05 November, 2020
- NGT to hear pollution cases beyond NCR - Environment
- The Financial capacity of states is being weakened - Polity
- Differential licensing will hurt telcos - Economy
- US formally exits Paris pact on curbing climate change International relations
- Prelims Summary
- Question of the Day
UPSC Current Affairs: NGT to hear pollution cases beyond NCR | Page 02
UPSC Syllabus: | Prelims: Environment and Biodiversity
Sub Theme: National Green Tribunal |UPSC
Pollution is a big menace. As per WHO data 14 out of world's 20 most polluted cities are in India. Although in newspapers we mostly read about worsening pollution level in Delhi NCR region. But such is not the case as is presented here….. Various cities are highly polluted in India other than delhi.
NGT has expanded the ambit of cases pertaining to pollution due to firecrackers beyond the NCR and has issued notice to 18 cities and UTs.
Now let us see Why NGT from where does NGT derive such powers -
About NGT- The NGT was established in, 2010 under the National Green Tribunal Act 2010, passed by the Central Government. It was established as a specialized forum for -
- effective and speedy disposal of cases pertaining to environment protection and conservation of forests.
- seeking compensation for damages caused to people or property due to violation of environmental laws or conditions
- Principal Bench of the NGT has been established in the National Capital – New Delhi.
- Regional benches in Pune (Western Zone Bench), Bhopal (Central Zone Bench), Chennai (Southern Bench) and Kolkata (Eastern Bench).
- Each Bench has a specified geographical jurisdiction covering several States in a region.
The Chairperson of the NGT is a retired Judge of the Supreme Court.
The tribunal is to have at least 10 judicial and 10 technical members;
Each bench of the NGT will comprise of at least one Judicial Member (other than chairperson all other Judicial members are retired Judges of High Courts) and one Expert Member (should have a professional qualification and a minimum of 15 years experience in the field of environment/forest conservation and related subjects.)
The NGT has the power to hear all civil cases relating to environmental issues and questions that are linked to the implementation of laws listed in Schedule I of the NGT Act. These include the following:
- The Water (Prevention and Control of Pollution) Act, 1974;
- The Water (Prevention and Control of Pollution) Cess Act, 1977;
- The Forest (Conservation) Act, 1980;
- The Air (Prevention and Control of Pollution) Act, 1981;
- The Environment (Protection) Act, 1986;
- The Public Liability Insurance Act, 1991;
- The Biological Diversity Act, 2002.
This means that any violations pertaining only to these laws, or any order / decision taken by the Government under these laws can be challenged before the NGT.
Principles of Justice adopted by NGT
The NGT is not bound by the procedure laid down under the Code of Civil Procedure, 1908, but shall be guided by principles of natural justice.
Further, NGT is also not bound by the rules of evidence as enshrined in the Indian Evidence Act, 1872. Thus, it will be relatively easier (as opposed to approaching a court) for conservation groups to present facts and issues before the NGT, including pointing out technical flaws in a project, or proposing alternatives that could minimize environmental damage but which have not been considered.
While passing Orders/decisions/awards, the NGT will apply the principles of sustainable development, the precautionary principle and the polluter pays principles.
Review and Appeal
Under Rule 22 of the NGT Rules, there is a provision for seeking a Review of a decision or Order of the NGT. If this fails, an NGT Order can be challenged before the Supreme Court within ninety days.
The NGT is undertaking a paradigm shift to change the way that it is perceived as the environmental watchdog of the country. Of late, the Tribunal has shown a heavy preference towards taking suo-motu cognizance of issues originating from newspapers, letters and emails and admitting them as ‘petitions’.
- .Not competent to address all environmental matters Importantly, the NGT has not been vested with powers to hear any matter relating to the Wildlife (Protection) Act, 1972, the Indian Forest Act, 1927 and various laws enacted by States relating to forests, tree preservation etc. Therefore, specific and substantial issues related to these laws cannot be raised before the NGT.
