CNA 11 Aug 2022:- Download PDF Here
TABLE OF CONTENTS
A. GS 1 Related B. GS 2 Related GOVERNANCE 1. Electricity Amendment Bill, 2022 C. GS 3 Related ENVIRONMENT 1. U.S. Bill on Climate Action ECONOMY 1. Tax Devolution D. GS 4 Related E. Editorials INTERNATIONAL RELATIONS 1. A new global vision for G20 ECONOMY 1. BSNL’s distress call answered, but towering issues prevail F. Prelims Facts G. Tidbits 1. 49th Chief Justice of India 2. Precaution Dose H. UPSC Prelims Practice Questions I. UPSC Mains Practice Questions
A. GS 1 Related
Nothing here for today!!!
B. GS 2 Related
1. Electricity Amendment Bill, 2022
Syllabus: Government Policies and Interventions
Mains: Infrastructure reforms for economic growth
Context: Recently, the Union Power Ministry introduced the Electricity (Amendment) Bill, 2022 in Lok Sabha.
Electricity Amendment Bill:
- The Bill amends the Electricity Act, 2003 which regulates the electricity sector in India.
- The intention of the original act (2003) was to consolidate the laws regarding the generation, transmission, distribution, trading and use of electricity.
- The 2003 Act also has provisions to protect the interest of consumers and supply of electricity to all areas, rationalization of tariffs, transparent policies regarding subsidies, etc.
- The Act resulted in the privatization of distributing companies.
- The provisions for “cross-subsidy” — ensuring subsidy to poor households were added to the Bill in 2007.
Key amendments:
- The recent amendment has several changes compared to earlier drafts.
- It amends Section 62 of the Act and makes provision for “mandatory” fixing of minimum as well as maximum tariff ceilings by the “appropriate commission” to overcome predatory pricing by power distribution companies and to safeguard consumers.
- It has various provisions to ensure graded and timely tariff revisions that will help provide state power utilities with enough cash to be able to make timely payments to power producers. This move is aimed at addressing the recurrent problem of default by distribution companies in payment to generation companies.
- Amendment to Section 166 also seeks to strengthen payment security mechanisms and give more powers to regulators by improving corporate governance of Discoms.
- Several clauses of the amendment can be seen as the Centre’s intervention in the area of power distribution, a domain under the State governments.
- Clause 5 amends Section 14 of the original Act empowering the Union Government to prescribe the criteria for discoms.
- Clause 11 amends Section 42 of the parent Act to permit the operation of multiple Discoms in the same area and avoid parallel networks and optimize usage of the distribution network.
- This provision might lead to the monopoly of large private companies and destroy public and smaller networks as we saw in the telecom sector.
- Clause 13 seeks to amend Section 60 of the principal Act to enable management of power purchase and cross-subsidy in case of multiple Discoms in the same area of supply. In case of multiple Discoms, the State Government shall set up a cross subsidy balancing fund which shall be managed by a government company.
Why is there opposition to the Bill?
- Farmers’ groups are opposing the Bill as they fear that it will end the subsidies and that power distribution will thereafter come under the control of private companies.
- Power sector employees oppose the Bill citing that privatization of distribution companies and generating units will result in job losses.
- As electricity/power comes under the Concurrent List, the opposition parties are questioning the bill on federalist principles. They want proper consultations with the state governments before the passage of the bill.
How will these amendments help?
- Freebies with respect to electricity offered by political parties among other things have led to various state power distribution companies not being able to raise sufficient resources to make timely payments to power generating companies.
- As per the latest data, Discoms of 3 states — Tamil Nadu, Maharashtra and Telangana have to pay about 57% of the total dues owed to power generating companies.
- State governments owe Discoms Rs 62,931 crore for services and another Rs 76,337 as the cost of freebies announced by them.
- Telangana has a cumulative outstanding of Rs 11,915 crore, followed by Maharashtra at Rs 9,131 crore among the states that have defaulted on payments to Discoms.
Read more on Freebie culture.
Nut Graf: Under the proposed amendments, the union government is providing consumers with a choice of power suppliers like internet and mobile service providers. It also provides for adequate and timely tariff revisions to help state utilities come out of losses and make payments for power in time.
C. GS 3 Related
1. U.S. Bill on Climate Action
Syllabus: Environmental Pollution and Degradation
Mains: Commitments to address climate change
Context: Recently, the United States Senate passed a bill called ‘The inflation Reduction Act (IRA) 2022’. It is a scaled-down version of President Joe Biden’s Build Back Better Act, which the Senate did not approve.
