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Goods and Services Tax (GST)

The way out on GST compensation

Note4Students

From UPSC perspective, the following things are important :

Prelims level : GST compensation cess

Mains level : Paper 3- GST compensation

The economic disruption due to pandemic has made the issue of GST compensation bone of contention between the Centre and the States. This article argues that it is the GST Council and not the Centre which is responsible to find ways to raise the revenue in such a situation.

GST revenue loss and role of the Centre

  • Due to global pandemic, one significant area of loss of revenue to both the Centre and the states is GST.
  • The states have the comfort of assured 14 per cent growth through the compensation mechanism.
  • The Centre has no such guarantee.
  • The Compensation Act mandates compensating the states for revenue loss on GST implementation from the Compensation Fund.

Role of GST Council

  • The course of action to be adopted in the event of the amount in the Fund falling short of requirements was discussed at length in the GST Council.
  • The late Arun Jaitley, then chairman, had, in the 8th meeting, assured that “in case Compensation Fund fell short of the compensation payable, the GST Council shall decide the mode of raising additional resources including borrowing from the market which could be repaid by collection of cess in the sixth year or further subsequent years”; the Council had agreed to this suggestion.
  • Quite clearly,  it is the Council and not the Government of India that shall decide the mode of raising additional resources in the event of a shortfall and this is reflected in Section 10(1) of the Compensation Act.

Why it makes sense for the States to borrow

  • It is argued that borrowings by the Centre or by the states make no difference in the context of fiscal discipline.
  • The argument further adds that the Centre should borrow in view of its higher borrowing and debt-servicing capacity and its ability to borrow at lower rates.
  • Article 292 (1) mandates that the Centre can borrow on the security of the Consolidated Fund of India (CFI).
  • However, the idea of providing compensation to the states from the Consolidated Fund of India was not agreed to in the Council, it is difficult to agree with the suggestion that GoI borrows on the basis of the said CFI.
  • Large borrowings by the Centre would push up the bond yield rates, pushing up bond yield of the states setting off a spiral leading to hike in the interest rates for businesses and individuals.
  • The states’ borrowing would become costlier if the Centre were to borrow for this purpose.
  • The borrowing capacity of the states, too, is not very inferior.
  • The RBI study of state finances shows that the debt receipts of all the states as a percentage of GDP has hovered between 2.4 per cent and 3.6 per cent during the last four years.
  • The states have on the average borrowed just about 1.25 per cent of the GSDP thus far.
  • The states are consistently borrowing less than they can borrow (legally and financially).
  • The cost of state borrowings for this purpose can be considerably lowered if arranged through a special window.
  • The Centre has already breached the budgeted borrowing limits for the current year.
  • Thus it makes sense for the states to borrow.

Borrowing options for the States

  • There are two ways in which the States can borrow.
  • 1) Borrowing the entire shortfall in the revenue.
  • 2) Borrowing only the shortfall attributable to GST implementation with the remaining shortfall to be made good from the Cess Fund post the transition period.
  • Certain conditionalities have been relaxed for option-1.
  • However, borrowing the entire shortfall, as envisaged in option-1, will hurt both the markets and the private sector, pushing up the interest rate.
  • The single window under option-1 being arranged by the Centre and the entire debt being serviced from future cess receipts will ensure that the cost remains close to the G-sec rate.
  • Moreover, there will be no variation in the interest rate as between the states.

Conclusion

The states should come forward and work with the Centre in the true spirit of cooperative federalism that the Council has come to be known for these past few years.

Electoral Reforms In India

Exploring the idea of blockchain voting

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Blockchain

Mains level : Paper 2- Idea of using blockchain technology for remote voting

The article analyses the pros and cons of the adoption of blockchain technology for remote voting.

Background

  • The Election Commission of India has been exploring the idea of further digitising the electoral infrastructure of the country.
  • In furtherance of this, it explored the possibility of using blockchain technology for the purpose of enabling remote elections.

