essentially take away a tool that countries use to push policies that suit them.
• The IMF and World Bank data suggest that developing countries with less ability to offer mega stimulus packages may experience a longer economic hangover than developed nations.
• A lower tax rate is a tool they can use to alternatively push economic activity and a global minimum tax rate will do little to tackle tax evasion.

India’s position on G7 corporate tax deal

• In 2019, the finance minister announced a sharp cut in corporate taxes for domestic companies to 22% and for new domestic manufacturing companies to 15%.
• The Taxation Laws (Amendment) Act, 2019 resulted in the insertion of a section (115BAA) to the Income-Tax Act, 1961.
• It aims to provide for the concessional tax rate of 22% for existing domestic companies subject to certain conditions including that they do not avail of any specified incentive or deductions.
• The cuts effectively brought India’s headline corporate tax rate broadly at par with the average 23% rate in Asian countries.

Context: India along with the United Kingdom has launched a new workstream to promote industrial energy efficiency under the Industrial Deep Decarbonization Initiative (IDDI).

• The workstream was launched at the 12th Chief Energy Ministerial(CEM).

About Clean Energy Ministerial (CEM)

• The Clean Energy Ministerial(CEM) was launched at the United Nations Framework Convention on Climate Change Conference Of Parties in Copenhagen in 2009.
• Objective: It is a high-level global forum to promote policies and programs for the development of clean energy technology. It also aims to share experience & best practices encouraging the transition to a global clean energy economy.
• Focus Areas: The CEM is focused on three global climate and energy policy goals:

Improve energy efficiency worldwide

• Enhance clean energy supply
• Expand clean energy access.
• Member Countries: 29 Countries. India is a member.

About Industrial Deep De-carbonization Initiative (IDDI)

• IDDI is an initiative of the Clean Energy Ministerial (CEM).

Purpose: It is a global coalition of public and private organizations that are working to stimulate demand for low carbon industrial materials. IDDI works to

• Standardize carbon assessments
• Establish ambitious public and private sector procurement targets
• Incentivize investment into low-carbon product development
• Design industry guidelines

Coordinated by: The initiative is coordinated by UNIDO and is co-led by the UK and India. The initiative also has the support of Germany and Canada.
United Nations Industrial Development Organization (UNIDO): It is the specialized agency of the United Nations that promotes industrial development for poverty reduction, inclusive globalization and environmental sustainability.

Context: A study has found that in the last three decades, such conflicts have been spread across habitats used by more than three-quarters of the world’s terrestrial birds and mammals as well.

• A staggering 9,056 bird species and 4,291 mammal species had witnessed armed conflicts.
• Around 70% of all threatened amphibians, birds and mammals, as categorised in the IUCN Red List, face armed conflict across their ranges

Key Points

• Armed conflicts – wars, civil strife and unrest, which cause human deaths, suffering and large-scale displacement – impact biodiversity too, and its direct consequences are often the most visible.
• Another direct impact of war is habitat loss and degradation.
• Armed conflicts can weaken regulatory mechanisms.

Indian Scenario

• Many conflicts in India have been known to affect wildlife and protected areas.
• Hotspots of armed conflict in India overlap particularly with biodiverse areas in parts of its north, east and northeast.
• Examples: Conflicts the disputed India-Pakistan border have affected species such as the endangered markhor.
• In Jharkhand, conflict has impacted protection capacity in the Palamau Tiger Reserve.

What can be done?

• Reassess species including those currently listed in non-threatened categories in the Red List – to better recognise and document threats from armed conflicts.
• Develop conservation plans to tackle the various direct and indirect threats at multiple levels.
• Conservation, sustainable and equitable management of nature play an important role in preventing conflict and in rebuilding peace.
• Take the support of indigenous and local communities.

Context: Turkey’s Sea of Marmara, that connects the Black Sea to the Aegean Sea, has witnessed the largest outbreak of ‘sea snot’. The sludge has also been spotted in the adjoining Black and Aegean seas.

• There has been growing environmental concern in Turkey over the accumulation of ‘sea snot’, a slimy layer of grey or green sludge in the country’s seas, which can cause considerable damage to the marine ecosystem.

