04.SEPTEMBER.2025 CURRENT AFFAIRS

Move towards a two-rate system:

• 5% (essential & common-use items)

• 18% (standard rate for most goods/services)

• Introduction of a 40% “special rate” → for sin goods (tobacco, pan masala, gutka, bidi, aerated/caffeinated drinks) and super-luxury goods (large cars, motorcycles>350cc, yachts, helicopters, airplanes for personal use).

Effective Date

• New rate structure effective from September 22, 2025 (most items).
•  Tobacco-related items → transition later, after Centre repays loans for GST compensation to States.

Fiscal Implication

• Estimated ₹48,000 crore revenue impact (based on 2023–24 consumption patterns).

• Govt expects buoyancy effect and better compliance to offset losses.

• Rate reductions on daily-use items:
•  From 18%/12% → 5%: hair oil, soap, shampoo, toothbrush, toothpaste, bicycles, kitchen/tableware, household articles.
•  From 5% → 0%: all Indian breads (roti, chapati, paratha), paneer, ultra-HT milk.
•  Processed foods: namkeens, sauces, pasta, instant noodles, chocolates, coffee, butter moved to 5%.

Health & Social Sector Benefits

• 0% GST:

• Individual life & health insurance
• 33 life-saving drugs/medicines

•  5% GST: spectacles for vision correction.

Labour-Intensive & Agriculture Support

• Handicrafts, marble/granite blocks, intermediate leather goods: 12% → 5%.

• 12 bio-pesticides & bio-menthol: 12% → 5%.

• Fertilizer input chemicals (sulphuric acid, nitric acid, ammonia): 18% → 5%.

• Cement: 28% → 18% (big relief for infra sector).

• Manmade textile sector:

• Fibre: 18% → 5%

• Yarn: 12% → 5%

• → Rectifies inverted duty structure (a chronic issue).

Continuity

• Electric vehicles: GST retained at 5% (no change).

Tobacco Sector Exception

• Current regime (28% + Compensation Cess) will remain till States’ compensation loans are repaid.
• Later, tobacco & related products to be shifted to 40% slab.

SRILANKAN TAMIL REFUGEES WHO ARRIVED BEFORE 2015 EXEMPTED

• Enacted in April 2025 – consolidates and repeals four earlier laws dealing with entry, stay, and immigration of foreigners.

Penal provisions:

• Entry/stay without valid passport/visa → ₹5 lakh fine or up to 5 years’ imprisonment or both.

• Section 3(1), (2), (3): Requirement of passport, travel document, or visa for entry/stay.

Sri Lankan Tamil Refugees

• Exemption granted under the Immigration and Foreigners (Exemption) Order, 2025.
•  Applies to Sri Lankan Tamils who entered India before January 9, 2015 and are registered with the government.

 Exemption covers:

• Stay in India without valid travel documents.  
• Exit from India.
•   Earlier order (December 16, 2015): Waived visa fees & overstay penalty for voluntary return to Sri Lanka.
•  Significance: Protects them from being treated as “illegal migrants.”

Exemption for Six Minority Communities

• Applies to Hindus, Sikhs, Buddhists, Jains, Parsis, Christians from Afghanistan, Bangladesh, Pakistan.
•   Cut-off: Entered India before December 31, 2024.
•  Purpose: Enable long-term visas (precursor to citizenship).
• Justification: Protection from religious persecution.
•   Note: Exemption ≠ extension of CAA cut-off date (still December 31, 2014).

Citizenship Framework

• Citizenship (Amendment) Act, 2019 (CAA):

• Cut-off date for eligibility: December 31, 2014.

• Cut-off date for eligibility: December 31, 2014.

• Citizenship Act, 1955:
• Naturalisation requires 11 years’ aggregate stay in India.

Political Context

• BJP units (esp. West Bengal) have been demanding extension of CAA cut-off date.
•  Recent confusion arose when Union MoS Sukanta Majumdar (BJP, West Bengal) posted (later deleted) thanking PM/ HM for extension.
• Clarified: Exemption = protection from deportation, not automatic CAA.

CONCEALING A JUNGE DISSENT, ERODING JUDICIARY’S AUTHORITY

• Coined by Etienne Mureinik (South African law professor).
• Principle: Every exercise of public power must be explained and defended, not just commanded.
•   Indian courts have invoked this principle often to demand state accountability.
•  Irony: The judiciary demands justification from others but shields its own decision-making (Collegium) from scrutiny.