- Administrative issues - roadblocks, mostly relating to the appointment of members which has led to a subsequent lack of quorum to hear cases. While today regular hearings take place in the Principal Bench of the NGT at Delhi, there are still several posts vacant across the four zonal benches.
- Dismissal of cases curbing the right to access environmental justice - current Chairperson had declared that no notices would be issued, and only cases which have an “important question relating to environment and ecology” shall be dealt with by the Tribunal. The method of dismissing cases in the first instance without providing due reasons seems to be a new stand taken by the NGT, curbing the right to access environmental justice.
NGT has done well so far but many improvements are still required to make accessible, speedy and effective resolution of environmental disputes a practical reality. The Central and State government should work in collaboration with NGT to secure the environment with better, faster enforcement of NGT orders. The government should make it more autonomous and efficient in a view to the growing concern regarding the environment and climate change.
UPSC Current Affairs: The Financial capacity of states is being weakened | Page 06
UPSC Syllabus: Mains– Polity & Governance
Sub Theme: Issues related to Federalism | UPSC
The article talks about the systematic curtailing of the revenues of the states because of various developments in past 10 years.
Why is there a vertical imbalance in revenues of states and centres?
- The Constitution assigned taxes with a nation-wide base to the Union to make the country one common economic space unhindered by internal barriers to the extent possible.
- States being closer to people and more sensitive to the local needs have been assigned functional responsibilities involving expenditure disproportionate to their assigned sources of revenue resulting in vertical imbalances.
- State governments drive a majority of the country’s development programmes. Greater numbers of people depend on these programmes for their livelihood, development, welfare and security.
- Varied economic growth and income levels across States confirm the primacy of State governments in the economic sphere as well. States need resources to deliver these responsibilities and aspirations.
But if you analyze the past trends, the financial capacity of the States is structurally being weakened.
Impact of GST
- The ability of the States to expand revenue has been constrained since the Goods and Services Tax (GST) regime was adopted.
- The Centre’s resource mobilization space vis-a-vis that of the States is now far greater. While both face a very challenging fiscal environment, the Centre, instead of finding mutually beneficial solutions, has repeatedly opted to undermine the current and future fiscal capacities of the States.
- It has systematically cut the share of States in taxes raised by the Union government (devolutions), it has reduced the pool of funds to be shared with the States by shifting from taxes to cesses and surcharges, and it is needlessly thrusting measly options to overcome the GST shortfall.
- GST shortfall
- Shortfalls have been persistent and growing from the inception of GST.
- Compensations have been paid from the GST cess revenue.
- As you are aware that GST cesses are levied on luxury or sin goods on top of the GST. Such cesses have justification independent of compensation needs.
- These are, and will be, levied irrespective of compensation needs. GST compensation will end with 2021-22. But cesses will continue.
- Impact of Covid:
- As we know:
- Finance Commissions recommend the share of States in the taxes raised by the Union government. Their recommendations are normally adhered to.
- But the current Union government has discarded this constitutional obligation.
- For Example:
- Prior to 2014, devolution of funds to the States were consistently and cumulatively more than 13th Finance Commission’s projections.
- The year 2014-15 commenced with a shock: actual devolution was 14% less than the Finance Commission’s projection.
- Subsequent devolutions have been consistently less every year, ending the period 2019-20 with a whopping -37%. Between 2014-15 and 2019-20, the States got ₹7,97,549 crore less than what was projected by the Finance Commission. This is an undeniable and substantial reduction of the fiscal resource capacity of the States.
Shrinking the divisible pool
- Let us first understand the cesses and surcharges and their roles:
- As we all know that various cesses and surcharges levied by the Union government are retained fully by it.
- They do not go into the divisible pool. This allows the Centre to raise revenues, yet not share them with the States.
- Hence, the Union government imposes or increases cesses and surcharges instead of taxes wherever possible and, in some cases, even replaces taxes with cesses and surcharges.
- What happens when the taxes are replaced with cesses?