About Sea Snot

• ‘Sea snot’ is marine mucilage that is formed when algae are overloaded with nutrients as a result of water pollution combined with the effects of climate change.
• A ‘sea snot’ outbreak was first recorded in the country in 2007. Back then, it was also spotted in the Aegean Sea near Greece.
• But the current outbreak in the Sea of Marmara is by far the biggest in the country’s history.
• The nutrient overload occurs when algae feast on warm weather caused by global warming. Water pollution adds to the problem.
• Environmental experts have said that the overproduction of phytoplankton caused by climate change and the uncontrolled dumping of household and industrial waste into the seas has led to the present crisis.

Key Concerns

• It has spread through the sea south of Istanbul and also blanketed harbours and shorelines.
• It is posing a severe threat to the marine ecosystem of the country- it has caused mass deaths among the fish population, and also killed other aquatic organisms such as corals and sponges.
• If unchecked, this can collapse to the bottom and cover the sea floor, causing major damage to the marine ecosystem.
• Over a period of time, it could end up poisoning all aquatic life, including fishes, crabs, oysters, mussels and sea stars.
• Besides aquatic life, the ‘sea snot’ outbreak has also affected the livelihoods of fishermen.
• It can also cause an outbreak of water-borne diseases such as cholera in cities like Istanbul.

Steps that are being Taken

• The entire Sea of Marmara will be turned into a protected area.
• Moreover, steps are being taken to reduce pollution and improve treatment of waste water from coastal cities and ships.
• Turkey’s biggest maritime clean-up operation is being launched and called on local residents, artists and NGOs to join hands to extend assistance.

• The United Nations Decade on Ecosystem Restoration has been officially launched, which will run from 2021 to 2030.
• United Nations Decade on Ecosystem Restoration will be co-led by the UN Environment Programme (UNEP) and the Food and Agriculture Organization of the UN (FAO).
• It was proclaimed by the United Nations General Assembly in a 2019 resolution.
• Purpose: Protection and revival of millions of hectares of ecosystems all around the world for the benefit of people and nature. This in turn will contribute to the achievement of all the Sustainable Development Goals.
• A Multi-Partner Trust Fund has also been launched for the Decade on Ecosystem Restoration. Germany is the first country to provide funding of Euro 14 million towards this fund.
• In order to support the launch of UN Decade, a report has also been released which defines the need of having such a global restoration effort. 

• Reserve Bank of India (RBI) has approved the re-appointment of Vishwavir Ahuja as the Managing Director (MD) and Chief Executive Officer (CEO) of private lender RBL Bank for further period of one year, with effect from 30 June 2021.
• Ahuja is the head of the bank since 30 June 2010
• RBL Bank headquarter - Mumbai.

• World Tumor Day is observed on June 8 every year to spread awareness about this deadly disease, ensure its early diagnosis, as well as as pay tribute to brain tumor patients and their families.
• The day was first initiated by the German Brain Tumor Association (GBTA) in 2000.

• World Oceans Day is marked annually on the 8 June to celebrate the role of the oceans in our everyday life and inspiring action to protect the ocean and sustainably use marine resources.
• The theme of UN World Oceans Day 2021 is ‘The Ocean: Life & Livelihoods’.
• World Oceans Day was officially recognised by the United Nations in 2008.
• The concept was originally proposed in 1992 by Canada’s International Centre for Ocean Development (ICOD) and the Ocean Institute of Canada (OIC) at the Earth Summit – UN Conference on Environment and Development (UNCED) in Rio de Janeiro, Brazil.

• Ranjitsinh Disale, the first Indian teacher to win the prestigious Global Teacher Award in 2020, has now been appointed as an Education Advisor to the World Bank international advisory board, which aims to improve teaching quality..
• He is among the 12 advisors appointed from all over the world and will be representing India.
• Mr Disale, who hails from Paritewadi in Solapur district of Maharashtra, will serve as the World Bank Education Advisor for the period from June 2021 to June 2024. 
• Mr Disale won the USD 1 million annual Global Teacher Prize 2020 in December 2020 for his efforts to boost girls’ education and spark a quick response (QR) coded textbook revolution in the country.

World Bank

• Headquarters - Washington, D.C., United States.
• Formation - July 1944.
• President - David Malpass.

• The Hongkong and Shanghai Banking Corporation Ltd. (HSBC) has appointed Hitendra Dave as the chief executive officer (CEO) of HSBC India.
• However, Dave’s appointment is subject to regulatory approval and until then he will work as interim CEO, with effect from 7 June 2021.
• Dave succeeds Surendra Rosha, who has been appointed as the Co-Chief Executive of HSBC, Asia-Pacific.