The Collegium System – Background

Created by Judicial Pronouncements:

• Second Judges Case (1993) → primacy to judiciary in appointments.
•  Third Judges Case (1998) → institutionalised Collegium of 5 senior-most SC judges.
• Nature: Judge-made law, not part of original Constitution.
•   Functions: Appointment and transfer of judges in High Courts and Supreme Court.
•  Criticism: Opaque, secretive, minimal disclosure of reasoning.

Justice Nagarathna’s Dissent – Case in Point

• Objection to Collegium’s recommendation of Justice Vipul M.Pancholi.
• Reported as “grave reservations” but not officially recorded
• Resolution uploaded on SC website showed unanimity, hiding dissent.
• Government notified the appointment within 48 hours, ignoring dissent.
• Highlights: Opacity, lack of accountability, suppression of internal disagreement

Transparency Attempts & Retreat

• 2017: Collegium began publishing resolution.
• 2018: Brief experiment with fuller reasons for decisions (later withdrawn).
• Reason for rollback: Fear of reputational harm to candidates.
• Current practice: Minimal, skeletal announcements → effectively a black box system.

Critiques of Collegium Secrecy

• Reputational harm argument weak: Can be mitigated with structured disclosure.
• Political pressure argument weak: Secrecy has not stopped the executive from delaying/ignoring Collegium recommendtaion.
• Comparative Perspective:
• UK: Judicial Appointments Commission – transparent criteria,reports.
• South Africa: Judicial Service Commission – public interviews,debates.
• Legitimacy flows from openness, not secrecy.

Democracy, Judiciary & Accountability

• Judiciary plays counter-majoritarian role: Protects rights, checks executive and legislature.

• Independence of judiciary = cornerstone of constitutional democracy.

• But legitimacy of unelected judges depends on trust.
•  Without transparency in appointments, democratic deficit deepens.
•  Paradox: Judiciary demands accountability from others but shields itself.

Reform Imperatives

• Collegium must adopt culture of justification in its own functioning.
•  Public reasoning would strengthen, not weaken, judicial independence.

Need for:

• Transparency & structured disclosure.

• Institutional reforms balancing independence with accountability.

INDIA’S RECENT MARITIME REFORMS NEED COURSE CORRECTION

New legislative package (2025):

• Indian Ports Bill, 2025 (repeals Act of 1908)  
• Coastal Shipping Act, 2025.
• Carriage of Goods by Sea Bill, 2025  Merchant Shipping Act, 2025
• Need for a holistic, people-centric conservation approach to preserve both tangible and intangible heritage.
• Aims: Streamline maritime governance, modernise fragmented legal framework, align with global conventions & best practices.

• Strategic importance: India has ~7,500 km coastline, handles ~95% of trade by volume.

• Simplification & coherence in regulation.
• Facilitative framework for ease of doing business.
• Encourages sustainable port development.
• Harmonises with international shipping standards.

• Modernises ownership, liability, and environmental safeguards.

• Recognises offshore units, new vessel types, training oversight.

Concerns & Criticisms

• Federalism & Centralisation
• Maritime State Development Council (chaired by Union Minister) → directs States to follow Centre’s policies (e.g., Sagarmala, Gati Shakti).
• Reduces States’ fiscal & policy autonomy in port development.

• Seen as federal subordination rather than cooperative federalism.

• Judicial Independence & Dispute Resolution
• Judicial Independence & Dispute Resolution committees.

• Risk: Bias, lack of impartiality, reduced investor confidence.

• Ownership Loopholes (Merchant Shipping Act, 2025)

• Earlier: 100% Indian ownership required.

• Now: Partial Indian ownership allowed (incl. OCI & foreign entities).

• Thresholds left to executive notification → potential dilution.
• BBCD registration: May allow foreign control of Indian-flagged vessels indefinitely.
• Risk of becoming a “flag of convenience” jurisdiction.

• Small Operators & Compliance Burden

• Mandatory registration of all vessels, irrespective of size.

• Coastal Shipping Act → burdensome reporting rules for small players (fishing industry particularly).

• Sweeping discretion for DG Shipping to allow foreign vessels (grounds: “national security”, “strategic alignment”) → scope for arbitrariness.

Broader Implications

• Economic: Potential to boost trade, attract FDI, but compliance burdens may hurt smaller domestic players.
• Governance: Excessive centralisation → weakens federal compact.

• Judicial: Erosion of independent judicial review.

• Strategic: Risk of foreign dominance over Indian-flagged fleet; long-term maritime security concerns.

• Regulatory Philosophy: Heavy executive discretion, limited parliamentary oversight, minimal public debate.

• Andhra Pradesh & Telangana witnessing recurrent extreme rainfall events (27% of annual rainfall in 2 days in 2024; Vizianagaram 46% excess in Aug 2025).