Inflation Reduction Act 2022:
- This bill has a special focus on healthcare, climate and tax provisions to address inflation.
- This bill contains packages worth $369 billion for clean energy transition which makes this the largest American investment towards clean energy.
- The Bill provides several tax deductions to low and middle-income households to promote electric energy and reduce electricity bills.
- It also aims to encourage the domestic production of heat pumps and critical minerals.
- The Bill funds various zero-emission technologies to increase the climate resilience of disadvantaged poor and tribal communities.
- Major tax credits are provided for wind and solar energy projects.
- It also imposes a fee on methane leaks from oil and gas drilling.
Why does the U.S. want to invest in addressing climate change?
- The U.S is currently facing extreme climate threats in the form of wildfires, heatwaves, floods, hurricanes and cyclones, that have become frequent and intense in the past few years.
- The ongoing floods because of 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, this bill is in line with President Joe Biden’s various climate commitments.
- In 2021, he committed to cutting down emissions by 50-52% below 2005 levels by 2030.
- He also signed a new methane deal to restrict methane emissions from the gas and oil industry.
- His ‘Build Back Better’ plan was a multi-trillion deal with key provisions for climate change.
- As per the estimates, these investments could reduce greenhouse gas emissions by 31 to 44% by 2030.
- This will make the U.S. compete with China in terms of renewable production, especially solar energy which can also facilitate the creation of domestic jobs.
- Thus, the Bill is very crucial for global climate action as the U.S. is one of the largest emitters of greenhouse gasses globally.
Image credit: nist.gov
Image credit: my republica
Who is opposing the bill?
- Fossil fuel supporters, climate advocates, Republicans and some senators within the Democrats are opposing the bill for various reasons.
- Fossil fuel supporters are against the bill as it completely neglects the people that are dependent on the fossil fuel industry for their income.
- Climate advocates oppose the bill for coupling the development of renewable energy with land leasing for oil and gas drilling and the Bill still contains giveaways to the fossil fuel sector.
- The Bill 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.
Similar climate packages:
- ‘Invest in Kisida’ plan by Japan aims for a $1.1 trillion investment to strengthen the Japanese economy. Announced in 2022, it aims to transition towards clean energy and achieve a 46% reduction in greenhouse gas emissions by 2030.
- In June 2021, the European Union proposed a ‘Fit for 55’ plan to reduce emissions by 55% by 2030.
Read about India and Climate Change
Conclusion:
It is a crucial step in achieving the climate target agreed upon in the Paris Agreement. Even though the Bill is not enough to address global climate finance which is a major roadblock to global climate action, such historic initiatives by global leaders in greenhouse gas emissions can be a benchmark for other large emitters to push their climate action programmes.
Nut Graf: The passage of the Inflation Reduction Act in the US is a significant step towards addressing climate change and related disasters. Being the largest emitters, both the U.S. and the EU can play a significant role in taking responsibility for historical emissions. This bill is the right step in finding sustainable solutions to climate change as it increases revenue, creates more domestic jobs and addresses the climate crisis.
Syllabus: Mobilization of Resources
Mains: Criticality of Fiscal Devolution
Context: Recently, the Union government released over ₹1.16 lakh crore to the States, equivalent to 2 monthly instalments of tax devolution.
Key Details:
- The Union Finance Ministry transferred two instalments together amounting to ₹1,16,665.75 crore as against the normal monthly devolution of Rs.58,332.86 crore.
- As per a report by the Investment Information and Credit Rating Agency of India (ICRA), the tax devolution by the Union government is likely to increase to ₹9.3 lakh crore exceeding the budget estimate of ₹8.2 lakh crore.
- Uttar Pradesh has got the highest amount followed by Bihar.
- At present, 41% of the tax collected is devolved in 14 instalments during a financial year.
Image Credit: The Hindu
Significance of the move:
- The advance release of the tax devolution amount is expected to ease the fiscal pressure on states and increase their capital spending abilities, especially after the end of the compensation mechanism under the Goods and Services Tax (GST) regime.
- As per the GST Act, 2017, the states were guaranteed compensation at the compounded rate of 14% from the base year 2015-16 for losses arising due to the implementation of GST, for 5 years since its rollout. This came to an end on June 30, 2022.
- Recently at NITI Aayog’s governing council, several Chief Ministers raised concerns about their shrinking resources and sought more funds from the Union through an extension of the GST compensation period and a higher share in the divisible pool of taxes.
