Daily Current Affairs for UPSC CSE
Topics Covered
- Finance Commission Report
- Pfizer Bio-Ntech Vaccine
- Ban on sale of Fire Cracker
- Ro-Pax Ferry Services
- Special Window for Borrowing
- India-Maldives Relationship
- Facts for Prelims
1 . Finance Commission Report
Context : 15th Finance Commission submits its report to President
About Finance Commission
- The Finance Commission is a constitutionally mandated body that decides, among other things, the sharing of taxes between the Centre and the states.
- Article 280 (1) requires the President to constitute, “within two years from the commencement of this Constitution and thereafter at the expiration of every fifth year or at such earlier time as the President considers necessary
- FC shall consist of a Chairman and four other members
- Under Article 280(3)(a), the Commission must make recommendations to the President “as the distribution between the Union and the States of the net proceeds of taxes which are to be, or may be, divided between them under this Chapter and the allocation between the States of the respective shares of such proceeds”.
- Accordingly, the Commission determines a formula for tax-sharing between the states, which is a weighted sum of the states’ population, area, forest cover, tax capacity, tax effort and demographic performance, with the weights expressed in percentages. This crucial role of the Commission makes it instrumental in the implementation of fiscal federalism.
15th Finance Commission
- The 15th Finance Commission was constituted on November 27, 2017 and is headed by former Revenue Secretary and former Rajya Sabha MP N.K. Singh.
- The recommendations, to be observed for a period of five years, will kick in from April 1, 2020.
Terms of Reference
The Commission shall make recommendations as to the following matters, namely:—
- The distribution between the Union and the States of the net proceeds of taxes which are to be, or may be, divided between them under Chapter I, Part XII of the Constitution and the allocation between the States of the respective shares of such proceeds;
- The principles which should govern the grants-in-aid of the revenues of the States out of the
Consolidated Fund of India and the sums to be paid to the States by way of grants-in-aid of their
revenues under Article 275 of the Constitution for purposes other than those specified in the
provisos to clause (1) of that article; and - The measures needed to augment the Consolidated Fund of a State to supplement the
resources of the Panchayats and Municipalities in the State on the basis of the recommendations
made by the Finance Commission of the State. - The Commission shall review the current status of the finance, deficit, debt levels, cash balances and fiscal discipline efforts of the Union and the States, and recommend a fiscal consolidation roadmap for sound fiscal management, taking into account the responsibility of the Central Government and State Governments to adhere to appropriate levels of general and consolidated government debt and deficit levels, while fostering higher inclusive growth in the country, guided by the principles of equity, efficiency and transparency. The Commission may also examine whether revenue deficit grants be provided at all.
- The Commission may consider proposing measurable performance-based incentives for States, at the appropriate level of government, in following areas:
- Efforts made by the States in expansion and deepening of tax net under GST;
- Efforts and Progress made in moving towards replacement rate of population growth ;
- Achievements in implementation of flagship schemes of Government of India, disaster resilient infrastructure, sustainable development goals, and quality of expenditure;
- Progress made in increasing capital expenditure, eliminating losses of power sector, and improving the quality of such expenditure in generating future income streams;
- Progress made in increasing tax/non-tax revenues, promoting savings by adoption of Direct Benefit Transfers and Public Finance Management System, promoting digital economy and removing layers between the government and the beneficiaries;
- Progress made in promoting ease of doing business by effecting related policy and regulatory changes and promoting labour intensive growth;
- Provision of grants in aid to local bodies for basic services, including quality human resources, and implementation of performance grant system in improving delivery of services;
- Control or lack of it in incurring expenditure on populist measures; and
- Progress made in sanitation, solid waste management and bringing in behavioural change to end open defecation.
- Apart from the vertical and horizontal tax devolution, local government grants, disaster management grant, the Commission was also asked to examine whether a separate mechanism for funding of defence and internal security ought to be set up and if so how such a mechanism could be operationalised
Details of the Report
- Report has provided unique requirements of each of India’s 28 States on board and come up with State-specific considerations
- Apart from its main recommendations for the devolution of funds between the Centre and the States for the period 2021-22 to 2025-26, the Commission has addressed all its unique terms of reference such as considering a new non-lapsable fund for financing national security and defence spending, and offering performance incentives for States that deliver on reforms
- Apart from the main report uniquely titled “Finance Commission in Covid Times” which depicts a set of scales on its cover to denote balance between the Union and the States, the Commission has presented two more volumes as part of its submissions.