• Reflects shifting monsoon behaviour → concentration of rainfall in shorter bursts.

• Highlights climate variability–governance nexus.

Hydrological Stress

• Reservoirs & barrages designed for seasonal inflows, but crises emerge when deluge coincides with near-full reservoirs (Srisailam 94%, Nagarjuna Sagar 96%).
•  Tributaries & rivulets neglected → Budameru (capacity 7,000 cusecs; inflow 35,000 cusecs in 2024) flooding Vijayawada.
•  Floodbanks near Bhadrachalam (Godavari) sinking/collapsing.

Infrastructure Weaknesses

• Damaged gates (Prakasam Barrage) left unrepaired, hampering water release.

Urban vulnerabilities:

• Encroached stormwater channels, incomplete desilting, concretised land → reduced absorption.

• Infrastructure exists but is not maintained or upgraded with urgency.

Governance & Disaster Management

• Disaster management apparatus effective in saving lives → institutional maturity.
•  Weakness: reactive, relief-focused, not risk-reduction oriented.

• Telangana → ₹1 crore per district (short notice) for relief.

• Structural solutions (floodbanks, diversion channels) remain incomplete.

• Protests highlight opaque relief fund utilisation and unfinished works.

Recurrent Pattern

•  In both 2024 & 2025:
•   Late Aug–early Sept extreme rainfall.
•  Krishna & Godavari systems severely strained.
•   Vijayawada inundated.
•   Public protests ensued.

Way Forward / Reform Agenda

Reservoir Management:

• Real-time hydrological modelling.
•   Pre-deluge drawdown for flood cushion creation.

Urban Planning:

• Prioritise drainage networks.
• Ensure permeable land reserves.
•  Move beyond cosmetic desilting.

Flood Infrastructure:

• Continuous (not episodic) maintenance of floodbanks & sluices.
•  Depoliticised upkeep insulated from political cycles.

Governance Mindset:

• Avoid “fatalism” that extreme rainfall overwhelms all→ reform still possible.

TARIFF IMPACTING 55% INDIA EXPORTS TO US

• Tariffs Impact: ~55% of Indian exports to US currently under punitive tariffs (as high as 50%).

• Affected Sectors: Mostly consumer goods → globally large markets, hence diversification possible.

Policy Approach Needed:

• Short-term: Mitigation support for most-exposed sectors.
•  Long-term: Finding new markets, leveraging FTAs (e.g., India–UK).
• Global Context: Despite US measures, ~87% of global trade continues normally → scope for trade deepening.

Russian Oil & Balance of Payments

• Sovereign Choice Principle: Nations must retain autonomy to buy energy from any source.
•  Economic Benefit: Cheaper Russian oil → significant savings for India’s BoP.
•  Counterfactual Impact: Without Russian oil, global market prices would spike, hurting India’s import bill.
•  Legal Justification: India allowed to continue purchases to mitigate instability as world’s 3rd largest oil importer.

Sanctions as a Source of Instability

• Ignored by Multilateral Institutions: IMF, World Bank etc. have not fully quantified sanctions’ spillover effects.
•  Sanctions & Counter-Sanctions: Comparable to war costs in terms of economic instability.
•  Investment Climate: Secondary sanctions + tariff uncertainty → high investment risk globally (“China + wait” phase).
•   Policy Gap: Need granular estimates of spillover costs to inform global policymaking.

BRICS & Alternative Institutions

• Expanded BRICS: Now includes new members beyond the original five → inclusive, growing bloc.
• Not a Counterpoint to the West: Framed as a cooperative institution for emerging economies’ interests.

 Institutional Tools:

• New Development Bank (NDB)
•   Asian Infrastructure Investment Bank (AIIB)
•  Contingent Reserve Arrangement (CRA) → risk- mitigation frameworks.

Climate Financing & CBAM (Carbon Border Adjustment Mechanism)

• Developed vs Developing Divide: Developed nations consume high-carbon products; developing nations bear adjustment costs.
•  CBAM Implementation: EU’s CBAM effective 1 Jan 2026 → non-tariff barrier for exports from emerging economies.
•  Geopolitical Bias: EU unlikely to impose CBAM on the US (due to trade agreement) → creates asymmetry.
•   India’s Opportunity: Use US carve-out precedent to argue for relief/exemptions for emerging economies.

AN EPIC EXCLUSION

• Introduced by Election Commission of India (ECI) in 1990s, under T.N. Seshan’s leadership.
•   Aimed to curb impersonation, bogus voting, and electoral malpractice.
•   Became the most widely possessed ID in India, central to voter identification.
•   Symbol of ECI’s independence and assertion of electoral integrity.
•   Funded after confrontation with PM P.V. Narasimha Rao (Article 75(5) anecdote).