- Given that projects and capital spending require a considerable lead time, an early reassessment of the devolution amount being shared with the states will help them to boost their capital spending. A large part of tax devolution was paid out to States in the 4th quarter previous year, which ended up reducing State government borrowings for that period but did not translate to higher spending.
Read more on Tax Devolution
Nut Graf: The Union government has released 2 instalments of tax devolution to the state governments to the tune of ₹1.17 trillion in August as against a normal monthly devolution of ₹0.58 trillion in an attempt to push capital and developmental expenditure by states.
D. GS 4 Related
Nothing here for today!!!
E. Editorials
Category: INTERNATIONAL RELATIONS
1. A new global vision for G20
Syllabus: Regional and global groupings involving India
Prelims: G20
Mains: India’s G20 Presidency, Challenges to India’s G20 Presidency and Key recommendations
Context
India is slated to take over the G20 Presidency in December 2022 and this article talks about the key focus areas for India.
To read more about G20 and its significance, check CNA dated July 10, 2022
India’s G20 Presidency
- The Group of 20 or G20 plays a crucial role in building and improving global architecture and governance of key international economic issues.
- G20 acknowledges that global prosperity along with economic opportunities and associated challenges are interdependent.
- As per the Ministry of External Affairs, India during its Presidency will host about 190 meetings and aim to strengthen international support for crucial sectors in developing countries such as energy, agriculture, trade, digital economy, health, environment, employment, tourism, anti-corruption, women empowerment, etc.
Challenges to India’s G20 Presidency
- Existing and well-established multilateral commitments on aid and trade which are important for cooperation between the countries are losing their relevance as international institutions like the United Nations and the World Trade Organization are losing their influence in securing cooperation between countries.
- The shift in the global power balance on account of increasing polarization.
- At present, there are three socio-economic systems on the global scale namely the G7, China-Russia, and India and the others.
- The Ukraine war and its adverse repercussions are being felt across the globe in terms of furthering economic instability, and food and energy insecurity.
- The increasing influence of the trade and value chains dominated by the U.S. and China, and the following hesitancy of the developing countries to take sides in this competition is also a key challenge to a multilateral grouping like G20.
Key recommendations for India
- India must work towards building collaborations on key focus areas such as science and technology by taking forward the resolutions made by the United Nations General Assembly (UNGA) and other international bodies.
- Science and technology play a key role in economic diversification and sustainable development which are important for overall human welfare.
- India must undertake measures to bring in a sense of equality and highlight common concerns and challenges which have been recognised in the case of climate change, in other areas as well.
- India should also highlight the success story of the BRICS model of governance to prove that a narrow group of countries that is dominated by one power will not be efficient in shaping the global agenda.
- India should look to build on conventions such as the Vienna Declaration on Human Rights 1993, 2030 Agenda for Sustainable Development and Principles of common but differentiated responsibilities.
- There is a need for fresh thinking on employment and environmental issues worldwide.
- India must look to harness the total potential of digital-information-technology which requires open access and universal service.
- Space is another sector that requires increased attention as it provides key solutions to problems of climate change, natural disasters, and urban and infrastructure planning.
- This calls for collaboration and sharing of advanced technologies such as AI and machine learning between the countries.
- Challenges such as antimicrobial resistance and rapid spread of infections on a global scale which was seen in the case of COVID-19 and MonkeyPox must also be discussed.
- The Global Financial Transaction Tax which was proposed by the G20 in 2011 must be revived and needs to be paid to a Green Technology Fund for Least Developed Countries.
- At this time of chaos and instability in the peace and order of the world, India must work proactively to diffuse the ongoing rivalries and conflicts.
Nut graf: The G20, which accounts for about 85% of global GDP, 75% of global trade and 65% of the global population, must be reoriented to address the current changes in the multilateral global order and India’s G20 presidency is an opportunity to reinvigorate, reinvent and re-centre the multilateral order and ensuring that multilateral institutions like G-20 stay intact.
1. BSNL’s distress call answered, but towering issues prevail
Syllabus: Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment.
Mains: The need for a revival package for BSNL and its impact
Context
Recently the Union Cabinet announced a ₹1.64 lakh crore package to revive Bharat Sanchar Nigam Limited (BSNL).
Background
For detailed background on this topic refer to the following article:
UPSC Exam Comprehensive News Analysis dated 29 Jul 2022
The need for revival and bail-out package for BSNL
- Loss of subscriber base
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- In 2005, BSNL accounted for 21% of the market share which was almost the same as Bharti Airtel and higher than Reliance Communications.
