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  • [pib] Lucknow Declaration

    The first India-Africa Defence Ministers’ Conclave held in Lucknow has adopted the Lucknow Declaration.

    India-Africa Framework for Strategic Cooperation

    The declaration:

    • Acknowledges contribution of Indian defence forces in humanitarian assistance and disaster relief operations in Africa.
    • It appreciates initiation of Africa India Field Training Exercises with the first ever AFINDEX in March 2019 and agree that it will further strengthen cooperation in defence preparedness and security.
    • The vision is to achieve ‘a conflict-free Africa, prevent genocide, make peace a reality for all and rid the continent of wars, violent conflicts, human rights violations, and humanitarian disasters.
    • It call for deeper cooperation in the domain of defence industry including through investment, joint ventures in defence equipment software, digital defence, research & development etc.
    • It recognizes the common security challenges such as terrorism and extremism, piracy, organised crime including human trafficking, drug trafficking, weapon smuggling and others.
    • The members endorsed initiatives such as African Peace and Security Architecture (APSA), Silence The Guns in Africa and Agenda 2063.
    • It calls for strengthening the UN Counter-Terrorism mechanisms and to ensure strict compliance with the UN Security Council sanctions regime on terrorism.
    • It urged the international community to envisage the adoption of Comprehensive Convention on International Terrorism in the UNGA.
    • The members recognized the importance of the oceans and seas to the livelihoods of our peoples and that Maritime security is a pre-requisite for the development of Blue or Ocean economy.
    • It sought to increase cooperation in securing sea lines of communication, preventing maritime crimes, disaster, piracy, illegal, unregulated and unreported fishing through sharing of information and surveillance.

  • [pib] National Judicial Pay Commission

    The Second National Judicial Pay Commission has filed its report covering the subject of Pay, Pension and Allowances in the Supreme Court.

    Second National Judicial Pay Commission

    • The Commission is headed by former Supreme Court judge P V Reddy.
    • It was set up on the directions of the apex court in May 2017 during the hearing of the All India Judges Association case.

    Key recommendations

    1) Pay

    • It has recommended the adoption of Pay Matrix which has been drawn up by applying the multiplier of 2.81 to the existing pay, commensurate with the percentage of increase of pay of High Court Judges.
    • The highest pay which a District Judge (STS) will get, is Rs.2,24,100/-.

    2)  Pension

    • Pension at 50% of last drawn pay worked out on the basis of proposed revised pay scales is recommended w. e. f. 1-1-2016. The family pension will be 30% of the last drawn pay.
    • Recommendation has been made to discontinue the New Pension Scheme (NPS) which is being applied to those entering service during or after 2004. The old pension system, which is more beneficial to be revived.

    3) Allowances

    • The existing allowances have been suitably increased and certain new features have been added. However, the CCA is proposed to be discontinued.
    • Certain new allowances viz. children education allowance, home orderly allowance, transport allowance in lieu of pool car facility, has been proposed.

  • Euthermia: the anomaly of human body temperature

     

    Euthermia refers to normal body temperature. The thermometer reading of 98.6°F has been a gold standard for a century and a half, ever since a German doctor laid it down as the “normal” body temperature.  A new research has found that body temperatures have, in fact, been declining over the last two centuries.

    Why we follow 98.6°F?

    • In 1851, Carl Reinhold August Wunderlich pioneered the use of the clinical thermometer.
    • It was a rod a foot long, which he would stick under the armpits of patients at the hospital attached with Leipzig University, and then wait for 15 minutes (some accounts say 20 minutes) for the temperature to register.
    • He took over a million measurements of 25,000 patients, and published his findings in a book in 1868, in which he concluded that the average human body temperature is 98.6°F.
    • Most modern scientists feel Wunderlich’s experiments were flawed, and his equipment inaccurate.
    • Another study concluded that the average human body temperature is closer to 98.2°F, and suggested that the 98.6°F benchmark be discarded.

