Daily Current Affairs : 31st January 2023

Daily Current Affairs for UPSC CSE

Topics Covered

  1. Finance Commission
  2. Electoral Bonds
  3. Right to Petition the Parliament
  4. Facts for Prelims

1 . Finance Commission

Context: The government will soon kick off the process to set up the Sixteenth Finance Commission, with the Finance Ministry likely to notify the terms of references for the constitutional body, tasked with recommending the revenue sharing formula between the Centre and States and their distribution among States, towards the latter half of this year.    

What is Finance commission?

  • The finance commission is a quasi-judicial body constituted by the president of India under Article 280 of the Indian Constitution. It was established in the year 1951, to define the fiscal relationship framework between the Centre and the state.
  • Finance Commission aims to reduce the fiscal imbalances between the centre and the states (Vertical imbalance) and also between the states (horizontal imbalance). It promotes inclusiveness.
  • Its working is characterised by extensive and intensive consultations with all levels of governments, thus strengthening the principle of cooperative federalism.
  •  Its recommendations are also geared towards improving the quality of public spending and promoting fiscal stability.
  • The first Finance Commission was set up in 1951 and there have been fifteen so far.
  • A Finance Commission is set up once in every 5 years. It is normally constituted two years before the period. It is a temporary Body.


  • The Finance Commission consists of a chairman and four other members to be appointed by the president.
  • They hold office for such period as specified by the president in his order. They are eligible for reappointment
  • The constitution authorises the parliament to determine the qualification of members of the commission and the manner in which they should be selected.
  • Accordingly, the Parliament of India enacted the Finance Commission [Miscellaneous Provisions] Act, 1951 and The Finance Commission (Salaries & Allowances) Rules, 1951 to specify the qualification of the chairman and members of the commission
  • As per the provisions contained in the Finance Commission [Miscellaneous Provisions] Act, 1951 and The Finance Commission (Salaries & Allowances) Rules, 1951, the Chairman of the Commission is selected from among persons who have had experience in public affairs, and the four other members are selected from among persons who–
    • (a) are, or have been, or are qualified to be appointed as Judges of a High Court; or
    • (b) have special knowledge of the finances and accounts of Government; or
    • (c) have had wide experience in financial matters and in administration; or
    • (d) have special knowledge of economics

  Functions of Finance Commission of India

Article 280 (3) speaks about the functions of the Finance Commission. The Article states that it shall be the duty of the Commission to make the recommendations to the President as to:

  • 1.  The distribution between the Union and the States of the net proceeds of taxes, which may be divided between them and the allocation among the states of the respective shares of such proceeds;
  •  2.  To determine the quantum of grants in-aid to be given by the Centre to states [Article 275 (1)] and to evolve the principles governing the eligibility of the state for such grant-in-aid;
  • 3.  Any other matter referred to the Commission by the President of India in the interest of sound finance. Several issues like debt relief, financing of calamity relief of states, additional excise duties, etc. have been referred to the Commission invoking this clause

About Fifteenth Finance Commission

  • The Fifteenth Finance Commission was constituted on 27 November 2017 against the backdrop of the abolition of Planning Commission (as also of the distinction between Plan and non-Plan expenditure) and the introduction of the goods and services tax (GST), which has fundamentally redefined federal fiscal relations.
  • It was chaired by N.K Singh
  • Its recommendations will be implemented starting 1 April 2020.

2 . Electoral Bonds

Context: The Supreme Court scheduled to examine whether petitions challenging the validity of electoral bonds scheme need to be referred to a Constitution Bench.

About the petition

  • The petition was filed by the Association for Democratic Reforms (ADR) challenging the Centre’s electoral bonds Scheme.
  • The petition alleged that the Finance Act 2017 made the electoral bonds exempt from disclosure under the Representation of peoples Act, 1951 led to unchecked, unknown funding to political parties.
  • The petition also said that The Finance Act 2016 which amended the Foreign Contribution Regulation Act (FCRA), 2010 will allow the foreign companies with subsidiaries in India to fund political parties in India. This will made Indian politics and democracy exposing to international lobbyists
  • The plea has been pending since 2017.

What is electoral bond scheme?

  • Electoral bonds are money instruments like promissory notes that can be bought by companies and individuals in India from the State Bank of India (SBI)
  • Such bonds, which are sold in multiples of Rs 1,000, Rs 10,000, Rs 1 lakh, Rs 10 lakh, and Rs 1 crore, can be bought from authorised branches of the State Bank of India.
  • As such, a donor is required to pay the amount — say Rs 10 lakh — via a cheque or a digital mechanism (cash is not allowed) to the authorised SBI branch.
  • There is no limit on the number of electoral bonds that a person or company can purchase.
  • The donor can then give this bond (just one, if the denomination chosen is Rs 10 lakh, or 10, if the denomination is Rs 1 lakh) to the party or parties of their choice.
  • The political parties can choose to encash such bonds within 15 days of receiving them and fund their electoral expenses. On the face of it, the process ensures that the name of the donor remains anonymous.
  • Every party registered under section 29A of the Representation of the Peoples Act, 1951 (43 of 1951) and having secured at least one per cent of the votes polled in the most recent Lok Sabha or State election has been allotted a verified account by the Election Commission of India.
  • The bonds go for sale in 10-day windows in the beginning of every quarter, i.e. in January, April, July and October, besides an additional 30-day period specified by the Central Government during Lok Sabha election years.
  • The central idea behind the electoral bonds scheme was to bring about transparency in electoral funding in India.

What is the Purpose of the electoral Bond?