What will be the benefits

  • ‘Remote voting’ would appear to benefit internal migrants and seasonal workers, who account for roughly 51 million of the populace (Census 2011).
  • The envisioned solution might also be useful for some remotely-stationed members of the Indian armed forces.

Key issues

  • Electors would still have to physically reach a designated venue in order to cast their vote,
  • Digitisation and interconnectivity introduce additional points of failure external to the processes which exist in the present day.
  • Blockchain solutions rely heavily on the proper implementation of cryptographic protocols.
  • If security is breached, it could unmask the identity and voting preferences of electors, or worse yet, allow an individual to cast a vote as someone else.
  • The provisioning of a dedicated line may make the infrastructure less prone to outages, it may also make it increasingly prone to targeted Denial-of-Service attack.
  • Digitised systems may also stand to exclude and disenfranchise certain individuals due to flaws in interdependent platforms, flaws in system design, as well as general failures caused by external factors.

Way forward

  • Political engagement could perhaps be improved by introducing and improving upon other methods, such as postal ballots or proxy voting.
  • Another proposed solution to this issue includes the creation of a ‘One Nation, One Voter ID’ system.

Consider the question “What are the opportunities and challenges in the adoption of blockchain technology. Suggest the other alternatives to enable the ballot portability.”

Conclusion

Adoption of technology should be weighed against the risk it carries in the electoral process. While the adoption of blockchain technology offers many opportunities, the concerns it raises must be addressed before its adoption.

Wildlife Conservation Efforts

Global Biodiversity Outlook-5 Report

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Global Biodiversity Outlook, CBD

Mains level : Biodiversity and its governance

The Global Biodiversity Outlook (GBO) 5 report was leaked before its official release. Let’s look at the highlights of the report.

Try this PYQ:

Q.Consider the following pairs:

Terms sometimes seen in the news- Their origin

  1. Annex-I Countries- Cartagena Protocol
  2. Certified Emissions- Nagoya Protocol Reductions
  3. Clean Development- Kyoto Protocol Mechanism

Which of the above pairs is/are correctly matched?

(a) 1 and 2 only

(b) 2 and 3 only

(c) 3 only

(d) 1, 2 and 3

About GBO report

  • The GBO is the flagship publication of the Convention on Biological Diversity (CBD).
  • It is a periodic report that summarizes the latest data on the status and trends of biodiversity and draws conclusions relevant to the further implementation of the Convention.
  • It summarizes progress made towards achieving the objectives of the Convention, such as the Aichi Targets and identifies key actions to achieve these.

Highlights of the Report

  • GBO-5 is an overview of the state of nature. It is a final report card on the progress made by countries in achieving the Aichi Biodiversity Targets.
  • What the world needed was a shift from business-as-usual, the report said. This transformation needed to take place in all human activities that were interlinked with natural resources.
  • This shift was crucial, the report added as natural resources would continue to decline and the world would not be able to meet the UN-mandated Sustainable Development Goals.
  • The GBO-5 suggested some shifts that need to be implemented to achieve the 2050 Vision for Biodiversity. These include:
  1. Transition within land and forests: The report called the restoration of all forests that had been degraded. It also urged restoring local ecosystems.
  2. Sustainable agriculture: Farmers would have to reduce the use of chemicals and instead focus more on agroecological farming practices, the report said.
  3. Sustainable food systems: The report urged people to eat healthier, plant-based food and less meat. It also called for a focus on the problem of food wastage within the supply chain and household.
  4. Climate action: The report called for nature-based solutions to reduce climate change
  5. One health: Agricultural and urban ecosystems, as well as wildlife, should be managed in an integrated manner, it said.

