Daily Current Affairs : 22nd and 23rd February 2024

Topics Covered

  1. Financial Devolution
  2. FSDC
  3. Maintenance rights for divorced Muslim women
  4. Open Book
  5. India – Albania Relationship
  6. Facts for Prelims

1 . Financial Devolution


Context: Recently various Opposition-ruled States especially from south India have claimed that they have not been receiving their fair share as per the present scheme of financial devolution. They have raised issues about their less than proportionate share of receipt in tax revenue when compared to their contribution towards tax collection. 

What is divisible pool of taxes?

  • Article 270 of the Constitution provides for the scheme of distribution of net tax proceeds collected by the Union government between the Centre and the States. 
  • The taxes that are shared between the Centre and the States include corporation tax, personal income tax, Central GST, the Centre’s share of the Integrated Goods and Services Tax (IGST) etc. This division is based on the recommendation of the Finance Commission (FC) that is constituted every five years as per the terms of Article 280. 
  • Apart from the share of taxes, States are also provided grants-in-aid as per the recommendation of the FC. The divisible pool, however, does not include cess and surcharge that are levied by the Centre. 

How is the Finance Commission constituted?

  • The FC is constituted every five years and is a body that is exclusively constituted by the Union Government. 
  •  It consists of a chairman and four other members who are appointed by the President. 
  • The Finance Commission (Miscellaneous Provisions) Act, 1951, has specified the qualifications for chairman and other members of the commission. 
  • The Union government has notified the constitution of the 16th Finance Commission under the chairmanship of Dr. Arvind Panagariya for making its recommendations for the period of 2026-31. 

What is the basis for allocation? 

  • The share of States from the divisible pool (vertical devolution) stands at 41% as per the recommendation of the 15th FC. 
  •  The distribution among the States (horizontal devolution) is based on various criteria.  
  • The criteria as per the 15th FC can be briefly explained as follows. ‘Income distance’ is the distance of a State’s income from the State with highest per capita income which is Haryana. States with lower per capita income would be given a higher share to maintain equity among States. ‘Population’ is the population as per the 2011 Census. Till the 14th FC, weightage was given for the population as per the 1971 Census but that has been discontinued in the 15th FC. 
  •  ‘Forest and ecology’ consider the share of dense forest of each State in the aggregate dense forest of all the States. 
  •  ‘The demographic performance’ criterion has been introduced to reward efforts made by States in controlling their population. 
  • States with a lower fertility ratio will be scored higher on this criterion. 
  • ‘Tax effort’ as a criterion has been used to reward States with higher tax collection efficiency. 

What are the issues? 

  • The Constitutional scheme has always favoured a strong centre in legislative, administrative and financial relations. However, federalism is a basic feature and it is important that States don’t feel short-changed when it comes to distribution of resources. 
  • While there are always political differences between the Union government and Opposition-ruled States that exacerbate the problem, there are genuine issues that need to be considered. 
  • Firstly, cess and surcharge collected by the Union government is estimated at around 23% of its gross tax receipts for 2024-25, which does not form part of the divisible pool and hence not shared with the States.  
  •  Cess like the GST compensation cess is for the repayment of loans taken to compensate States for the shortfall in tax collection due to GST implementation for the period 2017-22. Some of these amounts are also used for centrally sponsored schemes that benefit the States. However, the States have no control over these components. 
  • Secondly, the amount each State gets back for every rupee they contribute to Central taxes shows steep variation. It can be seen that industrially developed States received much less than a rupee for every rupee they contributed as against States like Uttar Pradesh and Bihar. This is partly due to the fact that many corporations are headquartered in these State capitals where they would remit their direct taxes. However, this variation can also be attributed to the difference in GST collection among various States. 
  • Third, the percentage share in the divisible pool of taxes has been reducing for southern States over the last six FCs. 
  •  This is attributable to the higher weightage being given for equity (income gap) and needs (population, area and forest) than efficiency (demographic performance and tax effort). 
  • Finally, grants-in-aid as per the recommendation of the FC varies among various States. As per the 15th FC, there are revenue deficit, sector-specific and State-specific grants given to various States as well as grants to local bodies that are given based on population and area of States. 

What can be the way forward? 

