PIB News Analysis 20th-22nd April 2020

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1)15th Finance Commission:–  Headed by N.k Singh.

The Finance Commission is a constitutional body formed by the President of India to give suggestions on centre-state financial relations.  The 15th Finance Commission (Chair: Mr N. K. Singh) was required to submit two reports.  The first report, consisting of recommendations for the financial year 2020-21, was tabled in Parliament on February 1, 2020.  The final report with recommendations for the 2021-26 period will be submitted by October 30, 2020.

Key recommendations in the first report (2020-21 period) include: 

  • Devolution of taxes to statesThe share of states in the centre’s taxes is recommended to be decreased from 42% during the 2015-20 period to 41% for 2020-21.  The 1% decrease is to provide for the newly formed union territories of Jammu and Kashmir, and Ladakh from the resources of the central government.

  • Income distance: Income distance is the distance of the state’s income from the state with the highest income.
  • Demographic performance: The Terms of Reference (ToR) of the Commission required it to use the population data of 2011 while making recommendations.   Accordingly, the Commission used only 2011 population data for its recommendations.
  • The Demographic Performance criterion has been introduced to reward efforts made by states in controlling their population.   It will be computed by using the reciprocal of the total fertility ratio of each state, scaled by 1971 population data.   States with a lower fertility ratio will be scored higher on this criterion.  The total fertility ratio in a specific year is defined as the total number of children that would be born to each woman if she were to live to the end of her child-bearing years and give birth to children in alignment with the prevailing age-specific fertility rates.
  • Forest and ecology: This criterion has been arrived at by calculating the share of dense forest of each state in the aggregate dense forest of all the states.
  • Tax effort: This criterion has been used to reward states with higher tax collection efficiency.   It has been computed as the ratio of the average per capita own tax revenue and the average per capita state GDP during the three-year period between 2014-15 and 2016-17.

Grants-in-aid:-

In 2020-21, the following grants will be provided to states: (i) revenue deficit grants, (ii) grants to local bodies, and (iii) disaster management grants.  The Commission has also proposed a framework for sector-specific and performance-based grants.  State-specific grants will be provided in the final report.

  • Revenue deficit grants
  • Special grants: In case of three states, the sum of devolution and revenue deficit grants is estimated to decline in 2020-21 as compared to 2019-20.  These states are Karnataka, Mizoram, and Telangana.  The Commission has recommended special grants to these states aggregating to Rs 6,764 crore.
  • Sector-specific grants: The Commission has recommended a grant of Rs 7,375 crore for nutrition in 2020-21.  Sector-specific grants for the following sectors will be provided in the final report: (i) nutrition, (ii) health, (iii) pre-primary education, (iv) judiciary, (v) rural connectivity, (vi) railways, (vii) police training, and (viii) housing.
  • Performance-based grants: Guidelines for performance-based grants include: (i) implementation of agricultural reforms, (ii) development of aspirational districts and blocks, (iii) power sector reforms, (iv) enhancing trade including exports, (v) incentives for education, and (vi) promotion of domestic and international tourism.  The grant amount will be provided in the final report.
  • Grants to local bodies: The total grants to local bodies for 2020-21 has been fixed at Rs 90,000 crore, of which Rs 60,750 crore is recommended for rural local bodies (67.5%) and Rs 29,250 crore for urban local bodies (32.5%).  This allocation is 4.31% of the divisible pool.   This is an increase over the grants for local bodies in 2019-20, which amounted to 3.54% of the divisible pool (Rs 87,352 crore).  The grants will be divided between states based on population and area in the ratio 90:10. The grants will be made available to all three tiers of Panchayat- village, block, and district.
  • Disaster risk management:  The Commission recommended setting up National and State Disaster Management Funds (NDMF and SDMF) for the promotion of local-level mitigation activities.  The Commission has recommended retaining the existing cost-sharing patterns between the centre and states to fund the SDMF (new) and the SDRF (existing).  The cost-sharing pattern between centre and states is (i) 75:25 for all states, and (ii) 90:10 for north-eastern and Himalayan states.