Failure to meet the targets

None of the 20 ‘Aichi Biodiversity Targets’ agreed on by national governments through the CBD has been met, according to the report. The world was supposed to meet these targets by 2020. Whatever little progress has been made, has to do with the following:

  • Aichi Biodiversity Target 1 (Creating awareness about the value of biodiversity)
  • Aichi Biodiversity Target 11 (17 per cent of terrestrial and inland water areas and 10 per cent of coastal and marine areas, to be effectively and equitably managed)
  • Aichi Biodiversity Target 16 (Access to genetic resources and the fair and equitable sharing of benefits arising from their utilization)
  • Aichi Biodiversity Target 17 (Creation, adoption and implementation of an effective, participatory and updated national biodiversity strategy and action plan)
  • Aichi Biodiversity Target 19 (Improvement and dissemination of knowledge, the science base and technologies relating to biodiversity).

Back2Basics: Convention on Biological Diversity

  • The CBD, known informally as the Biodiversity Convention, is a multilateral treaty.
  • The Convention has three main goals including the conservation of biological diversity (or biodiversity); the sustainable use of its components; and the fair and equitable sharing of benefits arising from genetic resources.
  • It has two supplementary agreements:
  1. Cartagena Protocol on Biosafety- An international treaty governing the movements of living modified organisms (LMOs) resulting from modern biotechnology from one country to another
  2. Nagoya Protocol on Access to Genetic Resources and the Fair and Equitable Sharing of Benefits Arising from their Utilization (ABS)
  • All UN member states—with the exception of the United States—have ratified the treaty.

Parliament – Sessions, Procedures, Motions, Committees etc

What constitutes a breach of the legislature’s privilege?

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Breach of Priviliges in Legislation

Mains level : Not Much

A motion for breach of privilege was moved in the Maharashtra Assembly against a news channel’s editor-in-chief. A similar motion was moved in the Maharashtra Legislative Council against an actor.

Try this PYQ:

Q.With reference to the Parliament of India, which of the following Parliamentary Committees scrutinizes and reports to the House whether the powers to make regulations, rules, sub-rules, by-laws etc. conferred by the constitution of delegated by the Parliament are being properly exercised by the Executive within the scope of such delegation?

(a) Committee on Government Assurances

(b) Committee on Subordinate Legislation

(c) Rules Committee

(d) Business Advisory Committee

Provisions to protect the privileges of the legislature

  • The powers, privileges and immunities of either House of the Indian Parliament and of its Members and committees are laid down in Article 105 of the Constitution.
  • Article 194 deals with the powers, privileges and immunities of the State Legislatures, their Members and their committees.
  • Parliamentary privilege refers to the right and immunity enjoyed by legislatures, in which legislators are granted protection against civil or criminal liability for actions done or statements made in the course of their legislative duties.

What constitutes a breach of this privilege?

  • While the Constitution has accorded special privileges and powers to parliamentarians and legislators to maintain the dignity and authority of the Houses, these powers and privileges are not codified.
  • Thus, there are no clear, notified rules to decide what constitutes a breach of privilege, and the punishment it attracts.
  • Any act that obstructs or impedes either House of the state legislature in performing its functions, or which obstructs or impedes any Member or Officer of such House in the discharge of his duty, or has a tendency, directly or indirectly, to produce such results is treated as a breach of privilege.
  • It is a breach of privilege and contempt to print or publish libel reflecting on the character or proceedings of the House or its Committees or on any member of the House for or relating to his character or conduct as a legislator.

Procedure followed in cases of an alleged breach

  • The Legislative Assembly Speaker or Legislative Council Chairman constitutes a Privileges Committee consisting of 15 members in the Assembly and 11 members in the Council.
  • The members to the committee which has quasi-judicial powers are nominated based on the party strength in the Houses.
  • The Speaker or Chairman first decides on the motions.
  • If the privilege and contempt are found prima facie, then the Speaker or Chairman will forward it to the Privileges Committee by following the due procedure.
  • At present, there is no Privileges Committee in either House of the state legislature.
  • The Committee will seek an explanation from all the concerned, will conduct an inquiry and will make a recommendation based on the findings to the state legislature for its consideration.

What is the punishment for this?

