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The Centre released over ₹1.16 lakh crore to States, equivalent to two monthly instalments of tax devolution, to help front-load State governments’ capital spending abilities in this financial year.
Coming soon after the expiry of the assured Goods and Services Tax (GST) compensation to States from this July, economists expect the move to give States' twice the monthly share of net proceeds of union taxes and duties for August will bolster their cash flows and nudge them into planning and executing capex outlays.
The development also assumes significance as some Chief Ministers raised concerns about their dwindling resources and sought more funds from the Centre through extension of the GST compensation period and a higher share in the divisible pool of taxes, at NITI Aayog’s governing council meeting chaired by Prime Minister on August 7.
As against a ‘normal monthly devolution’ of ₹58,332.86 crore, the Finance Ministry said an amount of ₹1,16,665.75 crore had been released ‘in line with the commitment of the Government of India to strengthen the hands of States to accelerate their capital and developmental expenditure’.
“Tax revenues have been buoyant so this is a good move from the Centre to provide an incentive for States to push discretionary spending, which is largely on capital investment projects.
In the last two years, we have seen States hold back a bit on such spending to meet their committed expenses such as salaries and pensions first. With more funds at their disposal now, they can consider such discretionary spends.
In 2021-22, a large part of the upside in tax devolution was paid out to States in the fourth quarter of the year, which ended up reducing State government borrowings for that period but did not translate to higher spending.
Rating agency ICRA anticipates the Central tax devolution to be ‘as large as’ ₹9.3 lakh crore this year, compared to the ₹8.2 lakh crore estimated in the Budget, on the back of higher non-excise tax revenues. It estimated that a total of ₹3.18 lakh crore has been devolved to States in the first five months of this year, about 39% of Budget estimates.
SC to take up plea to ban convicts from polls for life (Page no. 1)
(GS Paper 2, Polity and Governance)
The Supreme Court said it will consider a plea seeking a lifetime ban on people convicted of offences from contesting elections and becoming Members of Parliament and State Legislative Assemblies.
Appearing before a Bench led by Chief Justice of India N.V. Ramana, senior advocate Vikas Singh, appearing for petitioner Ashwini Upadhyay, said "even a constable can lose his job after conviction".
The Centre had, in an affidavit filed in 2020, maintained in court that disqualification under the Representation of the People Act of 1951 for the period of prison sentence and six years thereafter was enough for legislators.
A senior advocate Vijay Hansaria, the court's amicus curiae, however, said a convicted MP or MLA could come back after the six-year ban and make laws.
In its affidavit in December 2020, the Ministry had rejected the idea of a lifetime ban on convicted persons contesting elections or forming or becoming an office-bearer of a political party.
The Ministry had reasoned that MPs and MLAs were not bound by specific "service conditions". "They are bound by their oath to serve citizens and country. They are bound by propriety, good conscience and interest of the nation," the Ministry had argued.
The Centre had attempted to buttress its case last year by citing a Constitution Bench decision in the Public Interest Foundation case of 2019 which said "though criminalisation of politics is a bitter manifest truth, which is a termite to the citadel of democracy, be that as it may, the court cannot make the law.
But the Centre’s stand in 2020 contradicted that of the Election Commission of India (ECI). In 2017, the top poll body endorsed the call for a lifetime ban in the apex court. It had argued that such a move would “champion the cause of decriminalisation of politics”.
The ECI had then agreed in the Supreme Court that a ban would be in the spirit of fundamental rights of the Constitution, including the right to equality.
Mr. Upadhyay has urged in court the need for a level playing field. He said if a convicted person cannot be a government clerk, the same rule should apply to a politician.
Justice Lalit appointed 49th CJI (Page no. 1)
(GS Paper 2, Polity and Governance)
Justice Uday Umesh Lalit was appointed the 49th Chief Justice of India (CJI) after President Droupadi Murmu signed his warrant of appointment.
Justice Lalit will assume charge on August 27, a day after Justice N.V. Ramana demits office as the CJI. Justice Lalit will have a brief tenure as he will demit office on November 8 after holding the charge as the CJI for a little under three months.