- When taxes are replaced with cesses and surcharges, as has been done repeatedly by this government in the case of petrol and diesel, the consumer pays the same price. But the Union government keeps more of that revenue and reduces the size of the divisible pool. As a result, the States lose out on their share.
- For example:
- Between 2014-15 and 2019-20, cesses and surcharges soared from 9.3% to 15% of the gross tax revenue of the Union government.
- This systematic rise ensures that the revenue that is fully retained by the Union government increases at the cost of the revenue that is shared with the States.
- In 2019-20 alone, the Union government expected ₹3,69,111 crore from cesses and surcharges. This will not be shared with the States. This government has exploited this route to reduce the size of the divisible pool.
Hence, Due to the combined effect of cutbacks in devolution, the shrinking divisible pool, failure to pay full GST compensation this year and fall in Central grants, the States may experience a fall of 20%-25% in their revenues this year. To overcome such extreme blows to their finances and discharge their welfare and development responsibilities, the States are now forced to resort to colossal borrowings.
Repayment burden will overwhelm State budgets for several years. As we peer into the years ahead, after paying loans and interest, salaries and pensions, and establishment expenses, what will really be available for development and welfare? The fall in funds for development and welfare programmes will adversely impact the livelihoods of crores of Indians. The economic growth potential cannot be fully realised. Adverse consequences will be felt in per capita income, human resource development and poverty. This is a negative sum game.
States are at the forefront of development and generation of opportunities and growth. Strong States lead to a stronger India. The systematic weakening of States serves neither federalism nor national interest.
UPSC Current Affairs: Differential licensing will hurt telcos |Page 14
UPSC Syllabus: Mains – GS Paper III – Indian Economy
Sub Theme: Issues related to Telecom Sector | UPSC
Recently, the TRAI had come out with a consultation paper “Enabling Unbundling of Different Layers Through Differential Licensing”. Presently, the Telecom operators are provided with Unified License which enables them to provides various services such as Landline, Mobile Connection, Internet, International Calls etc. In its consultation paper, the TRAI has proposed differential licensing regime wherein different licenses would be issued for provision of different licenses. However, this proposal has been opposed by some of the Telecom Operators.
The idea of Differential licensing in Telecommunication sector is still in the proposal stage and hence not important from the perspective of UPSC Exam. However, as highlighted before the Telecommunication sector is a key enablers of growth and development. Hence, keeping in mind, the different dimensions on which UPSC could ask questions related to Telecom sector, we will focus on following aspects:
- Present Status of Telecommunication Sector
- Government Initiatives
- Constraints/ Challenges
The Telecommunication sector is considered as a powerful tool of development and poverty reduction. It is one of the key enablers for meeting a number of Sustainable development Goals (SDGs). Mobile phones which were once considered as luxury have become necessity now.
In this regard, the Government has placed considerable emphasis on growth of internet and broadband in the country as part its Digital India campaign. The success of these initiatives and our ability to promote inclusive growth depends upon the overall vibrancy and health of Telecommunications sector. However, in recent times, the revenues of the Telecom companies have come under immense pressure and reduced their ability to undertake investment in new age technologies such as 5G.
Present Status of Telecommunication Sector
Size and Contribution: Currently, India is the world’s second-largest telecommunications market with a subscriber base of 1.16 billion. It contributes almost 8.2% of India's GDP.
Tele density: 88% (Urban- 156%, Rural -56%)
Higher share of Private Sector: Since the 1991 LPG reforms, the share of private sector has steadily increased to 88%.
Efficiency of Sector: India is now the global leader in monthly data consumption, with average consumption per subscriber per month increasing 146 times from 16 MB in 2014 to 9.06 GB in 2019.
National Digital Communications Policy 2018
- Provide Universal Broadband connectivity at 50 Mbps to all citizens.
- Creating 4 million additional jobs in Digital Communications sector
- Propelling India to Top 50 Nations in the ICT Development Index of ITU from 134 in 2017.
- Attract investments of USD 100 Billion in the Digital Communications Sector
- Enhancing India's contribution to Global Value Chains
- Ensuring Digital Sovereignty
National Broadband Mission: Universal and equitable access to broadband services across the country, especially in rural and remote areas.
