28 Jul 2022: UPSC Exam Comprehensive News Analysis

B. GS 2 Related

Category: SOCIAL JUSTICE

1. Forest Rights Act: well begun, ready for the home run

Syllabus: Welfare schemes for vulnerable sections of the population by the Centre and States and the performance of these schemes

Prelims: About Forest Rights Act 

Mains: Details about the Forest Rights Act and the implementation of FRA in Odisha

Context

Odisha is aiming for a full rollout of the Forest Rights Act by 2024.

Scheduled Tribes And Other Traditional Forest Dwellers (Recognition Of Forest Rights) Act or the Forest Rights Act

Image Source: The Hindu

• Forest Rights Act (FRA) was enacted in 2006 to recognise the rights of the forest-dwelling tribal communities and other traditional forest dwellers to forest resources, on which these communities were dependent for livelihood, habitation and other socio-cultural needs.
• The Act covers:
  • Rights of self-cultivation and habitation 
  • Community rights of grazing, fishing and access to water bodies in forests 
  • Habitat rights for Particularly Vulnerable Tribal Groups (PVTGs) 
  • Traditional seasonal resource access to nomadic and pastoral community
  • Community rights to intellectual property and traditional knowledge
  • Recognition of traditional customary rights and the right to protect, regenerate or conserve or manage community forest resources for sustainable use. 
• It also provides rights to the allocation of forest land for developmental purposes to fulfil the basic infrastructural needs of the community. 
• The Act further provides the Gram Sabha and rights holders the responsibility of conservation and protection of biodiversity and wildlife.
• The Gram Sabha is a highly empowered body under the Act, which enables the tribal population to participate in the formulation of local policies and schemes.

Read more about – Forest Rights Act, 2006

Steps undertaken by Odisha to implement FRA

• The implementation of the Act involves 
  • Raising awareness among the uninformed tribal groups
  • Going through the previous and historical government records and data
  • Identifying the ownership details and further processing by various government departments
• Odisha has entered the 16th year of implementation of FRA and there are about 2.59 lakh beneficiaries at present.
• The Odisha government has established a dedicated project management unit only for FRA implementation.
• Odisha has become the first state in the country to allocate a budgetary provision for the implementation of the FRA.
• Forest rights committees which were earlier operating only in Tribal Sub Plan areas have now been extended to the entire State. 
• The State is also addressing aspects such as livelihood and food security under the Act along with ensuring ownership of land.
• As per the Scheduled Castes and Scheduled Tribes Research and Training Institute (SCSTRTI), Odisha has about 7.32 lakh potential claimants, with nearly 3 lakh eligible families still left out and the government is expediting the FRA implementation on mission mode to cover these families as well.
• Out of the 13 PVTGs identified in Odisha, habitat rights are being processed for 11 groups as the Lodhas and Lanjia Sauras do not believe in the concept of habitat.

Nut graf: While most of the state governments are struggling with the implementation of the Forest Rights Act, Odisha is now aiming for a full rollout by 2024. All the States must make a note of Odisha’s progress in this regard and expedite their implementation process.

E. Editorials

Category: POLITY

1. The poor state of India’s fiscal federalism

Syllabus: Functions and Responsibilities of the Union and the States, Issues and Challenges Pertaining to the Federal Structure, Devolution of Powers and Finances up to Local Levels and Challenges Therein.

Mains: Challenges to fiscal federalism in India and associated concerns.

Advent of centralized fiscal policy in India:

• There seems to be the advent of a centralised fiscal policy in India in recent times and the article makes the following arguments to put its point forward.

Implementation of GST system:

• The states have lost their capacity to generate their own revenues due to the implementation of the Goods and Services Tax (GST) regime. The indirect tax right of the state governments has been curtailed due to the implementation of the GST system.
• Also, the ending of the GST compensation regime for States will adversely impact their fiscal independence.

Impact of centrally sponsored schemes:

• There are a high number of centrally sponsored schemes currently being implemented. The number stands at 131 currently. Notably, the states are required to share a part of the cost for the implementation of such schemes. The state governments spend about 25% to 40% as matching grants.
• This amounts to unnecessary intrusion into the expenditure pattern of the states.

Politicisation of the Finance Commission:

• The article laments the politicization of the Finance Commission which is mandated to recommend on the distribution of tax revenues between the Union and the States and amongst the States themselves.
• The article argues that the Finance Commission has become a politicised institution with arbitrariness and inherent bias towards the Union government.

Increasing use of cesses and surcharges and other issues:

• The raising of non-divisive cess and surcharges by the Union government has resulted in the increase of the non-divisive pool in the Centre’s gross tax revenues. Currently, this share stands at 15.7% as compared to 9.43% in 2012. The shrinking of this divisible pool of resources for transfers to States will adversely impact the flow of revenues to the states despite the increased share of devolution to states from the previous 32% to the current 42%.
• The recent drastic cut in corporate tax will also have an adverse impact on the divisible pool of revenue with the states.

Differential treatment of states and union government:

• Notably, the states have to pay higher interest rates for market borrowings as compared to the Union government.
• Also, the investment of surplus by the Reserve Bank of India in Union government treasury bills places the union government at an advantage over the state governments.

Concerns:

Depleting fiscal capacity of states:

• While the expenditure of the States has been ever-increasing, the revenue inflow to the states hasn’t grown proportionately. As a result, the ability of States to finance current expenditures from their own revenues has declined drastically over the years. They have become dependent on fiscal transfers from the Union government.

Concerns over centrally sponsored schemes:

• The excessive number of centrally sponsored schemes undermines the electorally mandated democratic politics of States. This impedes States from charting their own autonomous path of development.
• The fact that the states are having to share the expenditure of a scheme on the Union list seems to be in violation of the constitutional provisions.
• The centrally sponsored schemes, driven by the one-size-fits-all approach, cannot be much effective as compared to State schemes based on ground realities.

Impact on socio-economic development:

• Notably, the states spend 60% of the expenditure in the country while accounting for higher proportions in critical sectors such as education and health. The state expenditure accounts for 85% in education and 82% in health.
• The decreased financial sources with the states will undercut the expenditure of the state on these crucial sectors and this could have serious consequences for socio-economic development in India. This could lead to the deepening of inequality in India. This, in the words of B.R. Ambedkar, would threaten the very foundations of Indian democracy.

Recommendations:

• There is a need to relook the Centre-State fiscal relations and ensure more transfers and taxation powers for regional governments.

Nut Graf

The increasing pattern of centralization of fiscal policy in India is a major point of concern as it undermines not only the autonomy of the states but also the process of socio-economic development.

I. UPSC Mains Practice Questions

1. Money laundering is not just a threat to the economic security of the nation but also to its national security. Examine these threats and how India is trying to counter the threat. (250 words, 15 marks) [GS-3, Internal Security]
2. The Indian rupee has been depreciating under the pressure of global and domestic factors. Evaluate the reasons and how it affects India’s exports and imports. (250 words, 15 marks) [GS-3, Economy]