    The body is cooler

    • The Stanford University the researchers confirmed some known trends — body temperature is higher in younger people, in women, in larger bodies and at later times of the day.
    • Additionally, they found that the bodies of men born in the early to mid-1990s is on average 1.06°F cooler than those of men born in the early 1800s.
    • And the body temperature of women born in the early to mid-1990s is on average 0.58°F lower than that of women born in the 1890s.
    • The calculations from the research correspond to a decrease in body temperature of 0.05°F every decade.

    Why there’s decrease in body temperature?

    • The researchers have proposed that the decrease in body temperature is the result of changes in the environment over the past 200 years, which have in turn driven physiological changes.
    • The decrease in average body temperature in the US, they said, could be explained by a reduction in metabolic rate, or the amount of energy being used.
    • The environment that we’re living in has changed, including the temperature in our homes, our contact with microorganisms and the food that we have access to.
    • Actually the human body is changing physiologically.

    So what’s the normal temperature?

    • The strong influences of age, time of day, and genders determine the healthy body temperature.

  • [op-ed of the day] Amendments to Medical Termination of Pregnancy Act are a mixed bag

    Context

    The Union Cabinet’s approval of the amended Medical Termination of Pregnancy (MTP) Bill 2020 was reported on January 29. This amendment was long due and has made some anticipated changes demanded by women’s groups and courts, including the Supreme Court.

    Why the amendment was necessitated?

    • Abortion (unsafe) accounts for almost 10 per cent of maternal deaths in India.
    • No provision to avoid unsafe abortion: The amended Act doesn’t have any new substantial provisions to avoid unsafe abortions.
      • The right to safe abortion (at least till 12 weeks, when it is safer) would have made the state responsible to provide safe abortion services.
    • Reduce the burden on judiciary: The proposed amendments will definitely reduce the burden on the judiciary, especially given the plethora of cases seeking permission for abortion beyond the prescribed duration of 20 weeks.
    • Two types of Court cases: The court cases are broadly two types.
      • The first group of cases: These are pregnancies that extend beyond 20 weeks of gestation as a result of rape, incest or of minor women.
      • The new Act rightly addresses these by extending prescribed period abortion to 24 weeks.
      • However, such cases form a minuscule proportion of the total number. For such cases, even the 24-week cap can be done away with, provided the abortions can be safely done.
      • The second group of cases
      • These are of pregnancies that become unwanted after congenital foetal anomalies are found upon testing.
      • With advancements in prenatal foetal screening/diagnostic technologies, more such cases are knocking at the doors of courts.
      • Marginal interval under the current act: Anomalies detected at 17-20 weeks provide only a marginal interval to conduct an abortion under the current Act.
      • The extension to 24 weeks seems to give cover to these cases for abortion services, reducing the burden on courts.

    How the law could be misused?

    • Possibility of using any anomaly as a ground for abortion: The amendments have opened up the possibility for any congenital anomaly to be used as grounds for abortion.
      • Anomalies which are incompatible with life provide grounds for access to abortion at any time during pregnancy -not just 24 weeks of gestation-as long as the woman desires it and it doesn’t endanger her health.
      • But with advancements in diagnostic technologies, more anomalies will be detected, including those which are compatible with life.
    • Social acceptability and anomaly: What constitutes an anomaly changes depending on what is considered socially desirable.
      • Issue of raising children with disability: Technology-aided detection of “undesirability” could now find social support, as has been the case with female foetuses.
      • This raises concerns that raising children with disability, especially in the absence of state support and poor social attitudes, could go down a similar path.

    The risk to the life of women

    • Abortion beyond 12 weeks carries serious health risks.
      • 12 weeks provision under current law: Current law requires the expert opinion of two registered medical practitioners for the abortion beyond 12 weeks.
        • Extending the limit to 20 weeks and risk involved: 12-week requirement has been delayed till 20 weeks, though the physiology of pregnancy and risks associated with procedures for second-trimester abortions haven’t changed significantly.
        • Possibility of more complications: Without the strengthening of public services, easing second-trimester abortions between 12-20 weeks opens the possibilities of more complications and endangers the life of the woman.

