EDITORIALS & ARTICLES
10th May 2021
Post Devolution Revenue Deficit (PDRD) Grant
Recently, the Department of Expenditure has released the 2nd monthly installment of Post Devolution Revenue Deficit (PDRD) Grant of Rs. 9,871 crore for the year 2021-22 to 17 States.
- With the release of 2nd installment, a total amount of Rs. 19,742 crore has been released in the first two months of the current financial year as Post Devolution Revenue Deficit Grant to the states.
- The 15th Finance Commission has recommended Post Devolution Release Deficit grants to 17 States.
- The States recommended for Post Devolution Revenue Deficit Grant are Andhra Pradesh, Assam, Haryana, Himachal Pradesh, Karnataka, Kerala, Manipur, Meghalaya, Mizoram, Nagaland, Punjab, Rajasthan, Sikkim, Tamil Nadu, Tripura, Uttarakhand and West Bengal.
Post Devolution Revenue Deficit (PDRD) Grant
- The PDRD grants are released as per the recommendations of the Finance Commission in monthly installments to meet the gap in Revenue Accounts of the States post devolution.
- The eligibility of States to receive this grant and the quantum of grant was decided by the Commission based on the gap between assessment of revenue and expenditure of the State.
- The Finance Commission provides a mechanism for compensation of any loss incurred by states, which is called post-devolution revenue deficit grants.
- It forms the second largest chunk of Finance Commission transfers after the assistance to local rural bodies.
Constitutional Provisions for RDRD Grant
- The Centre provides the Post Devolution Revenue Deficit Grant to the States underArticle 275 of the Constitution.
- Article 275 provides for the payment of such sums as Parliament may by law provide as grants-in aid to such States as Parliament may determine to be in need of assistance.
Finance Commission Grants
- The 73rd Constitutional Amendment requires both the Centre and states to help Panchayati Raj institutions to evolve as a unit of self-governance by assigning them funds, functions and functionaries.
- The Finance Commission Grants, in the Union Budget, provides funds to local bodies, state disaster relief funds and compensates any revenue loss to states after devolution of taxes.
- The Finance Commission Grants are primarily divided into four sub-heads:
- Grants for rural local bodies: The three-tier model of governance envisioned in the Constitution assigns clear roles and responsibilities to Gram Panchayats.
- The Finance Commission recommendations ensure that these local bodies are adequately funded.
- Grants for urban local bodies: In addition to units of self-governance at the village level, the Constitution also envisages cities as units of self-governance.
- The urban local bodies like municipal councils receive the largest chunk of Finance Commission Grants after Rural Local Bodies and Post Devolution Deficit Grants to states.
- Assistance to SDRF: The central government also provides funds to State Disaster Relief Funds in addition to funding the National Disaster Management Authority (NDMA).
- The assistance to state government’s disaster relief authorities is provided as per the recommendations of the Finance Commission.
- Post devolution revenue deficit grants: About a third of the total revenue collected by the Centre is directly transferred to states as their share in the divisible pool.
Clashes at Jerusalem’s Al-Aqsa Mosque
Recently, the Israeli police stormed the Al-Aqsa mosque compound in East Jerusalem, leaving a reported 300 people injured.
- It came on a day Israel observes as Jerusalem Day, and marked the fourth day of clashes at one of the most revered and the most contested sites of the Palestinian-Israeli conflict.
Al-Aqsa Mosque
- It is located on a plaza at Temple Mount, which is known in Islam as Haram-e-Sharif.
- The Mount is also Judaism’s holiest site.
- The most imposing structure on the compound is the Dome of the Rock, with itsgolden dome.
- The Western Wall, also known as the Wailing Wall sacred to Jews, is one side of the retaining wall of the Al-Aqsa compound.
- Al-Aqsa translates from Arabic to English as “the Farthest Mosque”.
- According to the Quran, it is believed that Prophet Muhammad travelled from Mecca to Al-Aqsa during the Night Journey, and then on to heaven.
- It was originally built as a small prayer house but the mosque was reconstructed by the Umayyad caliph Abd al-Malik in 705 CE.
