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  • What is Darbar Move?

    The Jammu and Kashmir High Court asked the Centre and the Union Territory (UT) administration to take a final call on the continuation of the 148-year-old practice Darbar Move i.e. shifting of capitals between Jammu and Srinagar.

    Possible mains question:

    Discuss the feasibility, benefits and constraints caused by multiple administrative capitals in Indian states with special context to Jammu and Kashmir and the state of Andhra Pradesh. (250W)

    Darbar Move

    • Darbar Move is the name given to the bi-annual shift of the secretariat and all other government offices of Jammu and Kashmir from one capital city to another.
    • From May to October, governmental offices are housed in the state’s summer capital, Srinagar, and the other six months in its winter capital, Jammu.
    • The tradition was started during Dogra rule in 1872 by Maharaja Ranbir Singh.
    • It involved shifting of the Maharaja’s government to Jammu to escape the harsh winters of the Kashmir Valley, which, in the 19th century, used to result in the Valley being cut off from outside the world.
    • It is advocated that the continuation of the practice helped in the emotional integration between two diverse linguistic and cultural regions of Jammu and Kashmir.

    A costly practice

    • Ahead of the Darbar Move, Srinagar usually receives a facelift every year. Over 10,000 employees shift capital annually.
    • Roads around and leading to the Civil Secretariat, the seat of the government, are being renovated now.
    • Besides, the government offices and quarters have been renovated and the streetlights restored.
    • Hundreds of trucks are usually plied to carry furniture, office files, computers, and other records to the capital.
    • Over the years, there have been voices raised against the century-old practice which involves heavy funding towards ensuring the smooth conduct of the move.

    Why scrap Darbar Move?

    • If this practice is rationalized, the amount of money, resources and time which could be saved, could be utilized towards the welfare and development of the Union Territory.
    • It could be utilized for the protection and propagation of culture and heritage of the communities.
    • No reason or justification at all is available for requiring the judiciary to shift with the ‘Darbar Move’. The same negatively impact justice dispensation and impedes judicial administration.

  • Vande Bharat and Samudra Setu Missions to repatriate Indian nationals

    India is all geared to operate flights and naval vessels to repatriate Indian nationals stranded abroad.

    The name Samudra Setu typically sound like a combatant naval exercise whereas Vande Bharat reminds us of Train-18. Both ideas have opposite context and meaning. One must keep this in mind.

    What is the ‘Vande Bharat Mission’ mission about?

    • ‘Vande Bharat Mission’ will see the operation of 64 flights from May 7 to May 13 to bring back around 15,000 Indian nationals stranded abroad.
    • Once completed, it may turn out to be the largest evacuation operation ever since the 1990 airlift of 1.7 lakh people from Kuwait.
    • Approximately, 2,000 people from abroad will fly back to India daily.

    What is Indian Navy’s ‘Operation Samudra Setu’?

    • The Indian Navy launched ‘Operation Samudra Setu’ (Sea Bridge) as a part of national effort to repatriate Indian citizens from overseas.
    • Indian Naval Ships Jalashwa and Magar are presently enroute to the port of Malè, Republic of Maldives to commence evacuation operations from 08 May 2020 as part of Phase-1.
    • INS Jalashwa is the largest amphibious platform in the Navy and is based at the Eastern Naval Command headquarters in Visakhapatnam.
    • It can normally accommodate 1,000 people but will take about 800.

  • [pib] Saras Collection on Government e-Marketplace

    The Union Ministry for Rural Development and Panchayati Raj and Agriculture and Farmers’ Welfare has launched “The Saras Collection” on the Government e-Marketplace (GeM) portal.

    Possible prelim question:

    ‘The Saras Collection’ recently seen in news is a:

    a) Subsidy on beekeeping and apiculture projects

    b) Indigenous light transport aircraft

    c) Database on wetland birds

    d) Collection of products made by SHGs

     The Saras Collection

    • It is a unique initiative by the GeM, Deendayal Antyodaya Yojana-National Rural Livelihoods Mission (DAY-NRLM) and Ministry of Rural Development.
    • The collection showcases daily utility products made by rural Self-Help Groups (SHGs) and aims to provide SHGs in rural areas with market access to Central and State Government buyers.
    • The on-boarding of the SHGs has been initially piloted in the states of Bihar, Chhattisgarh, Jharkhand, Karnataka, Kerala, Himachal Pradesh, Maharashtra, Odisha, Rajasthan, Uttar Pradesh and West Bengal.
    • SHGs from all the states and Union Territories (UTs) will be covered rapidly in the upcoming phases.

