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DAILY NEWS ANALYSIS

Monthly DNA

18 Jul, 2020

46 Min Read

Reservations for Divyangjan- Persons with Disability

GS-I : Social issues Disability

Reservations for Divyangjan- Persons with Disability

GS-PAPER-1 Social issue (MAINS- IV)

The Supreme Court, in a significant decision, confirmed that persons with disabilities are also socially backward. The decision highlighted that Divyangjan are entitled to the same benefits of relaxation as Scheduled Caste and Scheduled Tribe candidates in public employment and education.

SC upheld a 2012 judgment of the Delhi High Court in Anamol Bhandari vs. Delhi Technological University.

Constitutional provisions on reservations

  • Article 15 (4) empowers the State to make special provisions for the advancement of the SCs and the STs.
  • E.g. providing fee concession in admission to any educational institution, building hostels for SCs/STs.
  • Article 15 (5) empowers the State to reserve seats for SCs and STs in admission to educational institutions including private educational institutions, whether aided or unaided by the State.
  • However, it excludes minority educational institutions referred to in Article 30 (1).
  • Article 16 (4) empowers the State to make provisions for the reservation of appointments or posts in favour of SCs/STs.
  • Article 46 - Empower the state to promote educational and economic interests of the weaker sections of the people, and, in particular, SC & ST and shall protect them from social injustice and all forms of exploitation.

The Rights of Persons with Disabilities Act

A study conducted by the Disability Rights India Foundation (DRIF) on the implementation of the Rights of Persons with Disabilities (RPWD) Act, across 24 States, has revealed that more than half have not notified the State rules.

  • Only ten states including Bihar, Chandigarh, Manipur, Meghalaya, Odisha, Telangana, Tamil Nadu and West Bengal have notified the rules.
  • Recently, Rajasthan was recognised as the best State in implementation of Accessible India Campaign on the occasion of International Day of Persons with Disabilities (December 3rd).
    • This year's theme for International Day of Persons with Disabilities was- "Empowering persons with disabilities and ensuring inclusiveness and equality"- declared by the United Nations (UN).
    • It focuses on the 2030 Agenda for Sustainable Development and pledges to "leave no one behind". This year also marks the 70th anniversary of the Universal Declaration of Human Rights.
  • Article 41 of the Directive Principles of State Policy (DPSP) states that State shall make effective provision for securing right to work, to education and to public assistance in cases of unemployment, old age, sickness and disablement, within the limits of its economic capacity and development.
  • The subject of ‘relief of the disabled and unemployable’ is specified in state list of the Seventh schedule of the constitution.

Accessible India Campaign (AIC)

  • Accessible India Campaign (AIC) is the nationwide flagship campaign of the Department of Empowerment of Persons with Disabilities (DEPwD), Ministry of Social Justice and Empowerment.
  • The aim of the Campaign is to make a barrier free and conducive environment for Divyangjans all over the country.
  • It was launched on International Day of Persons with Disabilities on 3rd December, 2015.

Right of Persons with Disabilities Act 2016

  • Disability has been defined based on an evolving and dynamic concept.
  • The types of disabilities have been increased from 7 to 21. The act added mental illness, autism, spectrum disorder, cerebral palsy, muscular dystrophy, chronic neurological conditions, speech and language disability, thalassemia, hemophilia, sickle cell disease, multiple disabilities including deaf blindness, acid attack victims and Parkinson’s disease which were largely ignored in earlier act. In addition, the Government has been authorized to notify any other category of specified disability.
  • It increases the quantum of reservation for people suffering from disabilities from 3% to 4% in government jobs and from 3% to 5% in higher education institutes.
  • Every child with benchmark disability between the age group of 6 and 18 years shall have the right to free education. Government funded educational institutions as well as the government recognized institutions will have to provide inclusive education.
  • Stress has been given to ensure accessibility in public buildings in a prescribed time frame along with Accessible India Campaign.
  • The Chief Commissioner for Persons with Disabilities and the State Commissioners will act as regulatory bodies and Grievance Redressal agencies, monitoring implementation of the Act.
  • A separate National and State Fund be created to provide financial support to the persons with disabilities.

