Recent amendments to the Terms of Reference (ToR) of the 15th Finance Commission (FFC) are examined here.
Amendments
First – requires the FFC to examine “whether a separate mechanism for funding of defence and internal security ought to be set up and how such a mechanism should be operationalised”.
Second – from Section 83 of the Jammu and Kashmir Reorganisation Act 2019. It requires the President to “make a reference to the 15th Finance Commission to include the UT of J&K in its ToR and make an award for the successor UT of Jammu and Kashmir.
A new funding mechanism
Separate mechanism – The use of the words “separate mechanism” points to creating a mechanism distinct from the existing one.
Constitutional position
The Constitution requires that estimates relating to voted expenditure in the Annual Financial Statement be submitted in the form of demands for grants to the Lok Sabha.
The Government of India submits demands for grants to the Lok Sabha under the defence and home ministries for defence and deployment of armed forces in states.
New mechanism – The separate mechanism could be the creation of defence and internal security fund in the public account to which their annual budgetary allocations could be credited and spent over a multi-year time-frame without the threat of lapse.
Already existing model – Such an arrangement already exists for a number of funds in the public account, like the National Disaster Relief Fund.
Challenges with this model
The extent of sum – The budget provision for 2019-20 for defence and the police grant of the home ministry is about Rs 5,30,000 crore.
Huge amounts – It will be inappropriate to take away one-fifth of the GoI’s budget allocations into the public account.
Budgetary management – escrowing such a large amount from its resources will constrain the GoI’s budgetary management.
Other ministries – similar demands could arise from other critical ministries like infrastructure and health, which will further emasculate budgetary flexibility.
Lax budgeting – it will lead to lazy budgeting by the beneficiary ministries.
Violation of rules – it violates the Government Accounting Rules 1990 (GAR), which allow for creating a fund in the public account only for the implementation of specified schemes of ministries and not for entire budgetary allocations of departments.
Canons of budgeting – it violates the fundamental canons of annual budgeting mandated in the Constitution — providing for lapse of money budgeted but unspent during a year and obtaining Parliament’s approval every year for the Annual Financial Statement.
Ambiguity – The use of the words “internal security” creates ambiguity.
Internal security means maintaining public order and peace by tackling internal threats and upholding the law.
Public order and police are part of the state’s responsibility.
Internal security is as much a concern of states as it is of the centre.
Sharing with states – there would be a further challenge if such a fund is created in the GoI’s public account. It will have to decide how it will be shared with states.
J&K amendment
The phrase “include UT of JnK in its Terms of Reference” is indeterminate.
No place for states – ToR of the FFC has 15 clauses. In which clause and where should it be included remains a question. The names of no state or UT find a place in any of these 15 clauses.
Treat as a state – this amendment requires the FFC to treat the UT of JnK as a state for the purposes of its award.
No awards for UTs – No Finance Commission has ever made an award for any UT. It is not clear how the FFC can now make an award treating the UT of J&K as a state.
Competition with other UTs – the claims of the two other UTs with a legislature — Delhi and Puducherry demanding that FCs award a share of the divisible pool to them can’t be ignored.
The challenge from states – States argue that the impact of such a provision would increase the number of claimants to the divisible pool and reduce their individual share.
Conclusion
Some state governments have complained about its perceived inequities to the President.
These two amendments unnecessarily raise more challenges for the FFC.
Economics | Mains Paper 3: Infrastructure: Energy, Ports, Roads, Airports, Railways Etc.
Note4Students
From UPSC perspective, the following things are important :
Prelims level : Nothing much
Mains level : Telecom sector - impact of policies
Context
The telecommunications sector is one of the most progressive in the world, in terms of both development and outcomes.
The success of the telecom sector
It rides on increasing mobile penetration, declining tariffs, increasing competition, and the evolution of wireless technologies.
Telecom has surged ahead of other infrastructure-heavy sectors.
This success can be attributed to a large addressable market along with substantial private sector participation, technological innovations and an enabling institutional and regulatory environment.
Challenges
In a judicial pronouncement in 2012, the Supreme Court ordered the cancellation of 122 telecom licences in the 2G scam case.
Then there’s the phase of hyper-competition unleashed by a new entrant. This led to the rapid consolidation – a virtually 3+1-player market, bankrupt telcos, lakhs of lost jobs, red balance sheets and worried lenders/investors.
Now the Supreme Court judgement on licence fee and spectrum charges has taken away all those hopes.
Latest judgement
Court held that the definition of gross revenue mentioned in the licence agreement is sacrosanct and cannot be reviewed or decided by TDSAT or TRAI.
