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28th Aug 2021 | Geography Test 02

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August 28, 2021

Various Funds of Union Government of India and State Governments

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28st Aug 2021

Various Funds of Union Government of India and State Governments

There are three types of funds of the Central Government – Consolidated Fund of India (Article 266), Contingency Fund of India (Article 267) and Public Accounts of India (Article 266) mentioned in the Indian Constitution.

Funds of Government of India

The Indian government’s funds are kept in three parts, which are listed below:

Consolidated Fund of India
Contingency Fund of India
Public Accounts of India

(1) Consolidated Fund of India

This term derives its origin from the Constitution of India.
Under Article 266 (1) of the Constitution of India, ‘Consolidated Fund of India’ for the Union Government include –
- all revenues (for example tax revenue from personal income tax, corporate income tax, customs, and excise duties as well as non-tax revenue such as license fees, dividends, and profits from public sector undertakings, etc.) received by the Union government
- all loans raised by the issue of treasury bills, internal and external loans and all money received by the Union Government in repayment of loans
Similarly, under Article 266 (1) of the Constitution of India, a Consolidated Fund of State (a separate fund for each state) has been established where
- all revenues (both tax revenues such as Sales tax/VAT, stamp duty, etc.. And non-tax revenues such as user charges levied by State governments) received by the State government as well as
- all loans raised by the issue of treasury bills, internal and external loans and all money received by the State Government in repayment of loans shall form part of the fund.
The Comptroller and Auditor General of India audit these Funds and reports to the Union/State legislatures when proper accounting procedures have not been followed.
The government meets all its expenditure from this fund.
The government needs parliamentary approval to withdraw money from this fund.

(2) Contingency Fund of India

The Contingency Fund of India is established under Article 267(1) of the Indian Constitution. It is in the nature of an imprest (money maintained for a specific purpose). Accordingly, Parliament enacted the contingency fund of India Act 1950.
The fund is held by the Finance Secretary (Department of Economic Affairs) on behalf of the President of India and it can be operated by executive action. The Contingency Fund of India exists for disasters and related unforeseen expenditures.
In 2005, it was raised from Rs. 50 crores to Rs 500 crore.
Approval of the Parliament of India for such expenditure and for withdrawal of an equivalent amount from the Consolidated Fund is subsequently obtained to ensure that the corpus of the Contingency Fund remains intact.
Similarly, the Contingency Fund of each State Government is established under Article 267(2) of the Constitution – this is in the nature of an imprest placed at the disposal of the Governor to enable him/her to make advances to meet urgent unforeseen expenditure, pending authorization by the State Legislature.
Approval of the Legislature for such expenditure and for withdrawal of an equivalent amount from the Consolidated Fund is subsequently obtained, whereupon the advances from the Contingency Fund are recouped to the Fund.
The corpus varies across states and the quantum is decided by the State legislatures.

(3) Public Accounts of India

This is constituted under Article 266(2) of the Constitution.
All other public money (other than those which are credited to the Consolidated Fund of India) received by or on behalf of the Government of India shall be credited to the Public Account of India.
This is made up of:
- Bank savings account of the various ministries/departments
- National small savings fund, defense fund
- National Investment Fund (money earned from disinvestment)
- National Calamity & Contingency Fund (NCCF) (for Disaster Management)
- Provident fund, Postal insurance, etc.
Similar funds
- The government does not need permission to take advances from this account.
- Each state can have its own similar accounts.
- The audit of all the expenditure from the Public Account of India is taken up by the CAG

The following table summarizes the three funds:

Fund	Consolidated Fund of India	Contingency Fund of India	Public Account of India
Income	Taxes and non-tax revenue	Fixed corpus of Rs. 500 crore	Public money other than those under consolidated fund
Expenditure	All expenditure	Unforeseen expenditure	Public money other than those under consolidated fund
Parliamentary Authorisation	Required prior to expenditure	Required after the expenditure	Not required
Articles of Constitution	266(1)	267(1)	266(2)

Controller General of Accounts (CGA)

The CGA is the Principal Accounting Adviser to the Government of India. The office is in the Department of Expenditure, Ministry of Finance, GOI.
CGA is the Principal Accounting Adviser to the Government of India and is responsible for establishing and maintaining a technically sound Management Accounting System.
It also prepares and submits the accounts of the Central Government.
It is also in charge of the exchequer control and internal audits.

