UPSC 2022 Ethics Case Study and Perfect Solution:
The Supreme Court has banned mining in the Aravalli Hills to stop degradation the forest cover and to maintain ecological balance. However, the stone mining to still prevalent in the border district of the affected State with connivance of certain corrupt forest officials and politicians.
Young and dynamic SP who was recently posted in the affected district promised to himself to stop this menace. In one of his surprise checks with his team, he found loaded truck with stone trying to escape the mining area. He tried to stop the truck but the truck driver overrun the police officer, killing him on the spot and thereafter managed to flee.
Police filed FIR but no breakthrough was achieved in the case for almost three months. Ashok who was the Investigative Journalist working with leading TV channel, suo moto started investigating the case. Within one month, Ashok got breakthrough by interacting with local people, stone mining mafia and government officials. He prepared his investigative story and presented to the CMD of the TV channel. He exposed in his investigative report the complete nexus of stone mafia working with blessing of corrupt police and civil officials and politicians.
The politician who was involved in the mafia was no one else but local MLA who was considered to be very close to the Chief Minister. After going through the investigative report, the CMD advised Ashok to drop the idea of making the story public through electronic media. He informed that the local MLA was not only the relative of the owner of the TV channel but also had unofficially 20 percent share in the channel. The CMD further informed Ashok that his further promotion and hike in pay will be taken care of in addition the soft loan of 10 lakhs which he has taken from the TV channel for his son’s chronic disease will be suitably adjusted if he hands over the investigative report to him.
(a) What are the options available with Ashok to cope up with the situation?
(b) Critically evaluate/examine each of the options identified by Ashok.
(c) What are the ethical dilemmas being faced by Ashok?
(d) Which of the options, do you think, would be the most appropriate for Ashok to adopt and why?
(e)In the above scenario, what type of training would you suggest for police officers posted to such districts where stone mining illegal activities are rampant? (Answer in 250 words) 20
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Petrol in India is cheaper than in countries like Hong Kong, Germany and the UK but costlier than in China, Brazil, Japan, the US, Russia, Pakistan and Sri Lanka, a Bank of Baroda Economics Research report showed.
Rising fuel prices in India have led to considerable debate on which government, state or central, should be lowering their taxes to keep prices under control.
The rise in fuel prices is mainly due to the global price of crude oil (raw material for making petrol and diesel) going up. Further, a stronger dollar has added to the cost of crude oil.
Amongst comparable countries (per capita wise), prices in India are higher than those in Vietnam, Kenya, Ukraine, Bangladesh, Nepal, Pakistan, Sri Lanka, and Venezuela. Countries that are major oil producers have much lower prices.
In the report, the Philippines has a comparable petrol price but has a per capita income higher than India by over 50 per cent.
Countries which have a lower per capita income like Kenya, Bangladesh, Nepal, Pakistan, and Venezuela have much lower prices of petrol and hence are impacted less than India.
“Therefore there is still a strong case for the government to consider lowering the taxes on fuel to protect the interest of the people,” the report argued.
India is the world’s third-biggest oil consuming and importing nation. It imports 85 per cent of its oil needs and so prices retail fuel at import parity rates.
With the global surge in energy prices, the cost of producing petrol, diesel and other petroleum products also went up for oil companies in India.
They raised petrol and diesel prices by Rs 10 a litre in just over a fortnight beginning March 22 but hit a pause button soon after as the move faced criticism and the opposition parties asked the government to cut taxes instead.
India imports most of its oil from a group of countries called the ‘OPEC +’ (i.e, Iran, Iraq, Saudi Arabia, Venezuela, Kuwait, United Arab Emirates, Russia, etc), which produces 40% of the world’s crude oil.
As they have the power to dictate fuel supply and prices, their decision of limiting the global supply reduces supply in India, thus raising prices
The government charges about 167% tax (excise) on petrol and 129% on diesel as compared to US (20%), UK (62%), Italy and Germany (65%).
The abominable excise duty is 2/3rd of the cost, and the base price, dealer commission and freight form the rest.
Here is an approximate break-up (in Rs):
a)Base Price | 39 |
b)Freight | 0.34 |
c) Price Charged to Dealers = (a+b) | 39.34 |
d) Excise Duty | 40.17 |
e) Dealer Commission | 4.68 |
f) VAT | 25.35 |
g) Retail Selling Price | 109.54 |
Looked closely, much of the cost of petrol and diesel is due to higher tax rate by govt, specifically excise duty.
So the question is why government is not reducing the prices ?
India, being a developing country, it does require gigantic amount of funding for its infrastructure projects as well as welfare schemes.
However, we as a society is yet to be tax-compliant. Many people evade the direct tax and that’s the reason why govt’s hands are tied. Govt. needs the money to fund various programs and at the same time it is not generating enough revenue from direct taxes.
That’s the reason why, govt is bumping up its revenue through higher indirect taxes such as GST or excise duty as in the case of petrol and diesel.
Direct taxes are progressive as it taxes according to an individuals’ income however indirect tax such as excise duty or GST are regressive in the sense that the poorest of the poor and richest of the rich have to pay the same amount.
Does not matter, if you are an auto-driver or owner of a Mercedes, end of the day both pay the same price for petrol/diesel-that’s why it is regressive in nature.
But unlike direct tax where tax evasion is rampant, indirect tax can not be evaded due to their very nature and as long as huge no of Indians keep evading direct taxes, indirect tax such as excise duty will be difficult for the govt to reduce, because it may reduce the revenue and hamper may programs of the govt.