    Conclusion

    With congenital anomalies as a ground for abortion, the eugenic mindset of having socially desirable children could push more women into risky late abortions. The approach of medical boards advising courts in cases of late abortions under this Act will be critical to balancing women’s right to choose with risk to the woman and the motives for abortion. The rules framed under the Act must address this in no uncertain terms.

     

     

  • [op-ed snap] Fashioning the framework of a New India

    Context

    As the Indian economy is going through a severe crisis, a major solution to the present economic crisis is to go in for inclusive growth; it also means shared prosperity.

    Where India stands on poverty and how the slowdown is impacting the poor.

    • Bottom 30-40% adversely impacted: The slowing economy has had an adverse impact on the bottom 30%-40% of the population.
      • Absolute poverty on the rise: The incidence of absolute poverty, which has been falling since 1972-73, has increased to 30% (4% jump).
    • 44% population below the multi-dimensional Poverty line: The Human Development Report (2019) has shown, more than 44% of the Indian population is under the multi-dimensional poverty line.
    • Rising inequality: The poorest 50% population at present owns only 4.1% of the national wealth.
      • While the richest 10% of people own 73% of the total wealth in India (Suisse Credit 2019).
    • Rampant malnourishment: India has 15.2% population malnourished (women 15%) as against 9.3% in China.
      • And 50% of the malnourished children in the world are in India.
    • At 112th position on global hunger: India’s global hunger rank has gone up to 112 while Brazil is 18, China is 25 and South Africa, 59.
    • Dismal performance on education: In the field of education as per a UN report (2015), overall literacy in India is 74.04% (more than the 25% are totally illiterate) against 94.3% in South Africa, 96.6% in China and 92.6% in Brazil.
      • Almost 40-45% population is either illiterate or has studied up to standard 4.
    • Poor quality of education: Given the quality of education in India, the overall population is very poorly educated, with the share of ‘educated unemployment’ rising by leaps and bounds.

    What needs to be realised?

    • Focus on domestic demand: It needs to be realised that when exports are declining, the economy will have to depend on domestic demand for growth.
      • It is no more feasible for the top 20-25% population to continue growing without depending on the demand from the bottom 40-45% population.
    • Demand by the bottom 40% a must: There is thus a strong reason now for the economy to increase effective demand of this bottom 40-45% population at least to continue growing-to reach a $5-trillion economy by 2024.

    What is wrong with the growth process?

    • Bottom 40% not getting the fair share of growth: A major reason for the crisis is that the growth process has marginalised the bottom 40-plus% of the population.
      • It is in the sense that they do not get a fair share of the economic growth, and are more or less deprived of productive employment with a decent income.
      • They have not been used as active participants in the growth process. Their potential has not been promoted.
    • Less spending for the poor and its consequences: Though the bottom population depends on the government for basic health and elementary education (and also for access to higher educational opportunities)-
      • The government spends just 4% of GDP on health (against the norm of 4-6% of GDP) and 3% of GDP on education (against the norm of 6-8% of GDP).
      • How this dismal spending affects the poor: As a result of this below norm spending, these people are left hardly literate and sick, with poor nutrition and high morbidity.
      • They are incapable of acquiring any meaningful skills or participating actively when new technology is spreading in the rest of the economy.
    • The sub-optimal use of labour force: This sub-optimal use of the labour force in the economy is not likely to enable India to achieve optimal growth with proper use of the national resources -the labour force.