Digital India Scheme: Areas of focus include broadband highways, providing universal access to mobile connectivity, increasing electronics manufacturing etc.
BharatNet: Providing high-speed broadband to all the panchayats in the country
National Information Infrastructure (NII) : Ensure the integration of the networks and cloud infrastructure to provide high-speed connectivity to various government departments up to the panchayat level.
Public Internet Access Programme: Make 2,50,000 common service centres (CSCs) operational at the gram panchayat level to deliver government services online
Universal Service Obligation Fund (USOF): Fund is raised through the imposition of 'Universal Access Levy (UAL)' of 5% of the revenue earned by the operators under various licenses. This fund has been given statutory status through the Indian Telegraph (Amendment) Act, 2003. The proceeds of this fund are used for enhancing tele density in the rural and remote areas.
Liberalization of FDI norms: 100% FDI in Telecommunication (Up to 49%- Automatic; Beyond 49%- Government route).
Challenges affecting the Telecommunication Sector
Higher Licensing Fee: Presently, the Telecom companies are required to pay higher share of their revenue in form of various fees such as Licensing Fee (3%), Spectrum Usage Charges (3%) and Universal Service Obligation Fund (5%). This in turn affects their profit margin and reduces their ability to undertake higher investments.
Cut-throat Competition: The entry of new private players such as Reliance Jio has undoubtedly benefitted the consumers in terms of reduced call and data charges. However, the stiff competition has led to price wars among telecom operators. This had an overall negative impact on the telecommunication sector in the form of reduced revenues and higher debt (almost 8 lakh crores).
Higher NPAs of Telecom Companies: The poor financial position of Telecom companies has had a contagion impact on Banking Sector. In a way, this has created a vicious cycle wherein the Banks have been reluctant to lend loans to these loss-making Telecom companies.
Quality of Services:
- Internet access is plagued by issues related to quality and reliability, outages, call drops and weak signals.
- Existing networks have been strained by limited spectrum availability and usage, affecting the provision of quality services.
Broadband Connectivity: Fixed broadband penetration in India is among the lowest in the world at only 6 per cent as compared with 55 per cent in China, 70 per cent in Eurozone and 80 per cent in Japan.
Limited Spectrum Availability: Presently, the government has proposed to auction spectrum in 3300-3600 Mhz bands for the roll out of 5G services in India. However, only about 175 units are available in the 3300-3600 Mhz band. The rest is under the control of ISRO and Ministry of Defence. 5G requires a minimum of 100 MHz block. Anything less, will not be attractive for Telecom operators.
Poor Connectivity: Lack of Telecom Infrastructure in Rural and Remote areas as evident in poor Tele density of 56% as compared to Urban Tele density of 156%.
Decline in revenue due to growth of Over the Top (OTT) providers: OTT providers are the entities that offer ICT services without owning or operating the network. The best examples include Skype, WhatsApp, Snapchat, Google Talk, Netflix etc. Some of these apps such as WhatsApp, Skype etc. provide options such as Call, messaging etc. which are similar to services offered by Telecom operators leading to decline in their revenue.
Recent Judgement of Supreme Court: Recently, in 2019, the SC ruled that the Adjusted Gross Revenue (AGR) of the Telecom Operators would include both Core and Non-Core revenue. This judgement of SC has led to increase in the share of revenue which the Telecom operators are required to pay to the Government in form of various fees. The total burden on all the telecom operators due to the SC judgement is as high as around Rs 1.4 lakh crores.
UPSC Current Affairs: US formally exits Paris pact on curbing climate change |Page 13
UPSC Syllabus: Prelims: Environment & Biodiversity
Sub Theme: US Withdraws from Paris Deal | UPSC
The United States on Wednesday formally left the Paris Agreement. In accordance with Article 28 of the Paris Agreement, a country cannot give notice of withdrawal from the agreement before three years of its start date in the relevant country, which was on November 4, 2016 in the case of the United States. On November 4, 2019, the administration gave a formal notice of intention to withdraw, which takes 12 months to take effect.