United Nations Convention on the Rights of Persons with Disabilities (UNCRPD)

  • The Convention was adopted by the General Assembly in December 2006 and it came into force on in May 2008.
  • The convention seeks to engage member countries in developing and carrying out policies, laws and administrative measures for securing the rights recognized in the Convention and abolish laws, regulations, customs and practices that constitute discrimination.
  • It requires countries to identify and eliminate obstacles and barriers and ensure that persons with disabilities can access their environment, transportation, public facilities and services, and information and communications technologies.
  • It asks member countries to recognize the right to an adequate standard of living and social protection which includes public housing, services and assistance for disability-related needs, as well as assistance with disability-related expenses in case of poverty.

Source: PIB

India – Iran recent ties and China

GS-II : International Relations Iran

India – Iran recent ties and China

GS-Paper-2 International relation (Mains-I.V)

Recently, the Ministry of External Affairs (MEA) confirmed that India is no longer involved in the Farzad-B gas field project of Iran. Further, it said that India has not received any response from Iran since December 2019 on the future of the Chabahar-Zahedan railway project as well.

It cited policy changes by the Iranian government, Iran’s uncertain finances, and the USA sanctions situation as the reasons behind the decisions on Indian infrastructure projects in Iran.

Farzad-B Gas Field:

  • It is located in Persian Gulf (Iran).
  • The contract for exploration of the field was signed in 2002 by Indian consortium comprising ONGC Videsh, Indian Oil Corporation and Oil India.

  • The contract expired in 2009 after the declaration of commerciality of the field, based on the gas discovery.
  • It has gas reserves of more than 19 trillion cubic feet. ONGC has invested approximately USD 100 million.
  • Since then, the consortium has been trying to secure a contract for the development of the field.
  • The major dispute between India and Iran was over the setting up of two pipelines, and also over money to be quoted on the development plan.
  • Around 75% of the deal was finalised by May 2018, when the USA unilaterally withdrew from the nuclear deal and announced sanctions on Iran.
  • In January 2020, India was informed that in the immediate future, Iran would develop the field on its own and would like to involve India appropriately at a later stage.

Chabahar-Zahedan Railway Project:

In the ‘New Delhi Declaration’ signed in 2003, both countries had decided to jointly develop the Chabahar Port complex.

  • The Port development was exempted from the sanctions. India’s main investment in the Chabahar Port where it has taken over operations of one terminal had progressed well in the last few years, handling 82 ships with 12 lakh tonnes of bulk cargo in 8200 containers since December 2018.
  • A contract to develop the 628-km railway line (Chabahar-Zahedan) along the Iran-Afghanistan border was signed in 2016.
  • IRCON was appointed by the Government of India to assess the feasibility of the project. It was working with CDTIC, an Iranian company.
  • It had completed the site inspection and review of the feasibility report. The Iranian side was to nominate an authorised entity to finalise outstanding technical and financial issues. India waited for the same.
  • However, Iran started work on the railway project in July 2020. India is not part of this project as of now since there is lack of clarity on whether it will attract the USA sanctions. However, it has conveyed to Iran that it is open to joining the project later.

Concerns for India

  • Iran’s growing proximity to China. Further, Iran seems to be sceptical of India’s diplomatic ties with the USA.
  • Farzad-B gas Field: India needs gas and Iran remains one of the best options as geographically, Iran is closest to India of all the countries in the Persian gulf region. Further, it could have improved India-Iran ties as the crude oil import from Iran remains impacted due to the USA sanctions.
  • Chabahar is not only a key to maritime relations between both countries, but also provides an opportunity for India to reach Russia and Central Asia.
    Further, it allows India to bypass Pakistan which had blocked Indian aid to Afghanistan and all trade over land.

India needs to play a balancing act between the USA and Iran. Further, India needs to closely watch the space created by its exit. In a world where connectivity is seen as the new currency, India’s loss on account of these projects can become a gain for some other countries, especially China.