- However, by 2022, BSNL’s share dropped to 10% with other private telecom firms dominating the market.
- ARPU suffering
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- In March 2016, the average revenue earned per user per month (ARPU) of BSNL was ₹118 and other private firms earned about ₹126.
- When Jio entered the market with reduced tariffs, the ARPU of BSNL and other private firms was reduced.
- By 2021, BSNL’s ARPU reduced to ₹53 while the ARPU of private firms increased to ₹136. This is because when Jio started to increase their tariff rates other private firms also increased theirs while BSNL did not.
- Low earnings
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- Along with the erosion of the subscriber base, the low earnings from existing subscribers severely impacted BSNL’s revenue.
- The revenue of the state-owned firm dropped from ₹40,000 crores in FY06, to ₹19,052 crores in FY22.
- Further, at the time when revenues dropped, expenses of BSNL breached the ₹30,000 crore mark and had remained so for over 15 years.
- The revenue and expense mismatch resulted in losses. BSNL has incurred losses of close to ₹1.02 trillion in the last 13 years.
- High share of employee benefits
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- Until FY20, employee benefits accounted for nearly 40% of BSNL’s expenses.
- Post-2019’s rescue package, wherein a large share of the package was used to fund the Voluntary Retirement Scheme, the workforce was reduced to 64,500 in FY21 from 1.8 lakh in FY18.
- Despite this BSNL’s expenses in terms of employee benefits is much more than what is spent by private firms.
- Loss in the rural wireless segment
- BSNL had played a significant role in improving teledensity (connections per 100 people) in rural and far-flung regions.
- However, private firms have replaced BSNL in the rural wireless segment in recent years and BSNL now only operates the rural wireline segment.
Nut graf: Acknowledging the significance of BSNL’s role in ensuring inclusivity and reducing the digital divide by expanding services to rural areas, the Union Cabinet has announced a ₹1.64 lakh crore revival package for BSNL with an aim to make BSNL profitable in the next five years.
F. Prelims Facts
Nothing here for today!!!
G. Tidbits
1. 49th Chief Justice of India
- Justice Uday Umesh Lalit was appointed as the 49th CJI after the President of India signed his warrant of appointment under Article 124 of the Indian Constitution.
- He will have a brief tenure of less than 3 months as he will demit office on November 8.
- Justice Lalit will be the second CJI who was directly elevated to the top court Bench from the Bar after Justice S.M. Sikri.
Read more on the appointment of Judges.
- Recently, the Union government approved ‘Corbevax’ by Biological E as a precaution dose against COVID-19 for those above 18 who are fully vaccinated with either Covaxin or Covishield.
- 18+ can get the dose 26 weeks after the administration of the second dose. It will be considered as a precaution dose.
- Corbevax is still awaiting emergency use listing (EUL) by the World Health Organization.
- This approval is the first time that a booster dose different from the one used for primary vaccination is to be allowed in India.
- The approval is based on the recommendations made by the COVID-19 Working Group of the National Technical Advisory Group on Immunization.
Read more on ‘Corbevax’ in PIB dated Dec 29, 2021.
H. UPSC Prelims Practice Questions
Q1. In which amongst the following cases did the Supreme court ensure that convicted criminals don’t contest elections and find a place in the Parliament and State Legislature? (Level- Medium)
- Kehar Singh vs Union of India
- Kihoto Hollohan v Zachillhu And Others
- Lily Thomas v Union of India
- Lok Prahari v Union Of India And Others
CHECK ANSWERS:-
Answer: c
Explanation:
- Option 1 is incorrect, Supreme Court in Kehar Singh v Union of India, 1988 case talks about Article 72 of the Indian Constitution regarding the power of the President to grant pardons, etc. and to suspend, remit or commute sentences in certain cases.
- Option 2 is incorrect, ‘Kihoto Hollohan vs Zachillhu And Others’ (1992) case is regarding the constitutional challenge to the Tenth Schedule of the Indian Constitution and discretionary powers granted to the Speaker.
- The Supreme Court of India upheld the sweeping discretion available to the Speaker in deciding cases of disqualification of MLAs.
- Option 3 is correct, The judgment in Lily Thomas v Union of India case has provided that all the elected or non-elected MPs and MLAs would be disqualified with immediate effect if they were convicted in a criminal case by a trial court and the saving clause under section 8(4) will not be applicable.