Functions

The Office of CGA prepares monthly and annual analyses of expenditure, revenues, borrowings, and various fiscal indicators for the Union Government.
Under Article 150 of the Constitution, the Annual Appropriation Accounts (Civil) and Union Finance Accounts are submitted to Parliament on the advice of the Comptroller and Auditor General of India.
Along with these documents, an M.I.S Report titled ‘Accounts at a Glance’ is prepared and circulated to Hon’ble Members of Parliament.
It is also responsible for the coordination and monitoring the progress of submission of corrective/remedial action taken notes (ATNs) on the recommendations contained in Public Accounts Committee’s (PAC) reports as well as the Comptroller & Auditor General (CAG) reports through its web-based Audit Para Monitoring System (APMS).

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August 28, 2021

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5. Master polity and your score can rise by 100 marks in Mains.
6. It is easy to master the subject if you know the right tricks!
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What can you expect to learn in the webinar?
1. 5 Most valuable topics to be covered for Prelims.
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5. How to use the knowledge of polity for writing better essays.
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August 28, 2021
30th August 2021 | Prelims Daily with Previous Year Questions

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August 28, 2021
28th August 2021 | Prelims Daily with Previous Year Questions

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August 28, 2021
Asset monetisation — execution is the key
Context

The government has announced an ambitious programme of asset monetisation. It hopes to earn ₹6 trillion in revenues over a four-year period.

About Asset monetisation
- Unlike in privatisation, no sale of government assets is involved.
- The government parts with its assets — such as roads, coal mines — for a specified period of time in exchange for a lump sum payment.
- Asset monetisation will happen mainly in three sectors: roads, railways and power.
- Other assets to be monetised include: airports, ports, telecom, stadiums and power transmission.
- Two important statements have been made about the asset monetisation programme.
- The focus will be on under-utilised assets.
- Monetisation will happen through public-private partnerships (PPP) and Investment Trusts.
Challenges

1) Investors would prefer property utilised assets over underutilised assets
- Suppose an asset is not being used adequately because it has not been properly developed or marketed well enough.
- A private party may judge that it can put the assets to better use.
- It will pay the government a price equal to the present value of cash flows at the current level of utilisation.
- This is a win-win situation for the government and the private player.
- The government gets a ‘fair’ value for its assets.
- The private player gets its return on investment.
- Increase in efficiency: The economy benefits from an increase in efficiency.
- Monetising under-utilised assets thus has much to commend it.
- However, in case of an asset that is being properly utilised, the private player has little incentive to invest and improve efficiency.
- It simply needs to operate the assets as they are.
- The private player may value the cash flows assuming a normal rate of growth.
- The cost of capital for a private player is higher than for a public authority.
- The higher cost of capital for the private player could offset the benefit of any reduction in operating costs.
- The government earns badly needed revenues but these could be less than what it might earn if it continued to operate the assets itself.
- There is no improvement in efficiency.
- The benefits to the economy are likely to be greater where under-utilised assets are monetised.
- However, private players will prefer well-utilised assets to assets that are under-utilised.
- That is because, in the former, cash flows and returns are more certain.
2) Valuation challenges
- It is very difficult to get the valuation right over a long-term horizon, say, 30 years.
- For a road or highway, growth in traffic would also depend on factors other than the growth of the economy.
- . If the rate of growth of traffic turns out to be higher than assessed by the government in valuing the asset, the private operator will reap windfall gains.
- Alternatively, if the winning bidder pays what turns out to be a steep price for the asset, it will raise the toll price steeply.
- The consumer ends up bearing the cost.
- It could be argued that a competitive auction process will address these issues and fetch the government the right price while yielding efficiency gains.
- But that assumes, among other things, that there will be a large number of bidders for the many assets that will be monetised.
3) Life of the returned asset may not be long
- There is no incentive for the private player to invest in the asset towards the end of the tenure of monetisation.
- The life of the asset, when it is returned to the government, may not be long.
- In that event, asset monetisation virtually amounts to sale.
- Monetisation through the PPP route is thus fraught with problems.
Way forward: InvIT route
- Infrastructure Investment Trusts (InvIT) are mutual fund-like vehicles in which investors can subscribe to units that give dividends.
- Monetisable assets will be transferred to InvITs.
- The sponsor of the Trust is required to hold a minimum prescribed proportion of the total units issued.
- InvITs offer a portfolio of assets, so investors get the benefit of diversification.
- In the InvIT route to monetisation, the public authority continues to own the rights to a significant portion of the cash flows and to operate the assets.
- So, the issues that arise with transfer of assets to a private party — such as incorrect valuation or an increase in price to the consumer — are less of a problem.
Key takeaways
- Low cost of capital for public authority: In general, due to the low cost of capital for public authority, the economy is best served when public authorities develop infrastructure and monetise these.
- InvIT route: Monetisation through InvITs is likely to prove less of a problem than the PPP route.
- Monetise under utilised assets: We are better off monetising under-utilised assets than assets that are well utilised.
- Monitoring authority should be set up: To ensure proper execution, there is a case for independent monitoring of the process.
- The government may set up an Asset Monetisation Monitoring Authority staffed by competent professionals.
Consider the question “How asset monetisation is different from privatisation? What are the challenges in asset monetisation? Suggest the ways forward.”