It held that the “gross revenue of the licence” is equal to the “total revenue of the licensee company”.
It said all revenue arising out of non-telecom activities has to be classified as “miscellaneous revenue” and included in the total revenue of the company.
It affects several companies that hold ISP, national long-distance or international long distance licences, or are MSO/cable operators.
Impact of the judgement
The definition of revenue is the same for all telecom licences.
All companies such as GAIL, Power Grid, RailTel, Delhi Metro, Oil India Ltd—that have taken the telecom licence for their own captive use(not for a commercial purpose) would be liable to pay huge sums as licence fee on the revenue earned from its non-telecom operations.
Calculations suggest that the impact could be upwards of ₹2 trillion on these non-telecom entities alone.
Also, there would be an impact close to ₹93,000 crores for mobile operators.
Alternatives
DoT can waive these charges, fully or partly. If it decides to go ahead and recover these charges from all operators, the industry will face an unprecedented crisis.
TRAI always held that revenue from operation of non-telecom services should not attract licence fees. It recommended it to the government in 2006 and in 2015.
The government should review the levies on the operators. This might soften the blow on a promising industry.
The government should take a holistic view so as to ensure Digital India does not get off track.
From UPSC perspective, the following things are important :
Prelims level : Nothing much
Mains level : Judicial transparency
Context
Sunlight is the best disinfectant that is often used to highlight the need for disclosure of matters related to the public interest through the RTI mechanism.
Examples of transparency
The declaration of assets by ministers and legislators, besides electoral candidates, has shed light on public authorities.
It provided the citizenry with more relevant information about their representatives.
Judicial transparency
Judges of the Supreme Court had refused to share information on their personal assets, citing the lack of public interest.
5-member Constitution Bench of the Supreme Court ruled that the office of the Chief Justice of India is a “public authority” under the RTI Act.
It enables the disclosure of information such as the judges’ personal assets.
The judgment’s majority opinion emphasised the need for transparency and accountability and that “disclosure is a facet of public interest”.
They asserted that judicial independence was not secured by secrecy and argued for the need for proper calibration of transparency in light of the importance of judicial independence.
Balance with the right to privacy
The Bench argued that the right to know under the RTI Act was not absolute.
It had to be balanced with the right to privacy of judges.
The key takeaway from the judgment is that disclosure of the details of serving judges’ personal assets was not a violation of their right to privacy.
Other parts of the judgement
Information related to issues such as judicial appointments will also be subject to the test of public interest and procedures mandated in the RTI Act that specifies that views of third parties must be sought.
It lays out the importance of the assessment of public interest in an RTI query.
The RTI Act is a strong weapon that enhances accountability, citizen activism, and participatory democracy even if its implementation has come under strain in recent years.
Conclusion
The Supreme Court judgment paves the way for greater transparency.
It could impinge upon issues such as disclosure under the RTI Act by other institutions such as registered political parties.
This is vital as political party financing is a murky area today, marked by opacity and exacerbated by the issue of electoral bonds, precluding citizens from being fully informed on sources of party income.
From UPSC perspective, the following things are important :
Prelims level : RTI
Mains level : Read the attached story
Context
Recently the Supreme Court has ruled that the office of the CJI is a public authority under the Right to Information (RTI) Act.
A five-judge Constitution Bench headed by CJI Gogoi upheld a Delhi High Court ruling of 2010 and dismissed three appeals.
SC plea to SC
The Supreme Court in 2010 petitioned itself challenging the Delhi High Court order.
The matter was placed before a Division Bench, which decided that it should be heard by a Constitution Bench.
The Constitution Bench remained pending across the tenures of CJI K G Balakrishnan, S H Kapadia, Altamas Kabir, P Sathasivam, R M Lodha, H L Dattu, T S Thakur, J S Khehar and Dipak Misra.
What is the new ruling?
While ruling that the office of the CJI is a public authority, the Supreme Court held that RTI cannot be used as a tool of surveillance and that judicial independence has to be kept in mind while dealing with transparency.
While CJI Gogoi, Justice Gupta and Justice Khanna wrote one judgment, Justices Ramana and Chandrachud wrote separate verdicts.
Justice Ramana noted that Right to Privacy is an important aspect and has to be balanced with transparency while deciding to give out information from the office of the Chief Justice of India.
Justice Chandrachud wrote in his separate judgment that the judiciary cannot function in total insulation as judges enjoy a constitutional post and discharge public duty.
Balancing is crucial
The verdict underlines the balance Supreme Court needs between transparency and protecting its independence.
The step is significant because it opens the doors to RTI requests that will test the frontiers of what has been a rather opaque system.
What new red lines are drawn will decide how effective the step is.