Source: IE

Aid for Rural Local Bodies-Finance commission

GS-II : Governance Panchayati Raj Institution

Aid for Rural Local Bodies-Finance commission

Paper-2 Governance (Mains)

Finance Commission

It is a constitutional body, that determines the method and formula for distributing the tax proceeds between the Centre and states and among the states as per the constitutional arrangement and present requirements. Under Article 280 of the Constitution, the President of India is required to constitute a Finance Commission at an interval of five years or earlier.

The 1st FC was set up in 1951 and there have been fifteen so far. The 15th FC headed by N.K. Singh was constituted by the President of India on 27th November 2017, against the backdrop of the abolition of the Planning Commission and the introduction of the Goods and Services Tax (GST). In November 2019, the Union Cabinet approved the 15th FC to submit its first report for the first fiscal year 2020-21 and to extend its tenure to provide for the presentation of the final report covering Financial Years 2021-22 to 2025-26 by 30th October, 2020.

In News:

Recently, the Ministry of Finance has released a part of grants-in-aid of Rs. 15187.50 crore for around 2.63 lakh Rural Local Bodies (RLBs) of 28 States.

This has been made on the recommendations of the Ministry of Panchayati Raj and the Department of Drinking Water and Sanitation, Ministry of Jal Shakti.

This forms part of the Tied Grant as recommended by the 15th Finance Commission (FC) for the Financial Year (FY) 2020-2021.

Imp Points

  • Recommendation of 15th FC: It recommended the grant in aid of Rs. 60,750 crore for (FY 2020-21) the RLBs which is the highest ever allocation made by the Finance Commission in any single year.

  • Allocation: It will be allocated in two parts, namely Basic Grant and Tied Grant in 50:50% mode. Basic Grant: These grants are untied and can be used by RLBs for location-specific needs, except for salary or other establishment expenditure
  • Untied funds are utilised for the works of emergent nature which are normally not covered under the schemes decentralized at the district level.

Tied Grants: These are used for the basic services of:

      • Sanitation and maintenance of Open-Defecation Free (ODF) status.
      • Supply of drinking water, rain water harvesting and water recycling.
      • The RLBs shall, as far as possible, earmark one half of these grants each to these two critical services.
      • However, if any RLB has fully saturated the needs of one category it can utilize the funds for the other category.

Distribution: The State Governments will be distributing the grants to all the tiers of of the Panchayati Raj -village, block and district including the traditional bodies of 5th and 6th Schedule areas based on the accepted recommendations of the latest State Finance Commission (SFC) and in conformity with the recommendations of the 15th FC.

Assistance: The Ministry of Panchayati Raj would support the states in effective utilization of the grants by providing Web/IT enabled platforms for planning, monitoring, accounting / auditing of the works and funds flow at the level of each of the RLBs.

Significance:

    • Fighting Covid 19: It would help RLBs in providing employment. E.g. migrant laborers who have returned to their native places owing to Covid-19 pandemic situation.
    • Delivery of Basic Services: Availability of this fund will boost RLBs effectiveness in delivery of basic services to the rural citizens.
    • Rural Infrastructure: It will augment the rural infrastructure in a constructive way e.g construction of roads, supply of water etc.

Source: PIB

Scientific Cooperation between India and EU

GS-II :

Scientific Cooperation between India and EU

Paper-2 I.O (PT-MAINS)

European Union

European Union (EU), is an international organization comprising 27 European countries and governing common economic, social, and security policies.

The EU was created by the Maastricht Treaty, which entered into force on November 1, 1993. The treaty was designed to enhance European political and economic integration by creating a single currency (the euro), a unified foreign and security policy, and common citizenship rights and by advancing cooperation in the areas of immigration, asylum, and judicial affairs.

In NEWS:

Recently, India and the European Union (EU) agreed to renew the Agreement on Scientific Cooperation for the next five years (2020-2025) during the virtual 15th India-EU Summit.

Renewal of Agreement on Scientific Cooperation:

India and the EU have agreed to further collaborate in research and innovation based on the principles of mutual benefit and reciprocity, as established in the India-EU Agreement on Science and Technology (2001) which expired on 17th May 2020.

Both parties are also committed to launch the renewal procedure for the above agreement and acknowledge 20 years of cooperation on research and innovation.

