Content

1. A project of strategic and national importance
2. A ‘health check’ for the new GST health-care reforms

A project of strategic and national importance

Why in News?

• The Government of India has cleared the Great Nicobar Island Project — an integrated mega infrastructure plan of strategic, defence, and economic importance in the Indian Ocean Region.
• The project includes an international container transshipment terminal (ICTT), greenfield airport, 450 MVA gas & solar-based power plant, and a 16,610-hectare township.
• Project aims to position Great Nicobar as a major maritime & air connectivity hub while ensuring tribal and ecological safeguards.

Relevance

• GS-1 (Society): PVTGs, tribal rights, Anthropological Survey role.
• GS-2 (Governance & Welfare): Policies for Scheduled Tribes, NCST consultation.
• GS-3 (Economy & Environment): Infrastructure push, EIA/EMP compliance, Forest Act, compensatory afforestation, sustainable development.
• GS-3 (Internal Security/International Relations): Maritime security, Indo-Pacific strategy, IOR presence.

Practice Question : The Great Nicobar Project is being seen as both an economic opportunity and an ecological challenge. Critically analyze. (250 words)

Basics

• Project Area: 166.10 sq. km (35.35 sq. km revenue land + 130.75 sq. km forest land).
• Phased Development:
  • Phase I (2025–35): 72.12 sq. km
  • Phase II (2036–41): 45.27 sq. km
  • Phase III (2042–47): 48.71 sq. km
• Environmental Measures:
  • ₹81.55 crore released before construction for conservation studies.
  • Risk, vulnerability & disaster management plan prepared.
• Tribal Safeguards:
  • No displacement of Shompen and Nicobarese tribes.
  • Consultation with Anthropological Survey of India and Ministry of Tribal Affairs.
  • Net addition of 3.9 sq. km to Tribal Reserve (de-notification & re-notification process).
• Legal Basis: Scrutiny under EIA Notification 2006, Forest (Conservation) Act 1980, Shompen Policy (2015), Jarawa Policy (2004), and Article 338A(9) (consultation with NCST).

Overview

• Strategic Significance:
  • Enhances India’s maritime presence in the Indian Ocean Region.
  • Counters China’s influence in the Indo-Pacific (esp. Gwadar, Hambantota, Kyaukpyu ports).
  • Strengthens logistics hub potential near Malacca Strait → critical chokepoint for global trade.
• Economic Significance:
  • ICTT with 14.2 million TEU capacity → reduces dependence on Colombo/Singapore ports.
  • Boosts transshipment revenues, jobs, tourism, and allied industries.
  • Integrated township → new urban economy in A&N.
• Environmental & Ecological Safeguards:
  • Diversion of 130.75 sq. km forest land (1.82% of A&N’s forest area).
  • Compensatory afforestation in Haryana (97.3 sq. km identified) since >75% of A&N is already forested.
  • Estimated 18.65 lakh trees in diverted land; max 7.11 lakh trees to be felled.
  • 65.99 sq. km retained as green zone → no tree felling.
  • Safe wildlife corridors & viaducts for arboreal/marine fauna (snakes, crabs, crocodiles).
  • Studies done by ZSI, BSI, SACON, WII with decades of local data.
• Tribal Safeguards:
  • Shompen & Nicobarese = Particularly Vulnerable Tribal Groups (PVTGs).
  • No displacement of existing tribal settlements (New Chingen, Rajiv Nagar).
  • AAJVS designated trustee of PVTGs.
  • Shompen Policy (2015) explicitly mandates tribal welfare as priority in development projects.
  • Committee created to monitor welfare, livelihood, and well-being of PVTGs.
• Governance Significance:
  • Balance of development + ecological sustainability + tribal rights.
  • Shows application of EIA, EMP, disaster planning, and compensatory afforestation frameworks.
  • Part of India’s “blue economy” & “Act East” policy.
• Challenges Ahead:
  • Balancing ecological fragility vs economic potential.
  • Long-term monitoring of tribal welfare, forest health, biodiversity corridors.
  • Addressing global scrutiny by environmental watchdogs & human rights groups.
  • Ensuring project does not become another environment vs development conflict zone.