  • It must be noted that States generate around 40% of the revenue and bear around 60% of the expenditure. The FC and its recommendations are meant to assess this imbalance and propose a fair sharing mechanism. 
  • It is the responsibility of all States to contribute towards the more equitable development of our country. However, there are three important reforms that may be considered for maintaining the balance between equity and federalism while sharing revenue. 
  • Firstly, the divisible pool can be enlarged by including some portion of cess and surcharge in it. The Centre should also gradually discontinue various cesses and surcharges it imposes by suitably rationalising the tax slabs. 
  • Secondly, the weightage for efficiency criteria in horizontal devolution should be increased. GST being a consumption-based destination tax that is equally divided between the Union and the State means that State GST accrual (inclusive of Integrated GST settlement on inter-state sales) should be the same as the Central GST accrual from a State. Hence, relative GST contribution from States can be included as a criterion by providing suitable weightage in future FC. 
  • Finally, similar to the GST council, a more formal arrangement for the participation of States in the constitution and the working of the FC should be considered. 
  • These are measures that need to be implemented by the Centre after discussion with all the States. It is also imperative that the States uphold principles of fiscal federalism by devolving adequate resources to local bodies for vibrant and accountable development. 

2 . Financial Stability Development Council


Context: Illegal lending apps on FSDC radar.  

About FSDC

  • Financial Stability and Development Council is an apex-level body constituted by the government of India. 
  • The idea to create such a super regulatory body was first mooted by the Raghuram Rajan Committee in 2008. 

Members

  • The Council is chaired by the Union Finance Minister. 
  • its members are: Governor, Reserve Bank of India; Finance Secretary and/or Secretary, Department of Economic Affairs; Secretary, Department of Financial Services; Chief Economic Adviser, Ministry of Finance; Chairman, Securities and Exchange Board of India; Chairman, Insurance Regulatory and Development Authority and Chairman, Pension Fund Regulatory and Development Authority. 

Functions

  • The Council deals with issues relating to financial stability, financial sector development, inter–regulatory coordination, financial literacy, financial inclusion and macro prudential supervision of the economy including the functioning of large financial conglomerates.No funds are separately allocated to the Council for undertaking its activities.  
  • The Council and its Sub-Committee (chaired by Governor, Reserve Bank of India) deliberate on agenda items proposed by any of the members of the Council which broadly include matters relating to financial stability, inter-regulatory coordination, and financial sector development. 
  • The Council/Sub-committee deliberates on these issues and suggests taking appropriate steps, as required.  

3 . Maintenance rights for divorced Muslim women


Context: The Supreme Court has decided to examine if a divorced Muslim woman is entitled to a claim of maintenance under Section 125 of the Criminal Procedure Code (CrPC) from her former husband — reigniting the debate on whether secular laws should be given precedence over distinct personal laws. 

How has the law evolved? 

  • The law governing maintenance for destitute wives, children, and parents has been codified under Section 125 of the CrPC. It stipulates that if any person having sufficient means neglects or refuses to maintain his wife, then a magistrate of the first class may, upon proof of such neglect or refusal, order such a person to make a monthly allowance for the maintenance of his wife at a monthly rate as the magistrate thinks fit. 
  • The explanation to this provision clarifies that a “wife” includes any woman who has been divorced by, or has obtained a divorce from, her husband and has not remarried. 
  • The Muslim Women (Protection of Rights on Divorce) Act, 1986 (1986 Act), on the other hand, is a religion-specific law that provides a procedure for a Muslim woman to claim maintenance during divorce. Section 3 of the 1986 Act guarantees the payment of maintenance to a divorced Muslim woman by her former husband only during the period of iddat — a period, usually of three months, which a woman must observe after the death of her husband or a divorce before she can remarry. 
  • After the completion of the iddat period, a woman can approach a first-class magistrate for maintenance in case she has not remarried and is not in a position to take care of herself financially. 
  • A Constitution Bench of the Supreme Court in the Danial Latifi versus Union Of India (2001) case upheld the constitutional validity of the 1986 Act by extending the right of a Muslim woman to get maintenance till she re-marries. It, however, reduced the period of maintenance to the completion of iddat. 
  • In 2009, a Division Bench of the Supreme Court reiterated a divorced Muslim woman’s right to claim maintenance under Section 125 of the CrPC as long as she does not remarry. It highlighted that such a relief would be extended even after the expiry of the iddat period.  