Significance:

  • It is expected to enhance research and innovation cooperation in different fields like Water, Energy, Healthcare, Agritech & Bioeconomy, Integrated Cyber-Physical Systems, Information and Communication Technologies, Nanotechnology, and clean technologies, etc.
  • It will also strengthen the institutional linkages in research, exchange of researchers, students, startups and attract co-investment of resources for co-generation of knowledge.

India-EU Science and Technology Cooperation:

Science and Technology: India-EU Science & Technology Steering Committee meets annually to review scientific cooperation.

  • The Ministry of Earth Sciences (MoES) and the European Commission (EC) have established a Co-Funding Mechanism (CFM) to support joint research projects selected under European Research & Innovation Framework Program ‘Horizon 2020’ related to climate change and polar research.
  • Space Technology: Indian Space Research Organisation (ISRO) has had a long standing cooperation with the European Union, since the 1970s.
    ISRO and the European Space Agency are working towards enhancing cooperation in earth observation. It also involves the Copernicus programme signed in 2018.
  • Copernicus is the European Union's Earth observation programme.

India-EU Relations

Evolution of Diplomatic Relations:

  • India being amongst the first countries to establish diplomatic relations with the European Economic Community in 1962.
  • The first India-EU Summit was held in Lisbon (Portugal) in 2000. Since then, fifteen annual bilateral Summits have been held between India and the EU.
  • The relationship was upgraded to a ‘Strategic Partnership’ during the 5th India-EU Summit held at the Hague (Netherlands) in 2004.

The bilateral Strategic Partnership encompasses dialogue mechanisms covering a wide range of issues including trade, energy security, science & research, non-proliferation and disarmament, counter terrorism, cyber security, counter-piracy, migration and mobility, etc.

Trade and Investment:

  • The EU as a whole was India’s largest trading partner while India was EU’s 9th largest trading partner in 2018.
  • India is also the fourth largest service exporter to the EU and the sixth largest destination for service exports from the EU.
  • EU is the largest source of Foreign Direct Investment (FDI) into India.
  • Over the period April 2000 to June 2018, FDI equity flows from the EU countries into $ 90.7 billion, which is about 24% of the total FDI inflows to India.
  • Among countries, Singapore is the largest source of FDI in India during 2019 with $ 14.67 billion investment followed by Mauritius ($ 8.24 billion).
  • India and the EU are in the process of negotiating a bilateral Broad-based Trade and Investment Agreement (BTIA) since 2007.

Way Forward

India and the EU are ideal partners to make a difference in an international environment that is increasingly shaped by strategic rivalry between the USA and China.

They have a common interest in avoiding a bipolarised world and developing the rules-based international order. The effort has to be to make the India-EU partnership rise to its potential and provide a new model for international relations today.

Source: PIB

NEOWISE after the NASA telescope

GS-III :

NEOWISE after the NASA telescope

GS-Paper-3 S&T (PT)

The recently discovered comet C/2020 F3 will make its closest approach to the Earth at a distance of 64 million miles or 103 million kilometres while crossing Earth’s outside orbit on 22nd July 2020.

It is also known as NEOWISE after the National Aeronautics and Space Administration (NASA) telescope that discovered it. On 3rd July, it was closest to the sun at 43 million km due to which its outer layer was released, creating an atmosphere (referred to as coma) of gas and dust from its icy surface. It will be visible through binoculars or a small telescope.

What is Coma?

On July 3, the comet was closest to the sun at 43 million km. On this day, the comet cruised inside Mercury’s orbit and, due to its proximity to the sun, its outer layer was released creating an atmosphere – referred to as coma – of gas and dust from its icy surface.

  1. This atmosphere sometimes leads to formation of a bright tail of debris that can extend for thousands or millions of kilometres.

What Are The Differences Between An Asteroid, Comet, Meteoroid, Meteor and Meteorite?