Environmentalists & Tribal-rights concerns

• Ecological fragility & cumulative impact
  • Great Nicobar = highly ecologically sensitive (endemic species, unique forest–coastal ecosystems). Large-scale infrastructure risks fragmentation, edge effects, hydrological changes, pollution, invasive species, and long-term ecosystem service loss beyond immediate cleared area.
• Adequacy of EIA & baseline science
  • Criticisms typically question quality, scope and independence of EIAs: seasonal/longitudinal biodiversity baselines, cumulative impact assessments (including shipping, dredging, airport noise, fuel storage risks), and climate change stressors (sea-level rise, cyclone intensification).
• Forest diversion & ecological equivalence
  • Compensatory afforestation in Haryana (non-contiguous, different ecology) raises ecological equivalence concerns: afforesting a continental site cannot fully replace tropical island evergreen forests, mangroves, and unique coastal habitats lost.
• Irreversible losses & mitigation limits
  • Certain island biodiversity losses (endemics, old-growth trees, soil profiles) and cultural landscapes are non-substitutable; mitigation and offsets may be inadequate.
• Tribal rights, consent & cultural impact
  • Risk of cultural disruption, altered resource access, and indirect impacts (tourism, migrant labour influx, marketisation) even where direct physical displacement is minimal. Questions on Free, Prior and Informed Consent (FPIC) standard, transparency of consultations, and whether tribal communities genuinely participated in decision-making.
• Socio-economic safety nets & benefit distribution
  • Concerns about whether employment, revenue, and market linkages will benefit local tribal populations or mostly external agencies and migrant workers; potential loss of customary livelihoods (fishing, foraging) is highlighted.
• Implementation & monitoring credibility
  • Skepticism about enforcement of EMP conditions, long-term ecological monitoring, and independence of oversight bodies; past infrastructure projects show gaps between clearance conditions and on-ground implementation.
• Security framing vs local welfare
  • Strategic/security arguments can override precautionary environmental and social safeguards; critics warn of securitisation sidelining local rights.

Point-by-point evaluation (strengths vs weaknesses)

• Regulatory process
  • Strength: Statutory clearances, multi-agency studies, and EMPs exist on paper.
  • Weakness: Quality, independence, and transparency of EIAs / cumulative assessments often contested; public access to full reports and raw data is crucial but not always adequate.
• Tribal safeguards
  • Strength: Formal consultations, committees, and policy references (Shompen Policy, Jarawa Policy, NCST consultation obligation) provide institutional mechanisms.
  • Weakness: Formal consultation ≠ meaningful consent (FPIC). Committee oversight needs statutory teeth, independent membership, and transparent reporting.
• Environmental offsets
  • Strength: Compensatory afforestation and retained green zones indicate intent to limit damage.
  • Weakness: Off-site afforestation (Haryana) may not be ecologically equivalent; island ecosystem services and endemic species cannot be offset by planting trees elsewhere.
• Scientific inputs
  • Strength: Reputed institutions (ZSI, BSI, SACON, WII) involved — positive for baseline data.
  • Weakness: Need for long-term, peer-reviewed, publicly available longitudinal studies (pre-construction and continuing decades after) to capture slow ecological responses.
• Disaster resilience
  • Strength: Vulnerability & disaster management plans prepared; wildlife corridors proposed.
  • Weakness: Climate extremes (cyclones, sea-level rise) may alter risk profiles; hard infrastructure increases exposure unless designed for future climate scenarios.

Practical recommendations

• Transparency & independent review
  • Publish full EIAs, EMPs, biodiversity baselines, and cumulative impact models publicly. Commission independent peer review (national + international experts) with open hearings.
• Adopt FPIC standard
  • Implement Free, Prior and Informed Consent for affected PVTGs with independent facilitators; document consent processes and outcomes; ensure tribal languages and culturally appropriate formats.
• Strengthen compensatory measures
  • Prioritize in-situ conservation (minimise diversion, increase retained corridors), and use ex-situ/off-site afforestation only as last resort; ensure biodiversity-equivalent offsets where possible.
• Limit & stage footprint
  • Revisit project design to minimise land take (smaller port footprint, phased infrastructure only if ecological triggers pass), and consider technocratic alternatives (e.g., offshore transshipment, enhanced feeder services) to reduce island intrusion.
• Independent long-term monitoring & adaptive management
  • Set up an independent monitoring authority (statutory, multi-stakeholder) with power to halt or modify works; require periodic public audits, ecological health indices, and corrective action triggers.
• Benefit-sharing & livelihood guarantees
  • Legally binding provisions for local employment quotas, skill training, market access for tribal produce, community development funds, and safeguards for traditional livelihoods.
• Climate-proofing & disaster resilience
  • Integrate future climate projections into design (elevations, drainage, cyclone proofing); preserve natural buffers (mangroves) as primary defence.
• Legal & institutional safeguards
  • Time-bound review clauses, grievance redressal with representation of tribal nominees, and enforceable penalties for non-compliance with EMP and tribal welfare conditions.

Conclusion

• The project presents high strategic and economic opportunity for India’s maritime posture and regional development ambitions.
• However, the scale and island sensitivity make it unusually high-risk: ecological losses and cultural impacts may be irreversible and not fully mitigable by offsets or compensation elsewhere.
• A defensible path requires rigorous independent science, genuine tribal consent, drastic minimisation of ecological footprint, and legally enforceable, transparent monitoring. Absent these, the project risks becoming a case study in “development with delayed ecological and social costs.”