Significance of Al-Aqsa Mosque
- Al-Aqsa is central to the rival claims over Jerusalem because both Israel and Palestine have declared it their capital.
- In July 1980, the Israeli Parliament passed the Jerusalem Law declaring it the country’s capital.
- The Palestinians declared Jerusalem the capital of the putative state of Palestine by a law passed by the Palestinian Authority in 2000.
- The 1988 Palestinian Declaration of Independence also declared Jerusalem as the capital.
NASA’s OSIRIS-Rex Mission
Recently, the NASA’s OSIRIS-Rex spacecraft will depart asteroid Bennu, and start its two-year long journey back to Earth.
OSIRIS-Rex Mission
- It is NASA’s Origins, Spectral Interpretation, Resource Identification, Security, Regolith Explorer (OSIRIS-REx).
- In October 2020, the spacecraft briefly touched asteroid Bennu, from where it collected samples of dust and pebbles.
- It is NASA’s first mission meant to return a sample from the ancient asteroid.
- The mission is essentially a seven-year-long voyage and will conclude when at least 60 grams of samples are delivered back to the Earth.
- As per NASA, the mission promises to bring the largest amount of extraterrestrial material back to our planet since the Apollo era.
- The mission was launched in 2016, it reached its target in 2018 and since then, the spacecraft has been trying to match the velocity of the asteroid using small rocket thrusters.
- The spacecraft contains five instruments meant to explore Bennu including cameras, a spectrometer and a laser altimeter.
Asteroid Bennu
- The Asteroids are rocky objects that orbit the Sun, much smaller than planets.
- Bennu is an asteroid about as tall as the Empire State Building, located about 200 million miles away from the Earth.
- The asteroid was discovered by a team from the NASA-funded Lincoln Near-Earth Asteroid Research team in 1999.
- It is believed to have been born in the Main Asteroid belt between Mars and Jupiter.
- The asteroid is coming closer to Earth because of gravitational tugs from other celestial objects and the slight push asteroids get when they release absorbed sunlight.
Significance of Asteroid Bennu
- It is considered to be an ancient asteroid that has not gone through a lot of composition-altering change through billions of years.
- It implies that below its surface lie chemicals and rocks from the birth of the solar system.
- The scientists and researchers are interested in studying this asteroid as it might give them clues about the origins of the solar system, the sun, the Earth and the other planets.
- It is a B-type asteroid, implying that it contains significant amounts of carbon and various other minerals.
- The asteroid reflects about four per cent of the light that hits it, which is very low when compared with a planet like Venus, which reflects about 65 per cent of the light that hits it.
- Around 20-40 percent of Bennu’s interior is empty space and scientists believe that it was formed in the first 10 million years of the solar system’s creation, implying that it is roughly 4.5 billion years old.
Asteroid was named Bennu
- Bennu is named after an Egyptian deity.
- The name was suggested by a nine-year-old boy from North Carolina in 2013, who won NASA’s “Name that Asteroid” competition.
GST exemptions will make Covid supplies costlier
Recently, the Finance Minister has said that GST exemption on domestic supplies and commercial imports “would make these items costlier” for consumers.
What are the taxes levied currently on these items?
- At present, 5 per cent GST is levied on domestic supplies and commercial imports of vaccines.
- The Covid drugs and oxygen concentrators attract 12 per cent GST.
Demand from state government on GST exemption
- The individuals and agencies, which are engaged in donation of Covid related drugs and equipments, have approached the state government to consider exemption of these items from customs duty/ State GST (SGST)/ Central GST (CGST)/ Integrated GST (IGST).
- The state government has requested that these items may be exempted from GST/customs duty and other such duties and taxes as the rate structure falls under the purview of the Central Government.
- It aims to help remove supply constraints of the above mentioned life-saving drugs and equipment and contribute towards effective management of Covid pandemic.
Arguments from Central Government
- The FM has argued that if GST exemption is granted for domestic supplies and commercial imports of Covid-related drugs, vaccines and oxygen concentrators:
- The manufacturers would not be able to offset the taxes paid on inputs and pass it on to consumers in terms of higher prices.