Conclusion

Government must pay attention to the challenges in asset monetisation and use it in the proper way to increase the efficiency in the economy.

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August 28, 2021
Registrations Closing in 2 Hr || Live Free Session on Indian Polity Today || 5 High-Value Topics for Prelims 2021 and How to Simplify Polity for UPSC IAS 2022
Dear aspirants,

CLICK HERE TO REGISTER FOR FREE session

Polity is the key to success in UPSC, and here’s why:
1. Up to 20 questions in Prelims – 40 marks!
2. Command over Polity means great writing material in essays.
3. The knowledge of polity can be used in GS papers, IR, and national issues.
4. Polity concepts are highly useful in writing Ethics answer.
5. Master polity and your score can rise by 100 marks in Mains.
6. It is easy to master the subject if you know the right tricks!
This is why we believe that all UPSC aspirants who are serious about clearing Prelims in this attempt should know the 5 Most Valuable Topics in polity and the smart way of completing the syllabus in time. And we would like to share these with you for FREE in the upcoming webinar with Sudhanshu Sir.

For example, these are the areas that UPSC has focused on in the previous years:

And where are these questions sourced from?

But what about this year? Sudhanshu sir will explain, in detail, in the webinar.

CLICK HERE TO REGISTER FOR FREE session

What can you expect to learn in the webinar?
1. 5 Most valuable topics to be covered for Prelims.
2. How to complete the Polity syllabus ‘effectively.’
3. How to revise the syllabus in record time.
4. How to use the knowledge of Polity for better answer writing.
5. How to use the knowledge of polity for writing better essays.
6. How to make sure you answer ALL the polity questions in Prelims correctly.
7. How to use Polity to gain advantage over other candidates.
You can learn all of this and more for absolutely free in the webinar.

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August 28, 2021
Delhi HC observations on Right to be Forgotten
The Delhi High Court upheld the view that the “Right to Privacy” includes the “Right to be Forgotten” and the “Right to be Left Alone”.

Right to be Forgotten in India
- The Right to be Forgotten falls under the purview of an individual’s right to privacy, which is governed by the Personal Data Protection Bill that is yet to be passed by Parliament.
- In 2017, the Right to Privacy was declared a fundamental right by the Supreme Court in its landmark verdict.
- The court said at the time that “the right to privacy is protected as an intrinsic part of the right to life and personal liberty under Article 21 and as a part of the freedoms guaranteed by Part III of the Constitution”.
What was the recent case?
- The TV celebrity had moved Delhi High Court with the plea that orders be issued to Google and relevant entities to facilitate the removal of posts, videos, articles and any information related to incidents that he was involved.
- His plea cited that his presence on the internet is a source of “utmost psychological pain” to him.
Legal issues
- India does not have a law yet on right to be forgotten.
- In the meantime, the Information Technology Rules, 2011 — which is the current regime governing digital data — does not have any provisions relating to the right to be forgotten.
- The Personal Data Protection (PDP) Bill was tabled in Parliament in 2019 and is being examined by a Joint Parliamentary Committee (JPC).
Key features of PDP Bill
- Personal Data: Section 20 of the PDP Bill says that a ‘data principal’ — or the person who generates the data or to whom the information pertains — can rightfully ask a ‘data fiduciary’, which is any entity that stores or processes such data, to “restrict or prevent the continuing disclosure of his personal data” in specific circumstances.
- Purpose of data: To seek the erasure of data, it is necessary to establish that it “has served the purpose for which it was collected or is no longer necessary for the purpose; was made with the consent of the data principal.
- Right to be forgotten: The Bill says that the right to be forgotten can be enforced only on an order of an adjudicating officer following an application filed by the data principal.
- Contravention with Free Speech: However, the decision on whether the right to be forgotten can be granted with respect to any data will depend on whether it contravenes “the right to freedom of speech and expression and the right to information of any other citizen”.
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August 28, 2021
Govt’s clarifications on CSR Expenditure
The Ministry of Corporate Affairs has clarified that companies have to ensure that funds transferred to implementing agencies are actually utilized for them to be counted towards mandatory CSR expenditure.

