Sarat Chandra IAS Academy

Current Affairs of 29th August-2020


1) Bridging the GST gap:

Context: Finance minister said that the financial crisis facing the states is a result of covid-19; an ‘act of God’ and these kinds of act of God are not covered under GST compensation

  • The GST Regime was built on the promise that, if states faced revenue deficits after the GST’s introduction the centre would make good the loss in the first five years
  • It was on the basis of this commitment that States extended their support to GST
  • State sacrificed their constitutionally granted powers of taxation in the national interest, that allowed the state to announce the the dawn of one Nation one tax
  • Unfortunately this has become reality at a time when every Indian state is massively burden by the covid-19 crisis and governance has been severely affected
  • Finance minister said that the financial crisis facing the states is a result of covid-19 ., an act of God and these kinds of act of God are not covered under GST compensation.
  • That is Government of India would invoke ‘ Force Majeure’ clause against its own people and according to this, the centre is not liable to pay the GST compensation loss due to covid-19 as GST compensation to States act, did not include an act of God it only set protected revenue should be taken care of
  • This abdication of responsibility strikes a cruel blow to the social contract that exist between Government of India and state governments

Compensation plan suggested by centre:
The GST Council agreed to fund the revenue shortfall of rupees 3 trillion faced by the states through two options to make up the shortfall

Option 1: part funding:

  • State can borrow rupees 97,000 crore from the central bank this is the loss accruing from the implementation of GST.
  • Implication Centre will not fund the rest of the losses as it is attributable to Covid fallout and so not covered under the compensation pact.

Option 2: Borrowing:

  • State governments will be allowed to borrow an extra rupees 2.35 trillion balance that will not be financed from the compensation fund
  • Implication the fiscal responsibility and budget management (FRBM) caps on borrowings by the states will be for the further relaxed

It is different if funds are not available but this is entirely another issue where the centre is having no commitment to pay compensation

Paragraph 92 of the standing committee report shows that the centre assured payment of compensation for a specific period if there was such a loss

The constitutional Framework that ushered in the GST does not provide an escape clause for acts of God States never expected to be disappointed so early.

The central government has let them down by resting on them two options both of which involve borrowing by States.

This is similar to asking States to mortgage their future to sustain the present the thus transforming Cooperative federalism into coercive federalism.

Central Governments Powers:

  • Central government has the ability to raise resources through options that are not available to States.
  • Monetary measures are the Monopoly of the central government
  • Even Borrowing is more efficient and less expensive if it is undertaken by the central government
  • Over the last six years the centre has continually corner resources that should have been shared with States

The 14th Finance Commission allotted 42% of Central Government tax revenues to States

However Accountability initiative’s analysis of state Budgets shows that States received only 30% of Central tax collections during the 2015-19 period

Similarly cesses on petroleum products have resulted in the centre receiving 60% of Petroleum tax revenues with only 40% going to the states In 2013-14 the ratio was 50-50.

Prime Minister Narendra Modi proudly declared GST as a good and simple tax which would usher in a glorious economic future for India

Unfortunately these three years later the harsh reality is that states are staring at Grave and morally degraded times ahead.


2) Disinvestment:

Context: government to divest 15% stake in HAL

  • HAL is a PSU
  • Only aircraft manufacturer in the country and assembles and builds a range of military helicopters and aircraft


  • Disinvestment means sale or liquidation of assets by the government usually Central and state public sector enterprises projects or other fixed assets.
  • The government undertake this investment to reduce the fiscal burden on the exchequer or to raise money for meetings specific needs.
  • Strategic disinvestment is transfer of ownership and control of a public sector entity to some other entity mostly through a private sector entity.
  • Disinvestment process began in India in 1991-92, when 31 selected PSUs wear disinvested
  • In 1996 the Disinvestment Commission chaired by GV Ramakrishna was set up to advise, supervise, monitor and publicize gradual disinvestment of Indian PSUs. however the commission ceased to exist in May 2004
  • The Department of Disinvestment was set up as a separate Department in December 1999 and was later renamed as Ministry of Disinvestment in 2001. from 2004 the department of disinvestment was brought under Ministry of Finance
  • The Department of Disinvestment has been renamed as Department of Investment and Public Asset Management (DIPAM) from 2016 which has been made the nodal department for the strategic stake sale in public sector undertakings
  • National investment fund (NIF) was constituted in 2005 into which the proceeds from disinvestment of Central Public Sector Enterprises way to be channelized

