What to Read in Indian Express Editorial( Topic and Syllabus wise)

Editorial 1: A Cut in the Right Direction

Context:

The government’s decision to reduce the Goods and Services Tax (GST) rates has received wide appreciation for its boldness and potential to boost consumption. This move, while initially leading to some loss in tax revenue, is expected to have positive long-term economic effects and could signal a broader reform agenda ahead.

Introduction:

• India’s recent GST rate cut, implemented on September 22, 2025, marks one of the most significant indirect tax reforms since the introduction of GST in 2017. The reduction aims to revive demand, ease the tax burden on consumers, and stimulate economic growth amid global uncertainties.
• While short-term losses in revenue are anticipated, economists view this measure as a strategic shift toward increasing consumption, formalisation, and compliance laying the foundation for higher long-term growth.

Assessing the Impact of the GST Cut:

1. The Fiscal Impact and Estimates:

• Preliminary analysis by economists and data from the National Sample Survey (NSS) suggest that the effective tax rate(ETR) has fallen sharply from around 11% before the reform to about 6.2% post-reform.
• This reduction may lead to an estimated revenue loss of around ₹1 trillion over the next year. However, experts argue that this short-term dip could be offset by stronger demand, higher compliance, and better reporting under the new tax structure.

2. Boost to Consumption and Growth:

• The GST cut directly reduces the tax burden on goods and services, putting more disposable income in consumers’ hands. Increased household consumption especially in middle- and lower-income groups can trigger a multiplier effecton growth.
• Moreover, as compliance improves through lower rates and simplified structures, the overall tax base is likely to expand, gradually recovering the revenue gap.

3. Addressing Inflation and Fiscal Balance

• Some critics warn that higher disposable income could fuel inflation. However, current trends show declining global inflationand stable domestic prices. Therefore, the real risk lies not in inflation but in weaker demand if reforms are delayed.
• The key challenge for policymakers will be balancing growth stimuluswith fiscal discipline ensuring that revenue losses do not widen the fiscal deficit beyond sustainable limits.

4. Comparison with East Asia’s Reform Model:

• The article notes that India’s tax-to-GDP ratio (around 11%)is lower than that of East Asian economies (13–19%). Reducing GST rates may seem counterintuitive, but if it enhances compliance and stimulates growth, India could move closer to the East Asian model of growth-led revenue generation where economic expansion drives higher tax collection rather than high tax rates.

5. Broader Reform Signals:

• The GST cut is also seen as a signal that larger structural reformsmay follow possibly in areas such as land, labour, and capital markets. Such reforms can further improve India’s productivity, attract investment, and strengthen its position as a global manufacturing hub.

Conclusion:

• The GST rate cut represents more than just a tax adjustment it reflects a strategic policy shiftfrom revenue preservation to growth stimulation. If accompanied by prudent fiscal management and broader economic reforms, this measure could rejuvenate demand, improve compliance, and place India on a more sustainable growth path.
• While risks remain, particularly around revenue shortfalls, the move demonstrates policy confidence and the government’s willingness to take calculated risks for long-term gain.

 

Editorial 2: Ringing Out the Old-World Order

Context:

The post-World War II US-led international system, based on liberal democracy, multilateralism, and economic openness, is gradually collapsing. This decline has been accelerated by America’s inward-looking policies, especially during the Trump era. In the resulting power vacuum, China is actively attempting to reshape global norms and institutions to reflect its own values and interests.

Introduction:

• Decline of the Pax Americana: After World War II, the Allied powers led by the United States constructed a global order anchored in stability, democracy, and cooperation. Institutions such as the United Nations (UN), World Bank, IMF, and later the WTO, embodied this American-led vision of global governance. This order, often termed “Pax Americana,”underwrote peace and prosperity for decades, particularly across the Western world.
• However, by the 21st century, this model began to show strain. Prolonged wars in Iraq and Afghanistan, the 2008 financial crisis, rising nationalism, and protectionist policies have undermined US moral and economic leadership. The very principles that sustained the system multilateralism and free trade are now being questioned by their own architect.

Changing Contours of Global Power:

1. The Unraveling of the US-led Order:

• The United States, once the custodian of global stability, is now increasingly disengaged from its international responsibilities. Under former President Trump, Washington’s approach shifted from leadership to isolationism. Withdrawal from multilateral agreements, tariff wars, and skepticism toward alliances such as NATO reflected a fundamental rethinking of global engagement.
• Instead of preserving the post-war legacy, American policy under Trump viewed it as a burden that enabled rivals like China to expand influence. This retreat from global stewardship has left traditional allies uncertain and adversaries emboldened.

2. China’s Assertive Expansion:

• As the US recedes, China has positioned itself as an alternative centre of power. Through massive infrastructure investments under the Belt and Road Initiative (BRI), Beijing has built strong economic and strategic linkages across Asia, Africa, and Europe.
• China presents its rise as peaceful and developmental, offering a model of state-led capitalismthat contrasts sharply with Western liberal democracy.
• However, this engagement is not without criticism. Many nations accuse China of “debt diplomacy”, lack of transparency, and using trade dependencies for political leverage. Its assertiveness in the South China Sea, border disputes with India, and economic coercion against countries like Australia demonstrate a blend of ambition and authoritarianism.

3. A Multipolar and Pragmatic Global Order:

• The weakening of American dominance and the uncertain credibility of Chinese leadership are giving rise to a multipolar world. Middle powers and regional actors such as India, Japan, the EU, and ASEAN nationsare recalibrating their foreign policies to protect strategic autonomy.
• This emerging order is less ideological and more pragmatic, where cooperation is issue-based rather than bloc-based. Countries of the Global Southare seeking to diversify partnerships and assert their voices in international decision-making. Institutions like BRICS, G20, and Shanghai Cooperation Organisation (SCO) reflect this trend toward pluralism in global governance.

4. Implications for India:

• India finds itself uniquely positioned in this transition. As a democracy with growing economic and geopolitical weight, India can play a balancing role between the US and China.
• India’s participation in platforms like QUADand BRICS demonstrates its flexible diplomacy engaging with both Western democracies and emerging economies. However, navigating this shifting order will require sustained economic strength, technological advancement, and a consistent foreign policy focused on strategic autonomy, regional stability, and rule-based multilateralism.

Conclusion:

• The collapse of the US-led order marks the end of an era but not of global cooperation. The contest between liberal democracy and authoritarian capitalism is shaping a new international landscape where influence is earned through credibility, stability, and development partnerships rather than military might.
• While China’s rise fills part of the vacuum, it has not yet achieved universal legitimacy. The future global system will likely be multipolar, defined by power diffusion, regional leadership, and issue-based alliances.
• For India and the Global South, this evolving order offers both opportunity and responsibility to redefine global governance based on inclusivity, fairness, and sovereignty rather than domination.