Recommendations on fiscal roadmap

  • Fiscal deficit and debt levels:   It recommended that both central and state governments should focus on debt consolidation and comply with the fiscal deficit and debt levels as per their respective Fiscal Responsibility and Budget Management (FRBM) Acts.
  • Off-budget borrowings: The Commission observed that financing capital expenditure through off-budget borrowings detracts from compliance with the FRBM Act.   It recommended that both the central and state governments should make full disclosure of extra-budgetary borrowings.   The outstanding extra-budgetary liabilities should be clearly identified and eliminated in a time-bound manner.
  • Statutory framework for public financial management: The Commission recommended forming an expert group to draft legislation to provide for a statutory framework for sound public financial management system.  It observed that an overarching legal fiscal framework is required which will provide for budgeting, accounting, and audit standards to be followed at all levels of government.
  • Tax capacity: In 2018-19, the tax revenue of state governments and central government together stood at around 17.5% of GDP.  The Commission noted that tax revenue is far below the estimated tax capacity of the country.  Further, India’s tax capacity has largely remained unchanged since the early 1990s.   In contrast, tax revenue has been rising in other emerging markets.  The Commission recommended: (i) broadening the tax base, (ii) streamlining tax rates, (iii) and increasing capacity and expertise of tax administration in all tiers of the government.
  • GST implementation: The Commission highlighted some challenges with the implementation of the Goods and Services Tax (GST).  These include: (i) large shortfall in collections as compared to original forecast, (ii) high volatility in collections, (iii) accumulation of large integrated GST credit, (iv) glitches in invoice and input tax matching, and (v) delay in refunds.
  • The Commission observed that the continuing dependence of states on compensation from the central government (21 states out of 29 states in 2018-19) for making up for the shortfall in revenue is a concern.  It suggested that the structural implications of GST for low consumption states need to be considered.

2)Pradhan Mantri Kisan Samman Nidhi:-  “Under this programme, vulnerable landholding farmer families, having cultivable land upto 2 hectares, will be provided direct income support at the rate of Rs. 6,000 per year. This income support will be transferred directly into the bank accounts of beneficiary farmers, in three equal instalments of Rs. 2,000 each.

This programme will be funded by Government of India. Around 12 crore small and marginal farmer families are expected to benefit from this.

3)New Development Bank :-

It is a multilateral development bank operated by the BRICS states (Brazil, Russia, India, China and South Africa).

The New Development Bank was agreed to by BRICS leaders at the 5th BRICS summit held in Durban, South Africa in 2013.

It was established in 2014, at the 6th BRICS Summit at Fortaleza, Brazil.

The bank is set up to foster greater financial and development cooperation among the five emerging markets.

In the Fortaleza Declaration, the leaders stressed that the NDB will strengthen cooperation among BRICS and will supplement the efforts of multilateral and regional financial institutions for global development.

The bank will be headquartered in Shanghai, China.

Unlike the World Bank, which assigns votes based on capital share, in the New Development Bank each participant country will be assigned one vote, and none of the countries will have veto power.

 Roles and functions:

The New Development Bank will mobilise resources for infrastructure and sustainable development projects in BRICS and other emerging economies and developing countries, to supplement existing efforts of multilateral and regional financial institutions for global growth and development.

4)SWAYAM Prabha:-

The SWAYAM PRABHA is a group of 32 DTH channels devoted to telecasting of high-quality educational programmes on 24X7 basis using the GSAT-15 satellite. Every day, there will be new content for at least (4) hours which would be repeated 5 more times in a day, allowing the students to choose the time of their convenience.

5)Fish gills used to develop efficient low-cost electro-catalysts for rechargeable metal-air battery:- Scientists at the Institute of Nano Science and Technology (INST), Mohali, an autonomous institute under the Department of Science and Technology, Govt. of India, have recently come up with an efficient, low-cost electro-catalyst from fish gills that can help develop environmentally friendly energy conversion devices.

This bio-inspired carbon nanostructure can help overcome the bottleneck in the realization of several renewable energy conversion and storage technologies such as fuel cell, biofuel cell, and metal−air battery.

Dr. Ramendra Sundar Dey and his team from INST have explored a highly active Oxygen Reduction Reaction (ORR) electrocatalyst based on binary transition metals Iron (Fe), and Manganese (Mn) and N-doped porous carbon (Fe, Mn, N-FGC), derived from fish gills (FG) acquired as animal waste, which has a unique porous structure and could provide conductive carbon networks after heat treatment and could be an efficient electrode material. The catalyst was able to show active oxygen reduction reaction in a wide range of pH (pH < 1, 7, and >13) and outperformed the commercial Pt/C catalyst.

6)What is anti dumping? What is its purpose in International Trade?

Ans. Dumping is said to occur when the goods are exported by a country to another country at a price lower than its normal value. This is an unfair trade practice which can have a distortive effect on international trade.

Anti dumping is a measure to rectify the situation arising out of the dumping of goods and its trade distortive effect.

Thus, the purpose of anti dumping duty is to rectify the trade distortive effect of dumping and re-establish fair trade.

The use of anti dumping measure as an instrument of fair competition is permitted by the WTO. In fact, anti dumping is an instrument for ensuring fair trade and is not a measure of protection per se for the domestic industry. It provides relief to the domestic industry against the injury caused by dumping.

