[op-ed snap] The forgotten funds

Mains Paper 2 : Governance, Transparency & Accountability, Citizens Charters |


From UPSC perspective, the following things are important :

Prelims level : cess and tax difference

Mains level : There should be transparency regarding cess proceeds and its utilisation.


The government must utilise cess proceeds and publish an annual account of how they have been spent. In this period of accounting and accountability, as citizens, it is equally important to apply the same principles to the working of the government. A key area is the social accounting of the education cess, which is a compulsory contribution made by all taxpayers, both individuals and firms.

Everything about cess

  • A cess is levied on the tax payable and not on the taxable income.
  • Surcharge on tax – In a sense, for the taxpayer, it is equivalent to a surcharge on tax.
  • Comparison with tax
    • Direct taxes on income are compulsory transfers of private incomes (both individual and firm) to the government to meet collective aims such as the expansion of schooling infrastructure, an increase in health facilities, or an improvement of transportation infrastructure.
    • A cess can be levied on both direct and indirect taxes.
    • The revenue obtained from income tax, corporation tax, and indirect taxes can be allocated for various purposes.
    • Unlike a tax, a cess is levied to meet a specific purpose; its proceeds cannot be spent on any kind of government expenditure.
    • Recent examples of cess are: infrastructure cess on motor vehicles, clean environment cess, Krishi Kalyan cess and education cess.
    • To make the point clear, the proceeds from the education cess cannot be used for cleaning the environment and vice versa.
    • From the point of view of the government, the proceeds of all taxes and cesses are credited in the Consolidated Fund of India (CFI), an account of the Government of India.
    • And the approval of Parliament is necessary to withdraw funds from the CFI. While the tax proceeds are shared with the States and Union Territories according to the guidelines by the Finance Commission, the cess proceeds need not be shared with them.
    • To meet specific socioeconomic goals, a cess is preferred over a tax because it is relatively easier to introduce, modify, and abolish.

What data show

Dedicated Fund – In order to utilise the cess proceeds lying in the CFI, the government has to create a dedicated fund. As long as a dedicated fund is not created, the cess proceeds remain unutilised.

Case study of unutilised cess

  • The dedicated fund for primary education is the ‘Prarambhik Shiksha Kosh’, or PSK, (created in October 2005, a year after the cess was introduced) while that for higher and secondary education is the ‘Madhyamik and Uchchtar Shiksha Kosh’ (set up in August 2017).
  • It is baffling why the government set up the dedicated fund for higher and secondary education in 2017, 10 years after the introduction of SHEC; it is also shocking that this fund has remained dormant as of March 2018.
  • Moreover, data from the 2017-18 annual financial audit of government finances conducted by the Comptroller and Auditor General (CAG) show that ₹94,036 crore of SHEC proceeds is lying unutilised in the CFI.
  • In fact, it appears that the government finally set up the ‘Madhyamik and Uchchtar Shiksha Kosh’ after consecutive CAG reports, repeated Lok Sabha queries, and newspaper articles.

Comparison with expenditure on education –  In 2017-18, the public expenditure on school and higher education was estimated to be ₹79,435.95 crore. In other words, the cumulative unutilised SHEC funds far exceeded the expenditure on both school and higher education for the year 2017-18.

Going forward

  • Taxes in democratic societies indicate the presence of a collective socioeconomic vision aimed at improving livelihoods.
  • Just as taxpayers have a responsibility to pay taxes, the government ought to ensure that tax proceeds are appropriately utilised.
  • Since a cess is introduced with a specific purpose, it is completely unjustified when the proceeds remain unutilised for so many years.
  • Moreover, in the current context of self-imposed fiscal discipline and the consequent reduction of public expenditure, the opportunity cost of unutilised education cess proceeds is significantly high.
  • Finally, it is imperative that the government immediately begins utilising cess proceeds and also publishes an annual account of the manner in which they have been utilised.


Tax Reforms

[op-ed snap] The next structural change’

Mains Paper 2 : Representation Of People's Act |


From UPSC perspective, the following things are important :

Prelims level : Nothing Much

Mains level : Simultaneous election forms the fundamental pillar of electoral reforms.