In June, 2017, United States President Donald Trump announced that the U.S. would cease all participation in the 2015 Paris Agreement on climate change mitigation, and begin negotiations to re-enter the agreement "on terms that are fair to the United States, its businesses, its workers, its people, its taxpayers,". Trump stated that the withdrawal would be in accordance with his America First policy.
Implication of U.S withdrawal
- It will impact other countries due to reduction in U.S financial aid to the Green Climate fund and IPCC reports.
- Global consensus building on climate change goals will be derailed as, the U.S. is the world’s second biggest emitter after China of heat-trapping gases such as carbon dioxide.
- It will also affect the carbon emission space as well as the carbon price.
- Battery operated car industries have expressed concerns about their ability to remain competitive in light of the United States withdrawal.
- The move will further isolates the U.S. in the world. The spot to take over the global climate regime will be taken by EU and/or China.
Democratic presidential candidate Joe Biden has said he favours signing the U.S. back up to the Paris accord. After today’s result we have to whether U.S will re-join the agreement.
While U.S has pulled out of the Paris Agreement, it remains part of the UNFCCC, the mother agreement that was finalised in 1994.
- It is a multilateral agreement within the United Nations Framework Convention on Climate Change (UNFCCC)
- Aim of the agreement
- Keep the global temperature rise this century well below 2oC above the pre-industrial level.
- Pursue efforts to limit the temperature increase even further to 1.5 degrees Celsius.
- Strengthen the ability of countries to deal with the impacts of climate change.
- It was signed on 22 April 2016.
- 195 UNFCCC members have signed it.
- The agreement confirms the obligation that developed countries have towards developing countries, by providing them financial and technological support.
- Nationally determined contributions (NDCs) were conceived at Paris summit which require each Party to prepare, communicate and maintain successive nationally determined contributions (NDCs) that it intends to achieve.
Paris Agreement is the world’s first comprehensive climate agreement. Although developed and developing countries were parties to Kyoto Protocol, developing countries were not mandated to reduce their emissions.
UPSC Current Affairs: ED conducts raids at Bineesh Kodiyaris's residence |Page 08
UPSC Syllabus: Prelims: Important Govt. Agencies
Sub Theme: Enforcement Directorate | UPSC
Directorate of Enforcement is a Multi-Disciplinary Organization
- It is mandated with the task of enforcing the provisions of two special fiscal laws
- Foreign Exchange Management Act, 1999 (FEMA)
- Prevention of Money Laundering Act, 2002 (PMLA).
- Besides directly recruiting personnel, the Directorate also draws officers from different Investigating Agencies, viz., Customs & Central Excise, Income Tax, Police, etc. on deputation.
UPSC Current Affairs: Purchasing Managers Index |Page 14
UPSC Syllabus: Prelims: Important Indices
Sub Theme: Purchasing Managers Index | UPSC
Purchasing managers Index
- PMI Data is published by Japanese firm Nikkei but compiled and constructed by Markit Economics (for the US, it is the Institute of Supply Management).
- PMI is calculated on the basis of information received from companies on various factors that represent demand conditions.
- The PMI takes in responses from a company on a monthly basis on whether there has been improvement, deterioration or no change for a set of parameters relative to the previous month.
- It takes into account the following parameters for the calculation:
- new orders, output, employment, supplier’s delivery and stock of purchases.
- This questionnaire is administered to 500 private sector companies and the comprehensive score is arrived at.
- The PMI is constructed separately for manufacturing and services sector. But the manufacturing sector holds more importance.
- Meaning of values
- A figure above 50 denotes expansion in business activity. Anything below 50 denotes contraction. Higher the difference from this mid-point greater the expansion or contraction.
- The rate of expansion can also be judged by comparing the PMI with that of the previous month data.
If the figure is higher than the previous month’s then the economy is expanding at a faster rate. If it is lower than the previous month then it is growing