    It’s functioning

    • For Functionaries: They will be provided dashboards at the national, state, district and block level for real-time information about the number of products uploaded, their value and volume of orders received and fulfilled.
    • Government buyers: They will be sensitized through system-generated messages/ alerts in the Marketplace about the availability of SHG products on the portal.

    Benefits offered

    • The Saras Collection will provide SHGs with direct access to Government buyers which will do away with intermediaries in the supply chain.
    • Thus it would ensure better prices for SHGs and spurring employment opportunities at the local level.

    Back2Basics: Government e-Marketplace

    • The GeM is a one-stop National Public Procurement Portal to facilitate online procurement of common use Goods & Services required by various Government Departments / Organizations / PSUs.
    • It was launched in 2016 to bring transparency and efficiency in the government buying process.
    • GEM aims to enhance transparency, efficiency and speed in public procurement.
    • It is a completely paperless, cashless and system driven e-marketplace that enables procurement of common use goods and services with minimal human interface.
    • It provides the tools of e-bidding, reverse e-auction and demand aggregation to facilitate the government users to achieve the best value for their money.
    • The purchases through GeM by Government users have been authorized and made mandatory by the Ministry of Finance by adding a new Rule No. 149 in the General Financial Rules, 2017.
    • It has been developed by Directorate General of Supplies and Disposals (Ministry of Commerce and Industry) with technical support of National e-governance Division (MEITy).

  • ‘The Long March 5B’ rocket

    China has successfully launched a new rocket and prototype spacecraft in a major test of the country’s ambitions to operate a permanent space station and send astronauts to the Moon.

    Can you recall the historical link between the name “The Long March” and China’s History.

    The Long March 5B

    • Long March 5 or Chang Zheng 5 is a Chinese heavy-lift launch system developed by the China Academy of Launch Vehicle Technology (CALT).
    • It is the first Chinese launch vehicle designed from the ground up to focus on non-hypergolic liquid rocket propellants.
    • The maximum payload capacities of the base variant are ~25,000 kilograms to Low Earth Orbit and ~14,000 kilograms to Geosynchronous Transfer Orbit.
    • The spaceship is expected to transport astronauts to a space station that China plans to complete by 2022 — and eventually to the Moon. It will have a capacity for a crew of six.

    Back2Basics: Geosynchronous Transfer Orbit

     

    • About 35,786 kilometers above the Earth’s surface, satellites are in geostationary orbit. From the center of the Earth, this is approximately 42,164 kilometers. This distance puts it in the high Earth orbit category.
    • At any inclination, a geosynchronous orbit synchronizes with the rotation of the Earth.
    • While geosynchronous satellites can have any inclination, the key difference to geostationary orbit is the fact that they lie on the same plane as the equator.
    • GTO is a an elliptical orbit used to transfer between two circular orbits of different radiuses in the same plane—used to reach geosynchronous or  geostationary orbit using high-thrust chemical engines.

  • What is Cinco de Mayo and why is it celebrated?

    Cinco de Mayo, or fifth of May in Spanish, also called Battle of Puebla Day, is an annual celebration observed in Mexico and the US that marks the former’s military victory on its soil over French forces in 1862.

    Possible mains question:

    Q. The French colonization attempts went beyond India and had a global reach. Comment.

    French advent in Mexico

    • In the 1860s, Mexico had been severely weakened by lengthy wars over the previous two decades – the Mexican-American War (1846-48) and the internal Reform War (1858-61).
    • As a result, in 1861, the then President Benito Juárez announced a temporary moratorium of two years on repaying Mexico’s foreign debts.
    • In response, troops from Britain, Spain, and France invaded Mexico, demanding reimbursement.
    • By April 1862, Britain and Spain negotiated with Mexico and withdrew.
    • France, which at the time was led by Emperor Napoleon III, decided to establish an empire in Mexican territories with the support of the local landowning classes.
    • France also intended to curb US power in North America.