Justice Lalit will be the second CJI who was directly elevated to the apex court Bench from the Bar. Justice S.M. Sikri was the first lawyer to be elevated directly to the top court Bench in March 1964 and went on to become the 13th CJI in January 1971.
In exercise of the powers conferred by clause (2) of Article 124 of the Constitution of India, the President is pleased to appoint Shri Justice Uday Umesh Lalit, judge of the Supreme Court, to be the Chief Justice of India with effect from 27 August 2022.
While Supreme Court judges retire on attaining the age of 65, judges of the 25 High Courts superannuate at the age of 62. Justice Ramana congratulated Justice Lalit on his appointment and wished him a glorious tenure as the next CJI.
Shri Justice Ramana expressed confidence that with his long and rich experience in the Bar as well as on the Bench, Shri Justice Lalit will take the institution of the judiciary to greater heights through his able leadership.
Justice Lalit has been part of several landmark judgments, including the one which held the practice of divorce through instant triple talaq among Muslims illegal and unconstitutional. In the triple talaq verdict, while the then CJI J.S. Khehar and Justice S. Abdul Nazeer were in favour of putting on hold the judgment for six months and asking the government to come out with a law to that effect, Justices Kurian Joseph, R.F. Nariman and Lalit held the practice as violative of the Constitution.
Before his elevation as a judge, he was appointed a special public prosecutor for the CBI to conduct trial in the 2G spectrum allocation case.
Starting out at the Bombay High Court, he shifted his practice to Delhi in January 1986, and in April 2004, he was designated as a senior advocate by the apex court. He was appointed a judge of the Supreme Court on August 13, 2014.
City
17% rise in crimes against women in city, show police data till July 15 (Page no. 2)
(GS Paper 1, Issues related to Women)
Delhi recorded a 17% rise in crimes against women in the first six and a half months this year as compared to the respective period last year, according to Delhi police data.
An average of six cases of rape and eight cases of assault on women were reported daily, the data show. The total number of crimes against women recorded from January 1-July 15 last year was 6,747, while the number went up to 7,887 this year.
There has been a 19% rise in cases of assault on women, while the number of rape cases has gone up by 7%. In most cases of rape and assault, the victim and accused are known to each other, said a senior police officer.
Instances of cruelty by husband and in-laws have risen by 29% during the said period. The data show that 69 cases of dowry deaths and seven under the Dowry Prohibition Act have also been reported.
Cases of kidnapping of women have increased by around 17%, while cases of abduction of women went down by almost 43%. Cases of insult to the modesty of women have gone down —229 cases were reported last year and 225 were reported this year, according to the data.
Explaining the rise in crimes against women, the senior police officer said it’s because they are now focusing on registering FIRs. “No matter what the crime is, if a woman felt uncomfortable at a certain place, cases should be brought to our notice and we will ensure that an FIR is registered.
A lot of women, said the officer, find it difficult to approach the police, and keeping this in mind, “we have launched awareness campaigns that teach people how to approach local police officers. We also regularly inform the local police to interact with the residents, including women, in their areas. More conversations will build their trust in police.
The officer said the self-defence training programme — Sashakti — is helping women learn to protect themselves not just physically but also against cybercrimes. We have also added women beat constables to look into the issues of women; the ladies mobile patrolling squad ensures that the issues of women don’t go unheard.
In June, DCP (PRO) Suman Nalwa had told The Hindu that dark spots are being identified by the Delhi police and street lights are being put up to ensure women’s safety.
Editorial
COVID19, arguably, has become endemic in India (Page no. 8)
(GS Paper 3, Science and Tech)
The infectious disease ‘outbreaks’ or ‘epidemics’ or ‘pandemics’ share a fate — there is a day when the majority of them run their course and fade away.
However, a small proportion (of epidemics or pandemics) transitions to the stage of endemicity, i.e., a level of transmission which is not considered to be a major concern by the public or health authorities.