What is Corporate Social Responsibility (CSR)?
- CSR is a type of business self-regulation that aims to contribute to the societal goals of a philanthropic, activist, or charitable nature by engaging in or supporting volunteering or ethically-oriented practices.
- It rests on the ideology of “give and take” i.e. to take scarce resources from the environment for running a business, and in turn to contribute towards economic, social, and environmental development.
CSR in India
- India is the first country in the world to make corporate social responsibility (CSR) mandatory, following an amendment to the Companies Act, 2013 in April 2014.
- Businesses can invest their profits in areas such as education, poverty, gender equality, and hunger as part of any CSR compliance.
All companies with a net worth of Rs 500 crore or more, a turnover of Rs 1,000 crore or more, or net profit of Rs 5 crore or more, are required to spend 2 per cent of their average profits of the previous three years on CSR activities every year.

What is the recent clarification?
- The MCA has clarified that excess Corporate Social Responsibility (CSR) expenditure prior to FY21 cannot be set off against future CSR expenditure requirements.
- Corporate donations to government schemes cannot be counted as CSR.
- The ministry has also clarified that companies have to ensure that funds transferred to implementing agencies are actually utilized for them to be counted towards mandatory CSR expenditure.
Impact of the move
- This clarification may impact donations to state government schemes which are often done for the sake of managing relationships with the government.
Earlier changes

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August 28, 2021
[pib] Bharat Series (BH-series) for Vehicles
The Ministry of Road Transport & Highways has rolled out a new series for vehicles registration ‘BH’ to avoid re-registration of vehicles while moving to another state.

Bharat series (BH-series)
- There was a procedure of re-registration of a vehicle while moving to another state.
- A vehicle bearing BH registration mark shall not require assignment of a new registration mark when the owner of the vehicle shifts from one State to another.
- Format of Bharat series (BH-series) Registration Mark –
Registration Mark Format:
1. YY BH #### XX
2. YY – Year of first registration
3. BH- Code for Bharat Series
4. ####- 0000 to 9999 (randomized)
5. XX- Alphabets (AA to ZZ)
Why such move?
- Station relocation occurs with both Government and private sector employees.
- Such movements create a sense of unease in the minds of such employees with regard to transfer of registration from the parent state to another state.
- Under section 47 of the Motor Vehicles Act, 1988, a person is allowed to keep the vehicle for not more than 12 months in any state other than the state where the vehicle is registered.
Who can get this BH series?
- BH-series will be available on voluntary basis to Defense personnel, employees of Central Government/ State Government/ Central/ State PSUs and private sector companies/organizations.
- The motor vehicle tax will be levied for two years or in multiple of two.
- This scheme will facilitate free movement of personal vehicles across States/UTs of India upon relocation to a new State/UT.
- After completion of the fourteenth year, the motor vehicle tax shall be levied annually which shall be half of the amount which was charged earlier for that vehicle.
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August 28, 2021

Search results for: “”

28st Aug 2021

Various Funds of Union Government of India and State Governments

Funds of Government of India

(1) Consolidated Fund of India

(2) Contingency Fund of India

(3) Public Accounts of India

Controller General of Accounts (CGA)

Samanvaya: Free 1-to-1 mentorship for UPSC IAS

Civilsdaily Samanvaya 1-On-1 Mentorship Form

Context

About Asset monetisation

Challenges

1) Investors would prefer property utilised assets over underutilised assets

2) Valuation challenges

3) Life of the returned asset may not be long

Way forward: InvIT route

Key takeaways

Conclusion

Right to be Forgotten in India

What was the recent case?

Legal issues

Key features of PDP Bill

What is Corporate Social Responsibility (CSR)?

CSR in India

What is the recent clarification?

Impact of the move

Earlier changes

Bharat series (BH-series)

Why such move?

Who can get this BH series?

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