- The first one focuses on the State of the Union government’s finances, with an in-depth scrutiny of key departments, the medium-term challenges facing the Centre and a roadmap for the future.
- The other volume is entirely dedicated to States, with the finances of each analysed in great depth.
- The panel has come up with State-specific considerations to address the key challenges that individual States face
2 . Pfizer Vaccine
Context : US drug-maker Pfizer has released preliminary data from late-stage human trials of the Covid-19 vaccine it developed with German biotech firm BioNTech. The vaccine has been found more than 90% effective. The findings are critical as the vaccine is headed for a review by the US Food and Drug Administration (FDA) later this month, and talks of the shot receiving emergency authorisation are closer to reality.
What type of vaccine have Pfizer and BioNTech developed?
- Vaccine was developed using mRNA technology — it makes use of the messenger RNA molecules that tell cells what proteins to build. mRNA, in this case, is coded to tell the cells to recreate the spike protein of the novel coronavirus.
- Once the mRNA is injected into the body, the cells will use its instructions, creating copies of the spike protein, which is in return expected to prompt the immune cells to create antibodies to fight it.
How M-RNA Vaccine Works
- An m-RNA or simply “RNA vaccine” uses the genetic sequence of a portion of the virus that can be injected into the body. Once taken in by the body’s cells, the hope is that it makes an antigen to which the immunity machinery can manufacture antibodies.
Advantages of m-RNA Vaccine
- Unlike several other vaccine candidates, mRNA vaccines are synthetically developed — they don’t need the virus to be cultivated and replicated, just the code for the most crucial part that the body’s immune system is to target.
- Another advantage is that they can be manufactured at a large scale in large vats called bioreactors.
- m-RNA vaccines can be made in large quantities quicker than traditional vaccines as they don’t need to be cultured in chicken or mammalian cells.
- After getting the code for the virus, it is possible to develop the vaccine within weeks for pre-clinical testing, compared with months taken for more traditional platforms.
What do the early results say?
- The company’s first interim efficacy analysis signals that the vaccine is able to demonstrate an effectiveness against Covid-19. According to the findings, the vaccine was “more than” 90% effective in preventing Covid-19 among participants who had received a second dose as opposed to those participants who had only received a placebo.
- The firm also said that analysis of the late-stage trial data showed that there were no serious safety concerns.
What major roadblocks could prevent a quick scale up of this vaccine?
- The vaccine may run into logistical issues on account of cold storage — the candidate reportedly needs to be stored at temperatures below -90°F. This would require an ultra-cold storage system, as storing it at refrigerated temperatures reportedly for more than two days may render it ineffective.
- This means major constraints in storage and distribution in countries like India, which is still mapping and scaling up its cold storage footprint to store even vaccines at refrigerated temperatures. Even countries with more robust cold chain systems may have to invest more to adhere to these stricter conditions.
3 . Ban on sale of Crackers
Context : The National Green Tribunal (NGT) directed that there would be a total ban on sale or use of all kinds of firecrackers between November 10 and 30 in all cities and towns across the country where the average ambient air quality in November fell under the ‘poor’ and above category.
Background
- Recently, the NGT expanded its ambit of hearing cases on pollution by use of firecrackers beyond the Delhi-NCR region and issued notices to 19 states and Union Territories where air quality is beyond norms.
Details of the Judgement
- Apart from banning crackers where average ambient air quality fell under the poor and above category, the Bench also directed that in places where the ambient air quality fell under the ‘moderate’ or below category, only green crackers would be permitted to be sold and timings restricted to two hours for bursting of crackers.
- The panel specified that data from November 2019 would be calculated to ascertain the average ambient air quality for both the instances.
- The Tribunal in its order noted that several States, including Odisha, Rajasthan, Sikkim, Delhi and Chandigarh among others had prohibited the sale and use of firecrackers to protect vulnerable groups such as the elderly, children, persons with co-morbidities among others.
4 . Ro-Ro Ferry Service
Context : Prime Minister Narendra Modi will Sunday virtually inaugurate the Ghogha-Hazira Ro-Pax ferry service in Gujarat. This will be the second such ferry service to be launched by the PM after the Ghogha-Dahej route three years ago, which is now dysfunctional.