- If full exemption from GST is given, vaccine manufacturers would not be able to offset their input taxes and would pass them on to the end consumer/citizen by increasing the price.
- A 5% GST rate ensures that the manufacturer is able to utilise ITC (input tax credit) and in case of overflow of ITC, claim refund.
- The central government has argued that the exemption to vaccine from GST would be counterproductive without benefiting the consumer.
How much comes in from the levies and is shared?
- If IGST of Rs 100 is collected on an item, states and Centre get Rs 50 each as SGST and CGST, respectively.
- In addition, 41 per cent of the CGST revenue is transferred to states as devolution.
- The Finance Minister said that half the amount is earned by the Centre and the other half by the states on the GST revenues collected from sale of vaccines.
- Along with this, 41 per cent of Centre’s collections also get devolved to the states, resulting in almost 70 per cent of the total revenue collected from vaccines being given to states.
- The IGST exemption is provided for all Covid relief material imported by the Indian Red Cross for free distribution in the country.
- The goods which are imported free of cost for free distribution in the country by any entity, state government, relief agency or autonomous body is given the IGST exemption.
- The government has also provided full exemption from basic customs duty and health cess to their commercial imports.
Puducherry becomes ‘Har Ghar Jal’ UT is in the news
Recently, Puducherry has become ‘Har Ghar Jal’ UT by ensuring that every rural home in the Union Territory gets a household tap connection.
- The UT becomes the fourth State/UT after Goa, Telangana and Andaman & Nicobar Islands to provide assured tap water supply to every rural home under Jal Jeevan Mission.
Jal Jeevan Mission (JJM)
- Its objective is to supply 55 litres of water per person per day to every rural household through Functional Household Tap Connections by 2024.
- Under this mission, the creation of local infrastructure for source sustainabilitymeasures as mandatory elements, like rainwater harvesting, groundwater recharge and management of household wastewater for reuse, would be undertaken.
- Jal Jeevan Mission is based on a community approach and includes extensive Information, Education and Communication as a key component.
- The fund sharing pattern between the Centre and states is 90:10 for Himalayan and North-Eastern States, 50:50 for other states, and 100% for Union Territories.
- For the implementation of JJM, following institutional arrangement has been proposed:
- National Jal Jeevan Mission at the Central level;
- State Water and Sanitation Mission (SWSM) at State level;
- District Water and Sanitation Mission (DWSM) at the district level; and
- Gram Panchayat and/ or its sub-committees i.e. Village Water Sanitation Committee (VWSC)/ Paani Samiti at village Level.
Key Features of Jal Jeevan Mission-Urban (JJM-U)
- The mission is the India’s 12th attempt to connect every household with tap water and the target year is 2024.
- The government has announced an outlay of Rs 50,011 crore for this scheme, about 4.5 times the revised budget for 2020-2021.
- Nearly 2.68 crore is the estimated gap in urban household tap connections which is being proposed under Jal Jeevan Mission – Urban.
- Pey Jal Survekshan will be conducted in cities to ascertain equitable distribution of water, reuse of wastewater and mapping of water bodies with respect to quantity and quality of water through a challenge process.
- In order to promote Public private partnership, it has been mandated for cities having million plus population to take up PPP projects worth minimum of 10 percent of their total project fund allocation.
- The share of funding from the Centre is:
- For Union Territories, there will be 100% central funding;
- For North Eastern and Hill States, central funding for projects will be 90%;
- Central funding will be 50% for cities will less than 1 lakh population, one third for cities with 1 lakh to 10 lakh population; and
- 25% for cities with million plus population
Report on Connected Commerce: Creating a Roadmap for a Digitally Inclusive Bharat
Recently, NITI Aayog and MasterCard have released a report titled ‘Connected Commerce: Creating a Roadmap for a Digitally Inclusive Bharat’.
Key Highlights
- It identifies challenges in accelerating digital financial inclusion in India.