It has been 29 months since COVID-19 was declared a pandemic. However, new COVID-19 cases are still continuing to be reported from different parts of the world, including India, on a regular basis.
In fact, the numbers of daily new COVID-19 cases in many countries are more than what had been reported at the peak of the national waves in those countries before the emergence of Omicron as a variant of concern.
However, the severity of COVID-19 infections is low and the burden of health services due to intensive care unit and hospital admission even lower. COVID-19 vaccination coverage is increasing and, in many countries, COVID-19 related restrictions have either been removed completely or relaxed to a large extent.
After the third wave in January 2022, India saw the lowest number of daily new COVID-19 cases in March and April this year. However, since then, daily cases have spiked to around 18,000 a day.
In fact, in the last two months every rise and fall in daily cases in India revives the discussion on whether COVID-19 continues to remain pandemic or has become endemic.
Yet, consensus is missing. Part of the reason is that the discourse is dominated by opinion and there has been insufficient attention on an objective assessment of what constitutes the endemic stage or endemicity.
An important point to remember is that the terms, outbreaks, epidemics, and pandemics reflect only the geographical spread.
Outbreaks are a localised spread while an epidemic is when a disease affects a large geographical area within a country or a few countries.
A pandemic is when multiple countries in different regions of the world are affected. The severity of the disease has no or very limited linkage with this classification and a disease could be mild; but if it is widespread, it could be termed a pandemic.
COVID-19 began as an outbreak in China, became epidemic afterwards when more countries were affected, and then, finally, was declared a pandemic on March 11, 2020.
A new global vision for G20 (Page no. 8)
(GS Paper 2, International Organisation)
While India has taken a clear view of the role of the G20, there is concern that the agenda, themes and focus areas which India will set for 2023 lack vision.
The G20 plays an important role in shaping and strengthening global architecture and governance on all major international economic issues.
It recognises that global prosperity is interdependent and economic opportunities and challenges are interlinked. The challenge is to craft new approaches to overcome the acute global discord.
However, according to the Ministry of External Affairs, in 190 meetings, India will strengthen international support for priorities of vital importance to developing countries in diverse social and economic sectors, ranging from energy, agriculture, trade, digital economy, health and environment to employment, tourism, anti-corruption and women empowerment, including in focus areas that impact the most vulnerable and disadvantaged. Without specificity, India has lost a chance to nudge the G20 and regional organisations towards its focus areas.
The fractured world makes trade-offs, the essence of current multilateralism, difficult and suggests a new model of international cooperation.
First, multilateral commitments on aid and trade are faltering. Governance in a world that is steadily becoming more equal needs institutional innovation. This is because the role of the United Nations and the World Trade Organization in securing cooperation between donor and recipient country groups is losing centrality.
There are now three socio-economic systems — the G7, China-Russia, and India and the others — and they will jointly set the global agenda.
Second, Ukraine’s long shadow, rival finance, the expanding influence of the trade and value chains dominated by the U.S. and China, and the reluctance of developing countries to take sides in the strategic competition as they have a real choice requires fresh thinking on the nature and form of collaboration from the G20.
Third, the primary role of the G20, which accounts for 95% of the world’s patents, 85% of global GDP, 75% of international trade and 65% of the world population, needs to be reoriented to prevent a clash of ideas to the detriment of the global good.
BSNL’s distress call answered, but towering issues prevail (Page no. 8)
(GS Paper 3, Economy)
On July 27, the Union Cabinet approved a ₹1.64 lakh crore package to revive the stateowned telecom firm, Bharat Sanchar Nigam Limited. While private players are gearing up to deploy 5G services, the government has allocated ₹44,993 crore for administrative allotment of the 4G spectrum.
The revival package also includes funding for financially unviable rural wire line services where BSNL is the only effective player.
The government expects that with the implementation of this recent package, BSNL will turn around and earn a profit by FY27.
The firm last made a profit in 200809. In the last 13 years, the telecom has suffered losses amounting to ₹1.02 trillion.
To realise the goal of turning BSNL profitable in the next five years, a crucial step would be to expand the falling subscriber base.
