OROP sheme

One Rank One Pension Scheme: OROP Review

OROP or One Rank One Pension Scheme is government pensioning reform movement introduced in 2015. It states that any individual who has retired from Indian Civil Services with the same rank are liable for the same amount of pension irrespective of the age of retirement.

OROP sheme

Why Was OROP Introduced?

This scheme was introduced to avoid a discrimination in pension received by soldiers who retired earlier and soldiers who retired more recently. The pension system is dependent on the last salary received and with the introduction of pay commissions salaries have increased over the time. Thus an Army General who retired in 2015 would get more pension than an Army General who retired 1982. The OROP helped bridge this pension gap. This Armed Forces pension scheme was extended to all Indian Civil Services.

What is OROP?: Example and Illustration

Suppose an Army Major has retired back in the late 1970’s. Assume possible pension amount to be 50% of the last drawn salary. Due to inflation condition that was seen over the years in the market, the pension of the Army Major increased periodically. Now an Army Major has retired in 2015. Due to inflation, the officer’s salary is already higher. After retirement, the Major is pensioned at the same rate of 50% of the last drawn salary. Thus the initial pension amount is much greater. This amount now increases over the years due to inflation. So the individuals of the same rank would have different pensions.

This difference in pension did not matter much in other government organizations. But in Armed Forces where the retirement age is less and the rank holds far greater importance, the difference in pension was striking.

Advantages Of OROP

  • The OROP Scheme compensated for the fact that soldiers retired at a much younger age than other citizens. Thus their monetary needs and dependency on the pension system is higher. In this case, OROP makes sure that soldiers who have retired with the same rank status get a fair pension and do not suffer due to inflation.
  • OROP Scheme helps early retired government personnel to gain the same advantage of pay commissions like the more recently retired government personnel. This stands especially in the case of Armed Forces.

Disadvantages of OROP

  • All Civil Services are liable to OROP causing a huge amount to be invested in government job sectors. Though this scheme profited ex-servicemen, the other citizens who work for government organizations are dissatisfied. Thus in later years, this may cause a public outrage, meaning that the government will have to comply with the needs of other pensioners and extend OROP for them. This will result in a huge amount of wealth being drained out.
  • Pensioning the Armed Forces according to the OROP Scheme has resulted in raising the Defence Pension Budget to increase by approximately 4700 crores. Over the years the inflation and introduction of pay commissions have caused the salary of Civil Services officers to increase. Thus periodically more money has to be invested by the government.

OROP News Updates

Rahul Gandhi and Kejriwal claims that Modi has been lying on OROP. According to them, Army officials were fooled by the name of One Rank One Pension Yojana. They are not receiving any updated pension. – Is this True?

No. People have started getting a higher pension from the June 16, as promised by the Government. For people to get the benefits of higher pension, they should have done a service of 20 years as commissioned officers, and 15 years for the rest categories.

What should one do if they are not getting the higher amount as promised in OROP Scheme?

Instead of going to banks, you should connect with your relevant command. They should be able to help you with this. Please mind the pension pay orders comes from the command, and banks have no role to play in it.

OROP Facts

One Rank One Pension was already in place in 1973 before Mrs. Indira Gandhi stopped it when she was the then PM of India.

Indian Congress ruled for almost 30 years but never implemented OROP back.

Narendra Modi, after almost more than three decades, re-implemented OROP.

Still, out of 20.6 lakh Army personal, nearly one lakh people are still deprived of getting benefits of OROP Yojana due to various limitations but Defence Minister Manohar Parrikar has promised to solve the issue as early as possible (hopefully by February end).

Was there any change made by the Indian Government in the proposed OROP scheme?

Yes, a little. Before coming to the power, Prime Minister Narendra Modi had promised that they would implement OROP when they come to power. Once Narendra Modi became the Prime Minister, he had to fulfill his promises. But in reality, it was a lot of burden for the Indian Government. So to reduce the burden, they made a small change. Those Army Men, who opted for voluntary retirement were kept out of the benefits under the scheme.

This could, however, backfire the Indian Government. Many Army men used to opt for voluntary retirement, once they reached the pension permissible stage. As a result, new recruitment was possible. Now to get the benefits of One Rank One Pension Scheme, Army personnel would wait until their service period gets over and not take any voluntary retirement.

