Why is Excise Not Levied on Pan Masala Normally?

—>GST subsumed excise duty

After GST (2017):
—Central excise duty remains only on petroleum, tobacco, and a few special goods.
—Pan masala was moved into GST regime, taxed at GST + Compensation Cess.

Thus, excise duty cannot be levied on consumption of pan masala, because:

—GST already taxes consumption —>Dual taxation is not allowed.

Hence excise duty is being sought to be levied on the production capacity of pan masala units, which is a demerit good

Meaning:
—>Excise duty will apply not on output, but on installed manufacturing capacity, i.e.,
the number and capacity of machines in pan masala factories.

Why this unusual method?
1. Pan masala industry is notorious for tax evasion—underreporting of production.
2. Capacity-based taxation improves monitoring.

Why is the Centre creating a new cess when compensation cess is ending?

Possible angle:
—>To maintain revenue after expiry of compensation cess (used to repay 2.69 lakh crore COVID-period borrowings for states).

—>Minimum Value Register (MVR) is the government-notified minimum price of land used for stamp duty and registration; transactions cannot legally occur below it.

—>Issue: In Bihar, MVR is outdated (rural last revised 2013; urban 2016), creating a wide gap with rising market prices. This leads to undervaluation, revenue loss, black-money generation, and distorted land markets.

Urbanisation & Infrastructure Growth: Urban expansion, satellite townships and rising market prices demand periodic MVR updates to ensure orderly urban land markets.

Benefits:
Updated MVR improves transparency, checks black money, aligns land prices with reality, supports fair compensation, and boosts state finances(expands non-tax revenue and fiscal capacity of the state)

#BIHARspecial

“Presented a copy of the Gita in Russian to President Putin. The teachings of the Gita give inspiration to millions across the world,” PM Modi wrote on X

What Has Increased Dollar Demand (Why USD demand rose)
—>Widening trade deficit: Imports rising faster than exports; US tariffs made Indian goods less competitive.
—>FPI outflows: Investors selling Indian assets to chase higher US returns; global risk-off sentiment.
—>Debt servicing & remittances abroad: Corporates repaying USD loans; outward remittances for education/investments rising.
—>Speculative demand & hedging: Importers/banks buying USD forwards due to volatility; overvalued REER encouraged correction bets.


What Has Reduced Dollar Supply (Why USD inflow fell)
—>US tariffs & trade tensions: Hurt Indian exports; no new trade deal.
—>Weak FDI inflows: Global uncertainty slowed new investments.
—>Modest remittances & services receipts: Steady but not surging.
—>RBI’s limited intervention: Selling fewer dollars, allowing rupee depreciation.

#GS1mains

Why is the rupee weak even when the Indian economy is strong?

The rupee is weakening not because India’s economy is weak, but because external-sector pressures outweigh domestic strength.
A large trade deficit, FPI outflows, higher USD debt repayments, and hedging have sharply increased dollar demand, while US tariffs, weak FDI, moderate remittances, and limited RBI intervention have reduced dollar supply.
Thus, exchange rate pressure is arising from global and trade dynamics- not from India’s GDP performance.