The renewed pitch for “One Nation One Election” if understood in terms of process improvement, or reforms, makes eminent sense.

Harmful Impact of year-round election cycles

1.Concerns with Rajya Sabha

  • First, the Rajya Sabha has simply stopped reflecting the current will of the people.
  • No, this is not an argument to assert that Rajya Sabha should reflect the reality of the Lok Sabha mandate.
  • But is it anybody’s case that the Rajya Sabha members should not reflect the current will of their respective state’s mandate?

Case Study of UP

Eleven Rajya Sabha members were elected from Uttar Pradesh in June 2016: Seven of them were from the SP, two from the BSP and just one each from the BJP and Congress. These results reflected the reality of the then state assembly of UP. These seats will be up for re-election in June 2022. In between, the people of the state decisively voted in favour of the BJP in March 2017. The UP assembly is due for elections in February-March 2022. This would mean that the assembly elected in 2017 would have had zero say in its entire tenure on these 11 seats.

2. confrontationist Attitude between the state and centre

  • Second, assembly elections two years either side of Parliamentary elections, in states ruled by a different party than that at the Centre, have led to an almost continuous confrontationist attitude, severely compromising federal cooperation and governance delivery.
  • Examples – Take the case of West Bengal. Before the 2019 general elections, Ayushman Bharat was suspended, PM Kisan was not implemented, CBI jurisdiction was impeded.

3.  Delay in decision making

  • Third, although governments are nominally elected for five years, the frequent imposition of the Model Code suspends decision making and implementation every few months.
  • This has squeezed out space for ideas that may be vital but have no immediate electoral salience.

4. Electoral Swaying by short term promises

Fourth, the competitive nature of electoral democracy inevitably means choosing to make the easiest promise. Routed in the general elections and fearing similar result six months later, who would want to invest time in arduous efforts to effect real, long-term changes?

5. No availability of evaluation time

Fifth, the ubiquitous nature of social media has meant that almost everybody is now not just an informed political animal but a participating political animal. Once you have taken a position on a political issue, then the very nature of the beast will compel you to keep on participating with your political lens.


There have been various models proposed for implementing the idea of simultaneous elections. They will surely be debated and a plausible method to reconcile the practicalities be evolved. It took us about a decade to agree to GST. It was a one-time adjustment at the national and state level and we have already started seeing the benefits of this structural change. “One Nation One Election” is also about one-time structural change. First align various cycles and then evolve a structure, by consensus, which can serve us for the decades to come. It is an idea whose time has come.

Electoral Reforms In India

Central Equipment Identity Register (CEIR)

Mains Paper 2 : Governance, Transparency & Accountability, Citizens Charters |


From UPSC perspective, the following things are important :

Prelims level : Central Equipment Identity Register (CEIR), IMEI

Mains level : Privacy concerns associated with mobile phones


  • In a bid to curtail the rampant cloning and theft of mobile phones across the country, the Telecom Ministry is ready to roll out a Central Equipment Identity Register (CEIR) — a database of IMEIs, the 15-digit numbers that uniquely identify each mobile device.

Central Equipment Identity Register

  • The concept of a central identity register is advocated by the GSM Association (GSMA), a body representing mobile operators, equipment manufacturers, and software and internet companies, among other stakeholders in the telecom ecosystem.
  • In India, the plan to prepare the registry of mobile identification numbers was first conceived in the National Telecom Policy-2012.
  • A pilot for the project was developed and conducted by state-owned BSNL’s IT Project Service unit in Pune.
  • In the interim budget for 2019-20, the government allocated Rs 15 crore to the DoT for the CEIR project.

How will database work?

  • In line with global practices, DoT’s identity register will be a database of IMEI numbers that will consist of three lists – white, grey and black.
  • Mobile phones with IMEI numbers in the white list will be permitted for use, while those in the blacklist will be the ones that are reported stolen or lost and will not be allowed to access the network.
  • Devices with IMEI numbers in the greylist will be the ones that do not conform to standards but will be permitted to connect under supervision.

Utility of CEIR

  • Once implemented in the coming weeks, consumers in India whose mobile phones are lost or stolen can inform the Department of Telecom (DoT) via a helpline number after filing a report with police.
  • The DoT can then blacklist the IMEI number, effectively blocking the mobile device from accessing any cellular network in the future.
  • The CEIR will have access to GSMA’s global IMEI database, allowing comparison of IMEI numbers to identify counterfeit devices.