Suicide over OROP Scheme

If One Rank One Pension Scheme was for the benefit of the Indian Army, why did the ex-Jawan opt for suicide?

Subedar Ram Krishna Grewal, an ex-Army personnel, had taken retirement in 2004. Before the OROP scheme was implemented, he was getting a pension of Rs. 14,000 every month. Post OROP implementation, he was entitled to receive Rs. 28,000 INR per month. However, he only received Rs. 23,000 INR (Rs.5,000 less than what he should have got).

When he approached the SBI bank, the bank officials could not help him. As a result, he wrote a letter to the Defence minister Mr. Manohar Pariker, and committed suicide the very next day.

When enquired, it was found that due to a technical glitch, the bank showed miscalculated amount. Centre had already made all the clearance from their side.


Pradhan Mantri Garib Kalyan Yojana

Pradhan Mantri Garib Kalyan Yojana or PMGKY is a government scheme introduced by Narendra Modi in 2015 and was amended post demonetisation on 16th December 2016 to abolish poverty. The idea is to direct all the black money to improvise the conditions of the impoverished.


Objective Of PMGKY

When PMGKY was first introduced they had the following goals:

  • A series of workshops will be conducted for all citizens of the country. Each participant has to pay a small amount of money to register for the workshops.
  • All workshops will be conducted under the supervision of different Members of Parliament to analyse the proceedings and improvements.
  • Several ministers were encouraged to take part in these workshops in order to contribute to the funding for the weaker sections.

Why Re-Introduce PMGKY?

The Pradhan Mantri Garib Kalyan Yojana is the opportunity for all black money holders to convert their illegal financial assets to legal ones by investing in PMGKY as a penalty. The denominations, INR 500 was changed and INR 1000 was eliminated on 8th November, creating history in the nation and ruckus for all black money holders. A time frame was given to all citizens to exchange the old currency notes with new ones setting a limit for the money to be exchanged. Those with a huge amount of black money dealt with this blow by burning stacks of 500 and 1000 currency notes. Having observed this, the PMGKY introduced in 2015 was revised according to new tax laws in 2016. Thus while the original objectives were maintained this new amendment came into play to enable all black money holders to rectify the nature of their monetary assets.

Implementation Of PMGKY Post Demonetisation

When PMGKY was launched, Modi stated that a part of the government funds will be indulged in conducting paid workshops and raising money for the weaker sections of society. After demonetisation, the laws were modified to raise a greater amount of money to abolish poverty under PMGK.

  • The unaccounted black money held by citizens operating unlawfully will be declared confidentially via contributing it to PMGKY
  • The earlier Income Tax Act was modified by honourable Finance Minister Arun Jaitley to make these amendments.
  • The black money will be charged in two ways: 50% taxation for the illegal wealth attained with some of the amounts to PMGKY.
  • Apart from the above divisions for black money penalty, 25% of the black money will be invested in the account of PMGKY for a period of 4 years. This investment will not be liable for returns through interest rates for that duration.
  • Initially, all the national and co-operative banks were to operate in accordance with this scheme. But later co-operative banks were disallowed from continuing as they were suspected of converting the black money to legal currency for personal profits.
  • The PMGKY tax reform can be availed till 31st March and all black money holders are being encouraged to participate in it as the proceedings will remain anonymous.

How To Deposit Money Under PMGKY

All black money holders aiming to convert their illegal wealth confidentially, must make the deposits in a Bonds Ledger Account maintained by the Reserve Bank of India. A certificate will be drawn in the name of the beneficiary who has declared the illegal money. The deposits can be made in all denominations that are a multiple of 100. All deposits have to be made by the black money holders at one time for complete transparency and avoiding pilferage. A Bonds Ledger Account will commence only after a deposit is made via cash, cheque or online banking to the authorised banks under this scheme. 25% of these deposits made will be invested without interest for 4 years under PMGKY.

Nomination can be done in the case of a Bonds Ledger Account. The primary account holder can nominate more than one person for the account. In the case of death of the primary account holder, the amount payable will go to the nominees or the heir.

Success Of Amended PMGKY

The concept of organising workshops and raising money for funding the impoverished was not very successful. But with the new angle of raising money via the unaccounted wealth post demonetisation is by far a successful idea. A lot of lawful cash will be generated to benefit the poor and the black money holders will get a window to rectify themselves.