Where lies Public Authority?
Under Section 2(f) of the RTI Act, information means “any material in any form, including records, documents, memos, e-mails, opinions, advices, press releases, circulars, orders, logbooks, contracts, reports, papers, samples, models, data material held in any electronic form and information relating to any private body which can be accessed by a public authority under any other law for the time being in force”.
Implications of the ruling
The outcome is that the office of the CJI will now entertain RTI applications.
Whether a public authority discloses the information sought or not, however, is a different matter.
Offices such as those of the PM and the President too are public authorities under the RTI Act.
But public authorities have often denied information quoting separate observations by the Supreme Court itself in 2011.
Officials need to furnish only such information which already exists and is held by the public authority and not collate or create information.
It held that the nation does not want a scenario where 75% of the staff of public authorities spends 75% of their time in collecting and furnishing information to applicants instead of discharging their regular duties”.
CBI is still out of RTI
While the office of the CJI is now under the RTI’s ambit, the CBI is exempt.
The CBI, which is an agency that is often engaged in investigation of corruption cases, is today included in a list of exempted organisations in which most of the others are engaged in intelligence gathering.
The Administrative Reforms Commission had earlier recommended exemption of the armed forces from the RTI Act, but had not made such a recommendation for the CBI.
While the CBI demanded exemption only for units in intelligence gathering, exemption was granted in 2011 to the agency as a whole.
Litigation challenging the decision to exempt the CBI is pending with the Supreme Court; the next date of hearing, however, has not been fixed.
Polity | Mains Paper 2: Indian Constitution - historical underpinnings, evolution, features, amendments, significant provisions and basic structure
Note4Students
From UPSC perspective, the following things are important :
Prelims level : Doctrine of Essentiality
Mains level : Constitutional significance of Doctrine of Essentiality
Context
The Supreme Court has decided to refer the Sabarimala temple case to a larger 7-judge Bench.
This reopens not only the debate on allowing women of menstruating age into the Ayyappa temple but the larger issue of whether any religion can bar women from entering places of worship.
The case for Sabarimala
The majority opinion in the 2018 Sabarimala verdict had said that women have a fundamental right to equality in accessing public places which includes places of worship.
However, since the Sabarimala verdict will essentially be heard afresh, the constitutional debate on gender equality will open up once again.
The review gives the ‘devotees’ and the Sabarimala temple authorities who have battled the Supreme Court verdict a foot in the door to have the verdict potentially overturned.
What is the Supreme Court’s Doctrine of Essentiality?
The doctrine of “essentiality” was invented by a seven-judge Bench of the Supreme Court in the ‘Shirur Mutt’ case in 1954.
It is a contentious doctrine evolved by the court to protect only such religious practices which were essential and integral to the religion.
The court held that the term “religion” will cover all rituals and practices “integral” to a religion, and took upon itself the responsibility of determining the essential and non-essential practices of a religion.
Referring to the Ayodhya case, the Constitution Bench had ruled in 1994 that A mosque is not an essential part of the practice of the religion of Islam and namaz (prayer) by Muslims can be offered anywhere, even in open.
How has the doctrine been used in subsequent years?
The ‘essentiality doctrine’ of the Supreme Court has been criticised by several constitutional experts.
Scholars of constitutional law have argued that the essentiality/integrality doctrine has tended to lead the court into an area that is beyond its competence, and given judges the power to decide purely religious questions.
As a result, over the years, courts have been inconsistent on this question — in some cases they have relied on religious texts to determine essentiality.
In others it relied on the empirical behaviour of followers, and in yet others, based on whether the practice existed at the time the religion originated.
Issues over the doctrine
In the beginning, the court engaged with the question of whether untouchability, manifested in restrictions on entry into temples, was an “essential part of the Hindu religion”.
After examining selected Hindu texts, it came to the conclusion that untouchability was not an essential Hindu practice.
The idea of providing constitutional protection only to those elements of religion which the court considers “essential” is problematic as it assumes that one element or practice of religion is independent of other elements or practices.
So, while the essentiality test privileges certain practices over others, it is, in fact, all practices taken together that constitute a religion.
How does essentiality square up against religious freedom?
Freedom of religion was meant to guarantee freedom to practice one’s beliefs based on the concept of “inward association” of man with God.
The apex court in ‘Ratilal Panachand Gandhi vs The State of Bombay and Ors’ (March 18, 1954) acknowledged that “every person has a fundamental right to entertain such religious beliefs as may be approved by his judgment or conscience”.
The framers of the Constitution wanted to give this autonomy to each individual. Scholars have argued that the essentiality test impinges on this autonomy.