About Ro-Ro Ferry Service
- The ro-ro ferry services are vessels made to carry wheeled cargo that are driven on and off the ferry on their own wheels or using a platform vehicle. The wheeled cargo includes, cars, trucks, semi-trailer trucks, trailers, and railroad cars.
- The term ro-ro is generally reserved for large ocean-going vessels. The vessels have either built-in or shore-based ramps that allow the cargo to be efficiently rolled on and off the vessel when in port. This is in opposite to the lift-on and lift-off (lo-lo) vessels, which use a crane to load and unload cargo.
- ROPAX is an acronym for roll on/roll off a passenger. It is a ro-ro vessel built for freight vehicle transport with passenger accommodation. The vessels with facilities for more than 500 passengers are often referred to as cruise ferries.
- RoPax is basically used for short sea transport. These vessels comply with both the international standards which apply to a passenger ship as well as to a Ro-Ro.
5 . Special Window for Borrowing
Context : After Puducherry, Congress-ruled Rajasthan last week became the latest Opposition-ruled state to opt for a special borrowing window for meeting its compensation shortfall under Goods and Services Tax (GST). Other dissenting states — Kerala, Punjab, West Bengal, Chhattisgarh, Jharkhand — are yet to join any of the borrowing options floated by the central government to resolve the issue of compensation deficit in the current financial year.
What is the special window for borrowing?
- The Finance Ministry had said last month that the Centre would borrow from the market and then act as an intermediary to arrange back-to-back loans to pay the GST compensation shortfall of Rs 1.1 lakh crore to state governments. This arrangement will not reflect in the fiscal deficit of the Centre, and will appear as capital receipts for state governments.
- In August, the Centre gave two options to the states — either borrow Rs 97,000 crore from a special window facilitated by the RBI, or borrow Rs 2.35 lakh crore from the market. The options have since been revised to Rs 1.10 lakh crore and Rs 1.8 lakh crore, respectively.
- Kerala, Punjab and Chhattisgarh have insisted on further clarification and a no-strings-attached borrowing mechanism, and inclusion of the balance compensation deficit amount beyond the proposed borrowing of Rs 1.10 lakh crore, too, under the ambit of the back-to-back loan mechanism.
- The total GST revenue shortfall for the current fiscal was estimated at Rs 3 lakh crore, of which compensation cess collection was estimated at Rs 65,000 crore, leaving a compensation deficit of Rs 2.35 lakh crore. Of this Rs 2.35 lakh crore, Rs 1.1 lakh crore has been estimated as shortfall on account of GST implementation, while the rest is being estimated as the impact of the pandemic.
Why could states not borrow instead of the Centre enabling the borrowing?
- One of the primary concerns for that mechanism was that states, even if divided into groups, would have tapped the market for borrowing separately, leading to differential rates with a wide variance in interest rates between the states with more debt and those with less debt.
- Also, the yields for state development loans (SDLs), which is the tool for market borrowing by states, are generally at a premium, higher than the yield on the central government’s government securities. So, it would have been costlier for states to borrow rather than the Centre borrowing at a uniform rate and then passing it on to them as a back-to-back loan.
6 . India – Maldives Relationship
Context : New Delhi and Male signed four agreements, including a $100 million Indian grant for an ambitious connectivity project, during Foreign Secretary Harsh Vardhan Shringla’s visit to the Maldives.
Details of the agreements
- Two MoUs are related to “high impact” community development projects,
- Other MoU is on cooperation in sports and youth affairs and another for the $100 million grant, which is part of India’s “$500 million package” for the Greater Male Connectivity Project (GMCP).
7 . Facts for Prelims
Student READY (Rural Entrepreneurship Awareness Development Yojana) programme
- Student READY (Rural Entrepreneurship Awareness Development Yojana) programme is an initiative of Indian Council of Agricultural Research to reorient graduates of Agriculture and allied subjects for ensuring and assuring employability and develop entrepreneurs for emerging knowledge intensive agriculture.
- This envisages the introduction of the programme in all the Agricultural Universities as an essential prerequisite for the award of degree to ensure hands on experience and practical training depending on the requirements of respective discipline and local demands.
- The Student READY (Rural Entrepreneurship Awareness Development Yojana) programme requires all students to undertake a six-month internship, usually in their fourth year, to gain hands-on training, rural awareness, industry experience, research expertise and entrepreneurship skills