Why it is important?

  • The theft and cloning of mobile phones have become a serious problem.
  • The theft of mobile phones is not just a financial loss but also a threat to personal life of the citizens as well as national security.


What is IMEI?

  • The International Mobile Equipment Identity or IMEI is a number, usually unique to identify 3GPP and mobile phones, as well as some satellite phones.
  • GSM networks use the IMEI number to identify valid devices, and can stop a stolen phone from accessing the network.
  • For example, if a mobile phone is stolen, the owner can have their network provider use the IMEI number to blacklist the phone.
  • This renders the phone useless on that network and sometimes other networks, even if the thief changes the phone’s subscriber identity module (SIM).
  • The IMEI only identifies the device and has no particular relationship to the subscriber.
  • The phone identifies the subscriber by transmitting the International mobile subscriber identity (IMSI) number, which it stores on a SIM card that can, in theory, be transferred to any handset.
  • However, the network’s ability to know a subscriber’s current, individual device enables many network and security features.
Digital India Initiatives

Kolhapuri chappal gets GI Tag

Mains Paper 3 : Intellectual Property Rights |


From UPSC perspective, the following things are important :

Prelims level : Kolhapuri Chappal, GI Tag

Mains level : Implications of GI Tags


  • Kolhapuris, the sturdy leather chappal that rose from its humble rural origins to occupy the high table of fashion globally, now has a Geographical Indication (GI) tag.
  • The Controller General of Patents, Designs and Trade Marks has granted the GI tag for Kolhapuris to a large area in Maharashtra and Karnataka, covering four districts in each state.

Kolhapuri Chappal

  • According to the GI application made by the two states, Kolhapuris can be traced back to the 12th century King Bijjal who ruled Bidar in Karnataka.
  • His prime minister Vishwaguru Basavanna wanted to create a casteless society and remove the stigma associated with the cobbler community.
  • The community embraced Lingayat faith and used its creative skills to start producing footwear known equally for its ruggedness and regal bearing.
  • Brand Kolhapuri came into being only in the beginning of 20th century when the footwear began to be traded in Kolhapur.
  • Chhatrapati Shahu Maharaj (1874-1922) of Kolhapur encouraged its production and 29 tanning centres were opened during his rule in Kolhapur.

What GI tag means for the Kolhapuris?

  • The GI tag will open large markets – both domestic and international – to the artisans producing Kolhapuris in Kolhapur, Solapur, Sangli and Satara districts of Maharashtra and Dharwad, Belgaum, Bagalkot and Bijapur districts of Karnataka.
  • What the GI tag means is that footwear produced only in these eight districts will qualify to carry the tag of being Kolhapuris.


Geographical Indications in India

  • A Geographical Indication is used on products that have a specific geographical origin and possess qualities or a reputation that are due to that origin.
  • Such a name conveys an assurance of quality and distinctiveness which is essentially attributable to its origin in that defined geographical locality.
  • This tag is valid for a period of 10 years following which it can be renewed.
  • Recently the Union Minister of Commerce and Industry has launched the logo and tagline for the Geographical Indications (GI) of India.
  • The first product to get a GI tag in India was the Darjeeling tea in 2004.
  • The Geographical Indications of Goods (Registration and Protection) Act, 1999 (GI Act) is a sui generis Act for protection of GI in India.
  • India, as a member of the WTO enacted the Act to comply with the Agreement on Trade-Related Aspects of Intellectual Property Rights
  • Geographical Indications protection is granted through the TRIPS Agreement. See also the Paris Convention, the Madrid Agreement, the Lisbon Agreement, the Geneva Act.
GI(Geographical Indicator) Tags

Facebook’s cryptocurrency ‘Libra’

Mains Paper 3 : Awareness In The Fields Of It, Space, Computers, Robotics, Nano-Technology, Bio-Technology |


From UPSC perspective, the following things are important :

Prelims level : Libra, Calibra

Mains level : Blockchain technology


  • There’s a new cryptocurrency called Libra to be rolled out by Facebook by 2020.
  • Facebook also announced a dedicated wallet app called Calibra, which will be built into WhatsApp and Messenger as well, to let users store and use these Libra coins.