At present, the subscriber base of Jio and Airtel is three times that of BSNL’s. Not only is the subscriber base falling, but the revenue BSNL makes from each user is also a fraction of what private service providers get.
The average revenue earned per user by BSNL is 2.5 times lower than what private players make. An earlier bailout package announced in 2019 helped trim BSNL’s bloated employee benefits expense, halving the losses incurred by FY21.
However, the revenue remained stagnant for four years after recording a major fall in FY19. Expanding the subscriber base and improving the revenue earned per user would take care of the shrinking revenue.
In 2005, BSNL commanded a market share of 21%, the same as Bharti Airtel and slightly higher than Reliance Communications. By 2022, BSNL’s share reduced to 10% while three private players controlled the rest of the market.
The average revenue earned per user per month (ARPU) by BSNL and other private players. In March 2016, BSNL’s ARPU was ₹118 while private companies earned ₹126.
The dirt cheap tariffs with which Jio entered the market forced other players to reduce their charges. This impacted the average revenue of both BSNL and other private service providers.
Explainer
The new U.S. Bill on climate action (Page no. 10)
(GS Paper 3, Environment)
On August 7, the U.S. Senate approved a Bill titled the Inflation Reduction Act (IRA) 2022, with a simple majority of 51 to 50. Vice President Kamala Harris cast her tie-breaking vote to aid the approval after the Senate was evenly divided. Even though all Republicans opposed the bill, the Democrats pushed through after a long debate taking advantage of the budget reconciliation process.
The bill is a scaled-down version of President Biden’s Build Back Better Act (BBBA), which failed to get approval from the Senate. The IRA has a special focus on climate, healthcare, and tax provisions to address inflation.
The Bill marks the largest American investment aimed toward making the U.S. a leader in clean energy. It includes packages worth $369 billion for the clean energy transition.
It provides a tax deduction to low and middle-income households to go electric and seeks to lower the energy bills of American households.
It also aims to bolster the domestic production of heat pumps and critical minerals. For disadvantaged low-income communities and tribal communities, the Bill provides funding to benefit from zero-emission technologies which reduce greenhouse gas emissions, enhance climate resilience, and mitigate risks from extreme heat.
The Bill provides significant investment in renewable energy through heavy tax credits for wind and solar energy projects and electric vehicles.
Additionally, the Bill imposes a tax on the largest and most profitable companies in order that they pay their fair share, without levying any taxes on households with income less than $40,000 per annum. It also imposes a fee on methane leaks from oil and gas drilling.
It seeks to expand oil and gas drilling, with the federal government offering land for onshore and offshore drilling as a prerequisite for developing renewable energy. Thus, it handcuffs the expansion of oil and gas with renewable energy development.
The U.S is currently facing extreme climate threats. This includes heatwaves, wildfires, cyclones, floods, and hurricanes that have become frequent and intense in the past few years.
The ongoing floods in Kentucky triggered by heavy rainfall and the wildfires in California induced by dry lightning have become a major concern for the country. There is a link between extreme weather events and climate change.
Additionally, President Joe Biden has also undertaken certain climate commitments. Climate action has been a priority since he came into office.
The uproar over the Electricity (Amendment) Bill, 2022 (Page no. 10)
(GS Paper 2, Governance)
Ignoring the objections of the Opposition, the Samyukt Kisan Morcha (SKM) and the trade unions, the Union Power Ministry introduced the Electricity (Amendment) Bill, 2022 in Lok Sabha on August 8.
Union Power Minister R.K. Singh said at the stage of introduction that the Bill could be moved to the Energy Standing Committee of Parliament for broader consultations.
My simple submission is that this entire matter will be discussed in the Standing Committee and the Standing Committee has representatives from all the parties. The Opposition questioned the introduction of the Bill. They alleged that the Centre is breaching the promise given to SKM that the Bill will not be brought to Parliament.
The Opposition MPs said the Bill is not just anti-farmer, but also anti-constitutional and against the interest of States. The basis of their argument was that the Bill may lead to ending subsidies for farmers and poor consumers.