Major objective of disinvestment in India

  • Meet budgetary needs
  • Reduce fiscal deficit
  • Improve public finances and overall economic efficiency
  • To diversify the ownership of PSU for enhancing efficiency of individual Enterprise
  • To raise funds for technological up gradation modernization and expansion of PSU


  • Loss making units don’t attract investment so easily
  • Government has mostly used disinvestment for fiscal regions rather than growth objective
  • Process of disinvestment is not favoured socially as it is against the interest of socially disadvantaged people
  • Over the years the policy of disinvestment has increasingly become a tool to raise resources to cover the fiscal deficit with the little focus on market discipline of strategic objective
  • Sometimes emergence of private monopolies consumer welfare will be reduced
  • Transfer of ownership from public to private does not ensure higher efficiency and productivity
  • May lead to retrenchment of workers who will be deprived of livelihood
  • Private sector which is governed by profit motive has a tendency to use capital intensive technique which will was an unemployment problem in India


3) National well being:

  • India’s crime data recording system is not built to capture everything; One of the thing is problems of woman
  • We don’t know what proportion of pregnancies in India start off without the consent of woman even though the veil of marriage may cover it legally and culturally
  • Physical and mental violence can be ascertained by a sensitive clinician, the intergenerational impact of a regretful and anxiety loaded pregnancy, all these are not captured

If we equally value All Indians we should not stick to decennial census operations alone what we should rather do is measure different indicators like:

  • Birth weights
  • The Heights and weights of our children when the Inter School
  • School completion rates
  • Age, height and weight of a first time pregnant woman
  • And most definitely the number of women in the formal workforce who are on par with men in terms of earning

Parameters that are valuable:

  •  Under age married of girls must become history
  • Ensuring Secondary School completion of every child
  • Separate functional toilets and sanitary pads for girls
  • Ensuring gender parity in school completion rates
  • Teaching, school leaving girls and boys the notion of Consent and also the basics of contraception that will ensure that the start of every pregnancy will be a desired and happy one.

Birth issues in the country

  • Not every pregnancy ends up with a live birth
  • A desired pregnancy is to be supported by a fully functional health care system able to anticipate complications and facilitate safe delivery.
  • Still births and Neo-natal births still an issue to be addressed.
  • Despite the trend towards nuclear families pregnancies in India still are familial events
  • Birth weights, which is much more than a number, it tells how well the woman and her family eats and her status in the family.
  • Tracking average birth rates by district and Sub District on a regular basis is a fair proxy for food security, the status of women and the delivery of Primary Health Care.
  • For a nation with plans to assign digital health ideas to everyone this is not a tall task
  • Lack of adequate nutrition exclusively from mother’s breast first then from locally available weaning and complementary foods and repeated bouts of vaccine preventable or easily readable illness should be addressed
  • Correlation with birth weights at district level gives a better understanding of multidimensional poverty
  • If India is to be truly taking advantage of its large birth cohort in the form of a demographic dividend then the correlation of birth weight and under 5 year height-weight needs to be reviewed at the highest political levels regularly as it reflects the physical and cognitive nature of human capital.


  • Schooling is a socio economic and gender parity Springboard, if school completion rates show, no gender, rural-urban or parental income divides.
  • Consequently India may not only bring down its maternal mortality ratios but also improve neonatal and under 5 mortality rates through delayed marriages and exercising of reproductive choices by its empowered Young women.
  • Unimaginative teaching of anaemic children is a double whammy partially addressed through protein rich mid-day meals.
  • Deworming, school toilets, sanitary pads and bicycle for girls are progressive policy step in the right direction
  • With better cognitive capacities and supportive environment the stress of learning reduces and outcomes improve.


  • Public health is about people, their continued well-being and not just about controlling disease outbreaks.
  • Multidimensional data helps immensely in ensuring collective well-being physical, mental and social.
  • People are India’s greatest possession and will remain so for the conceivable future, provided they are in a state of well being.
  • An ill-educated anxious population is a tinderbox, capable of self-harm as well as being kindling for malice-driven mobilisation.