How did the proceedings play out? 

  • The apex court pointed out that Section 3 of the 1986 Act begins with a non-obstante clause (“notwithstanding anything contained in any other law for the time being in force”), and thus it does not bar an alternative remedy under Section 125 of the CrPC. 
  • A Senior advocate agreed with this observation. He also said that the question of whether the 1986 Act takes away the right under Section 125 of the CrPC was not dealt with in Danial Latifi and thus there is a requirement of an authoritative pronouncement in this regard. 
  • However, the observations in paragraph 33 of the judgment suggest that the 1986 Act has to be interpreted in such a manner that the divorced Muslim woman is entitled to all rights of maintenance as are available to other divorced women in the country. Consequently, the rights of divorced women cannot be taken away only from one section of divorced women of our country, lest it infringe Articles 14, 15, and 21 of the Constitution. 
  • Thus, the validity of the 1986 Act was upheld with this understanding that the 1986 Act does not seek to treat Muslim divorced women any less favourably than other divorced women. 
  • Dismissing the petitioner’s argument that the provisions of the 1986 Act reflect the Parliament’s intent to debar Muslim women from seeking relief under Section 125 of the CrPC, the court asserted that if that were the case then the legislators would have explicitly given an overriding effect to the 1986 Act.  

4 . Open Book


Context: After the Central Board of Secondary Education (CBSE) proposed to create open-book tests for students of Classes 9 to 12 in English, Science, Mathematics and Biology from this year, members of the CBSE governing body discussed the issue recently. 

What is an open book exam? 

  • In an open book exam (OBE), students are allowed to refer to their books and notes to answer questions. 
  • OBEs can be either of a restricted type or a free type. In a restricted open book assessment, only the study material approved by the exam-conducting authority is allowed during the exam. In a free type, students can bring any material they find relevant. 
  • Unlike a closed book exam, the test questions in OBEs are structured in a way that students have to apply concepts, instead of just copying information from the available material. 
  • They aim to test whether a student understands the big picture and can apply analytical skills on the concepts learnt. 

Is this a new concept for Indian students? 

  • Contrary to popular assumption, open-book exams are not a new idea. In 2014, CBSE had introduced an Open Text Based Assessment (OBTA) to relieve the students from the burden of mugging up, and acquiring skills of information processing. 
  • Back then, OTBA was introduced in Class 9 for Hindi, English, Mathematics, Science and Social Science, and final examination of Class 11 in subjects such as Economics, Biology and Geography. Students were allowed to refer to learning material provided to them four months ahead of the exam. 
  • The Board, however, discontinued the practice in the 2017-18 academic year, because of its inability to cultivate “critical abilities” among students. 
  • In higher education, OBEs are fairly common. In 2019, the All India Council for Technical Education (AICTE) allowed open book exams in engineering colleges based on the recommendation of an advisory body. 
  • During the pandemic, several Central universities like Delhi University, Jamia Millia Islamia, Jawaharlal Nehru University and Aligarh Muslim University conducted an open book test to assess students. IIT Delhi, IIT Indore and IIT Bombay also conducted online OBEs. 
  • More recently, Kerala’s higher education exam reforms commission recommended the open book format, but only for internal or practical examinations. 

Are open book exams easier? 

  • Contrary to popular opinion, open book assessments are not easier than the traditional form of examination. They are designed to test learning beyond facts and definitions. 
  • For teachers too, setting up questions for an open book exam can be a challenge, as, unlike a traditional exam, the questions cannot be direct. 

Why has CBSE proposed the open book exam now? 

  • The CBSE’s proposal falls in line with the larger reforms planned in the school education system. While there is no mention of the open book examination per se in the National Education Policy 2020, one of the primary reforms it suggests is transition from rote memorisation to competency-based learning.  
  • Similarly, the National Curriculum Framework for School Education also highlights the need to reform the current assessment process, which is at its best “focused on measuring rote learning” and at its worst “creates fear”. 
  • The NCF SC suggests assessments that can accommodate different learning styles of students, provide constructive feedback, and support learning outcomes. 

What does research say on open book exams? 