Pradhan Mantri Jeevan Jyoti Bima Yojana

Pradhan Mantri Jeevan Jyoti Bima is an Insurance Scheme introduced by Narendra Modi to increase the number of citizens insured in India. From a survey, it was deduced that only 20% of the demography is insured with a Life Insurance policy. With a country that has a huge population, 80% individuals being uninsured is a big lag in development.

What are the particulars Pradhan Mantri Jeevan Jyoti Bima Yojana?

Under PMJJBY, it is stated that the Indian citizens between the age 18-50 years must pay a premium of INR 330 per year which will be auto debited from the bank account of the beneficiary. This premium will be mature to an amount of INR 2,00,000 and will be paid to the heir or nominee in case of the death of the account holder. Thus PMJJY aims at every citizen having a life insurance. The scheme will be provided by all Life Insurance companies. PMJJBY can be availed by all saving account holders. Thus it will be mandatory for all earning citizens to open a bank account.

What is the eligibility criterion for PMJJBY?

  • An Indian citizen who is a savings bank account holder. (Age bracket: 18-50 years).
  • Must submit a written consent to the government that a premium of INR 330 will be auto debited from their account annually.

How To Apply For PMJJBY: Filling Online Application

The following are the steps to apply for PMJJBY:

  • Open the internet banking account of the bank you hold a savings account.
  • Go to the “Social Security Schemes” section. This section is available under account details.
  • Click on “Apply” and select scheme as “Pradhan Mantri Jeevan Jyoti Bima Yojana”.
  • Enter your account number and CIF number.
  • This application form is also available offline. Collect it from your bank or download it. Then you can fill the form online and submit with an authorized signature.

How is the premium divided?

The INR 330 premium auto debited monthly is divided as follows:

  • INR 289 is the annual amount for crediting the insurance.
  • INR 11 is payable to the bank by all account holders as Administrative Reimbursement.
  • INR 30 is the amount payable to various government and private corporate sectors for incurring the payments that enable the provision of these services.

What is the termination scheme for PMJJBY?

The termination policy is as follows:

  • The account will be terminated in the case of closure of the savings bank account of the beneficiary for reasons like bankruptcy or being unable to pay the premium due to insufficient balance remaining.
  • When the citizen reaches 55 years of age, the account is automatically terminated.( Note: Enrolment can’t be done in PMJJBY after 50 years of age).
  • In case the government comes to find out that an individual has multiple insurance schemes in the same account or under separate accounts, the PMJJBY for that individual will be terminated.

Aam Aadmi Bima Yojana (AABY) – Benefits and How to apply

Aam Aadmi Bima Yojana was launched on Gandhi Jayanti, 2007 by P.Chidambaram who was the Finance Minister back then. This was Social Security providing welfare scheme that targeted at benefiting the households of the lower sections of the society. The scheme covered the primary member of the family or the head of the family. The age of the family member should be between 15 years to 59 years, to be eligible for this scheme.

Who Is Administering The AABY Scheme?

The central head for the administration of the AABY Scheme is appointed by the Central Government. Thus according to feasibility, the administering body is either the Central Government, State Government or a local NGO who has taken up the charge for the welfare of any particular rural location.

What is Aam Aadmi Bima Yojana Premium Fund?

When individuals register for AABY, an account will be started under their name. For all the citizens who have applied for this scheme, a funding account will be set up. This account is known as the “Aam Aadmi Bima Yojana Premium Fund”. The account of every beneficiary will be credited with a premium of INR 200 annually. The payment of this amount will be incurred by the Central Government and the State Government equally.

What is the insurance coverage under AABY?

If an individual is registered for AABY Premium Fund account, the government will provide the insurance coverage as follows:

  • On death of the insured individual: INR 30,000
  • On untimely death due to an accident or complete disability: INR 75,000
  • On partial disability due to an accident: INR 37,500

What is the eligibility criteria for AABY?

The eligibility for Aam Aadmi Bima Yojana is as follows:

  • The individual applying for AABY should be a member of a household below the poverty line or marginal with the poverty line as identified by the government.
  • The individual must be from a family where no other member has an existing AABY account under their name. This scheme stands only for one earning member of the family or the head of the family.
  • The individual must be in the age bracket of 15-59 years.

