The term ‘Base Erosion and Profit Shifting’ is something seen in the news in the context of

Base Erosion and Profit Shifting (BEPS) refers to tax planning strategies that multinational enterprises use to exploit gaps and mismatches between national tax rules, so that profits are shifted to low- or no-tax jurisdictions and taxable income 'erodes' in the countries where economic activity actually takes place. The term was popularised by the OECD and G20 BEPS project, launched in 2013, which produced 15 action points and final reports in 2015. Option B is therefore correct.

Why the others are wrong:

• A describes resource extraction and displacement concerns, which belong to debates on mining, tribal rights and the Forest Rights Act, not to tax planning.
• C is about biopiracy and access-and-benefit-sharing under the Convention on Biological Diversity and the Biological Diversity Act, 2002.
• D concerns environmental impact assessment and the valuation of environmental costs in project planning, not corporate taxation.

Core concept: BEPS works through legal but aggressive structuring, such as transfer pricing, treaty shopping and hybrid mismatches, which is different from illegal tax evasion. For Mains (GS-III, economy), it links to tax sovereignty, domestic resource mobilisation and India's responses, such as the equalisation levy and GAAR. Note that the OECD's Pillar Two global minimum tax of 15%, agreed in 2021, is a later development that the 2016 exam would not have covered.

Trap: Aspirants often confuse BEPS with tax evasion, which is illegal, when BEPS is about exploiting legal loopholes. Some also get distracted by the 'multinational companies' phrase and pick the resource or environment options.