    The Battle of Puebla

    • In late 1861, a French fleet attacked the Mexican port of Veracruz on the country’s eastern coast and landed a large army that drove the Juárez government into retreat.
    • As they moved from Veracruz to capital Mexico City, the French encountered stiff resistance from Mexican forces.
    • At Puebla, over 100 km ahead of Mexico City, a poorly equipped and outnumbered Mexican force decisively defeated the advancing French troops on May 5, 1862, killing over a thousand.
    • The event marked a significant political victory of Mexican republicans and President Juárez and helped establish a sense of national unity in the country.

    Cinco de Mayo: Present-day significance

    • In Puebla, Cinco de Mayo is celebrated annually with speeches, parades, and by reenacting episodes of the 1862 battle.
    • The city today houses a museum dedicated to the battle, and the actual battlefield is maintained as a park.
    • In the US, in the mid-20th century, the celebration became a way for immigrants from Mexico to express pride in their heritage.
    • Later, Cinco de Mayo also became popular with other demographics in the country when the festivities were linked with Mexican alcoholic beverages.
    • As the celebration assumed greater importance in the country, many have criticised the negative stereotypes of Mexicans that were perpetuated as a result, as well as the promotion of excessive drinking.

  • Should we do away with the MPLADS?

    Since its inception in 1993, MPLADS has continued uninterrupted for 27 years. But COVID-19 came as a roadblock for MPLADS. Recently, it was suspended by the government for two years. As expected it led to huge political drama. However, as an aspirant, it is our duty to cut the drama out and focus on issues that matter. This article discusses MPLADS and argues for its abolition owing to various issues associated with it.

    Reason for suspension of MPLADS

    • The government suspended the scheme to strengthen the government’s efforts in managing the challenges and adverse impact of COVID-19 in the country.
    • It has been suspended for two years.
    • BTW scheme in short: Each MP has the choice to suggest to the District Collector for works to the tune of ₹5 crores per annum to be taken up in his/her constituency.

    Why should MPLADS be abolished?

    1. It goes against the spirit of the Constitution

    • The scheme violates one of the cardinal principles: separation of powers.
    • Simply put, this scheme, in effect, gives an executive function to legislators or the legislature.
    • The argument that MPs only recommend projects, but the final choice and implementation rest with the district authorities is unfounded.
    • There are hardly any authorities in the district who have the courage to defy the wishes of an MP.

    2. Lacunae in implementation

    • Consider some of the observations made by the Comptroller and Auditor General (CAG) of India:
    • Expenditure incurred by the executing agencies being less than the amount booked.
    • Utilisation of funds between 49 to 90% of the booked amount.
    • The scheme envisages that works under the scheme should be limited to asset creation, but 78% of the works recommended were for improvement of existing assets.
    • Wide variations in quantities executed against the quantities specified in the BOQ (Bills of Quantity) in 137 of the 707 works test-checked. Variations ranged from 16 to 2312%.
    • Use of lesser quantities of material than specified by contractors resulting in excess payments and sub-standard works.
    • Delays in issuing work orders ranging from 5 to 387 days in 57% of the works against the requirement of issuing the work order within 45 days.
    • Extensions of time granted to contractors without following the correct procedure.
    • Register of assets created, as required under the scheme, not maintained, therefore location and existence of assets could not be verified.

    3. Wide variation in utilisation of MPLADS funds

    • A report published in IndiaSpend has some very interesting insights based on data made available to it by the Ministry of Statistics and Programme Implementation.
    • A year after they took office, 298 of 543 members of the 16th Lok Sabha— have not spent a rupee from the ₹5 crore.
    • Though ₹1,757 crore had been released for MPLADs, only ₹281 crore had been utilised by all the 543 MPs till May 15, 2015.
    • This means only 16% of the money had been spent in one year by all the MPs put together, because the Lok Sabha was constituted in May 2014.
    • Since the MPLADS began in 1993, ₹5,000 crore was lying unspent with various district authorities by May 15, 2015.
    • It is clear from the details above, as well as later experience, that most MPs use money under MPLADS quite haphazardly, and a significant portion of it is left unspent.