Current Controversy (Bihar SIR – 2025)

• Special Intensive Revision (SIR) of electoral rolls announced in Bihar.
•   Applicants asked to submit any of 11 documents to prove identity/residence.
•  EPIC and Aadhaar excluded from the accepted list → raised litigation & SC intervention.

  Supreme Court’s response:

•   Surprised at exclusion of EPIC & Aadhaar.
•  Directed inclusion of Aadhaar (limited to deleted voters), not EPIC.
•  ECI’s stance: Claimed compliance with Court, but continued non-acceptance of EPIC.

Issues and Concerns

• Paradox: EPIC valid for 2024 General Election (642 million voters) but invalid for roll revision.
•  Symbolic irony: On National Voters’ Day (25th Jan), President of India personally hands over EPICs to new voters.
•  Risk of disenfranchisement:
•  Particularly severe in Bihar (high migration, rural poor).
• Many citizens possess only EPIC as ID.
•  Exclusion may deter enrolment, reduce participation, erode trust.
•  Public perception: Arbitrary/inconsistent rules undermine credibility of elections.

Constitutional & Democratic Dimensions

•  Free and fair elections = part of basic structure doctrine (Kesavananda Bharati case).
•   ECI’s independence under Article 324 questioned if its own reform (EPIC) sidelined.
•   Right to vote & participation linked to Article 326 (universal adult suffrage).
•   Trust in institutions: Democracy depends not only on procedure but also on perception of fairness.

 Way Forward / Reform Imperatives

• Reinstate EPIC as valid document with safeguards against duplication/misuse.
•   Ensure no genuine voter excluded for lack of alternative IDs (passport, DL, etc.).
•  Transparent communication by ECI: Why excluded? Any evidence of misuse?
•  Use controversy as an opportunity for civic education.
• Reaffirm EPIC’s central role as an anti-fraud measure & democratic symbol.

DELHI HC: DENIED BAIL TO UMAR KHALID

• Delhi HC (Sept 2025 ruling) denied bail to Umar Khalid, Sharjeel Imam, Gulfisha Fatima, and 7 others.
• Accused in the Feb 2020 Delhi riots case; charged under UAPA, 1967.
•  In custody for 5+ years without trial commencing.

Legal Provisions Involved

UAPA Sections:

•  Section 15 – defines a “terrorist act” (includes causing terror by explosives, firearms, or any other means).
•  Section 16 – prescribes punishment (including death penalty) for terrorist acts.
•  Section 13 – “unlawful activities” (lesser offence, bail provisions less stringent).
•  Section 43D(5) – bar on bail if accusations are prima facie true, unless exceptional delay/lapse.

Prosecution’s Case

• Riots were a “deep-rooted, premeditated conspiracy”.
•   Allegations: conspiracy through WhatsApp groups + secret meetings; “chakka jam” = “any other means” of striking terror.

• 54 deaths, 1,500+ properties

 Key evidence:

•  WhatsApp chats.
•   Testimony of protected witnesses (“Radium”,“Sodium”).
•   Alleged open discussions on escalation of violence.

Defence Arguments

• Evidence from protected witnesses unreliable (delayed, vague, not cross-examinable).
•   Actions, at worst, fall under Section 13 UAPA (not terrorism).
•   Bail should be given on parity with co-accused (Kalita, Narwal, Tanha).
• Prolonged incarceration without trial violates liberty.

Court’s Reasoning

• At bail stage: evidence presumed true; credibility not examined.
•   No mini-trial permissible during bail hearing.
• Found prima facie grounds for allegations → bail
•  On parity: SC had earlier directed that 2021 bail to Kalita/Narwal/Tanha cannot be precedent.
•   On delay: acknowledged 5 years in jail, but said “hurried trial” also risks fairness.

Constitutional & Legal Issues

• Article 21 (Right to Life & Liberty) vs State’s interest in security & terrorism cases.
•  Due process concerns: prolonged undertrial detention = punishment before conviction.
•   Culture of justification vs culture of suspicion in anti- terror laws.
•   Bail as a rule vs UAPA making jail the rule.

Supreme Court Precedent

• Union of India v. K.A. Najeeb (2021):
•  Bail granted when incarceration exceeds 5 years and trial unlikely soon.
•  Restrictive UAPA bail provisions “melt down” if liberty disproportionately curtailed.
•  Delhi HC distinguished current case, citing “ongoing trial process”.