9 PM Daily Current Affairs Brief – February 18, 2021

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An Analysis of 15th Finance commission’s recommendations

Source: Indian Express

Syllabus: GS 2: Functions and Responsibilities of various Constitutional Bodies

Synopsis: The 15th Finance Commission recommendations are slightly different from the other Finance commission’s recommendations. It has introduced many revolutionary changes that can shape India’s future.

What are the major challenges faced by 15th Finance commission?

The 15th Finance commission (FC) had faced many challenges while preparing its report for the year 2021-26. Some of them are,

  1. One, the issue of using 2011 population census data. The southern states were against it.
  2. Two, the issue of creating a non-lapsable defence fund.
  3. Three, using certain parameters for calculating performance incentives to states.
  4. Fourth, the 15th FC was required to prepare the fiscal roadmap for the Union and state amid a shortfall in the GST collection and the Pandemic.

How the 15th FC report addressed these challenges?

  1. First, the 15th FC recommended vertical devolution at 41 per cent to states against 14th FC recommendation of 42% devolution. The 15th FC adjusted 1 per cent for the erstwhile state of Jammu and Kashmir.
  2. Second, for horizontal distribution, it introduced efficiency criteria for tax and fiscal efforts of states. This is expected to harmonise the principles of revenue needs and performance.
  3. Third, the 15th FC assigned 12.5 per cent weightage to demographic performance. By that, it incentivized the southern states for the progress made by them in replacement rate of population growth.

What was the recommendation of 15th FC for distributing grant in aids to the states?

  • The grant allocation will be based on the below five categories. 1. Revenue deficit grants, 2. Grants for local governments, 3. Grants for disaster management, 4. Sector-specific grants and 5. State-specific grants.
  • The centre in its Action Taken Report accepted all the grants except sector-specific grants (Rs 1,29,987 crore) and state-specific grants (Rs 49,599 crore).
  • The Commission also tasked to examine, whether revenue deficit grants should be provided at all to the states. Some states argued that providing revenue deficit grants will disincentives tax efforts and prudence in expenditure.
  • However, the FC recommended revenue deficit grants of Rs 2,94,514 crore for (2021-26). It will help fiscally stressed states due to COVID pandemic, such as Kerala, Punjab, West Bengal.

What were the Changes brought by 15th FC regarding grants to local governments?

  • First, the 15th FC has prescribed the following conditions to local bodies to get access to the grants.
    • Constitution of State Finance Commissions
    • Timely auditing and online availability of accounts for rural local bodies
    • Notifying consistent growth rate for property tax revenue for urban local bodies.
  • Second, it has also recommended for tying the grants to the local bodies to drinking water, sanitation, solid-waste management and faecal sludge management. This is in line with the national programmes such as Swachch Bharat Mission and Jal Jeevan Mission.
  • Third, for the first time, the FC recommends Rs 8,000 crore to states for incubation of eight new cities. It also provides for urban grants to million-plus cities for improving air quality, to meet the benchmark of solid waste management and sanitation.
  • Fourth, the landmark recommendation of the 15th FC is the health grant of Rs 70,051 crore through local bodies. It will help to address the gaps in primary health infrastructure.

15th FC recommendations for strengthening Disaster risk management

  • The FC recommends setting up the state and national level Disaster Risk Mitigation Fund (SDRMF). It is in line with the provisions of the Disaster Management Act.
  • Also, for the first time, it introduced a 10-25 per cent graded cost-sharing by the states for the NDRF and NDMF. Though, this is not accepted by the states.

15th FC recommendations to strengthen Defence sector

  • It recommends for setting up of a dedicated non-lapsable fund and the Modernisation Fund for Defence and Internal Security (MFDIS) for 2021-2026.
  • The fund will bridge the gap between projected budgetary requirements and budget allocation for defence and internal security. It will also provide greater predictability to critical defence related capital expenditure.
  • It has recommended the following four specific sources from where the funds for defence can be sourced.
    1. Transfers from the Consolidated Fund of India.
    2. Disinvestment proceeds of DPSEs.
    3. Proceeds from the monetisation of surplus defence land.
    4. Proceeds of receipts from defence land, which is likely to be transferred to state governments.
  • Furthermore, it recommends an allocation of Rs 1,000 crore per annum for the welfare of families of the defence and CAPF personnel who sacrifice their lives in frontline duties.