    Inclusive growth- a solution to the present economic crisis

    • Inclusive growth also includes shared prosperity: Here, inclusive growth does not mean only including all sections of the population in the growth process as producers and beneficiaries; it also means “shared prosperity”.
      • Since India has already committed to sustainable and inclusive growth at the UN General Assembly, India is definitely obliged to implement inclusive growth.
      • This should be our “New India”.
    • What “New India” would involve?
      • Improve the capability and opportunities: To start with, to improve the capabilities of the masses as well as their well-being by expanding productive employment opportunities for them.
      • What expanding productive employment mean? The main steps to expand productive employment for all in the economy should be made up of-
      • A process of inclusion.
      • Expanding the quality of basic health for all.
      • And ensuring quality education to all.
    • How will “New India” help?
      • Which will by itself generate large-scale employment in the government.
      • Having a well-educated and healthy labour force will ensure high employability.
      • Such people will be able to participate actively in the development process.
      • The cycle of more productive employment: Having a well-educated labour force will help start-ups and MSMEs, in turn triggering a cycle of more productive employment in the economy.
      • Global competitiveness increase: This will also improve the global competitiveness of our production units.
      • Labour absorption potential of MGNREGA: Employment guarantee schemes such as the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) will also increase employment.
        • Assets generated under MGNREGA will expand capital formation in the economy, thereby raising the labour-absorbing capacity of the mainstream economy.
      • Why this strategy is advantageous?
        • Such a strategy has multiple advantages:
        • First– it will raise incomes and the well-being of those who need it most urgently.
        • Second– it will raise effective demand rapidly, which is so badly needed in the economy today to raise economic growth.
        • Third– growth will be equitable and sustainable.

    Way forward

    • Finally, how does one raise resources to increase new public investments in the selected sectors?
    • Raise direct taxes: One major strategy is to raise direct taxes, both capital tax and wealth tax.
      • Past growth has failed to reach the poor: Growth led by providing tax cut and extra incentives, but this growth does not much percolate to the poor.
      • Consequently, taxing the rich has to be a major strategy to raise government revenue.
    • Treat public expenditure as an investment: The public expenditure on raising capabilities should be treated as social investment rather than social welfare, policymakers will be willing to spend on this capital formation.
    • Let the fiscal deficit slip: Finally, there was no sound economic reason to control fiscal deficit ratio. Sound macroeconomics never supports this.

     

     

     

  • Defence Bill in Budget

     

    The Union Budget for 2020-21 has allocated Rs 1,33,825 crore to defence pensions. This is up by 10½ times in a decade and a half, from Rs 12,715 crore in 2005-06.

    The ‘hype’ of defence pension

    • The allocation of Rs 1,33, 826 crore is 4.4% of the total expenditure of the central government or 0.6% of GDP.
    • And of the overall allocation made to the Defence Ministry, 28.4% goes towards pensions.
    • So sharply has the bill for defence pensions gone up that it is now Rs 15,291 crore more than the Defence Ministry’s total capital expenditure, a bulk of which goes towards modernization of the armed forces.
    • It now nearly equals the salaries bill for Defence Ministry. The more the government spends on salaries and pensions, the less it can spend on modernizing the armed forces.
    • To put it in perspective, the government’s spending on education is Rs 99,300 crore and on health is Rs 69,000 crore.
    • To compare it with other sectors, the government’s rural employment scheme MGNREGA has an allocation of only Rs 61,500 crore — 46% of the bill for defence pensions.

    Why the bill is high?

    • As per the Defence Ministry, there are about 26 lakh armed forces pensioners and family pensioners and approximately 55,000 pensioners are added every year.
    • In 2015, the government announced the OROP (One Rank, One Pension) scheme which cost it Rs 8,600 crore.
    • The implementation of the Seventh Pay Commission recommendations in 2017 again increased the defence pensions bill.

    What makes defense pensions distinct?