Counter Veiling Duty:-

Countervailing duty (CVD) is a specific form of duty that the government imposes in order to protect domestic producers by countering the negative impact of import subsidies. CVD is thus an import tax by the importing country on imported products.
To make their products cheaper and boost their demand in other countries, foreign governments sometimes provide subsidy to their producers. To avoid flooding of the market in the importing country with these goods, the government of the importing country imposes countervailing duty, charging a specific amount on import of such good.
7)‘COVID India Seva’:- It will Provide an interactive platform to establish a direct channel of communication with millions of Indians amid the pandemic.
This initiative is aimed at enabling transparent e-governance delivery in real-time and answering citizen queries swiftly, at scale, especially in crisis situations like the ongoing COVID-19 pandemic. Through this, people can pose queries @CovidIndiaSeva  and get them responded to in almost real time.
8)Pune’s mobile App Saiyam tracks Home Quarantined Citizens:-  In order to effectively track the home-quarantines citizens and ensure they are actually staying in the home, a mobile application named Saiyam has been developed by the Pune Municipal Corporation under Smart Cities Mission (SCM).
9)To generate awareness about and promote various tourism destinations of India, the Ministry of Tourism has launched the “DekhoApnaDesh” webinar series which  provide information on the rich culture and heritage of the country and share the depth and expanse of the destinations in India. As part of the ongoing series, the Ministry of Tourism conducted its 5th webinar on the rich heritage of Ladakh titled “Ladakh: Explore the Unexplored” on 20th April 2020.
Ladakh, the roof of the world, is home to breathtaking Himalayan landscapes and an ancient Buddhist culture living in harmony with nature for over a thousand years.
The region is also famous for its 7th century old Chamba Buddha statues, similar to the Bamiyan statues in Afghanistan. Finally, to  the undiscovered and pristine Zanskar valley, home to beautiful monasteries of Rangdum, Karsha and the trek into the Lungnak valley to visit the 2500-year-old cave monastery of Phugtal.
Archery is the Traditional Sport of the region.
 Trans- Singge -La valley of Lingshed, famous for its 15th Century monastery and the Aryan villages of Dha and Hanu, home to the last of the Brokpa tribes of India.
10)PM expresses gratitude to Mother Earth:- Prime Minister Shri Narendra Modi has expressed gratitude to Mother Earth on International Earth Day. (22nd April).
Earth Day is an annual event celebrated around the world on April 22 to demonstrate support for environmental protection. First celebrated in 1970.
11)Proactive Initiatives of TRIFED Due To Covid-19:-Short Term measures: Social Distancing Awareness

  • Launched Van Dhan Samajik Doori Jagrookta Abhiyaan, which is aimed at educating Tribals engaged in gathering NTFPs in forest areas, on covid-19 response, key preventive behaviour like social distancing, home quarantine, hygiene tips through a two-tired training program (Training of Trainers and SHG training), using digital means such as webinars, facebook live streams etc.
  • Initiated steps to provide the Van Dhan Self Help Groups (SHGs) with protective masks and hygiene products (Soaps, Disinfectants, etc.) that are necessary for carrying out their operations in a safe manner.

Medium and Long Term measures : Livelihoods

  • To ensure relief to crores of tribals dependent on gathering of forest produce, the Ministry of Home Affairs was approached for necessary amendments in the list of exemptions in the guidelines for second phase of lockdown. The Ministry of Home Affairs has issued Revised guidelines on 16th aApril 2020 allowing Collection, harvesting and processing of non – timber Minor Forest Produce (MFP) by scheduled tribes and other forest dwellers. These exemptions are timely as the peak harvesting season has set-in in many regions.
  • Further Ministry of Tribal Affairs have asked TRIFED to focus on revamping the Minimum Support Price (MSP) for MFP to enhance tribal livelihood in these testing times and to ensure that they get the benefit of an equitable market price for their produce.
  • As directed by the Ministry of Tribal Affairs, on 17 April 2020, TRIFED has initiated steps for operationalizing MSP operations in all states at primary markets called haat bazaars, setting up procurement centres with weighing facilities, transport and appropriate cold and dry storage.

Van Dhan Samajik Doori Jagrookta Abhiyaan – Educating Tribals through ~15,000 Self Help Groups under Pradhan Mantri Van Dhan Yojana spread across 28 States/UTs. TRIFED teamed up with UNICEF and WHO for launching a digital campaign spreading awareness about the importance of social distancing amid the coronavirus crisis in India. UNICEF is providing the necessary IEC materials ( posters, flyers, leaflets, brochures, booklets, messages for health education sessions, radio broadcast or TV spots etc) for the campaign christened as “ Van Dhan Samajik Doori Jagrookta Abhiyaan OR Van Dhan Social Distancing Awareness Movement”. Extensive outreach through Train of Trainer Programs and Webinars focused on basic orientation on covid-19 response, key preventive behaviour, social media campaigns on social distancing, home quarantine has been initiated.

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