  • Asteroid: A relatively small, inactive, rocky body orbiting the Sun and is available between Mars and Jupiter.
  • Comet: A relatively small, at times active, object whose ices can vaporize in sunlight forming an atmosphere (coma) of dust and gas and, sometimes, a tail of dust and/or gas.
  • Meteoroid: A small particle from a comet or asteroid orbiting the Sun.
  • Meteor: The light phenomena which results when a meteoroid enters the Earth’s atmosphere and vaporizes; a shooting star.
  • Meteorite: A meteoroid that survives its passage through the Earth’s atmosphere and lands upon the Earth’s surface.

NASA’s NEOWISE:

Launched in December 2009 as the Wide-Field Infrared Survey Explorer, or WISE, the space telescope was originally designed to survey the sky in infrared, detecting asteroids, stars and some of the faintest galaxies in space.

It did so successfully until completing its primary mission in February 2011. In December 2013, it was re-purposed for the NEOWISE project as an instrument to study near-Earth objects, or NEOs, as well as more distant asteroids and comets.

Significance of the Study

  • Astronomers believe that comets hold important clues about the formation of the solar system and it is possible that comets brought water and other organic compounds to Earth.
  • NASA tracks all Near Earth Objects (NEOs) that includes comets and asteroids using telescopes placed all around the Earth, as part of its NEO Observation Program.
  • Objective of the Program: To find, track and characterise NEOs that are 140 meters or larger in size since they can pose a risk to the Earth because of the devastation a potential impact can cause.

Source: TH

Multidimensional Poverty Index

GS-III : Economic Issues Poverty

Multidimensional Poverty Index

GS-PAPER-3 Poverty (PT-MAINS)

The Multidimensional Poverty Index was launched by the United Nations Development Programme (UNDP) and the Oxford Poverty & Human Development Initiative (OPHI) in 2010.

MPI is based on the idea that poverty is not unidimensional (not just depends on income and one individual may lack several basic needs like education, health etc.), rather it is multidimensional. The index shows the proportion of poor people and the average number of deprivations each poor person experiences at the same time. MPI uses three dimensions and ten indicators which are:

    • Education: Years of schooling and child enrollment (1/6 weightage each, total 2/6);
    • Health: Child mortality and nutrition (1/6 weightage each, total 2/6);
    • Standard of living: Electricity, flooring, drinking water, sanitation, cooking fuel and assets (1/18 weightage each, total 2/6)

A person is multidimensionally poor if she/he is deprived in one third or more (means 33% or more) of the weighted indicators (out of the ten indicators). Those who are deprived of one-half or more of the weighted indicators are considered living in extreme multidimensional poverty. MPI is significant as it recognizes poverty from different dimensions compared to the conventional methodology that measures poverty only from income or monetary terms.

In News:

According to India’s Voluntary National Review (VNR) of Sustainable Development Goals (SDG) at least 271 million people were lifted out of multi-dimensional poverty between 2005-06 and 2016-17. The VNR of SDGs has been presented by the Niti Ayog at the High-Level Political Forum on Sustainable Development.

Data:

  • The estimates presented were drawn from the 2019 global Multidimensional Poverty Index (MPI) released in July 2019.
  • Over 640 million people across India were in multidimensional poverty in 2005-2006.
  • The number of people living under poverty decreased to around 369.55 million by 2016-2017.
  • However, 27.9% of India’s population was still poor in 2016-17

Poverty Reduction: In rural areas, poverty reduction has outpaced that in urban areas.

Source: TH

Himalayan Viagra

GS-III :

Himalayan Viagra

  • Ophiocordyceps Sinensis, also known as Himalayan Viagra is a fungus.
  • It is known for its aphrodisiac and rejuvenation properties
  • Recently IUCN has placed the fungus, in the ‘vulnerable’ category.
  • According to IUCN its spread has declined by at least 30% over the past 15 years as a result of overharvesting.
  • It is endemic to the Himalayan and Tibetan plateau and is found in China, Bhutan, Nepal and India.
  • In India, it is primarily found in Uttarakhand in the higher reaches of districts like Pithoragarh and Chamoli.
  • It is the world’s costliest fungus which sells in international markets for upwards of Rs.20 lakh per.

