12 Jan 2022: UPSC Exam Comprehensive News Analysis

B. GS 2 Related

Category: POLITY AND GOVERNANCE

1. HC orders notice to Center on Dam Safety Act

Syllabus: Government policies and interventions for development in various sectors and issues arising out of their design and implementation.

Mains: Critical Evaluation of Dam Safety Act 2021; Issues with Cooperative Federalism

Prelims: Dam Safety Act 2021

Context:

The Madras High Court ordered notice to the Centre on a case challenging the constitutional validity of the Dam Safety Act, 2021, on the grounds that it goes against federalism and is beyond the legislative competence of the Centre.

What is the Significance of Dams in India?

• The first Prime Minister of India, Pandit Jawaharlal Nehru, proudly proclaimed dams as the ‘temples of modern India’. 
• Dams are critical infrastructure, constructed with large investments which provide multipurpose benefits such as irrigation, power generation, flood moderation and supply of water for drinking and industrial purposes. 
• Other physical assets, such as hydropower plants, irrigation, drinking and industrial water networks besides municipal supplies are also linked with the dams.

What is the Dam Safety Act and what is its Significance?

• The Dam Safety Act is aimed at developing uniform safety procedures for all dams across the country.
• The Act provides for surveillance, inspection, operation and maintenance of dams to prevent disasters, and institutional mechanisms to ensure safety. 
• It is applicable to all dams across the country which are over 10 meters in height, subject to specific design and structural conditions.

Know more about the Dam Safety Act and its Significance in PIB dated Dec 2nd, 2021.

What are the reasons for criticism of the Act?

• Many states opposed the Act because they say it encroaches upon the sovereignty of States to manage their dams and violates the principles of federalism.
• The Centre taking control of state dams is considered an unconstitutional move. 
•  The provisions in the Act implies that the dam-owning State would not have rights over the safety and maintenance of the dam located in another State.

Know more about Criticisms of Dam Safety Act in CNA dated July 30, 2019.

What are the grounds on which the petition is filed against the Act?

1. Legislative competence: The petition contended that the Act is ex-facie unconstitutional and ultra vires as the Parliament lacked legislative competence to enact a law on a subject matter in the State’s domain. 
2. Against Fundamental Rights: Various provisions of the Act were manifestly arbitrary, discriminatory, unreasonable and against Articles 14, 19 and 21. More on fundamental rights in the link.
3. Against Cooperative Federalism: It encroaches upon the exclusive legislative domain of the State. Hence, it infringes the doctrine of cooperative federalism.
4. Against Basic Structure: It violates the federal structure of the Constitution which was a part of the basic structure of the Constitution.

Conclusion:

There needs to be a pan-India statutory framework for reporting and recording dam failure events. The legislation to ensure the safety of dams in India should be put in place with proper consideration of all the stakeholders and ensuring the democratic principle of cooperative federalism.

D. GS 4 Related

Nothing here for today!!!

E. Editorials

Category: ECONOMY

1. Extending GST compensation as a reform catalyst

Syllabus: Issues relating to planning, mobilisation of resources

Mains: Necessity to reform GST structure

Context: The landmark implementation of Goods and Services Tax in India has set a remarkable example of cooperative federalism between the centre and states. This intended to evolve as a value-added tax on goods and services establishing tax harmonisation. In order to mitigate the revenue losses of the states in the short term implementation phase of the GST, the Union government promised to pay compensation in the evolutionary phase of five years.

Estimation of GST Compensation:

• The compensation was calculated as the shortfall in the actual revenue collections in GST. Such revenues include ones that the states would have got from the taxes merged in the GST. 
• The estimation of the revenue shortfalls was carried out taking 2015-16 as the base and applying the growth rate of 14% every year. 
• A GST compensation cess was imposed on items such as tobacco products, automobiles, coal and solid fuels manufactured from lignite, pan masala and aerated waters. 

The Outcome:

• The entire episode of compensation was accompanied by several controversies after a smooth execution in the first two years of its implementation wherein the cess collection exceeded the compensation requirements.
• The states incurred huge losses of revenue in the period of 2020-21 due to severe lockdown activities in the wake of the pandemic. The loss was estimated to be ₹3 lakh-crore of which ₹65,000 crore was supposed to be recovered from compensation cess. 
• The remaining amount was decided to be paid by the Union government by borrowing from the Reserve Bank of India under a special window and the interest and repayment were to be made by collections from compensation cess in the future. 
• The follies in the compensation payments took the Centre-State relationship to a new low widening scope for mistrust which has been further elevated due to the pandemic. 