  • If the Committee finds the offender guilty of breach of privilege and contempt, it can recommend the punishment.
  • The punishment can include communicating the displeasure of the state legislature to the offender, summoning the offender before the House and giving a warning, and even sending the offender to jail.
  • In the case of the media, press facilities of the state legislature may be withdrawn, and a public apology may be sought.

NGOs vs. GoI: The Conflicts and Scrutinies

Registration under Foreign Contribution Regulation Act (FCRA)

Note4Students

From UPSC perspective, the following things are important :

Prelims level : FCRA

Mains level : Money laundering and terror financing

The Union Home Ministry has granted FCRA registration to the famous Gurdwara Harmandir Sahib, or the Golden Temple, in Amritsar, enabling it to receive foreign donations.

Foreign Contribution Regulation Act

  • The Foreign Contribution (Regulation) Act, 2010 is an act to regulate the acceptance and utilization of foreign contribution or foreign hospitality by certain individuals or associations or companies
  • It prohibits acceptance and utilization of foreign contribution or foreign hospitality for any activities detrimental to the national interest and for matters connected therewith or incidental thereto
  • The central government has the power to prohibit any persons or organizations from accepting foreign contribution or hospitality if it is determined that such acceptance would likely “affect prejudicially”

(i) the sovereignty and integrity of India,

(ii) public interest,

(iii) freedom or fairness of election to any legislature,

(iv) friendly relations with any foreign State, or

(v) harmony between religious, racial, social, linguistic or regional groups, castes or communities

Premise for the FCRA

  • Government of India enacted the Foreign Contribution (Regulation) Act (FCRA) in the year 1976 with an objective of regulating the acceptance and utilization of foreign contribution.
  • Any association, non-government organisation (NGO) or registered society requires FCRA registration to receive foreign donations for specified purposes.
  • The act was majorly modified in 2010 with several amendments because many NGOs were found using illegal use of foreign funding.

Port Infrastructure and Shipping Industry – Sagarmala Project, SDC, CEZ, etc.

What are SAROD-Ports?

Note4Students

From UPSC perspective, the following things are important :

Prelims level : SAROD-Ports

Mains level : Not Much

Union Ministry of Shipping has e-launched ‘SAROD-Ports’ (Society for Affordable Redressal of Disputes – Ports).

Try this MCQ:

Q.The term SAROD is sometimes seen in the news with context to governance is related to:

(a) Disputes Redressal

(b) Employment

(c) Sustainable Development

(d) None of the above

SAROD Ports

SAROD-Ports are established under the Societies Registration Act, 1860 with the following objectives:

  1. Affordable and timely resolution of disputes in a fair manner
  2. Enrichment of Dispute Resolution Mechanism with the panel of technical experts as arbitrators.
  • They consist of members from the Indian Ports Association (IPA) and Indian Private Ports and Terminals Association (IPTTA).
  • They will advise and assist in settlement of disputes through arbitrations in the maritime sector, including ports and shipping sector in Major Port Trusts, Non-major Ports, including private ports, jetties, terminals and harbours.
  • It will also cover disputes between granting authority and Licensee/Concessionaire /Contractor.

Rural Distress, Farmer Suicides, Drought Measures

[pib] Five Star Village Scheme

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Schemes covered under the initiaitive

Mains level : Not Much

The Department of Posts has launched a scheme called Five Star Villages, to ensure universal coverage of flagship postal schemes in rural areas of the country.

The Five Star Villages Scheme sounds typically among the most commons types say, Swachh Bharat, Financial Inclusion and Literacy or Infrastructure amenities. Here is the caution for preventing a blunder.