HSBC

• Founded: 3 March 1865, Hong Kong.
• Founder: Thomas Sutherland.
• Headquarters: London, United Kingdom.
• CEO: Noel Quinn.

• Three Indian Universities have made it to the top 100 list of Times Higher Education (THE) Asia University Rankings 2021.
• A record number of 63 Indian universities found place in 2021 list, however, none of them could make to top 10.
• Ranked at 37th spot, the Indian Institute of Science (IISc), Bengaluru was the highest ranked university from India for the seventh year in a row.
• The other two universities in the top 100 are: Indian Institute of Technology Ropar (55) and Indian Institute of Technology Indore (78)
• 14 Indian institutions debuted in 2021 rankings. India is ranked third overall in terms of representation of universities. Japan with 116 universities is on top, followed by Mainland China with 91 representation.
• Overall, the mainland Chinese universities Tsinghua University ranked first followed by Peking University at second position.
• The Times Higher Education Asia University Rankings assessed performance of 551 universities from 30 countries on the 13 performance indicators/parameters.

List of Top 5 Universities

1. Tsinghua University, China
2. Peking University, China
3. National University of Singapore
4. Hong Kong’s University of Hong Kong
5. Nanyang Technological University, Singapore

• India has been elected as the member of the United Nations Economic and Social Council (ECOSOC), one of the six main organs of the United Nations, for three-year terms of 2022-24.
• India was elected to the 54-member ECOSOC, by the UNGA on June 7, 2021, in the Asia-Pacific States category, along with Afghanistan, Kazakhstan and Oman.
• ECOSOC serves as the central platform for discussing international economic, social and environmental issues and formulating policy recommendations addressed to member states and the United Nations system.
• ECOSOC Headquarters - New York, United States, and Geneva.

• Muscat, the capital city of Oman, has been picked as the host city for the inaugural Hockey5s World Cups (Men and Women), by the International Hockey Federation (FIH).
• The World Cup will take place in January 2024.
• 16 teams per gender (3 per continent + Oman, as hosts) will take part in the first edition.

• The 2021 Performance Grading Index (PGI) was released by Union Education Minister, Shri Ramesh Pokhriyal ‘Nishank’ on June 06, 2021.
• The PGI index measure the performance of states in school education, based on data drawn from several sources, like Unified District Information System for Education Plus, National Achievement Survey, and Mid-Day Meal.
• 2021 PGI is the third edition of the PGI Index and has considered 2019-20 as reference year. The first PGI for States and Union Territories was published in 2019 with reference year 2017-18.
• States are scored on a total of 1,000 points across 70 parameters.
• These parameters are grouped under five broad categories

1. Access (eg. enrolment ratio, transition rate and retention rate);
2. Governance and management;
3. Infrastructure;
4. Equity (difference in performance between scheduled caste students and general category students) and
5. Learning outcomes (average score in mathematics, science, languages and social science).

• In PGI Index, states are graded and not ranked so as to discourage the practice of one state improving only at the cost of other state.
• There are 10 levels in PGI grading system. Level I (951-1000) is the highest grade while Level X, also known as Grade VII (0-550) is the lowest grade.
• In 2021 PGI, none of the state or Union Territory could achieve the highest grade, that is Level I.
• Chandigarh, Punjab, Tamil Nadu, Andaman and Nicobar and Kerala have obtained Grade 1++ (or Level II), which makes them the best performing states. 
• Ladakh has obtained the lowest grade, Grade VII.

• Raimona Reserve Forest in Assam has been upgraded as the National Park. It will now be the sixth National Park in Assam.
• Raimona National Park is in Kokrajhar district under the Bodoland Territorial Region (BTR), spread over 422 sqkm.
• Raimona also shares its boundary with Phipsoo Wildlife Sanctuary and Jigme Singye Wangchuk National Park in Bhutan (1,999sqkm).
• The other five existing national parks in Assam are Kaziranga National Park, Manas National Park, Nameri National Park, Dibru-Saikhowa National Park and Orang National Park.

• Former power secretary Sanjeev Nandan Sahai has been named as the new Chairman of oil regulator Petroleum and Natural Gas Regulatory Board (PNGRB).
• Sahai is a 1986 batch IAS officer who retired as Secretary in Ministry of Power on January 31, 2021.
• His appointment is subject to approval by Appointments Committee of the Cabinet (ACC).