How to apply for AABY?

The application form for AABY is available both online and offline. Thus interested citizens must apply for it by filling in the required information. This application form has to be submitted to the respective banks and municipality with supporting documents for further processing.

What the documents required to apply for this scheme?

Application for this scheme would mean submitted proof of age to the government. Thus the following documents:

  • Ration Card (Proof of Below The Poverty Line)
  • Aadhaar Card (account linked to Aadhar)
  • Voter Card (Proof for 18 years of age and above)
  • Birth Certificate (Age proof)

What are the other benefits of AABY?

Under the AABY Scheme, an additional benefit has been provided by the government to all premium fund account holders. This benefit states that an educational scholarship can be opted for by children of the individual registered for AABY. The scholarship is available for a maximum of 2 children who are studying in grades between 9 to 12. As scholarship, an amount of INR 300 is given to them on a quarterly basis.

LPG subsidy scheme

LPG Subsidy Scheme: Pros, Cons, Success Rate and Recent News

LPG Subsidy Scheme, popularly known as PAHAL, was launched by Narendra Modi Government, where the citizens living below poverty line gets a new LPG connection with the subsidized amount of the rich/middle-class people (who sacrificed their subsidy voluntarily).

This scheme was primarily launched to facilitate rural development. In a country having 125 crores population, there are many people who do not need any subsidy in LPG gas but were paying the same amount no matter he needed the subsidy or not. So the government came up with an idea, where people could voluntarily give up their subsidy and the government used the same amount to give a new connection to the poor as they can’t afford it.

LPG subsidy scheme

What is The LPG Subsidy Scheme?

The LPG Subsidy scheme introduced as PAHAL by Narendra Modi was initially launched in 54 districts when it started in 2014. By 2015, the scheme covered all the 622 districts remaining. The PAHAL or Pratyaksh Hanstantrit Labh Scheme states that there will be a direct benefit transfer of LPG subsidy that is given for domestic use. Initially, when the scheme started, the LPG subsidy was directly linked to the bank account via the Aadhaar Card under DBTL (Direct Benefit Transfer LPG). But the individuals who did not have an Aadhaar ID suffered. Thus the scheme was re-launched for the benefit of everyone, where CTC (Cash Transfer Compliant) was possible under PAHAL even if they do not have any Aadhaar card. But the CTC was only a two-month grace period given. Thereafter, Aadhaar is mandatory for LPG subsidies after 30th November.

Since LPG is a government provided service, there should be no money charged for transportation and direct delivery of LPG subsidies. Only the cost of the LPG is to be directed to the government. Thus, the mission of the PAHAL Scheme is providing cashless LPG Subsidies to households to maintain a transparency in the market.

What are DBTL and CTC?

DBTL is Direct Benefit Transfer LPG where the amount paid for LPG subsidies will be directly deducted from the bank account linked to the Aadhaar Card.

CTC is Cash Transfer Compliant where the bank account can be directly linked without an Aadhaar card in order to pay for LPG subsidies.

Update: This scheme is not available anymore.

What is the Success Rate Of LPG Subsidy Scheme?

  • PAHAL has reached a major milestone with generating saving up to 21,000 crores by 2016. More savings are expected by the end of this fiscal year.
  • In the face of demonetization, the dependency on PAHAL has increased as it promotes cashless transaction. Thus an increase in the number of LPG subsidies has been seen. From 13 crore in 2014 when it started, the number of domestic subsidies have become 17.4 crores.
  • PMUY was introduced for the households below the poverty line. Under the PMUY or Pradhan Mantri Ujjwala Yojana, LPG connection is given to all the households below the poverty line at no cost.

What Are The CONS of LPG Subsidy Scheme?

PAHAL was introduced in good faith to start cashless provision of LPG subsidies, but it has gone awry in some places. India is divided into two parts: the under-developed and the highly developing. For the people in urban areas where development is fast paced, PAHAL through DBTL and CTC is possible. But when looking at the broader picture, the overall price indexing system has to be considered. The poorer sections of the society are falling in a disadvantageous position in this respect due to the lack of development.

The successful fulfillment of PAHAL scheme depends on factors like proper banking system and remote network connectivity. But neither exists in rural India. Thus over 10 million have given up LPG subsidies after PAHAL.