- It provides recommendations for making digital services accessible to its 1.3 billion citizens.
- The report highlights key issues and opportunities on policy and capacity buildingacross agriculture, small business (MSMEs), urban mobility and cyber security.
- The key issues addressed during the knowledge series were:
- Acceleration of digital financial inclusion for underserved sections of Indian society.
- Enabling SMEs to ‘get paid, get capital and get digital’ and access customers, and ensure their continued resilience.
- Policy and technological interventions to foster trust and increase cyber resilience.
- Unlocking the promise of digitization in India’s agriculture sector.
- The essential elements of a digital roadmap to make transit accessible for all citizens.
Recommendations of Report on Connect Commerce
- The key recommendations in the report include:
- Strengthening the payment infrastructure to promote a level playing field for NBFCs and banks.
- Digitizing registration and compliance processes and diversifying credit sources to enable growth opportunities for MSMEs.
- Building information sharing systems, including a ‘fraud repository’, and ensuring that online digital commerce platforms carry warnings to alert consumers to the risk of frauds.
- Enabling agricultural NBFCs to access low-cost capital and deploy a ‘phygital’ (physical + digital) model for achieving better long-term digital outcomes. Digitizing land records will also provide a major boost to the sector.
- To make city transit seamlessly accessible to all with minimal crowding and queues, leveraging existing smartphones and contactless cards, and aim for an inclusive, interoperable, and fully open system such as that of the London ‘Tube’.
India participates in the 3rd Arctic Science Ministerial (ASM3)
Recently, the Ministry of Earth Science has participated in the 3rd Arctic Science Ministerial (ASM3).
Arctic Science Ministerial (ASM)
- It is the global platform for discussing research and cooperation in the Arctic region.
- The first two meetings i.e. ASM1 and ASM2 were held in the USA in 2016 andGermany in 2018, respectively.
- It promotes collaborations towards strengthening observational systems and sharing of data to enhance knowledge.
Key Highlights of Third Arctic Science Ministerial (ASM3)
- The ASM3 is jointly organised by Iceland and Japan.
- It is the first Ministerial meeting being held in Asia.
- The theme for this year is ‘Knowledge for a Sustainable Arctic’.
- It aims to use the well-established foundation of the Ministerial as a means to take action on coordinated Arctic observing and research in an open and transparent format which includes all Arctic stakeholders.
- The platform aims to emphasize and engage in constant monitoring, and strengthen observations.
- A vital element of ASM3 is the development of education and capacity building for future generations, with an emphasis on both scientific and local knowledge in Arctic and non-Arctic States.
India’s role in Arctic Region
- India would continue to play a positive role in deepening shared understanding of the Arctic through observation, research, capacity building, as well in promoting sustainable development of the region through international cooperation
- India would deploy open ocean mooring in the Arctic for long-term monitoring of upper ocean variables and marine meteorological parameters.
- The launch of NISER (NASA-ISRO Synthetic Aperture Radar) satellite mission, in collaboration with the USA, is underway.
- NISER aims to conduct global measurements of the cause and consequences of land surface changes using advanced radar imaging.
- India has a permanent research station in the Arctic called Himadari at NyAlesund, Svalbard Area in Norway.
- It has also deployed a multi-sensor moored observatory called IndARC in the Kongsfjorden fjord since July 2014.
- The research in the Arctic region from India is coordinated, conducted, and promoted by the National Centre for Polar and Ocean Research (NCPOR), Goa, under the Ministry of Earth Sciences.
Arctic Council
- India enjoys ‘Observer’ status in the Arctic Council with twelve other countries since 2013.
- The 12 countries are Japan, China, France, Germany, UK, Italy, Switzerland, Poland, Spain, Netherlands, Singapore, and South Korea.
- It is a high-level intergovernmental forum to promote cooperation, coordination, and interaction towards sustainable development and environmental protection in the Arctic.
- It was formally established in 1996.
- The Ottawa Declaration defines these states such as Canada, Denmark, Finland, Iceland, Norway, Russia, Sweden and United States as Members of the Arctic Council.
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