    4. Misuse of the money under MPLADS

    • There is widespread talk of money under MPLADS being used to appease or oblige two sets of people: opinion-makers or opinion-influencers, and favourite contractors.
    • There have been cases of the contractor and the MP being financially linked with each other.

    5. Legality issue

    • The constitutional validity of MPLADS was challenged in the Supreme Court of India in 1999, followed by petitions in 2000, 2003, 2004, and 2005.
    • The combined judgment for all these petitions was delivered on May 6, 2010, with the scheme being held to be constitutional.
    • The SC seems to have placed an unquestioned trust in the efficacy of the scheme of implementation of MPLADS drawn up by the government without an assessment of the situation prevalent in the field.
    • The court should pay more attention to its skewed implementation, evidence of which is available in audit reports.

    Contrast and compare the provision of MPLADS with the Saansad Adarsh Gram Yojana. A direct question on the MPLADS could be asked by the UPSC, for instance, consider this question-“There has been the debate around the MPLADS. Discuss the issues involved in the MPLADS.”

    Conclusion

    Reports of underutilisation and misutilisation of MPLADS funds continue to surface at regular intervals but there seems to have been no serious attempt to do anything about it till now. Some concrete decisions on the future of the scheme is now inevitable.

     Back2Basics: What is MPLADS?

    • MPLAD is a central government scheme, under which MPs can recommend development programmes involving the spending of Rs 5 crore every year in their respective constituencies.
    • MPs from both Lok Sabha and Rajya Sabha, including nominated ones, can do so.
    • MPs do not receive any money under these schemes.
    • The government transfers it directly to the respective local authorities.
    • The legislators can only recommend works in their constituencies based on a set of guidelines.
    • For the MPLAD Scheme, the guidelines focus on the creation of durable community assets like roads, school buildings etc.
    • Recommendations for non-durable assets can be made only under limited circumstances.

    For example, last month, the government allowed the use of MPLAD funds for the purchase of personal protection equipment, coronavirus testing kits etc.

     

     

  • Environmental regulations: go or no go?

    As the world struggles to restart the economic activities amid the pandemic, various strategies are being advised to salvage the damaged economies. One amongst them is to cut down on the environmental standards to spur the economic activities. This article explains why India should not be short-sighted to lower the environmental standards.

    What is this fuss about environment and lockdown?

    • The lockdown exit strategies are focused on saving livelihoods.

    • But the lockdown is causing fiscal pressures on governments which further motivates it to lower the environmental standards, suspend environmental monitoring requirements and reduce environmental enforcement. (Well to save some bucks.)

    • And also in the belief that this is necessary to secure economic growth.

    • But it would be a mistake to assume that there is a trade-off between saving livelihoods and protecting the environment.

    • The crisis of COVID-19 has highlighted that improving the quality of air in our country is not a matter of choice but an emergency.

    How countries around the world are reacting?

    • The US announced a significant reduction in fuel efficiency standards for new cars.

    • This move could result in increased gasoline consumption by 80 billion tonnes, pumping increased carbon emissions into the atmosphere.

    • The US Environmental Protection Agency has announced that it will not be enforcing compliance with routine monitoring and reporting obligations of environmental protection, for an indefinite period.

    • 13 European ministers have been outspoken about resisting the temptations of short-term solutions in response to the present crisis- need to maintain and strengthen EU’s effective regulatory tools to stick to its 2030 climate goals.

    5 Arguments that Indian authorities that look into viz a viz environmental standards

    1. Pollution increases risk to COVID-19

    • People living in areas with higher levels of air pollution face increased risk of premature death from COVID-19.

    • New Delhi was the world’s most polluted capital city for the second straight year in 2019.

    • And India was also home to 21 of the world’s 30 most polluted cities, Swiss-based group IQ AirVisual said in a recent study.

    • The State of Global Air 2019 Report finds air pollution responsible for over 1.2 million deaths in China and India each, based on 2017 data.

    2. The poor are the most affected by air pollution

    • There is enormous inequality in the impact of the COVID-19 fallout.