- Option 4 is incorrect, Lok Prahari v Union Of India And Others case deals with the provision of Article 224A of the Constitution of India regarding the appointment of ad hoc Judges to deal with the backlog of cases in High Courts.
Q2. Consider the following statements: (Level-Easy)
- In case of a conflict between the central law and the state law on a subject enumerated in the Concurrent List, the central law prevails over the state law.
- If the state law has been reserved for the consideration of the President and has received his assent, then the state law prevails in that state.
- The Malimath Committee, constituted by the Atal Bihari Vajpayee government in 2000, favoured making Section 498A of the Indian Penal Code (dowry harassment) a bailable and compoundable offense.
Which of the statements given above is/are correct?
- 1 only
- 1 and 3 only
- 2 and 3 only
- 1, 2 and 3
CHECK ANSWERS:-
Answer: d
Explanation:
- Statement 1 is correct. If there is any inconsistency between laws made by Parliament and laws made by the Legislatures of States on subjects in the concurrent list then the central law prevails over the state law.
- Statement 2 is correct, as per Article 254(2) of the Indian Constitution, the law made by the State shall prevail if it has been reserved for the consideration of the President and has received his assent.
- Statement 3 is correct, Malimath Committee headed by Justice V.S. Malimath to examine the fundamental principles of criminal law favoured making Section 498A of the Indian Penal Code (dowry harassment) a bailable and compoundable offense.
Read more on the 7th schedule of the Indian Constitution.
Q3. Which amongst the following is not correctly matched as per the Chola inscriptions? (Level-Difficult)
- Vellanvagai – land of non-Brahmana peasant proprietors
- Pallichchhandam – land gifted to Brahmanas
- Shalabhoga – land gifted to temples
Options:
- 1 only
- 2 and 3 only
- 2 only
- 1, 2 and 3
CHECK ANSWERS:-
Answer: a
Explanation:
- Pair 1 is correctly matched, Vellanvagai was land of non-Brahmana peasant proprietors, and land gifted to temples was referred to as devadana or tirunamattukkani.
- Pair 2 is incorrectly matched, Pallichchhandam was land donated to Jaina institutions.
- Pair 3 is incorrectly matched, Shalabhoga refers to the land denoted to the maintenance of a school.
Q4. With respect to Third Anglo Mysore War, which of the following statements is/are correct? (Level-Easy)
- During the initial phase of the war Tipu defeated the English under Cornwallis.
- The War ended with the Treaty of Mangalore.
- It was during the Third Anglo-Mysore War that Tipu’s two sons were taken as hostages by the British.
Options:
- 2 only
- 1 and 3 only
- 3 only
- 1, 2 and 3
CHECK ANSWERS:-
Answer: c
Explanation:
- Statement 1 is incorrect, Tipu was defeated in the first phase of the war against Lord Cornwallis and his forces had to retreat.
- Statement 2 is incorrect, the war ended with the Treaty of Seringapatam in 1792.
- Statement 3 is correct, as per the treaty, Tipu had to surrender two of his sons as surety to the British till he paid his due.
Read more on the Third and Fourth Anglo-Mysore wars.
Q5. With reference to the “Tea Board” in India, consider the following statements: (Level-Medium) (CSE Prelims:2022)
- The Tea Board is a statutory body.
- It is a regulatory body attached to the Ministry of Agriculture and Farmers’ Welfare.
- The Tea Board’s Head Office is situated in Bengaluru.
- The Board has overseas offices at Dubai and Moscow.
Which of the statements given above are correct?
- 1 and 3
- 2 and 4
- 3 and 4
- 1 and 4
CHECK ANSWERS:-
Answer: d
Explanation:
The Tea Board was set up under the Tea Act 1953. It has succeeded the Central Tea Board and the Indian Tea Licencing Committee which functioned respectively under the Central Tea Board Act, 1949 and the Indian Tea Control Act, 1938 which were repealed. The Tea Board is functioning as a statutory body of the Central Government under the Ministry of Commerce.
I. UPSC Mains Practice Questions
- The past couple of decades have witnessed considerable weakening of the state governments’ fiscal autonomy in India. Do you agree? Elaborate. (250 words; 15 marks) [GS-3, Economy]
- Playing host to the G20 summit gives a chance to India to assert its standing as a global thought leader. Comment. (250 words; 15 marks) [GS-2, International Relations]
Read the previous CNA here.
CNA 11 Aug 2022:- Download PDF Here
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