  • It was introduced to” cleanse the system of political funding in the country” by eradicating the “menace of unaccounted money coming into the country’s economy through political funding”.
  • It would make political donations transparent while also protecting the identity of the donor.
  • Under the scheme, bonds are available for purchase at any SBI branch in multiples of ₹1,000, ₹10,000, ₹1 lakh, ₹10 lakh and ₹1 crore and can be bought through a KYC-compliant account. There is no limit on the number of electoral bonds that a person or company can purchase.
  • Every party registered under section 29A of the Representation of the Peoples Act, 1951 (43 of 1951) and having secured at least one per cent of the votes polled in the most recent Lok Sabha or State election has been allotted a verified account by the Election Commission of India. The donor can donate the bond to a party of their choice, which can cash it within 15 days, only through the allotted account.

Will it be tax deductible?

  • A donor will get a deduction and the recipient, or the political party, will get tax exemption, provided returns are filed by the political party

 Why have electoral bonds attracted criticism?

  • The central criticism of the electoral bonds scheme is that it does the exact opposite of what it was meant to do: bring transparency to election funding.
  • Critics argue that the anonymity of electoral bonds is only for the broader public and opposition parties.
  • The fact that such bonds are sold via a government-owned bank (SBI) leaves the door open for the government to know exactly who is funding its opponents.
  • This, in turn, allows the possibility for the government of the day to either extort money, especially from the big companies, or victimise them for not funding the ruling party — either way providing an unfair advantage to the party in power.
  • Critics have noted that more than 75 per cent of all electoral bonds have goes to the ruling party in the centre.
  • Further, one of the arguments for introducing electoral bonds was to allow common people to easily fund political parties of their choice but more than 90% of the bonds have been of the highest denomination (Rs 1 crore).
  • Moreover, before the electoral bonds scheme was announced, there was a cap on how much a company could donate to a political party: 7.5 per cent of the average net profits of a company in the preceding three years. However, the government amended the Companies Act to remove this limit, opening the doors to unlimited funding by corporate India, critics argue.

3 . Right to Petition the Parliament

Context:  The Supreme Court has said it will hear on February 17 a petition to evolve a mechanism for citizens to directly move Parliament and seek initiation of deliberations on issues highlighted by them.

About the Plea

  • A plea has been filed in the Supreme Court seeking a direction to the Centre and others to take steps to create an appropriate system which empowers citizens to petition Parliament and seek initiation of deliberations on issues highlighted by them
  • The plea has sought a declaration that it is the fundamental right of citizens under Articles 14, 19(1)(a) and 21 of the Constitution to directly petition Parliament to seek initiation of a debate, discussion and deliberation on the issues highlighted by them in their petitions.

What is the need for the Mechanism to petition the Parliament

  • An ordinary citizen of the country felt “disempowered” when it came to participation in the democratic process as after they cast their votes to elect representatives there was no scope for any further participation.
  • The absence of this mechanism creates a void between elected representatives and the citizens.
  • The people are disconnected from the law-making process. This distancing of the citizens to their inherent rights to fully participate in Indian democracy is a matter of concern
  • The Current system does not fully allow citizens to initiate discussions in Parliament by moving appropriate petitions. Hence, if the framework is implemented, it will ensure that the grievances of citizens can be addressed in a proper manner by Parliament.
  • The Citizens have a fundamental right to participate in democratic affairs and are constitutionally entitled to present workable and constructive suggestions to Parliament on matters of national importance so that public interest is appropriately safeguarded.
  • This kind of mechanism is already in place in the United Kingdom, and it has been working for several years

The Right to petition Parliament

  • Petitioning is a formal process that involves sending a written appeal to Parliament. The public can petition Parliament to make MPs aware of their opinion and/ or to request action.
  • Anyone can petition Parliament. The only requirement is that petitions be submitted in the prescribed format, in either Hindi or English, and signed by the petitioner. In the case of Lok Sabha, the petition is normally required to be countersigned by an MP.
  • Petitions can be sent to either House in respect of:
    • Any Bills/ other matters that are pending before the House
    • Any matter of general public interest relating to the work of the Central Government
  • The petition should not raise matters that are currently sub-judice or for which remedy is already available under an existing law of the Central Government.
  • A system by which the citizens can directly petition Parliament is already in place in the United Kingdom and it has been working well for several years

4 . Facts for Prelims

Polar vortex

  • The polar vortex is a low pressure area—a wide expanse of swirling cold air—that is parked in polar regions. During winter, the polar vortex at the North Pole expands, sending cold air southward. This happens fairly regularly and is often associated with outbreaks of cold temperatures in the United States.
  • When the low-pressure system is strong and healthy, it keeps the jet stream traveling around Earth in a circular path. The jet stream is a band of reliably strong wind that plays a key role in keeping colder air north and warmer air south. But when the vortex weakens, part of the weakened low-pressure system can break off. This breaking-off process causes colder temperature in United states and Europe
  • Without that strong low-pressure system, the jet stream does not have enough force to maintain its usual path. It becomes wavy and rambling. When high-pressure systems get in its way, a collection of cold air pushes south, along with the rest of the polar vortex system.
  • The waxing and waning of the polar vortex is driven by the movement of mass and the transfer of heat in the polar region.
  • The breakup of the northern polar vortex occurs between mid-March to mid-May. This event signifies the transition from winter to spring, and has impacts on the hydrological cycle, growing seasons of vegetation, and overall ecosystem productivity. The timing of the transition also influences changes in sea ice, ozone, air temperature, and cloudiness

Submarine cable

  • A submarine cable is a fiber optic cable laid in the ocean, connecting two or more landing points.
  • These cables are generally comprised of the optical fibers that carry the information, which are then covered in silicon gel, then sheathed in varying layers of plastic, steel wiring, copper, and nylon in order to provide insulation to protect the signal and protect the cable from damage from wildlife, anchors & fishing, or weather & other natural events.

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