    • Those who suffer the most from air pollution are the millions who live and toil in the open, who cannot afford air-purifiers or other mitigating measures, as also the elderly and children.

    3. Risk of future pandemics

    • There is good evidence that three-quarters of the emerging infectious diseases migrate from wild or domesticated animals into humans.

    • This includes Ebola, SARS, MERS and now COVID-19.

    • Deforestation, industrial agriculture, illegal wildlife trade, climate change and other types of environmental degradation increase the risk of future pandemics.

    4. Public support for environment protection

    • From Delhi to Sao Paulo, Bangkok to Bogota, the dramatic improvement in the quality of air and water in the most polluted cities around the world has been transmitted by social media.

    • This may well result in a groundswell of public support for measures to protect the environment.

    5. The environment will get the value it deserves

    • The corona pandemic will jolt the markets into giving a clean, healthy and sustainable environment the economic value it deserves.

    • There’s a possibility that the gulf between what markets value, and what people value, will close.

    Environment conservation as a silver lining in this Pandemic

    • We have never treated air pollution as a national emergency, failing to coordinate between the Centre and state governments.

    • The COVID pandemic has been declared a national disaster in India, under the National Disaster Management Act, 2005.

    • This legislation mandates the disaster authorities coordinate among themselves and take measures for the prevention and mitigation of the pandemic.

    • Preventing and mitigating the risks of COVID-19, therefore, means the mandate for the disaster authorities is also to tackle air and other forms of pollution head-on.

    Questions based on disasters have been a recurring theme in the UPSC. In 2014, a question was asked with respect to drought, the same could be asked about air pollution. In 2017 again a question based on role of NDMA and tsunami was aksed. In 2018, a question based on Sendai Framework was asked.

     

    Conclusion

    The NDMA is a platform which should be used to combat air pollution as an emergency, similar coordination will be required at an international level to continue to work towards reduced emissions under the Paris Agreement. It is a great pity that it takes a pandemic to bring the realisation that economic growth versus clean air is a false dichotomy.

    Back2Basics: NDMA

    • On 23 December 2005, the Government of India enacted the Disaster Management Act, which envisaged the creation of the National Disaster Management Authority (NDMA).
    • It is headed by the Prime Minister, and State Disaster Management Authorities (SDMAs) headed by respective Chief Ministers.
    • It aims to spearhead and implement a holistic and integrated approach to Disaster Management in India.

  • FCI to the rescue

    FCI, indeed, has remained a crucial topic from the examination viewpoint. Mostly it is highlighted for its issues, corruption and wastages in the godowns. Be it MS Swaminathan or the latest Shanta Kumar committee all focus on how to revamp this giant institution. This article, however, points to the relevance of the FCI in the times of pandemic and suggests areas where there is scope for improvement in fulfilling its role. Stay tuned to find out what are the major concerns with FCI which needs consideration by the government.

    A background check on FCI

    • The FCI was set up under the Food Corporations Act 1964.

    •  In its first decade, FCI was at the forefront of India’s quest of self-sufficiency in rice and wheat following the Green Revolution.

    • Its functions involved managing procurement and stocking grain that supported a vast Public Distribution System (PDS).

    • Over time it became a behemoth that had long outlived its purpose and Its operations were regarded as expensive and inefficient.

    • Even in the 1970s and 1980s, poor storage conditions meant a lot of grain was lost to pests, mainly rats; diversion of grain was widespread.

    What role can FCI play amid Covid-19?

    • The FCI has consistently maintained the PDS, a lifeline for vulnerable millions across the country.

    • In the middle of the COVID-19 pandemic, it can play a major role in avoiding hunger and starvation.

    • Before the lockdown, with 77 million tonnes of grains in its godowns, the FCI was facing a serious storage problem.

    • This was worrying not just because of a shortage of modern storage facilities but also because the FCI lacked a “pro-active liquidation policy” for excess stocks.

    • Post-COVID: FCI has opened up the godowns to release food stocks to those affected by the lockdown.

    • The FCI has also enabled purchases by States and non-governmental organisations directly from FCI depots, doing away with e-auctions typically conducted for the Open Market Sale Scheme (OMSS).