4) Kharif crops:

Context: Kharif crops sown on 1082.22 lakh ha area till now; increase in area coverage by 7.15% compared to corresponding period of last year.

Kharif crops : Rice, Pulses, Coarse Cereals, Oilseeds, Sugarcane, Jute & Mesta, Cotton

Kharif Crops : The crops which are sown in the rainy season are called kharif crops. The rainy season in India is generally from June to September. Paddy, maize, soyabean, groundnut and cotton are kharif crops.


5) Poshan Maah:

Context: To commemorate the ‘Poshan Maah’ organised by Ministry of Women and Child Development, a meeting was taken today by Secretary, Department of Food & Public Distribution with CMD, Food Corporation of India, MD, CWC and senior officers of the department.

  • POSHAN Abhiyaan is a multi- ministerial convergence mission with the vision to address malnutrition with a targeted approach by 2022.
  • Poshan Abhiyaan was launched by the Prime Minister from Jhunjhunu in Rajasthan. The programme aims at achieving improvement in nutritional status of children up to six years of age, adolescent girls, pregnant women and lactating mothers.
  • The purpose of celebrating the Poshan month is to take the message of nutrition to every nook and corner of the country and to focus on complimentary food, treatment and prevention from infections in children.
  • The Poshan Maah is observed every year in the month of September


6) “Chunauti”- Next Generation Start-up Challenge Contest:

Context: Union Minister for Electronics and Information Technology Shri Ravi Shankar Prasad today launched “Chunauti”- Next Generation Startup Challenge Contest to further boost startups and software products with special focus on Tier-II towns of India.

The government has earmarked a budget of Rs. 95.03 Crore over a period of three years for this programme. It aims to identify around 300 startups working in identified areas and provide them seed fund of upto Rs. 25 Lakh and other facilities

Under this challenge the Ministry of Electronics and IT will invite startups in the following areas of work:

1. Edu-Tech, Agri-Tech & Fin-Tech Solutions for masses
2. Supply Chain, Logistics & Transportation Management
3. Infrastructure & Remote monitoring
4. Medical Healthcare, Diagnostic, Preventive & Psychological Care
5. Jobs & Skilling, Linguistic tools & technologies

  • The startups selected through Chunauti will be provided various support from the Government through Software Technology Parks of India centers across India.
  • They will get incubation facilities, mentorship, security testing facilities, access to venture capitalist funding, industry connect as well as advisories in legal, Human Resource (HR), IPR and Patent matters.
  • Besides seed fund of upto Rs. 25 Lakh, the startups will also be provided cloud credits from leading cloud service providers.
  • Start-ups who are in the ideation stage may be selected under the pre-incubation programme & mentored for up-to six months to evolve their business plan & solution around the proposed idea.
  • Each intern (start-up under pre-incubation) will be paid Rs. 10,000/- per month upto a period of 6 months.


7) PM svanidhi:

Context: Secretary, Housing and Urban Affairs launched the PM Street Vendor’s atmanirbhar Nidhi (PM svanidhi) online dashboard today, through video conferencing.

The online dashboard is dynamic, interactive and would provide a one stop solution to all stakeholders looking for information and tracking monitoring of progress of PM svanidhi up to city level.

PM svanidhi was launched by the Ministry on June 01, 2020, for providing affordable working capital loan to street vendors to resume their livelihoods that have been adversely affected due to Covid-19 lockdown. This scheme targets to benefit over 50 lakh Street Vendors who had been vending on or before 24 March, 2020, in urban areas including those from surrounding peri-urban/rural areas. Under the Scheme, the vendors can avail a working capital loan of up to Rs. 10,000, which is repayable in monthly instalments in the tenure of one year. On timely/ early repayment of the loan, an interest subsidy @ 7% per annum will be credited to the bank accounts of beneficiaries through Direct Benefit Transfer on quarterly basis. There will be no penalty on early repayment of loan. The scheme promotes digital transactions through cash-back incentives up to an amount of Rs. 100 per month. The vendors can achieve their ambition of going up the economic ladder by availing the facility of enhancement of the credit limit on timely/ early repayment of loan.