Source: Web

Hope orbiter

GS-III :

Hope orbiter

  • The Emirates Mars Mission is a planned space exploration mission to Mars set to launch the Hope orbiter in July 2020.
  • It was built by the Mohammed bin Rashid Space Centre, an Emirati space organization, as well as the University of Colorado Boulder, Arizona State University, and the University of California, Berkeley.
  • The probe will study daily and seasonal weather cycles, weather events in the lower atmosphere such as dust storms, and how the weather varies in different regions of Mars.
  • It will attempt to answer the scientific questions of why the Martian atmosphere is losing hydrogen and oxygen into space and the reason behind the drastic climate changes on Mars.
  • The mission is being carried out by a team of Emirati engineers in collaboration with foreign research institutions and is a contribution toward a knowledge-based economy in the UAE.
  • Hope is scheduled to reach Mars in February 2021, which coincides with the 50th anniversary of the United Arab Emirates' formation.
  • It wll be launched from Tanegashima space centre, Japan.

Source: TH

15th Finance Commission

GS-II : Governance Finance commission

15th Finance Commission for FY 2020-21

Paper-2 Governance Finance commission (PT-MAINS-IV)

The Finance Commission is a constitutional body formed by the President of India to give suggestions on centre-state financial relations. The 15th Finance Commission (Chair: Mr N. K. Singh) was required to submit two reports. The first report, consisting of recommendations for the financial year 2020-21, was tabled in Parliament on February 1, 2020. The final report with recommendations for the 2021-26 period will be submitted by October 30, 2020.

Key recommendations in the first report (2020-21 period) include:

  • Devolution of taxes to states: The share of states in the centre’s taxes is recommended to be decreased from 42% during the 2015-20 period to 41% for 2020-21. The 1% decrease is to provide for the newly formed union territories of Jammu and Kashmir, and Ladakh from the resources of the central government. The individual shares of states from the divisible pool of central taxes is provided in Table 3 in the annexure.

Criteria for devolution

Table 1 below shows the criteria used by the Commission to determine each state’s share in central taxes, and the weight assigned to each criterion. We explain some of the indicators below.

Table 1: Criteria for devolution (2020-21)

Criteria

14th FC

2015-20

15th FC

2020-21

Income Distance

50.0

45.0

Population (1971)

17.5

-

Population (2011)

10.0

15.0

Area

15.0

15.0

Forest Cover

7.5

-

Forest and Ecology

-

10.0

Demographic Performance

-

12.5

Tax Effort

-

2.5

Total

100

100

Sources: Report for the year 2020-21, 15th Finance Commission; PRS.

  • Income distance: Income distance is the distance of the state’s income from the state with the highest income. The income of a state has been computed as the average per capita GSDP during the three-year period between 2015-16 and 2017-18. States with lower per capita income would be given a higher share to maintain equity among states.
  • Demographic performance: The Terms of Reference (ToR) of the Commission required it to use the population data of 2011 while making recommendations. Accordingly, the Commission used only 2011 population data for its recommendations.
  • The Demographic Performance criterion has been introduced to reward efforts made by states in controlling their population. It will be computed by using the reciprocal of the total fertility ratio of each state, scaled by 1971 population data. States with a lower fertility ratio will be scored higher on this criterion. The total fertility ratio in a specific year is defined as the total number of children that would be born to each woman if she were to live to the end of her childbearing years and give birth to children in alignment with the prevailing age-specific fertility rates.
  • Forest and ecology: This criterion has been arrived at by calculating the share of the dense forest of each state in the aggregate dense forest of all the states.
  • Tax effort: This criterion has been used to reward states with higher tax collection efficiency. It has been computed as the ratio of the average per capita own tax revenue and the average per capita state GDP during the three-year period between 2014-15 and 2016-17.

Grants-in-aid

In 2020-21, the following grants will be provided to states: (i) revenue deficit grants, (ii) grants to local bodies, and (iii) disaster management grants. The Commission has also proposed a framework for sector-specific and performance-based grants. State-specific grants will be provided in the final report.