    • With rabi procurement underway in many States, it seems that the country will secure ample food supplies to cope with the current crisis.

    • Given the extended lockdown, the FCI is uniquely positioned to move grain across State borders where private sector players continue to face formidable challenges of transport.

    5 suggestions for the FCI to perform better

    1. Using roads along with rails:

    • The FCI is overwhelmingly reliant on rail, which has several advantages over road transport.

    • In 2019-2020 (until February) only 24% of the grain moved was by road.

    • The FCI has long recognised that road movement is often better suited for emergencies and for remote areas.

    • Containerised movement too, which is not the dominant way of transporting grain, is more cost-effective and efficient.

    • Now, more than ever, it is imperative to move grain quickly and with the least cost and effort, to areas where the need is greatest.

    2. Store grain near demand hotspot

    • The FCI already has a decentralised network of godowns.

    • In the current context, it would be useful for the State government and the FCI to maintain stocks at block headquarters or panchayats in food insecure or remote areas.

    • This would allow State governments to respond rapidly.

    •  It will also provide a sense of assurance and psychological comfort to vulnerable communities.

    • This is especially relevant for regions that are chronically underserved by markets or where markets have been severely disrupted.

    3. Release stocks over and above existing allocation

    • The central government need to look beyond the PDS and the Pradhan Mantri Garib Kalyan Yojana and release stocks over and above existing allocations.

    • This would provide flexibility to local governments to access grains for appropriate interventions at short notice and to sell grain locally at pre-specified prices until supply is restored.

    • This would allow the state government to engage in feeding programmes, free distribution to vulnerable and marginalised sections, those who are excluded from the PDS, etc.

    • In many States, there is a vibrant network of self-help groups formed under the National Rural Livelihoods Mission (NRLM) which can be tasked with last mile distribution of food aid other than the PDS.

    • Consultative committees presumably exist already in each State to coordinate with the FCI on such arrangements.

    4. Suspend FIFO principle

    • Typically, the FCI’s guidelines follow a first in, first out principle (FIFO).

    • FIFO mandates that grain that has been procured earlier needs to be distributed first to ensure that older stocks are liquidated, both across years and even within a particular year.

    • It is time for the FCI to suspend this strategy, that enables movement that costs least time, money and effort.

    5. Support the farmers trying to reach out to consumers directly

    • In many places, farmer producer organisations (FPOs) have been at the forefront of rebuilding these broken supply chains.

    • The FCI along with the National Agricultural Cooperative Marketing Federation of India Ltd. (NAFED), is well placed to rope in expertise to manage the logistics to support these efforts.

    • NAFED has already taken the initiative to procure and transport horticultural crops.

    • The FCI should similarly consider expanding its role to support FPOs and farmer groups, to move a wider range of commodities including agricultural inputs such as seeds and fertilizers, packing materials and so on.

    Major concerns regarding FCI’s role

    • Cost of food subsidy: The first is a long-term concern regarding the costs of food subsidy.

    • An analysis of FCI costs spanning 2001-16 suggests that on average about 60% of the costs of acquisition, procurement, distribution and carrying stocks are in fact transfers to farmers.

    • Not all of what is counted as subsidy therefore represents a waste of resources.

    • The government needs to address the FCI’s mounting debts — an estimated ₹2.55 lakh crore in March 2020 in the form of National Small Saving Funds Loan alone.

    • Depressing food prices: A second concern is that extended food distribution of subsidised grain is akin to dumping and depresses food prices locally.

    • The depressed prices, in turn, affect farmers.

    The Covid-19 pandemic has brought into sharp focus the relevance of the FCI. This makes PDS and Food security in prelims as well as in mains examination focus area. So, questions based on the topic are likely to be asked by the UPSC, for ex- “The FCI’s role in providing succour has been proved many times in the past and it lived up to its reputation amid Covid-19 pandemic as well. In the light of the above statement, discuss the relevance of the FCI and suggest the ways to improve its performance in the times of disasters”

    Also consider a question asked by the UPSC in 2019, “What are the reformative steps taken by the Government to make the food grain distribution system more effective?”