    • Defence pensions are unique in many ways. Defence personnel retire at a young age and thus continue to get pensions for a longer period of time than their civilian counterparts.
    • The current ratio of military pensioners to serving military personnel is 1.7 to 1, while the ratio of civil pensioners to civil working personnel is 0.56 to 1.
    • This ratio in defence is projected to further change as life expectancy in India goes up and retired personnel live far longer than earlier.
    • All civilian employees in the government who joined service on or after 1 January 2004 do not get an assured pension but come under the ambit of the contributory National Pension Scheme (NPS).
    • That is meant to reduce the pensions bill of the government on the civilian side, but military personnel have been excluded from the ambit of the NPS because of their short service span.

    Where this can lead to

    • With economic growth stalling and competing requirement from development and infrastructure sectors, the government is being hard-pressed for the last rupee in its kitty.
    • The defence services themselves need more funds to modernize themselves but are struggling with budgetary allocations.
    • In such a scenario, attention is likely to come to the fast-rising defence pensions bill.

    Feasible solutions

    • The short-term answer to keep the bill frozen at the same level is to increase the retirement age of serving military personnel and stop the rise in number of pensioners.
    • But at a time when the country is facing unemployment at an all-time high, stopping recruitment for a few years will worsen the situation.
    • The other solution is to send the retired military personnel to paramilitary forces but those forces, too, need to stay young and have not accepted the proposal.
    • That would also pose the problem of recruitment in a time of high unemployment, as in the case of increase in retirement age of military personnel.

    Conclusion

    • The sharply rising defence pensions bill, however, has become a challenge that cannot be ignored any longer.
    • Unless India’s economy grows at a double-digit rate, it will not be possible to furnish this bill and still modernize the armed forces.
    • There are no easy answers to the challenge, and the answer will have to come from the top political leadership.

  • Kumbhabishegam at Brahadeeswarar Temple, Thanjavur

     

    • Tens of thousands of pilgrims thronged Thanjavur in Tamil Nadu’s Cauvery delta to witness the Kumbhabishegam (consecration) ceremony at the Sri Brahadeeswarar Temple.
    • This enormously significant event was held after 23 years — and after the Madras High Court had settled an old argument over the ritual purification process only five days previously.
    • The judgment delivered by the Madurai Bench of the court addressed the struggle for supremacy between the Sanskrit and Tamil traditions.

    Sri Brahadeeswarar Temple and Kumbhabishegam ceremony

    • The Sri Brahadeeswarar Temple (also spelt Brihadisvara, and called Peruvudaiyar Koyil, which translates simply to ‘Big Temple’) is the most famous of the many temples in Thanjavur.
    • The temple, one of the world’s largest and grandest, was built between 1003 AD and 1010 AD by the great Chola emperor Raja Raja I (c. 985-1014 AD).

    Before the High Court

    • The court, in a dispute over which language should be used in the slokas at the kumbhabishegam, agreed with the state government’s affidavit that the ceremony should be in both Sanskrit and Tamil.
    • The Temple committee had demanded that the Kumbhabishegam should be held only in Tamil.
    • The court ruled the choice to be vested with the devotees to seek for their archanas to be performed at their wishes by chanting the manthras either in Tamil or in Sanskrit.

  • Global Report on Medical Data Leak

     

    Medical details of over 120 million Indian patients have been leaked and made freely available on the Internet, according to a recent report.

     Global Report on Medical Data Leak

    • It is published by Greenbone Sustainable Resilience, a German cybersecurity firm.
    • The first report was published in October 2019 in which Greenbone revealed a widespread data leak of a massive number of records, including images of CT scans, X-rays, MRIs and even pictures of the patients.
    • The follow-up report, which was published, classifies countries in the “good”, “bad” and “ugly” categories based on the action taken by their governments after the first report was made public.
    • India ranks second in the “ugly” category, after the U.S.

    Highlights of the report

    • As per the follow-up report, Maharashtra ranks the highest in terms of the number of data troves available online, with 3,08,451 troves offering access to 6,97,89,685 images.
    • The next is Karnataka, with 1,82,865 data troves giving access to 1,37,31,001 images.
    • The number of data troves containing this sensitive data went up by a significant number in the Indian context a month after the initial report was published.
    • It is a notable fact for the systems located in India, that almost 100% of the studies (data troves) allow full access to related images stated the report.