Celebrity activism and government’s response to it

Source: click here

Syllabus: GS 2

Synopsis:  The MEA’s response to celebrity activism is fair. But its global reach has to go beyond majoritarian representation.

Introduction 

The tweets by international pop singer Rihanna and climate activist Greta Thunberg on farmers’ protest created a huge stir.   

  • In response, The Minister for External Affairs tweeted about motivated campaigns targeting India. It also said that India has the self-confidence today to hold its own. However, MEA’s reaction has come under criticism, inside and outside Parliament. 
  • On the one hand, the hashtag activism was welcomed by the protesting farmers’ associations. However, some Indian film and sports stars tweeted that policy matters are internal to the nation. 

How is celebrity and Twitter activism used globally?

Celebrity activism over human rights is now an established tradition the world over. Twitter diplomacy is a fairly new phenomenon in India, but it is for the MEA to decide how foreign policy is best conducted. 

  1. First, the world of celebrities is firmly rooted in international relations. It has helped in the growth of global civil society opinion and action. Many Indian film celebrities such as Rajinikanth and Kamal Hasan are engaged in such activism. 
  2. Second, many celebrities become a member of Rajya Sabha or receive national honours. It is because political parties also seek to convey their messages to the masses through their chosen celebrities. 
  3. Third, the United Nations makes celebrities its goodwill ambassadors. Many celebrities are used as brand ambassadors for corporates. For example, the Gates Foundation has engaged in supporting AIDS sufferers in India, and elsewhere.
  4. Last, there is a growing public trust in the image of the celebrity as a rescuer of victims.

However, celebrity activism has its downside as well. Sometimes they promote ill-informed solutions and glamourizes populist policies, which results in misinformation among the public.

What should India do?

  • The MEA should extend its reach beyond majoritarian representation to the minority. It has a different opinion from the masses. 
  • The government should create a wider constitutional trust among the Public. It requires a focus beyond governance and development.
  • All citizens have a fundamental constitutional duty to reject violence and develop respect for India’s diverse culture.
  • These duties apply equally to the protesters, citizens, government or Opposition, the media, or state and party actors, etc. 

A robust ‘health and well-being budget for 2021-22’

Source: https://epaper.thehindu.com/Home/ShareArticle?OrgId=GKD89ON6M.1&imageview=0 

Syllabus: GS 2 – Issues relating to development and management of Social Sector/Services relating to Health

Synopsis: The government has come up with an integrated health and well-being budget for 2021-22. It would help meet the current and upcoming challenges created by the COVID-19 pandemic.

Background:

  • The pandemic struck India in March 2020 and exposed the vulnerabilities of the Indian health care system.
  • Although India’s performance in tackling the pandemic was better than various developed countries. But its impact on the economy and society was significant.
  • It was therefore imperative to come up with a strong health and wellbeing budget to develop resilience against the ill effects of the pandemic. The health budget was prepared in this context of Atma Nirbhar Bharat Abhiyan.

Government measures for strengthening ‘health and wellbeing’:

  • A Production linked incentive scheme is announced to boost the manufacture of pharmaceutical and medical devices.
  • 35000 crore rupees has been allocated for the development of COVID-19 vaccine. Mission COVID Suraksha has been launched to improve indigenous vaccine testing and development. Further coverage of pneumococcal vaccine will also be enhanced.
  • Pradhan Mantri Garib Kalyan Yojana (PMGKY) was launched to provide free food grains to 800 million beneficiaries.
  • One Nation One Ration Card (ONORC) will target 690 million beneficiaries covering 32 states/UTs.
  • Jal Jeevan Mission (JJM) has been given substantial allocation.
  • There would be an expansion of health and wellness centres under Pradhan Mantri – Atmanirbhar Swasth Bharat Yojana (PMANSBY). It would also involve using a 13,192 crore Finance Commission grant for strengthening the primary health system.
  • Allocation for the Pradhan Mantri Jan Arogya Yojana (PM-JAY) has not changed in comparison to last year.
  • There has been a 40% increase in Budget of the Ayurveda, Yoga & Naturopathy, Unani, Siddha and Homoeopathy (AYUSH) Ministry.