The Electricity Bill was brought for the first time and passed in Parliament in 2003, when A. B. Vajpayee was the Prime Minister. The intention was to consolidate the laws relating to generation, transmission, distribution, trading and use of electricity.
The Act also offered to protect the interest of consumers and supply of electricity to all areas, rationalisation of electricity tariff, transparent policies regarding subsidies etc.
The Act resulted in privatisation of distributing companies. It was amended in 2007 by the UPA Government, apparently under pressure from the Left parties.
The provisions for “cross subsidy” — ensuring subsidy to poor households was added to the Bill in 2007. There were attempts to amend the Bill further in 2014, 2017, 2018, 2020 and 2021.
While the 2014 Bill was cleared by the Standing Committee on Energy, it could not be passed in the House as the Centre wanted to revise it.
None of the other draft Bills came to Parliament as the Centre was not satisfied with the primary response it received after consultations with stakeholders. All of those Bills remained in their draft form.
News
India, Australia to sign film treaty (Page no. 14)
(GS Paper 2, International Relation)
The Union Cabinet has approved the signing of an Audio Visual Co-production Treaty between India and Australia, which is aimed at facilitating joint production of films between the two countries.
Audio visual co-production treaties are enabling documents which facilitate co-production of films between two countries,” said the government in a statement, adding that under such umbrella agreements, private, quasi-government or governmental agencies enter into contracts to produce films together.
India has so far signed 15 audio visual co-production treaties with other countries. Australia has emerged as a preferred destination for shooting of Indian films. India is fast emerging as a major content hub for film-makers looking for new projects.
India has abundance of exotic locations, talent pool and relatively cheaper cost of production, making India a favoured destination of foreign film-makers.
According to the co-production treaty, the respective contributions of the producers of the two countries may vary from 20% to 80% of the final total cost of the jointly produced work.
The proposed agreement will boost ties with Australia, lead to exchange of art and culture, showcase the soft power of our country and lead to generation of employment among artistic, technical as well as non-technical personnel engaged in audio visual co-production, including production and post-production work,” said the government.
The use of Indian locations would increase the prospects of the country becoming a preferred film-shooting destination and also lead to inflow of foreign exchange.
Business
RBI targets unfair methods in digital lending with new norms (Page no. 16)
(GS Paper 3, Economy)
The Reserve Bank of India (RBI) will soon come out with regulatory architecture for digital lending platforms, many of which are unauthorised and illegal. There are rising cases of borrowers allegedly dying by suicide due to facing harassment at the hands of a few platform operators.
I think very soon we will be coming out with a broad regulatory architecture, which should be able to address the challenges that we are confronted with regard to lending through digital platforms, many of which are unauthorised, unregistered and, should I say, illegal,” Mr. Das said while delivering a lecture on ‘Indian Businesses (Past, Present and Future).’
He was speaking at the Iconic Week celebration as part of the ‘Azadi Ka Amrit Mahotsav’ to mark the 75th anniversary of India’s Independence, organised by the Central Board of Indirect Taxes and Customs (CBIC).
Mr. Das on June 8 suggested that customers borrowing from unregistered digital lending apps should approach the local police in case of any issue.
Most of the digital lending apps are not registered with the central bank and operate by themselves, he told reporters after announcing the monetary policy.
The RBI Governor noted that whenever it gets a complaint from any customer, the central bank directs customers of such unregistered apps to approach the local police, which will conduct an investigation and take necessary action.
It is my humble request to all those using such apps to first check if the app is RBI registered or not. If the app is RBI registered, the central bank will act immediately in case of any misdoing.
The Governor on June 9 said the RBI does recognise the role of existing as well as emerging businesses for economic progress.
The long-term success of any business is directly linked to its quality of governance, internal control systems, and the robustness of its risk and the organisational culture.
The central bank has been pushing for improvements in the governance and compliance culture of its regulated entities like banks, NBFCs, and other financial entities through a series of measures.