8) KVIC:

Context:The Khadi and Village Industries Commission (KVIC) has received the first order from Indo-Tibetan Border Police (ITBP) for supplying 1200 quintals of kacchi ghani mustard oil worth Rs 1.73 crore.

  • KVIC’s efforts saying this would encourage local production and empower lakhs of people engaged with village industries.
  • KVIC has said that this order will create additional jobs at the Khadi institutions manufacturing high quality kacchi ghani mustard oil.
  • “Only by encouraging local production and strengthening our village industries, we can overcome financial distress and create sustainable livelihood for our people.
  • At the same time, our jawans at the border will get the best quality mustard oil. The KVIC and ITBP have signed the mou for a period of one year which will be renewed further.
  • The next products in the pipeline are cotton mats (dari), blankets, bed sheets, pillow covers, pickles, honey, papad and cosmetics, etc. The total value of oil and dari will be approximately Rs 18 crore.

KVIC: TheKhadi and Village Industries Commission (KVIC) is a statutory body formed by the Government of India, under the Act of Parliament, ‘Khadi and Village Industries Commission Act of 1956’.

  • It is an apex organisation under the Ministry of Micro, Small and Medium Enterprises, with regard to khadi and village industries within India.
  • It seeks to – “plan, promote, facilitate, organise and assist in the establishment and development of khadi and village industries in the rural areas in coordination with other agencies engaged in rural development wherever necessary.
  • The KVIC may also undertake directly or through other agencies studies concerning the problems of Khadi and/or village industries besides research or establishing pilot projects for the development of Khadi and village industries.


9) Association of Renewable Energy Agencies of the States (AREAS):

MNRE in consultation with snas(State Nodal Agencies), and Association of Renewable Energy Agencies of States (abbreviated as “AREAS) has been formed in 2014 ,registered as a under Society Registration Act 1860.

Secretary, MNRE is the ex-officio President of the Association. All snas to be the member of the association. The elected members of the Executive Committee were snas from Uttar Pradesh, Uttarakhand, Jharkhand, West Bengal, Maharashtra, Gujarat, Karnataka, Tamil Nadu and Mizoram.

Ministry of New & Renewable Energy (MNRE) is the nodal agency at the central level for promotion of grid-connected and off-grid renewable energy in the country.

Ministry’s programmes are implemented in close coordination with State Nodal Agencies (snas) for renewable energy (RE). Over the period the snas have developed considerable knowledge and experience in planning and implementation of RE programmes.


10) Eklavya Model Residential School (EMRS):

Context: EMRS teacher selected for National Award to Teachers 2020.

  • EMRS started in the year 1997-98 to impart quality education to ST children in remote areas in order to enable them to avail of opportunities in high and professional educational courses and get employment in various sectors.
  • Across the country, as per census 2011 figures, there are 564 such sub-districts out of which there is an EMRS in 102 sub-districts. In its continuous journey of expansion, 462 new schools have to be opened by the year 2022.
  • As per the revised 2018 EMRS Scheme, every block with more than 50% ST population and at least 20,000 tribal persons, will have an Eklavya Model Residential School by the year 2022.
  • These schools will be on par with Navodaya Vidyalayas and will have special facilities for preserving local art and culture besides providing training in sports and skill development.


11) Jammu and Kashmir LG functions:

Context: the union home ministry notified new rules for the administration in the union territory of Jammu and Kashmir that specify the Lieutenant Governor functions and the Council of Ministers functions.

  • Police, Public order, All India Services and Anti-Corruption will fall under the executive functions of the LG implying that the chief minister of Council of Ministers will have no say in their functioning
  • The Council of Ministers led by Chief Minister will decide service matters of non-All India service officers, proposal to impose new tax, land revenue, sale grant or release of government property, reconstituting departments or officers and draft legislation.
  • However in case of difference of opinion between the LG and a Minister, when no agreement could be reached even after a month the decision of the Lieutenant Governor shall be Deemed to have been accepted by the Council of Ministers.
  • The rules state that any matter which is likely to bring the Government of the Union territory into controversy with central government or with any state government shall as soon as possible be brought to the notice of the LG and the Chief Minister by the secretary concerned through the chief secretary


12) Ease of doing business ranking:

  • Index released by World Bank India, jumped 14 places to 63 rd position
  • India has improved its ranking by 79 positions in last 5 years

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