A ‘health check’ for the new GST health-care reforms

Basics – GST & Health Care

• GST (Goods and Services Tax): A unified indirect tax introduced in 2017, subsuming multiple central and state taxes.
• Relevance to healthcare:
  • Core medical services by doctors/hospitals are exempt.
  • However, insurance, medicines, medical devices, and hospital room charges attract GST.
  • These taxes directly affect affordability of health services and preventive care.
• New Reform (Sept 2025): Part of “GST 2.0” under the 2047 Viksit Bharat vision, aimed at universal health coverage + affordability + preventive health.

Relevance

• GS-2 (Governance, Welfare): Health policy, universal health coverage, regulation (IRDAI, NPPA).
• GS-3 (Economy): Taxation policy, affordability of medicines, insurance, preventive health.

Practice Question : GST 2.0 reforms in health care are not just about taxation, but about reimagining affordability and universal coverage.Discuss. (250 words)

Key Sectoral Changes

Insurance

• Complete removal of 18% GST on individual health & life insurance premiums.
• Includes: term insurance, ULIPs, endowment plans, family floater, senior citizen health policies.
• A family paying ₹50,000 premium earlier paid ₹9,000 GST → now zero.
• Reinsurance also exempt → benefit across chain.
• Impact: Makes insurance ~18% cheaper, could boost penetration (currently ~3.7% of GDP vs global ~6.8%).
• Challenge: Depends on insurers passing on benefit; monitoring needed.

Hospital Room Charges

• Exempt: Rooms below ₹5,000/day & all ICU/critical care units (ICU, CCU, ICCU, NICU).
• Taxed: Non-ICU rooms above ₹5,000/day → 5% GST (no ITC).
• Continuity: Same structure as July 2022, ensuring middle/lower income groups shielded; only premium rooms taxed.

Medicines & Drugs

• Most medicines now under 5% GST.
• Life-saving drugs → 0% GST.
• Impact: Direct price reduction, better affordability of essential medicines.

Medical Devices & Diagnostics

• Uniform 5% GST slab.
• Example: CT scan machine taxed at 5% vs 18% earlier → lower hospital capital costs.
• Diagnostic kits: 12% → 5%.
• Impact: Reduced input cost for labs & hospitals → cheaper X-rays, MRIs, blood tests (if passed on).

Preventive & Wellness

• GST cut from 18% → 5% on gyms, yoga centres, fitness & wellness services.
• Aim: Encourage preventive health, lifestyle change.

Sin Goods

• Cigarettes: Remain at 28% GST + cess → effective 52–88%.
• Sugary drinks: Shifted to new 40% slab (highest bracket), replacing 28%+cess.
• Goal: Discourage unhealthy consumption, generate revenue for public health.

Personal Care & FMCG

• Daily-use products (soap, shampoo, toothpaste, shaving cream, etc.) down to 5% GST (from 12–18%).
• Example: ₹100 shampoo earlier ₹112–118 → now ~₹105.
• Impact: Eases household expenditure, promotes hygiene & preventive health.

Positive Impacts

• Affordability Boost
  • Insurance premiums, medicines, and tests become cheaper.
  • Preventive health & personal care made more accessible.
• Increased Insurance Penetration
  • Removal of GST directly addresses affordability barrier, encouraging households to purchase insurance.
• Healthcare Infrastructure Relief
  • Lower capital costs for hospitals (equipment at 5%) → improved financial viability, scope to expand.
• Preventive Health Push
  • Reduced GST on gyms/yoga aligns with Ayushman Bharat & Fit India vision.
  • Sin tax on sugary drinks aligns with NCD (non-communicable disease) control policies.
• Simplification & Compliance
  • Fewer GST slabs → reduced litigation & easier compliance for pharmacies, clinics, labs.

Challenges & Risks

• Benefit Transmission
  • Insurance companies, hospitals, labs may not fully pass savings to consumers.
  • Requires regulatory monitoring by IRDAI & NPPA.
• Revenue Trade-off
  • Lower GST on health products/services reduces tax inflows; government banks on long-term gains (insurance penetration, preventive health).
• Equity Concerns
  • ICU exemptions protect poor, but premium room GST may still impact upper-middle class.
  • Need balance between progressive taxation and hospital cost structures.
• Implementation Gaps
  • In past, EMP (Environmental Mgmt Plan)-like safeguards not strictly monitored in healthcare reforms.
  • Strong audit needed to ensure GST relief translates to affordability, not higher margins.
• Public Health Priorities
  • Insurance relief helps urban middle class most; poorest depend on Ayushman Bharat (already GST-exempt).
  • Question: Does this reform primarily benefit formal-sector households more than informal poor?

Long-term Significance

• First time entire health-care chain — insurance, treatment, medicines, equipment, preventive care — integrated under one rationalized GST framework.
• Fits into India’s 2047 Viksit Bharat & Universal Health Coverage goals.
• If implemented well, can:
  • Improve trust in health care,
  • Reduce catastrophic health expenditure,
  • Lower misuse of antibiotics & OTC drugs by rationalizing pricing,
  • Contribute to reduced out-of-pocket expenditure (currently ~48% of health spending in India).