Significance:

  • First, the nature of allocation strengthens the vision of making India Atma Nirbhar.
  • Second, initiatives like Mission COVID Suraksha will help India sustain its position of being the vaccine hub of the world. Significant allocation towards vaccine development will also ensure all the citizens are able to get vaccinated in due time.
  • Third, PMGKY and ONORC will help in ensuring food and nutritional security in the country.
  • Fourth, a reduction in diseases namely Malaria, Polio and Diarrhoea would be seen due to substantial allocation towards JJM. This is explained by a report released by the Johns Hopkins Bloomberg School of Public Health in 2019.
  • Fifth, focusing on capital expenditure through schemes like PMANSBY is a welcome step for strengthening the health system. Earlier the capital expenditure used to constitute only a small fraction of health allocation.
  • Sixth, an improvement in AYUSH Ministry’s budget will allow the country to focus more on preventive care and integrated treatment. 
  • Lastly, integration of health with well-being (Water, Sanitation and Nutrition) would help in improving the outcomes. Both National Health Policy, 2017 and Economic Survey have stressed the interdependence of these sectors.  

Way Forward:

India’s commitment towards health has allowed it to successfully deliver 8 million doses of COVID vaccine to health and frontline workers. This is the fastest vaccination drive in the world.

  • Allocation towards schemes like PM-JAY should be enhanced. A 20% decline was seen in infant mortality rate (IMR) between 2015-20 in states which adopted the scheme in comparison to a 12% in IMR decline in states which didn’t adopt it as per the economic survey.
  • The states must increase their health spending to 8% of their respective budgets by 2022 as recommended by the National Health Policy and Finance Commission. This would reduce the burden on the Centre and ensure effective spending.

The Union Budget has effectively prepared the ground for tackling the upcoming challenges in the health sector. This should be coupled with other reforms so that the resilience capacity of the country gets enhanced. This would help in achieving the vision of universal health coverage by 2030 as part of sustainable development goals.


Balancing freedom of speech and national security

Source: https://epaper.thehindu.com/Home/ShareArticle?OrgId=GN689L1EJ.1&imageview=0 

Syllabus: GS-2 – Indian Constitution—historical underpinnings, evolution, features, amendments

Synopsis: The government warned Twitter over its reluctance in following the executive order for blocking of information. However, the focus should be on balancing free speech and national security.

Background

  • The government used its power under Section 69A of the Information and Technology Act to block information on the Micro-blogging site.
  • This section allows the government to block any information by issuing orders to a digital intermediary. National security, public order, sovereignty and integrity of India, etc, are some grounds for blocking.
  • The apparent reason behind such an order was the use of a controversial hashtag that disturbed public order.
  • The order was only partially followed by Twitter.

Government’s Stance:

  • Social media platforms should respect the law of the land. Partial compliance is simply a violation.
  • Further, there should be consistency in behaviour as Twitter supported police action in Washington’s Capitol Hill incident. But similar support was not seen in the 26th January violent protests at Red fort, Delhi.
    • It removed problematic hashtags as the same was spreading the hatred. 
    • It viewed the blocking of journalists’ and activists’ accounts as a threat to freedom of speech and expression under Article 19 of the constitution. Therefore, accounts were reactivated after some time. 

Way Forward:

  • Both the government and Twitter are determined not to escalate the issue. The government has only issued a warning while Twitter has refrained from approaching the court.
  • There is a need to re-examine the extent of the wide ambit of censorship powers under Section 69A. An opportunity was missed by the court in Shreya Singhal versus Union of India, in which the extent of the section was not rationalized.

In the world’s largest democracy, the culture of secrecy and arbitrariness shouldn’t be allowed to suppress freedom of speech and expression. The government must view freedom of speech as a facilitator to the security of the state and not an impediment.


Issues in Taxing PF contribution

Source: The Hindu

Syllabus: GS 2: Government Policies and Interventions for Development in various sectors and Issues arising out of their Design and Implementation.

Synopsis: By taxing the income of PF contributions over 2.5 lakhs, the government wants to restrict High net-worth individuals (HNIs) who are using the social welfare scheme as a tax haven. Though it is well-intended, it has many ambiguities.