What is Libra?

  • Libra is a cryptocurrency built on a blockchain network, though Facebook was quick to insist that it will respect user privacy and transactions will in no way to be linked to the user’s real world identity.
  • Libra is like any other cryptocurrency powered by blockchain technology.
  • It wants to be a ‘global currency’, one that can be used to transfer money anywhere in the world without any transaction fees.
  • The claim is that Libra will be accessible to anyone with a smartphone, even a low-cost budget phone, and a network connection.
  • Of course, there are several mobile payment services already offering seamless payments, though with real-money.

Calibra Wallet

  • Calibra is the digital wallet from Facebook to let users store these Libra coins.
  • Facebook says this is a separate company, and data will not be shared with them and it will respect user privacy.
  • Calibra will have a dedicated team of experts in risk management to prevent fraudulent use.
  • Also if someone loses their Libra coins from the Calibra wallet, they will refund users. Libra will also work with other third-party wallets.
  • Calibra will also be added to WhatsApp and Messenger.

How will Libra blockchain work?

  • Libra is also being governed by the independent Libra Association, which is not what you see in typical cryptocurrency.
  • A new programming language is also being built for Libra called Move, which the organisation claims is more secure and private.
  • The Libra Blockchain will record the history of transactions and states over time, rather than the typical blockchain where each transaction is added a new block.

Buying Libras

  • The network is still far from ready. The Libra blockchain will be tested over the coming months.
  • While there’s no word on exactly how someone will buy Libra, the Calibra wallet from Facebook will probably be one way.
  • To purchase Libra, user will have to pay in their local currency, provided the laws allow it.

Its uniqueness

  • Libra will also be backed by a reserve of assets designed in order to “give it intrinsic value” and ensure stability, which is not seen in typical cryptocurrencies.
  • These assets includes securities and fiat currencies (like dollar, pound) etc as part of this reserve.
  • The website says Libra will be backed by “short-term government securities in currencies from stable and reputable central banks.”
  • Still the “value of the one Libra in any local currency may fluctuate,” cautions the page.
  • The idea is to ensure Libra is stable to give more users confidence in this, while ensuring that currency does not fluctuate wildly like other cryptocurrencies such as Bitcoin which had at point had reached a high of $20,000.

Is Facebook the sole company involved in Libra?

  • Facebook is not the only company, though it has leadership role for all of 2019, which means it will have a significant role in deciding the direction for Libra at least for this year.
  • Facebook’s teams have also helped build the technology for the currency.

Will Libra work in India?

  • Cryptocurrency is illegal in India and the draft bill right now is recommending a maximum of 10 year punishment for those who mine, trade, buy or sell these.
  • In India, if the bill passes, trading in cryptocurrency could result in hard punishment.
  • So one of the biggest markets, which is India, will not be able to use Libra, which could limit its potential.
  • The Supreme Court of India is hearing a matter regarding regulation of Bitcoin in India and the matter will now be heard on July 23, 2019.


Blockchain Technology and Bitcoins

Blockchain Technology: Prospects and Challenges

AWaRe: A WHO tool for safer use of antibiotics

Mains Paper 2 : Health & Education |


From UPSC perspective, the following things are important :

Prelims level : AWARE tool by WHO

Mains level : Anti-microbial resistance


  • The WHO has launched a global campaign that urges countries to adopt its new online tool aimed at guiding policy-makers and health workers to use antibiotics safely and more effectively.


The tool, known as ‘AWaRe’, classifies antibiotics into three groups:

  • Access   — antibiotics used to treat the most common and serious infections
  • Watch    — antibiotics available at all times in the healthcare system
  • Reserve — antibiotics to be used sparingly or preserved and used only as a last resort