LPG Subsidy: Union Budget 2017

The Union Budget 2017 claimed that several schemes regarding the use of non-renewable resources was to be financially earmarked. A total of 25,000 crore INR is to be set aside for that purpose. The LPG Subsidy Scheme which revolutionized rural India is to gain a massive capital under this. Thus out of 25,000 crore INR an amount of 16,076 crore INR is to be credited towards LPG Subsidy. This is a huge step forward by the government for the betterment of those who cannot avail the services of cooking gas.

LPG Subsidy Recent News

  • In an attempt to eradicate all black money and dealings in India, a new scheme related to PAHAL has been introduced. It states that all domestic households are entitled to a subscription of 12 cylinders of 14.2kg each at government stated rates. If more cylinders are in demand by the higher income group (greater than 10 lakh per annum), they will not get a further subscription.
  • 12% of customers in Indore who had LPG subsidies have been denied subscription as they have not linked their Adhaar number to their accounts.
  • The PMUY (Pradhan Mantri Ujjwala Yojana), which aimed at providing LPG as a free benefit to the households below poverty line, has met with a huge success. Narendra Modi has successfully monitored the delivery of LPG connections in 15 million households over a period of 8 months.
Start Up India

Start Up India Loan Scheme: Review

Concept of Start Up India

The young ignited minds will help build a better India. And that is exactly the inspiration drawn by Narendra Modi when he launched the Start-Up India Scheme. The aim was to take the country to a level where innovations will lead the youth to embark on a journey from “Job Seekers to Job Creators“. Thus, the end result would be a developed nation with a stable economy. The Start Up India Scheme states that if any Indian citizen shows potential entrepreneurship qualities by presenting an innovative idea that promotes development, they will get a monetary support from the Government of India.

Start Up India

What Is A Start Up and How Will It Be Eligible For Startup India Loan Scheme?

The eligibility criterions as set by the government of India for a Start Up Organization avail financial aid under Start Up India Loan Scheme is as follows:

  • The organization must be independent and registered in India.
  • It should not be formed after division, modification or close down of any previously present organization.
  • The organization must not be an establishment older than five years.
  • The turnover of the company should not be more than 25 Crores annually.

Action Plan For Start Up India Loan Scheme

The action plan for implementation of Start Up India Scheme will be in these areas:

  • To provide technical guidance to a Start Up organization to simplify their working plan and if required modify their innovations to get better results.
  • Support a Start Up organization with proper funding and provide good incentives.
  • Involve a Start Up organization with Incubators and help them partner with well established Industrial and Academic Institutions.

 Loan Value Under Start-Up India Scheme

The scheme, Start Up India was announced on 16th January 2016 and was officially launched on 1st April 2016. Under this scheme, if any organization with innovative ideas for development is considered as a “Start-Up” by the Government of India then a loan be extended to the organization. The amount of loan will range from 10 Lakhs to 100 Lakhs according to the requirement and set norms. Parallelly a scheme known as Stand Up India will be launched with similar facilities to promote entrepreneurship among women, SC/ST and Other Backward Classes.

Features Of Start Up India Loan Scheme

The key features of Start Up India Scheme are:

  • The registration to apply for Start Up India loan will be done via online application forms.
  • A system to self-certify a Start Up has been introduced.
  • To provide proper online support a web domain and a mobile app will be developed which will be dedicated to the Start Up organization.
  • The organization will not be inspected for the initial three years.
  • Exemption from Income Tax for the first three years.
  • Innovation promoting courses will be started under the Atal Innovation Mission.

An important point to note while applying for Start Up India is that the Start Up organization will be exempt from tax deductions unless it gets a certification from Inter-Ministerial Board.

Startup India: Registration Procedure

All aspirants who wish to register for the Startup India Scheme must follow either of the two options:

  • An individual can register himself or herself via a MCA or through Registrar of Firms. Simultaneously they have to register themselves officially on the web portal of Startup India.
  • The second option is to make the complete application through the Startup India mobile application. Though mostly it is recommended that this mobile application process is followed as it is an easier one. Registering via MCA or Registrar firms had to be done previously as the mobile app was not built.
railway travel insurance

Railway Travel Insurance Scheme: Review

What Is Railway Travel Insurance Scheme?