Demand of the States:

• The agreement to pay the compensation for revenue losses will come to an end in June 2022 that marks the completion of five years till which it was valid. 
• The states demanded the continuity of the compensation scheme for another five years by considering the uncertainties faced by them in the midst of COVID-19. 

Major Challenges: 

• The initially planned returns could not be filed as the technology platform could not be firmed up for a long time. This resulted in a large-scale misuse of input tax credit using fake invoices. 
• The 41st GST Council meeting in 2020 that offered two options of borrowing to the states to address the revenue shortfalls attracted a deluge of opposition from the states as the borrowing options were perceived as a liability on the states. This contributed to further the face-offs between the centre and states. 
• The states are overburdened with the commitments to protect the lives and livelihoods of people with limited avenues for mitigating revenue losses. Therefore it is imperative that the entire structure of GST must undergo reformations. 

Reforms Suggested:

• It is recommended that 50% of the consumption items that are categorised under the Consumer Price Index (CPI) are in the exemption list. This requires significant pruning of items.
• It is necessary to bring petroleum products, real estate, alcohol for human consumption and electricity within the ambit of GST. 
• Multiple rates that complicate the tax system and lead to administrative constraints must be reformed into a unified structure that is accompanied by the cooperation of states addressing their concerns and opinions.
• It is inferred that the GST tax regime is still in the transition stage and is evolving with the succeeding days. An extension of the compensation would not only be necessary for GST to attend a holistic transition but also be beneficial in providing a comfortable environment to the states. 
• The restructuring of GST will open ways to increase the buoyancy of the tax along with the reduction of several administrative challenges. 
• The compensation scheme of applying 14% growth on the base year must be revisited which was also put forth by the 15th Finance Commission.
• The rate of growth of reference revenue can be linked to the growth of Gross State Domestic Product (GSDP) in states to calculate the compensation assuring some certainty on the revenue. 

Category: ENVIRONMENT

1. Treating the planet well can aid progress

Syllabus: Conservation, environmental pollution and degradation

Mains: Correlation of Environmental and Social issues

Context: The Human Development Report of the UNDP proposed to introduce a planetary pressure-adjusted Human Development Index. 

The Human-Induced Change: 

• Environment, over a period of time, has become an essential component to determine human development.
• The concept of planetary pressure adjusted HDI was introduced by a group of scientists across the world to highlight the implications of human activities on the environment. 
• This proposed aspect of measuring human development is significant to regulate the imbalance caused by humans that has led to detrimental consequences to biodiversity disturbing the ecological balance. 
• As a consequence, the world is witnessing the issues of climate change, unusual heat waves, global warming, urban deluge and other natural calamities.        

The Purpose of planetary pressure-adjusted Human Development Index:

• This index intends to communicate to the larger society the risk involved in continuing with the ongoing practices of misusing natural resources and the generation of greenhouse gas emissions. 
• It also serves the purpose of determining the effect of environmental stress on development. 

Challenges Faced by India:

• Poverty alleviation and safeguarding the environment have been twin problems that India has experienced with emerging complexity in the present day.

Ways Ahead: 

• An interconnect between people and the planet is considered to play a pivotal role in buffering the issues of the social-ecological system. Therefore social and environmental problems cannot be treated in isolation and there must be an integrated perspective in order to achieve the goals echoed in the form of SDGs. 
• A local-level involvement for effective delivery of policies is required with enormous emphasis on the provisions of the 73rd and 74th constitutional amendments. 
• Reorientation of planning, adoption of decentralised approach, effective policy interventions, expansion of technology and institutional frameworks will serve as major condiments to address the social and environmental issues and assist in the creation of a progressive and sustainable future. 

Read more about the Human Development Index (HDI) in the linked article.

Q1. Consider the following statements with regards to the PM Kusum scheme:

Q2. Which of the following statements is not true about the World Trade Organization?

Q3. Post joining which of the following groups was India able to extend the range of 
Brahmos missile beyond 290 km?

Q4. Consider the following statements with regards to Mamallapuram:

Q5. The Global Competitiveness Report is published by the [UPSC 2019]

I. UPSC Mains Practice Questions

1. Discuss the merit and demerits of the idea of State funding of elections in India. (250 words; 15 marks) GS II (Polity)
2. Extending GST compensation to the states would go a long way in bridging the lack of trust between the Union and the State governments. Comment. (250 words; 15 marks) GS III (Economic Development)

Read the previous CNA here.