Antimicrobial resistance

  • Antimicrobial resistance (AMR or AR) is the ability of a microbe to resist the effects of medication that once could successfully treat the microbe
  • The term antibiotic resistance is a subset of AMR, as it applies only to bacteria becoming resistant to antibiotics.
  • Antibiotics are medicines used to prevent and treat bacterial infections. Antibiotic resistance occurs when bacteria change in response to the use of these medicines.
  • Bacteria, not humans or animals, become antibiotic-resistant.
  • These bacteria may infect humans and animals, and the infections they cause are harder to treat than those caused by non-resistant bacteria.
  • Antibiotic resistance occurs naturally, but misuse of antibiotics in humans and animals is accelerating the process.
  • A growing number of infections – such as pneumonia, tuberculosis, gonorrhoea, and salmonellosis – are becoming harder to treat as the antibiotics used to treat them become less effective.
  • It leads to higher medical costs, prolonged hospital stays, and increased mortality.
Health Sector – UHC, National Health Policy, Family Planning, Health Insurance, etc.

2019 Yearbook of the Stockholm International Peace Research Institute (SIPRI)

Mains Paper 2 : Bilateral, Regional and Global Groupings and agreements involving India |


From UPSC perspective, the following things are important :

Prelims level : SIPRI

Mains level : Progress in nuclear disarmament


  • A report by a think-thank has found that the worldwide total of nuclear warheads has decreased since 2018 but countries are modernizing their nuclear arsenals.

Worldwide nuclear arsenal

  • The 2019 Yearbook of the Stockholm International Peace Research Institute (SIPRI) is part-funded by the Swedish government.
  • It said that nine nuclear-armed countries (including India) had a total of some 13,865 nuclear weapons at the start of 2019, which is a decrease of 600 nuclear weapons from 14,465 at the start of 2018.
  • Figures for North Korea were not added to the total on account of uncertainty.
  • The report separately counts “deployed warheads” (warheads placed on missiles or located on bases with operational forces) and “other warheads” (stored or reserve warheads and retired warheads awaiting dismantlement).

Why decrease?

  • It attributed the decrease mainly to Russia and the US.
  • They together still account for over 90 per cent of all nuclear weapons.
  • They are further reducing their strategic nuclear arms pursuant to the implementation of the 2010 Treaty on Measures for the Further Reduction and Limitation of Strategic Offensive Arms (New START).


New START Policy

  • The New Strategic Arms Reduction Treaty (New START) pact limits the number of deployed nuclear warheads, missiles and bombers and is due to expire in 2021 unless renewed.
  • The treaty limits the US and Russia to a maximum of 1,550 deployed nuclear warheads and 700 deployed missiles and bombers, well below Cold War caps.
  • It was signed in 2010 by former US President Obama and then-Russian President Dmitry Medvedev.
  • It is one of the key controls on superpower deployment of nuclear weapons.
  • If it falls, it will be the second nuclear weapons treaty to collapse under the leadership of US President Donald Trump.
  • In February, US withdrew from the 1987 Intermediate-Range Nuclear Forces Treaty (INF), accusing Moscow of violating the agreement.
Nuclear Diplomacy and Disarmament

[pib] Regional Cooperation Agreement on Combating Piracy and Armed Robbery against Ships in Asia (ReCAAP)

Mains Paper 3 : Various Security Forces, Agencies & Their Mandates |


From UPSC perspective, the following things are important :

Prelims level : RECAAP

Mains level : Maritime Security in IOR


  • The Indian Coast Guard (ICG) will be co-hosting an international workshop that aims to deepen knowledge on issues related with piracy and armed robbery, the maritime agency said.
  • The two-day workshop has been organised in cooperation with the Regional Cooperation Agreement on Combating Piracy and Armed Robbery against Ships in Asia (ReCAAP) Information Sharing Centre (ISC).


  • The ReCAAP stands for Regional Cooperation Agreement on Combating Piracy and Armed Robbery against Ships in Asia.
  • It is the first regional Government-to-Government agreement to deal with piracy and armed robbery at sea in Asia.
  • The ReCAAP Information Sharing Centre (ReCAAP ISC) was established under the Agreement and was officially launched on 29 November 2006 in Singapore.
  • Presently, 20 countries are members of the ReCAAP including Australia, US, Japan, China and Bangladesh (Pakistan is not a member).
  • India had played an active role in setting up and functioning of the ReCAAP ISC along with Japan and Singapore.
  • The Centre has designated the ICG as the focal point within India for the ReCAAP.
Indian Ocean Power Competition