  • According to a 2021 study conducted among medical students of All India Institute of Medical Sciences (AIIMS) Bhubaneswar, open book exams have the benefit of being less stressful. 
  • A pilot study, published in Cambridge University Press, was performed to check the feasibility and acceptability of online open-book examination in 2020. 
  • The study concluded that among the 98 students, 21.4% failed and 78.6% passed.The disadvantage most students complained of was network connectivity issues. 
  • A 2021 study conducted by Dhananjay Ashri and Bibhu P Sahoo on the use of open book exams for the students of DU stated that even though mean marks scored by the students in an OBE is higher than in a closed book exam, the university did not focus on developing the skills required for a student to crack an OBE. 
  • Another study conducted by Nirma University’s Nitin Pillai and Mamta Pillai, published in June 2022, stressed on the need to train students on how to write an open book exam and developing the necessary skills of analysing concepts to get the benefits of OBE. 

5 . India – Albania relationship


Context: India to open diplomatic mission in Albanian capital.  

About the News

  • Albania’s Foreign Minister Igli Hasani said that Albania is planning to open an Embassy in New Delhi while India will soon have a diplomatic mission in Tirana. 
  • Mr. Hasani, who is visiting India to participate in the annual Raisina Dialogue, presented his country as an important location on the ‘corridor’ that connects Europe with the Asia and urged closer trade ties between the two countries. 
  • He mentioned that in 2023, more than 10 million tourists visited Albania. 

India – Albania Relationship

  • India and Albania established diplomatic relations in 1956. Albania had a Mission in New Delhi since early 2008 and the first Albanian Ambassador to India presented his credentials to the President in October 2010. The Mission was, however, closed down in 2014. 
  • Present-day India-Albania relations are positive and friendly and forward-looking on most counts. Both countries also cooperate in multilateral forums. 

Agreements

  • Following protocol/agreement have been signed between India and Albania: 
  • FOC: A Protocol on India-Albania Foreign Office Consultations was signed in February 2003 in Tirana. 
  • DTAA: The Agreement was signed in July 2013. 
  • Visa Waiver Agreement for Diplomatic and Official Passport was signed in Tirana on 27 November 2015. The Agreement has come into force w.e.f. 20 January 2018. 
  • MoU for Cooperation in the Field of Elections Commission of India and the Central Election Commission of Albania was signed in September 2020. 
  • MoU on mutual recognition of Covid-19 vaccination certificates was signed in February 2022. 

Trade and Investment 

  • The main export items are ceramic products, articles of stone, plaster, cement, aluminum and articles thereof, pharmaceuticals, coffee, tea, spices, electrical machinery and equipment, organic chemicals, raw hides and skins, machinery and mechanical appliances, fish and crustaceans, mollusks, plastics and articles thereof. 
  • The main import items are iron and steel, salt, sulfur earths and stone, raw hides and skins (other than fur skins) and leather, aluminum and articles thereof, oil seeds and olea, footwear, electrical machinery and equipment and parts thereof, essential oils and resinoids, plastic and articles thereof, nuclear reactors, boilers, machinery and mechanical appliances. 
  • GOI Assistance to Albania: India has extended humanitarian assistance of 5,00,000 doses of Covid-19 vaccine (Covishield) to the Republic of Albania to fight the pandemic on 18 April 2021. 
  • ITEC and Other Exchanges: Albania has been availing of the ITEC slots offered to it by the Government of India under its ITEC Scholarship programme. In 2022-23, three slots were allotted to Albania out of which two slots have already been availed of by the Albanian participants. Albanian diplomats have also attended various courses conducted by SSIFS, New Delhi, for Foreign Diplomats. 
  • Culture: The prevalence in Albania of mass-based cultural activities common to socialist regimes, made the people receptive to popular music and cultures from other countries, though these are increasingly overtaken by US and European-origin mass entertainment. Indian films are shown on Albanian television which is state-run and a few Indian films have been shot on location. An ICCR sponsored Manipuri Dance troupe visited Albania in November 2012 and performed during the centenary celebrations of Albania’s independence. Their performance was very much appreciated by local parliamentarians and other dignitaries. An ICCR sponsored classical Indian dance troupe (Mohiniattam form), led by Dr. Neena Prasad, and accompanied by 3 musicians, visited Tirana, Albania, and performed on 6 June 2019 to an appreciative audience. 
  • The International Day of Yoga has been celebrated in Tirana, Albania every year since 2015. The 9th International Day of Yoga 2023 was celebrated in Tirana and more than 100 yoga enthusiasts participated in the event. 
  • Indian Community: There is a small Indian community in Albania of approx. 400. Most of them are temporary worker.  