Narendra Modi launched the Railway Travel Insurance Scheme on 1st September 2016, to ensure safer journeys via Indian Railways. This is another revolutionary government scheme that aims at providing complete insurance to a person if they become a victim of an unfortunate train accident. The aim is to provide better accident relief facilities and ensure an overall safety as far as Rail journeys are concerned. The insurance cover that can be claimed is up to 10 Lakhs.

railway travel insurance

How To Apply For Railway Travel Insurance Cover

After booking and generation of E-Ticket via IRCTC website, an SMS will be sent to the citizen who has booked the ticket. That SMS will state that the Railway Travel Insurance can be availed by paying a nominal amount of 92 paise per passenger. Also, a link will be given in the SMS from where the user will be redirected to apply for the insurance. This insurance is, of course, optional and a citizen may or may not avail it as per will. Also, this insurance option is available to all passengers irrespective of the class and status of the ticket. Therefore, all confirmed, waitlisted and RAC passengers can avail this insurance.

Exemptions In Railway Travel Insurance

There are certain criterions under which a passenger cannot avail Railway Travel Insurance. They are as follows:

  • Any passenger traveling by local or suburban trains cannot avail this insurance.
  • This insurance is applicable only if the passenger is above 5 years of age.
  • Foreign citizens cannot avail this insurance.

This premium amount of 92 paise per passenger is non-refundable and hence will not be credited in case of cancellation of a ticket.

Compensation According To Railway Travel Insurance Scheme

As per the set norms, the amount of compensation in case of an untoward accident is as follows:

  • In case of death and complete physical disability: 10 Lakhs
  • In case of semi-physical disability: 7.5 Lakhs
  • In case a person needs to be hospitalized due to serious wounds: 2 Lakhs
  • Transporting mortal remains after an incident like dacoit attack, Riots, Shooting, etc: INR 10,000

To conclude, the Railway Travel Insurance Scheme is a necessary step that had to be taken, for the Rail Department to take better care of their passengers and avoid any unwanted accidents by being more alert about the track conditions, foggy weather or potential attacks.

Railway Travel Insurance Scheme: Application Policy

Railway Travel Insurance Scheme offers compensation, but that is liable to certain terms and conditions. The application policy states that the intimation towards claiming the premium should be made within four months within occurrence of the untoward event that demands a compensation. Then the claim will be approved by the Railway Insurance Department and the premium will be processed within 15 days. The compensation will be extended towards the aggrieved in form of a cheque of the premium amount. Thus the application and cancellation policy are flexible as it occurs within a short period of time.


10 Things You Need To Know About GST

The Union Budget 2017 that was introduced by Arun Jaitley on 1st February 2017 stated that the GST bill is to be implemented from 1st July 2017. Both the central and state government have signed an agreement in order to commence the implementation of GST. Though in its initial years post demonetisation, GST will be difficult on the operation form, but here the future is being considered. Thus, even though a tough stride has to be taken to maintain the GST reform initially it will help generate excellent revenues in future. Thus the fiscal year 2017-18 is very crucial with the advent of GST bill.

What is GST?

GST stands for Goods and Services Tax. The GST bill was to be launched long back in April 2014, but since it faced opposition it will finally be levied from 1st April 2017. The GST bill is the 122nd amendment of the constitution which will bring one of the largest economic waves in the country. The bill states that every state, region and district in India will follow a common taxation structure in case of goods, products and services delivered. This will lead to the demolition of other taxes like state level service tax and state level VAT( Value Added Tax). This unification in taxation system will ensure a stable economic system and will completely abolish corruption in market transactions.

What other changes will be seen in the constitution on the issue of GST bill?

With the 122nd amendment being issued an Article will be added in the constitution stating that the right to legislating GST will lie with the Central and the State Governments.

What is the governing body responsible for GST framing?

A governing body known as GST Council will be formed to legislate the GST. The chairman of this council Finance Minister at the Central level and the State Finance Minister at the State level. At State level, there can be changes as per nominated by the State Government. The other ministers who will be part of this council will be nominated from the Finance department at both Central and State Level.

What is the framework for implementation of GST?

The GST is divided into two parts: The State Goods and Services Tax (SGST) and the Central Goods and Services Tax (CGST). Both SGST and CGST will be simultaneously levied for market transactions. The Central Government will be responsible for collecting the CGST and the State Government will be responsible for collecting the SGST.