  • Revenue deficit grants: In 2020-21, 14 states are estimated to have an aggregate revenue deficit of Rs 74,340 crore post-devolution. The Commission recommended revenue deficit grants for these states (see Table 4 in the annexure).
  • Special grants: In case of three states, the sum of devolution and revenue deficit grants is estimated to decline in 2020-21 as compared to 2019-20. These states are Karnataka, Mizoram, and Telangana. The Commission has recommended special grants to these states aggregating to Rs 6,764 crore.
  • Sector-specific grants: The Commission has recommended a grant of Rs 7,375 crore for nutrition in 2020-21. Sector-specific grants for the following sectors will be provided in the final report: (i) nutrition, (ii) health, (iii) pre-primary education, (iv) judiciary, (v) rural connectivity, (vi) railways, (vii) police training, and (viii) housing.
  • Performance-based grants: Guidelines for performance-based grants include: (i) implementation of agricultural reforms, (ii) development of aspirational districts and blocks, (iii) power sector reforms, (iv) enhancing trade including exports, (v) incentives for education, and (vi) promotion of domestic and international tourism. The grant amount will be provided in the final report.
  • Grants to local bodies: The total grants to local bodies for 2020-21 has been fixed at Rs 90,000 crore, of which Rs 60,750 crore is recommended for rural local bodies (67.5%) and Rs 29,250 crore for urban local bodies (32.5%). This allocation is 4.31% of the divisible pool. This is an increase over the grants for local bodies in 2019-20, which amounted to 3.54% of the divisible pool (Rs 87,352 crore). The grants will be divided between states based on population and area in the ratio 90:10. The grants will be made available to all three tiers of Panchayat- village, block, and district.
  • Disaster risk management: The Commission recommended setting up National and State Disaster Management Funds (NDMF and SDMF) for the promotion of local-level mitigation activities. The Commission has recommended retaining the existing cost-sharing patterns between the centre and states to fund the SDMF (new) and the SDRF (existing). The cost-sharing pattern between centre and states is (i) 75:25 for all states, and (ii) 90:10 for north-eastern and Himalayan states.

For 2020-21, State Disaster Risk Management Funds have been allocated Rs 28,983 crore, out of which the share of the union is Rs 22,184 crore. The National Disaster Risk Management Funds has been allocated Rs 12,390 crore.

Recommendations on fiscal roadmap

  • Fiscal deficit and debt levels: The Commission noted that recommending a credible fiscal and debt trajectory roadmap remains problematic due to uncertainty around the economy. It recommended that both central and state governments should focus on debt consolidation and comply with the fiscal deficit and debt levels as per their respective Fiscal Responsibility and Budget Management (FRBM) Acts.
  • Off-budget borrowings: The Commission observed that financing capital expenditure through off-budget borrowings detracts from compliance with the FRBM Act. It recommended that both the central and state governments should make full disclosure of extra-budgetary borrowings. The outstanding extra-budgetary liabilities should be clearly identified and eliminated in a time-bound manner.
  • Statutory framework for public financial management: The Commission recommended forming an expert group to draft legislation to provide for a statutory framework for sound public financial management system. It observed that an overarching legal fiscal framework is required which will provide for budgeting, accounting, and audit standards to be followed at all levels of government.
  • Tax capacity: In 2018-19, the tax revenue of state governments and central government together stood at around 17.5% of GDP. The Commission noted that tax revenue is far below the estimated tax capacity of the country. Further, India’s tax capacity has largely remained unchanged since the early 1990s. In contrast, tax revenue has been rising in other emerging markets. The Commission recommended: (i) broadening the tax base, (ii) streamlining tax rates, (iii) and increasing capacity and expertise of tax administration in all tiers of the government.
  • GST implementation: The Commission highlighted some challenges with the implementation of the Goods and Services Tax (GST). These include: (i) large shortfall in collections as compared to original forecast, (ii) high volatility in collections, (iii) accumulation of large integrated GST credit, (iv) glitches in invoice and input tax matching, and (v) delay in refunds. The Commission observed that the continuing dependence of states on compensation from the central government (21 states out of 29 states in 2018-19) for making up for the shortfall in revenue is a concern. It suggested that the structural implications of GST for low consumption states need to be considered.