Five Star Villages Scheme

  • The scheme seeks to bridge the gaps in public awareness and reach of postal products and services, especially in interior villages.
  • The initiatives covered under the scheme include:
  1. Savings Bank accounts, Recurrent Deposit Accounts, NSC / KVP certificates,
  2. Sukanya Samridhi Accounts/ PPF Accounts,
  3. Funded Post Office Savings Account linked India Post Payments Bank Accounts,
  4. Postal Life Insurance Policy/Rural Postal Life Insurance Policy and
  5. Pradhan Mantri Suraksha Bima Yojana Account / Pradhan Mantri Jeevan Jyoti Bima Yojana Account.
  • If a village attains universal coverage for four schemes from the above list, then that village gets four-star status; if a village completes three schemes, then that village gets three-star status and so on.

Its implementation

  • The scheme will be implemented by a team of five Gramin Dak Sevaks who will be assigned a village for the marketing of all products, savings and insurance schemes of the Department of Posts.
  • This team will be headed by the Branch Post Master of the concerned Branch Office. Mail overseer will keep personal watch on the progress of the team on daily basis.
  • The teams will be led and monitored by concerned Divisional Head, Assistant Superintendents Posts and Inspector Posts.

History- Important places, persons in news

US Presidents who have won Nobel Peace Prize

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Persons mentioned in the news, Nobel Prize

Mains level : Not Much

A Norwegian legislator has nominated US President Donald Trump for the 2021 Nobel Peace Prize for his efforts towards furthering peace in the Middle East.

Take a look at the Presidents and Vice-Presidents who have won the Nobel Peace Prize:

These trivial facts are too unlikely to be asked in the CS prelims, but may hold importance for CAPF and other exams.

 (1) Theodore Roosevelt (1906)

  • Roosevelt, the 26th occupant of the White House (1901-09), was not only the first American president but also the world’s first statesman to win the honour, five years after the Peace Prize was instituted in 1901.
  • He was given the prize for negotiating peace between imperial Russia and Japan after the Russo-Japanese War of 1904-05.
  • He was also praised for his efforts in resolving a dispute between the US and Mexico through arbitration, and for extending the use of arbitration as a means for settling international disputes.
  • At home, Roosevelt launched radical social and economic reform policies and earned a reputation as a “trust buster” for breaking up monopolies.

(2) Woodrow Wilson (1919)

  • Wilson (1913-21) was given the award for his efforts in ending World War I, and for being the key architect of the League of Nations– born out of his famous ‘Fourteen Points’.
  • Although the League faltered in a few years, it served as a blueprint for the United Nations after World War II.
  • At home, Wilson saw the reduction of import duties, started America’s central bank and a national business oversight body, and strengthened anti-monopoly and labour laws.
  • In his second term, the US passed its 19th constitutional amendment giving women the right to vote.

(3) Jimmy Carter (2002)

  • The 39th President was awarded the Peace Prize “for his decades of untiring effort to find peaceful solutions to international conflicts, to advance democracy and human rights, and to promote economic and social development”.
  • During his presidency (1977-81), Carter earned praise for his role in bringing about a peace agreement between Israel and Egypt.
  • His later years were more fraught, including foreign policy failures such as the conflict with Iran and the Soviet invasion of Afghanistan, culminating in him losing re-election to the conservative Ronald Reagan in 1980.
  • Post his presidency, Carter pursued peace and mediation efforts independently and co-founded the Carter Center, a non-profit that chiefly works to advance human rights.

(4) Barack Obama (2009)

  • The country’s 44th President (2009-2017) was given the Nobel Peace Prize “for his extraordinary efforts to strengthen international diplomacy and cooperation between peoples”.
  • Cited among Obama’s achievements were his promotion of nuclear non-proliferation, and bringing a “new climate” in international relations.
  • Obama donated the full prize money – 10 million Swedish kronor (around $1.4 million) – to charity.

(5) Al Gore (1993-2001)

  • Apart from the four Presidents, one Vice President– Al Gore (1993-2001) – has been given the Nobel Peace Prize.
  • He shared the honour in 2007 with the Intergovernmental Panel on Climate Change (IPCC) for their joint efforts to build up and disseminate greater knowledge about man-made climate change.