How will the CGST and SGST be decided?

The GST Council will be responsible for taking all decisions regarding levying GST at both Central and State level. They will be reviewing the market rates of all the products and applying the unified tax rates on all goods and services.  The GST council may also decide to waive taxes on certain goods and change the uniform rates based on their discretion.

What are the exceptions to GST scheme rule?

All alcoholic liquor will not come under GST and will be exempted from the taxes levied by GST. Also, non-renewable fuel resources will fall under varied rates as decided by the GST council. They will not be subject to the unified rate.

How will GST function in case of the Inter-State trade framework?

In the case of inter-state trading, an additional 1% tax will be levied apart from the GST. This tax will have to be paid for demand and supply of goods.

What if a State incurs heavy losses under the GST Scheme?

In the case of major losses incurred by any State under the GST Scheme, the Council will compensate for the losses by paying the lost funds to the State for a duration of 5 years.

What will be the positive results of issuing GST?

The economic worth of a country is defined by its GDP rate. This system of unified taxation would mean a complete transparency in market taxation systems and an equality as far as economic gains due to taxes are concerned. This would also mean better trading systems as GST will affect the export of goods. As a result, an increase in GDP will be seen. Thus the stability of economic system will be retained, giving a profit turnover of over 10 billion dollars in India.

What will be the CONS of GST system?

The GST will be issued in accordance with the global market taxation scheme. The global range of taxation is 14% to 22%. Thus the average range is seen to be between 18%-20%. So the GST issued will levy an 18% tax on all goods, products as services. While this will maintain uniformity, certain tax values which were originally low will now rise.

Direct Benefits Transfer

Direct Benefit Transfer – What is DBT Policy, Pros and Cons

What is DBT Policy?

DBT stands for Direct Benefit Transfer is a government scheme via which all subsidies taken by a citizen is directly transferred to the bank account of the beneficiary if a citizen is below the poverty line. The primary aim of DBT is transparency in the process of monetary benefits transferred by the government whereas charging subsidies below the poverty line are concerned.

Direct Benefits Transfer

How Is DBT Implemented?

The Direct Benefit Transfer implementation is made via the Aadhar card. The Aadhar card has the unique identity number of every citizen and is directly linked to their account. Thus using the Aadhar number it is possible for benefits to be transferred from the government so that subsidies can be given to individuals who are living below poverty line. Another major reason for taking this step is to eliminate excessive poverty in the country. Plus using an Aadhar number to transfer the money, would also ensure complete transparency and hence eliminate any means of corruption in government funding schemes.

PROS of Direct Benefit Transfer

The benefits that are observed through the implementation of this scheme are as follows.

  • It eliminates black money pilferage and ensures complete transparency in transactions.
  • DBT is an organized process that helps the financially unstable citizens of our country to gain benefits in subsidies like LPG with minimum effort and saves their money.
  • The poverty line is reduced and thus the financial gap in the community is somewhat bridged.
  • Since it is a government initiated scheme, there are no faults in the subsidies or delay in delivery of services.
  • Since subsidized gains are portrayed transparently in the market, there is proper regulation of the market price framework.
  • Economic finances circulated by the government will ensure some rise in the GDP.
  • These subsidies will help the rural people in the following areas: health services, the growth in net worth of a rural farmer, simplicity in the distribution of funds.

CONS of Direct Benefit Transfer

  • The subsidies will be funded by the government as the money will be directly transferred to the bank account. This will mean more money in the hands of the rural citizens below the poverty line. Now, India is not a completely developed country, so it can be possible that the citizen is not educated enough to use this extra money where it is aimed at. Via DBT there are no means to monitor how the money once transferred is being handled, which can be a huge demerit.
  • The number of bank branches in rural areas is less. There are no steps being taken to look into that. Therefore, it may sometimes not be possible for rural locales to withdraw the money at desired time.
  • In rural areas, people are more conservative. Thus it is obvious that most bank accounts have male beneficiaries. Thus the money can be withdrawn only under their name, whereas the female rural locales may be completely denied of any advantage that DBT offers. This is again a case where money pilfered illegally by one individual will negatively affect another, and the government has no ways to keep tabs.