    What led to the leaks?

    • Greenbone’s original report says the leak was facilitated by the fact that the Picture Archiving and Communications Systems (PACS) servers, where these details are stored.
    • These servers are not secure and linked to the public Internet without any protection, making them easily accessible to malicious elements.

    Impact of leaks

    • The leak is worrying because the affected patients can include anyone from the common working man to politicians and celebrities.
    • In image-driven fields like politics or entertainment, knowledge about certain ailments faced by people from these fields could deal a huge blow to their image.
    • The other concern is of fake identities being created using the details, which can be misused in any possible number of ways.

  • Ujh Multi-purpose Project

     

    The Union government has approved a nearly ₹6,000-crore multi-purpose project for the Ujh multi-purpose project.

    Ujh Multi-purpose Project

    • The project will store around 781 million cubic meters of water of river Ujh, a tributary of river Ravi.
    • It aims to provide uninterrupted water for irrigation to farmers in J&K’s Kathua district and to produce power.
    • After completion of the project, utilization of waters of eastern rivers allotted to India as per the Indus Water Treaty would be enhanced by utilising the flow that presently goes across the border to Pakistan.

    Back2Basics

    Indus Waters Treaty, 1960

    • The IWT is a water-distribution treaty between India and Pakistan, brokered by the World Bank signed in Karachi in 1960.
    • According to this agreement, control over the water flowing in three “eastern” rivers of India — the Beas, the Ravi and the Sutlej was given to India
    • The control over the water flowing in three “western” rivers of India — the Indus, the Chenab and the Jhelum was given to Pakistan
    • The treaty allowed India to use western rivers water for limited irrigation use and unrestricted use for power generation, domestic, industrial and non-consumptive uses such as navigation, floating of property, fish culture, etc. while laying down precise regulations for India to build projects
    • India has also been given the right to generate hydroelectricity through run of the river (RoR) projects on the Western Rivers which, subject to specific criteria for design and operation is unrestricted.

    Present Status of Development

    • To utilize the waters of the Eastern rivers which have been allocated to India for exclusive use, India has constructed Bhakra Dam on Satluj, Pong and Pandoh Dam on Beas and Thein (Ranjitsagar) on Ravi.
    • These storage works, together with other works like Beas-Sutlej Link, Madhopur-Beas Link, Indira Gandhi Nahar Project etc has helped India utilize nearly entire share (95 %) of waters of Eastern rivers.
    • However, about 2 MAF of water annually from Ravi is reported to be still flowing unutilized to Pakistan below Madhopur.
    • The three projects will help India to utilize its entire share of waters given under the Indus Waters Treaty 1960:

    I. Resumption of Construction of Shahpurkandi project

    • It is a dam project under construction on Ravi River.

    II. Construction of Ujh multipurpose project

    • It is a dam project under construction on Ujh, a tributary of Ravi River.

    III. 2nd Ravi Beas link below Ujh

    • This project is being planned to tap excess water flowing down to Pakistan through river Ravi, even after construction of Thein Dam.
    • It aims constructing a barrage across river Ravi for diverting water through a  tunnel link to Beas basin.

  • [op-ed snap] No rescue in sight

    Context

    The disconnect between Budget and Economic Survey is much greater this year.

    Background of the economy as the budget is introduced

    • The 2020 Budget was presented against the background of-
      • Slowing economy.
      • Poor investment climate.
      • Declining consumption demand and
      • Stagnant exports.
      • The steady deceleration in growth, which registered at 4.5 per cent in the second quarter of the current fiscal — the lowest in the last 26 quarters — presented a challenge as well as an opportunity.