    Conclusion

    In 2015, the Shanta Kumar report recommended repurposing the organisation as an “agency for innovations in Food Management System” and advocated shedding its dominant role in the procurement and distribution of grain. There is no doubt that the FCI needs to overhaul its operations and modernise its storage. At the same time, the relevance of an organisation such as the FCI or of public stockholding, common to most Asian countries, has never been more strongly established than now.

  • Why liquor sale matters to states?

    Following the ease of restrictions in the third phase of the nationwide lockdown, some of the most striking images showed long queues outside liquor stores around the country. The Delhi government announced a 70% hike in the price of liquor across categories in the capital.

    Aspirants must note:

    1. Purview of Excise duty (i.e. Petroleum and Liquor)

    2. Excise duty before and after GST regime

    3. Sources of state revenue etc.

    4. Argument relating to inclusion of Liquor in GST

    Why liquor matters?

    • Delhi’s “special corona fee” on alcohol underlines the importance of liquor to the economy of the states.
    • Manufacture and sale of liquor is one of the major sources of their revenue, and the reopening comes at a time when the states have been struggling to fill their coffers amid the disruption on account of the lockdown.

    How do states earn from liquor?

    • Liquor contributes a considerable amount to the exchequers of all states and UTs except Gujarat and Bihar, both of which have enforced prohibition.
    • Generally, states levy excise duty on manufacture and sale of liquor.
    • Some states, for example, Tamil Nadu, also impose VAT (value-added tax).
    • States also charge special fees on imported foreign liquor; transport fee; and label & brand registration charges.
    • A few states, such as UP, have imposed a “special duty on liquor” to collect funds for special purposes, such as maintenance of stray cattle.

    Share in revenue

    • A report published by the RBI last year shows that state excise duty on alcohol accounts for around 10-15 per cent of Own Tax Revenue of a majority of states.
    • In fact, the state excise duty on liquor is the second or third largest contributor to the category State’s Own Tax revenue; sales tax (now GST) is the largest.
    • This is the reason states have always wanted liquor kept out of the purview of GST.

    What exactly is State Excise?

    • Excise duty on alcohol, alcoholic preparations, and narcotic substances is collected by the State Government and is called “State Excise” duty.
    • For most of the states, excise duty is the second largest tax revenue after sales taxes (state VAT).
    • Besides, a substantial amount comes from licences, fines and confiscation of alcohol products.

    What has changed with the State Excise after the GST regime?

    • At the central level, excise duty earlier used to be levied as Central Excise Duty, Additional Excise Duty, etc.
    • However, the Goods and Services Tax (GST), introduction in July 2017, subsumed many types of excise duty. Today, excise duty applies only on petroleum and liquor.
    • Excise duty was levied on manufactured goods and levied at the time of removal of goods, while GST is levied on the supply of goods and services.
    • Alcohol does not come under the purview of GST as exclusion mandated by constitutional provision.
    • States levy taxes on alcohol according to the same practice as was prevalent before the rollout of GST.
    • After GST was introduced, central excise duty was replaced by Central GST because excise was levied by the central government. The revenue generated from CGST goes to the central government.

    What are the other sources of revenue for the states?

    • The states’ revenues comprise broadly two categories — Tax Revenue and Non-Tax Revenue.
    • Tax revenue is divided into two further categories: State’s Own Tax Revenue, and Share in Central Taxes.
    • Again, Own Tax Revenue comprises three principal sources:

    1) Taxes on Income (agricultural income tax and taxes on professions, trades, callings and employment);

    2) Taxes on Property and Capital Transactions (land revenue, stamps and registration fees, urban immovable property tax); and

    3) Taxes on Commodities and Services (sales tax, state sales tax/VAT, central sales tax, a surcharge on sales tax, receipts of turnover tax, other receipts, state excise, taxes on vehicles, taxes on goods and passengers, taxes and duties on electricity, entertainment tax, state GST, and “other taxes and duties”).

    Back2Basics: What is Excise Duty?

    • Excise duty is a form of tax imposed on goods for their production, licensing and sale.
    • It is the opposite of Customs duty in sense that it applies to goods manufactured domestically in the country, while Customs is levied on those coming from outside of the country.
    • At the central level, excise duty earlier used to be levied as Central Excise Duty, Additional Excise Duty, etc.
    • Excise duty was levied on manufactured goods and levied at the time of removal of goods, while GST is levied on the supply of goods and services.