Read More – Budget proposes tax on EPF interest|ForumIAS Blog

Background

  • The Union Budget 2021 has proposed taxing the income on provident fund contributions of over Rs. 2.5 lakh a year from 01 April 2021.
  • The rationale given for taxing the income from provident fund contributions is to target HNIs. They are using the PF savings to avoid taxation. For example, the 100 largest employees’ PF (EPF) accounts had a combined balance of over ₹2,000 crore.
  • This is not the first time the government had tried to tax PF savings. In the 2016-17 Budget, the government proposed to tax 60% of EPF balances at the time of withdrawal. But due to protest from employees, it was withdrawn later.

What are the ambiguities in this scheme?

Revenue Department has pointed out that the tax will only affect a small group of HNIs. However, the scheme suffers from the following ambiguities,

  • First, the threshold of taxing contributions of over Rs. 2.5 lakh is very low. It will end up taxing PF income for employees who are investing ₹21,000 a month towards their retirement.
  • Second, the threshold proposed is also not in line with the ₹7.5 lakh limit. It was set in last year’s Budget for employers’ contributions into the EPF, National Pension System (NPS) or other superannuation funds.
  • Third, it creates inequity between India’s limited retirement savings instruments. For example, it does not cover NPS investments over ₹2.5 lakh a year, but it includes government employees’ contributions into the GPF.
  • Fourth, it is also not clear on when and how the tax is to be paid. Either at retirement or each year after the PF rate is announced.
  • Fifth, The CBDT chief has said that employees should showcase PF income in their annual tax returns. But this may work for GPF members whose interest rate is announced every quarter. Not for EPF accounts, as interest rates are declared late and credited even later.
  • Finally, this move will affect the fund flow into EPF. This will in turn hamper the government’s sources for finance which is largely dependent on market borrowings.

Issues in the draft rules for the Code on Social Security 2020

Source- The Indian Express

Syllabus –  GS 3 – Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment.

Synopsis –  The Government drafted the rules for the Code on Social Security 2020 without considering growing informal workforce.

Introduction:

  • During the Budget, Finance Minister highlighted the implementation of the four labour codes.
  • Budgetary Allocation for the MSME sector this year was Rs.15700 Crores. This is more than double the amount allotted last year.
  • This will be a positive step if it provides jobs and social security to informal workers.

What are the positive aspects of the draft labour codes?

  1. Social security benefits will extend to gig and platform workers.
  2. Minimum wages will apply to all categories of workers. They all will be covered by the Employees State Insurance Corporation (ESIC).
  3. Compliance burden on employers will get reduced. Because the labour codes provide a single registration and licensing instead of multiple ones at present.

Impacts of lockdown on informal workers-

  1. The lockdown impacted the informal sector more. This is highlighted by the Oxfam inequality Virus reportFew key findings of the report were,
    • Informal workers were the worst hit– 75% out of the total 122 million who lost their jobs were in the informal sector.
    • Over 300 informal workers died due to the lockdown due to starvation, suicides, exhaustion, road and rail accidents, police brutality and denial of timely medical care.
  2. More than 2,582 cases of violation of human rights were recorded by the National Human Rights Commission as early as April 2020.

What are the issues pertaining to the draft rules for the code on Social security, 2020?

  1. First, Lack of information- The Draft rules make Aadhaar based registration mandatory for receiving benefits. However, there is not much information available in the registration process.
  2. Second, Confusion regarding applicability-There is no specific guidelines on how benefits will be applicable to all the informal sector employee.
    • A question for example- Will migrant workers qualify for the social security benefits if they employed in a different state than the registered [Aadhaar based] state?
  3. Third, rising inequality gap- The draft rules are not able to address the issues of the growing informal workforce. The growing informal workforce along with the lack of state’s accountability is responsible for rising inequality.
    • Due to this, workers face the risk of human and labour rights violation. It also leads to unsafe and unregulated working conditions and lower wages and other vulnerabilities.

Way forward-

  • There is a need to address the growing informal workforce and provide social protection, especially to the 450 million informal sector workers.
  • It is important that the draft labour codes take that also into account.

Factly :-News Articles For UPSC Prelims | Feb 18, 2021

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