    Infrastructure investment

    • The hope of substantial increase in allocation for infra: The hope was that there will be a substantial increase in infrastructure investment, which in turn will trigger investment demand, but the actual allocations are not promising.
      • This was particularly surprising in the wake of the recent announcement that there will be an investment of Rs 103 trillion in the next five years to leapfrog India to a $5-trillion economy.
      • Private sector expected to contribute: Much of the investment for this will have to be made by the private sector and it is hoped that the allocation of Rs 20,000 crore in equity in specified infrastructure finance companies will help them to leverage more than Rs 1 lakh crore of investment support.

    Budgetary allocation for capital expenditure

    • 1.7% of GDP to 1.8 %: The budgetary allocation for capital expenditure for the current year, which is estimated at 1.7 per cent of GDP this year, is budgeted at 1.8 per cent in 2020-21.
    • Agriculture, irrigation and rural development: The Budget also contained 16 action points on agriculture, irrigation and rural development and the Rs 2.83 lakh crore allocation is higher than the budget estimate for the previous year by just 2.5 per cent and revised estimate by 13.2 per cent.
      • But the allocation looks impressive only because there was a massive cut (Rs 26,000 crore) in the budget estimate over the revised estimate.
    • Transport infrastructure: The allocation to transport infrastructure in the Budget- at Rs 1.7 lakh crore-is just 7.6 per cent higher than the revised estimate for 2019-20.
    • MGNREGA and PM-Kisan Samman Nidhi: The allocations to schemes like the MGNREGA has been cut from Rs 71,002 crore (RE) in the current year to Rs 61,500 crore in 2020-21.
      • PM Kisan Samman Nidhi: For schemes like PM Kisan Samman Nidhi, it is just as much as was budgeted for 2019-20.
      • As a consequence, not much is expected in terms of propping up the consumption demand.

    Slippage in fiscal deficit

    • Increase in fiscal deficit expected: The slippage in fiscal deficit from the target set in the budget estimate in 2019-20 was expected for the following reasons-
      • Below expected nominal GDP growth: Nominal GDP growth was 7.5 per cent as against the estimated 12 per cent in the budget.
      • Overestimation in the growth of tax revenue at 18.3 per cent over the pre-actuals of the previous year.
      • Missed disinvestment target: The slippage in achieving the disinvestment target of Rs 1.03 lakh crore.
    • Thus, it is not surprising that the fiscal deficit for the current year stands estimated at 3.8 per cent of GDP and for the next year at 3.5 per cent.
    • Off-budget financing: The major concern is that the reported off-budget financing is almost 0.85 per cent. This does not capture the bills and refunds payable by the government.

    Would the budgeted and revised estimates realise?

    • On disinvestment front: The disinvestment revenue is estimated at Rs 65,000 crore though the realisation so far has been just Rs 18,000 crore, which implies another Rs 47,000 crore will have to be mobilised in the next two months.
    • On tax revenue front: The RE of tax revenue for the current year is over 14 per cent higher than the actual for 2018-19.
      • This is perhaps predicated on the hope that the scheme, “Vivad se Vishwas”, which allows the settlement of disputed tax to be paid without interest and penalty.

    Tax reforms in the budget

    • DDT abolition: On tax reforms, the abolition of dividend distribution tax (DDT) was expected.
    • Complicating Income tax: The reforms in individual income tax complicates the tax by creating six brackets.
      • The best practice approach to tax reform is to broaden the base, reduce the rates and reduce the number of brackets to make it a simple tax.
    • What could have been done? The government could have simply-
      • Phased out the tax concessions.
      • Indexed the brackets for inflation and
      • Reduced the rates of tax with an appropriate adjustment in the brackets.

    Conclusion

    The impact of fiscal developments on the states’ finances is clearly adverse. The shortfall in tax devolution in 2019-20 from the budgeted amount works out to Rs 1.53 lakh crore and the total shortfall in transfers amounted to Rs 1.41 lakh crore. Besides starving funds for various projects, this has serious repercussions on budget management at the state level.