    Purview of excise duty

    • The GST introduction in July 2017 subsumed many types of excise duty.
    • Today, excise duty applies only on petroleum and liquor.
    • Alcohol does not come under the purview of GST as exclusion mandated by constitutional provision.
    • States levy taxes on alcohol according to the same practice as was prevalent before the rollout of GST.
    • After GST was introduced, excise duty was replaced by central GST because excise was levied by the central government. The revenue generated from CGST goes to the central government.

    Types of excise duty in India

    Before GST kicked in, there were three kinds of excise duties in India.

    1) Basic Excise Duty

    • Basic excise duty is also known as the Central Value Added Tax (CENVAT). This category of excise duty was levied on goods that were classified under the first schedule of the Central Excise Tariff Act, 1985.
    • This duty was levied under Section 3 (1) (a) of the Central Excise Act, 1944. This duty applied on all goods except salt.

    2) Additional Excise Duty

    • Additional excise duty was levied on goods of high importance, under the Additional Excise under Additional Duties of Excise (Goods of Special Importance) Act, 1957.
    • This duty was levied on some special category of goods.

    3) Special Excise Duty

    • This type of excise duty was levied on special goods classified under the Second Schedule to the Central Excise Tariff Act, 1985.
    • Presently the central excise duty comprises of a Basic Excise Duty, Special Additional Excise Duty and Additional Excise Duty (Road and Infrastructure Cess) on auto fuels.

  • Non-Aligned Movement (NAM) Virtual Summit

    PM Modi has for the first addressed the Non-Aligned Movement (NAM) summit since assuming office in 2014.

    Possible mains question-

    Q. Non-Aligned Movement (NAM) has lost its relevance in the new era of multipolar world. Comment.

    Highlights of the online summit

    • The online NAM Contact Group Summit on “United against COVID-19” was hosted by current NAM Chairman and Azerbaijan President Ilham Aliyev.
    • The NAM leaders announced the creation of a task force to identify requirements of member countries through a common database reflecting their basic medical, social and humanitarian needs in the fight against COVID-19.

    What is the Non-Aligned Movement (NAM)?

    • The NAM is a forum of 120 developing world states that are not formally aligned with or against any major power bloc.
    • The group was started in Belgrade, Yugoslavia in 1961.
    • After the UN, it is the largest grouping of states worldwide.

    Its formation

    • NAM emerged in the context of the wave of decolonization that followed World War II.
    • It was created by Yugoslavia’s President, Josip Broz Tito, India’s first PM, Jawaharlal Nehru, Egypt’s second President Gamal Abdel Nasser, Ghana’s first president Kwame Nkrumah, and Indonesia’s first President, Sukarno.
    • All five leaders believed that developing countries should not help either the Western or Eastern blocs in the Cold War.
    • As a condition for membership, the states of the NAM cannot be part of a multilateral military alliance (such as the NATO) or have signed a bilateral military agreement with one of the “big powers” involved in Great Power conflicts.
    • However, its idea does not signify that a state ought to remain passive or even neutral in international politics.

    Terms of summits

    • Unlike the UN or the Organization of American States, the NAM has no formal constitution or permanent secretariat.
    • All members of the NAM have equal weight within its organization.
    • The movement’s positions are reached by consensus in the Summit Conference of Heads of State or Government, which usually convenes every three years.
    • The administration of the organization is the responsibility of the country holding the chair, a position that rotates at every summit.
    • The ministers of foreign affairs of the member states meet more regularly in order to discuss common challenges, notably at the opening of each regular session of the UN General Assembly.

    Its relevance today

    • One of the challenges of the NAM in the 21st century has been to reassess its identity and purpose in the post-Cold War era.
    • The movement has continued to advocate for international cooperation, multilateralism, and national self-determination, but it has also been increasingly vocal against the inequities of the world economic order.
    • On the contrary, from the founding of the NAM, its stated aim has been to give a voice to developing countries and to encourage their concerted action in world affairs.