Other recommendations

  • Financing of security-related expenditure: The ToR of the Commission required it to examine whether a separate funding mechanism for defence and internal security should be set up and if so, how it can be operationalised. In this regard, the Commission intends to constitute an expert group comprising representatives of the Ministries of Defence, Home Affairs, and Finance. The Commission noted that the Ministry of Defence proposed following measures for this purpose: (i) setting up of a non-lapsable fund, (ii) levy of a cess, (iii) monetisation of surplus land and other assets, (iv) tax-free defence bonds, and (v) utilising proceeds of disinvestment of defence public sector undertakings. The expert group is expected to examine these proposals or alternative funding mechanisms.

Criticisms:

  • The population parameter used by the Commission has been criticised by the governments of the southern states.
  • The previous FC used both the 1971 and the 2011 populations to calculate the states’ shares, giving greater weight to the 1971 population (17.5%) as compared to the 2011 population (10%).
  • The use of 2011 population figures has resulted in states with larger populations like UP and Bihar getting larger shares, while smaller states with lower fertility rates have lost out.
  • The combined population of the Bihar, Uttar Pradesh, Madhya Pradesh, Rajasthan and Jharkhand is 47.8 crore.
  • This is over 39.48% of India’s total population, and is spread over 32.4% of the country’s area, as per the 2011 Census.
  • On the other hand, the southern states of Tamil Nadu, Kerala, Karnataka and undivided Andhra Pradesh are home to only 20.75% of the population living in 19.34% of the area, with a 13.89% share of the taxes.
  • This means that the terms decided by the Commission are loaded against the more progressive (and prosperous) southern states.

Source: PIB

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Equal treatment Context: -   Supreme Court judgment on entitlements for the disabled people.   Delhi High Court judgment of 2012: - In 2012, a university had allowed a 10% concession in the minimum eligibility requirement for SC/ST candidates, and 5% concession for disa

Improvement in economy might slow down or even stagnate in the second quarter

Improvement in economy might slow down or even stagnate in the second quarter Context: The article discusses the economic impact of the pandemic and analyzes India’s approach.   Details: - Reopening of the economy post the lockdown phase has led to some improvement in econo

No postal ballot facility for voters above 65: EC

No postal ballot facility for voters above 65: EC The Election Commission said that the postal ballot facility for electors above the age of 65 in the Bihar Assembly elections would not be implemented. The poll body said the option of postal ballots would be available to electors over 80 ye

16 July,2020
India should believe in the EU

India should believe in the EU By, Stefania Benaglia is an Associate Researcher at the Centre for European Policy Studies - The EU and India have much in common. Both aim to enhance strategic autonomy and their global standing. Diversifying strategic value chains is also a common interest, as

Putting victims on trial

Putting victims on trial By, Shraddha Chaudhary is a Lecturer, Jindal Global Law School, Sonipat Context - In late June, a single bench of the Karnataka High Court granted anticipatory bail to a man accused of rape. - One of the first reasons mentioned for granting bail was that the seri

Inflation alert: On rising prices

Inflation alert: On rising prices Context - June’s retail inflation reading of 6.1% is worrying, particularly since it was the first month when the economy reopened from the crippling lockdowns of the preceding two months. - While the disruptions caused to the supply of goods and ser

China’s post-COVID aggression is reshaping Asia

China’s post-COVID aggression is reshaping Asia Context * China’s coronavirus “mask diplomacy” has given way to tense geopolitical confrontations with a growing array of its neighbours, from stand-offs with Vietnam and Malaysia in the South China Sea to threatening Aust

Zinc Gluconate

Zinc Gluconate Element Zinc is vital for maintaining normal bone homeostasis, and its levels are reported to get reduced in rheumatoid arthritis patients and arthritis-induced animals. It is also known that oral supplementation of zinc in the form of zinc gluconate have very low bioavailabilit

Biofuels

Biofuels Researchers of the Indian Institute of Technology (IIT) Hyderabad are studying impediments to incorporating biofuels into the fuel sector in India. Significance of Biofuels: Biofuels in India are of strategic importance as it augers well with the ongoing initiatives of the Gove

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