The apex court has itself emphasised autonomy and choice in its Privacy (2017), 377 (2018), and Adultery (2018) judgments.
Economics | Mains Paper 3: Infrastructure: Energy, Ports, Roads, Airports, Railways Etc.
Note4Students
From UPSC perspective, the following things are important :
Prelims level : Not Much
Mains level : Make in India
Indian Railways has entered into Procurement cum Maintenance Agreement with Madhepura Electric Locomotive Pvt. Ltd. (MELPL), a joint venture of Indian Railways and M/s Alstom.
About the Project
Indian Railways and Alstom came together in 2015 to transform the heavy freight transportation landscape of the country.
A landmark agreement worth 3.5 billion Euro was signed to manufacture 800 electric locomotives for freight service and its associated maintenance.
This is the first time such High Horse Power locomotive is being tested on Broad Gauge network in the World by any Railways.
As part of the project, factory along with township has been set up in Madhepura, Bihar with capacity to manufacture 120 locomotives per year.
Benefits of Project
Indian Railways have taken decision to have 12000 horse power twin Bo-Bo design Locomotive with 22.5 T (Tonnes) axle load upgradable to 25Tonnes with design speed of 120 kmph.
This locomotive will be game-changer for further movement of coal trains for Dedicated Freight Corridor.
With the success of this project it will boost the “Make in India” programme of the Government of India. This will further develop ancillary units for locomotive components.
The project will allow faster and safer movement of heavier freight trains.
It will haul 6000T trains at maximum speed of 100 kmph.
With 100% electrification, the new locomotive will not only bring down operational cost for Railways, the locomotive will also reduce the congestion faced by Indian Railways.
This will be used to haul heavier trains such as coal and iron ore.
Why makes it special?
More than 300 Engineers from India and France are working in Bangalore, Madhepura and France on the Project.
The project is expected to create more than 10,000 direct and indirect jobs in the country.
In two years time, more than 90% parts will be manufactured in India. This is a truly Make in India project.
Economics | Mains Paper 3: Effects Of Liberalization On The Economy, Changes In Industrial Policy and their effects on Industrial Growth
Note4Students
From UPSC perspective, the following things are important :
Prelims level : International Symposium on Lighting (iSoL)
Mains level : Automobile industries in India
Minister of Heavy Industries and Public Enterprises has inaugurated the International Symposium on Lighting (iSoL).
International Symposium on Lighting (iSoL)
The International Centre for Automotive Technology (ICAT) organizes International Symposium on lighting (iSoL).
The two days Symposium provides a common platform to professionals related directly or indirectly to the automotive lighting fraternity from all around the globe.
The iSoL from 2009 has grown and transformed itself into a global event.
ICAT has been associated with the field of lighting research and testing since 2006.
Taking this commitment to a greater height, iSoL-2019 is aimed at creating a knowledge sharing platform ensuring the flow of information.
About ICAT
The International Centre for Automotive Technology (ICAT), Manesar (Haryana) is located in the northern automotive hub of India.
It is a leading world class automotive testing, certification and R&D service provider.
It functions under the aegis of NATRiP (National Automotive Testing and R&D Infrastructure Project), Government of India.
From UPSC perspective, the following things are important :
Prelims level : Venice, Acqua alta
Mains level : Sea level rise and its impact
High tides in the Adriatic Sea have caused floods in the historic city of Venice.
Acqua alta
Venice is situated on the coast of northeastern Italy, bounded by the Adriatic Sea Acqua alta is the name given to exceptionally high tides in the Adriatic Sea.
Water levels this week has reached heights of 1.87 metres (well over 6 feet) — only a little short of the 1.91-metre record that was set during the “great flood” of 1966.
The city’s Saint Mark’s Square went under more than a metre of water, whereas the adjacent Saint Mark’s Basilica was flooded for only the sixth time in the last 1,200 years and for the fourth time in the last 20 years.
Late autumn and winter are the seasons for high tides or acqua alta in Venice.
At the end of October last year, over 75% of the lagoon city went underwater after high tides and stormy weather led to an increase in the water levels of the canals.
About Venice
Venice is a city in northeastern Italy and the capital of the Veneto region.
It is situated on a group of 118 small islands that are separated by canals and linked by over 400 bridges.
The islands are located in the shallow Venetian Lagoon, an enclosed bay that lies between the mouths of the Po and the Piave rivers.
The lagoon and a part of the city are listed as a UNESCO World Heritage Site.
Venice has been known as “La Dominante”, “La Serenissima”, “Queen of the Adriatic”, “City of Water”, “City of Masks”, “City of Bridges”, “The Floating City”, and “City of Canals”.