6 . Facts for Prelims


Milan- NISHAR and MITRA 

  • NISHAR is a platform created by the Indian Navy for networking and information-sharing. 
  • It allows ships of the friendly navies to share information through the MITRA terminal, which works on plug-and-play architecture. 

Human rating

  • Human-rating refers to rating a system that is capable of safely transporting humans to space. 
  • There is no one particular standard for human-rating a spacecraft or launch vehicle, and the various entities that launch or plan to launch such spacecraft specify requirements for their particular systems to be human-rated. 

India-U.S. Defence Acceleration Ecosystem (INDUS-X) summit: 

  • The U.S. Department of Defense (DoD) and Indian Ministry of Defense (MoD) participated in the second India-U.S. Defense Acceleration Ecosystem (INDUS-X) Summit  in New Delhi. 
  • Speakers at the INDUS-X Summit explored opportunities to co-produce advanced military capabilities, create resilient defense supply chains, and enhance U.S.-India military interoperability in support of both countries’ shared vision for a free and open Indo-Pacific. 
  • The Department and Ministry launched the bilateral initiative INDUS-X in 2023 to spur defense innovation in critical technologies by facilitating partnerships among U.S. and Indian companies, investors, and universities. 
  • INDUS-X is the innovation bridge envisioned by the U.S. and Indian national security advisors under the initiative on Critical and Emerging Technology (iCET).   
  • The DoD and MoD have released an INDUS-X Fact Sheet to outline both the initiative’s progress to date and priority near-term efforts. 

Guinea Worm disease

  • Guinea worm disease, a neglected tropical disease (NTD), is caused by the parasite Dracunculus medinensis. 
  • The disease affects poor communities in remote parts of Africa that do not have safe water to drink. 
  • There is neither a drug treatment for Guinea worm disease nor a vaccine to prevent it. 
  • GWD is spread by drinking water containing Guinea worm larvae. 
  • GWD can occur at any time of the year but occurs most commonly during peak transmission season, which varies from country to country. In dry regions, people generally get infected during the rainy season, when stagnant surface water is available. In wet regions, people generally get infected during the dry season, when surface water is drying up and becoming stagnant. 
  • GWD is primarily a human disease. However, in recent years infections in animals, particularly in dogs, have been reported.  

Flash PMI

  • Flash Manufacturing PMI is an estimate of manufacturing for a country, based on about 85% to 90% of total Purchasing Managers’ Index (PMI) survey responses each month.  
  • Any reading of the Flash Manufacturing PMI above 50 indicates improving conditions, while readings below 50 indicate a deteriorating economic climate. 
  • Flash manufacturing PMI is a forward-looking estimate of a country’s manufacturing sector and is intended to provide an accurate advance indication of the final PMI data.  

Interpol 

  • The International Criminal Police Organization, more commonly known as Interpol, comprising 194 member countries, plays a crucial role as an information-sharing network to enable national police forces to combat transnational crimes. 
  • The General Secretariat coordinates our day-to-day activities to fight a range of crimes. Run by the Secretary General, it is staffed by both police and civilians and comprises a headquarters in Lyon, a global complex for innovation in Singapore and several satellite offices in different regions. 
  • In each country, an INTERPOL National Central Bureau (NCB) provides the central point of contact for the General Secretariat and other NCBs. An NCB is run by national police officials and usually sits in the government ministry responsible for policing. 
  • The General Assembly is the governing body and it brings all countries together once a year to take decisions. 
  • There are seven types of notices issued by Interpol — Red Notice, Yellow Notice, Blue Notice, Black Notice, Green Notice, Orange Notice, and Purple Notice. 
  • A blue corner notice also known as an “enquiry notice” allows police forces in member states to share critical crime-related information such as obtaining a person’s criminal record, and location and, having his or her identity verified among others. 
  • A red corner notice is issued by a member state to arrest a wanted criminal through extradition or any other similar lawful action. Such notices are issued against persons wanted by national jurisdictions for prosecution or to serve a sentence based on an arrest warrant or a court decision. The country issuing the request need not be the home country of the fugitive, Interpol acts even on the request of a country where the alleged crime has been committed. 

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