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Port Infrastructure and Shipping Industry – Sagarmala Project, SDC, CEZ, etc.

What is in Great Nicobar, site of NITI Aayog’s mega Island Project?

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Nicobar Triangle, GNI Project

Why in the News?

  • The opposition party has demanded the immediate suspension of all clearances granted to NITI Aayog’s Great Nicobar Island (GNI) Project.
  • It alleged violations of due process, legal and constitutional provisions protecting tribal communities.

Great Nicobar Island: An Overview

  • Geography and Ecology: Southernmost tip of India, part of the Andaman and Nicobar archipelago comprising 600-odd islands.
  • Environment: Hilly, covered with lush rainforests, annual rainfall of around 3,500 mm.
  • Biodiversity: Hosts numerous endangered and endemic species including the giant leatherback turtle, Nicobar megapode, Great Nicobar crake, Nicobar crab-eating macaque, and Nicobar tree shrew.
  • Area: 910 sq km with mangroves and Pandan forests along the coast.
  • Indigenous Communities:
    • Shompen Tribe: Approximately 250 people live in interior forests, predominantly hunter-gatherers, classified as a Particularly Vulnerable Tribal Group.
    • Nicobarese Community: Two groups – Great Nicobarese and Little Nicobarese, practice farming and fishing.
    • Resettlement: The Great Nicobarese were resettled in Campbell Bay after the 2004 tsunami.
  • Administrative Hub: Campbell Bay serves as the administrative hub, housing local offices of the Andaman and Nicobar administration and the panchayat.

Back2Basics: “Nicobar Triangle”

It is named after the Nicobar Islands, which are located at the northern apex of this triangular area.

The islands within the Nicobar Triangle include:

  1. Nicobar Islands: This group of islands belongs to India and is situated to the south of the Andaman Islands. They are known for their diverse flora and fauna and are inhabited by indigenous tribes.
  2. Andaman Islands: Located to the north of the Nicobar Islands, the Andaman Islands are also part of India. They are well-known for their lush forests, coral reefs, and indigenous tribes.
  3. Indonesian Archipelago: To the south and southeast of the Nicobar Islands lies the Indonesian archipelago, which includes thousands of islands spanning a vast area between the Indian and Pacific Oceans.

What is GNI Project?

The GNI Project refers to the “Holistic Development of Great Nicobar Island,” a proposed mega project being piloted by NITI Aayog.

  • Implementing Agency: The project is to be implemented by the Andaman and Nicobar Islands Integrated Development Corporation (ANIIDCO).
  • Historical Context: Development plans for a port in Great Nicobar date back to the 1970s, aimed at leveraging its strategic location near the Malacca Strait.
  • The project aims to develop the southern end of the Andaman and Nicobar group of Islands in the Bay of Bengal by constructing –
  1. Transshipment port
  2. Dual-use military-civil international airport
  3. Power plant (450 MVA gas and solar-based) and
  4. A township over a span of 30 years on more than 160 sq. km of land, of which 130 sq. km is primary forest

Features of the Project

  • Transshipment hub of the East: The proposed port will allow Great Nicobar to participate in the regional and global maritime economy by becoming a major player in cargo transshipment.
  • Naval control: The port will be controlled by the Indian Navy, while the airport will have dual military-civilian functions and will cater to tourism as well.
  • Urban amenities: Roads, public transport, water supply and waste management facilities, and several hotels have been planned to cater to tourists.

Significance of the project

  • Economic significance: The proposed port would allow GNI to become a significant player in cargo transhipment, as it is positioned equidistant from Colombo, Port Klang (Malaysia), and Singapore.
  • Strategic significance: The proposal to develop GNI has been on the table since the 1970s, and it has been highlighted repeatedly as a crucial element for national security and consolidation of the Indian Ocean Region.
    • In recent years, the escalating Chinese presence in the Indian Ocean has added greater urgency to this imperative.

Issues with the Project

  • The project entails the deforestation of 130 sq km, and felling 10 lakh trees, threatens biodiversity at Galathea Bay, displaces indigenous tribes, lacks thorough impact assessments, and poses seismic risks to vulnerable communities.

Due-process Violations highlighted by the ‘Opposition’

(1) Did not recognise the grant ownership: The island administration did not recognise or grant ownership of any forest land to local tribespeople as per FRA, a requisite step under the Forest Conservation Rules, 2017, before Stage-I clearance is granted.

  • This is despite the fact that Rule 6(3)(e) of Forest Conservation Rules-2017 (FCR) requires that any diversion of forest land first requires the District Collector to recognise and vest rights to locals under the FRA.
  • The legislation allows forest communities the right to control and manage the use of the forest land over which they hold titles, and their consent is mandatory for diverting it.

(2) Inconsistencies with Stage-I Clearance: The Stage-I clearance for the project was granted in October 2022, two years after the application was received. Monthly progress reports show that the district administration did not process any claims over forest land under the FRA in the 26 months since project sanction.

(3) Withdrawal of Consent: Weeks after the Stage-I clearance was granted, the Tribal Council at Campbell Bay withdrew the consent granted by the Gram Sabha.

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Festivals, Dances, Theatre, Literature, Art in News

Srinagar gets tag of ‘World Craft City’, fourth from country

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Global Craft Cities in India, World Crafts Council International (WCCI)

Why in the News?

Srinagar has become the fourth Indian city to be recognised as a ‘World Craft City’ by the World Craft Council (WCC), three years after it was designated as part of the UNESCO Creative City Network (UCCN) for crafts and folk arts.

Craft Sector in Kashmir

  • The Indian National Trust for Art and Cultural Heritage-Kashmir (INTACH-K) is working with the J&K Handicrafts department to map Srinagar’s craft sector in preparation for the final nomination.
  • Srinagar boasts a rich artisanal heritage, with over 20,000 registered craftsmen engaged in various disciplines such as papier mâché, walnut wood carving, hand-knotted carpets, and more.
  • Handicrafts contribute significantly to the local economy, with approximately 2.64% of J&K’s overall economic output attributed to the sector by 2016-17.
  • Notable Craft: Papier-Mache, Walnut Wood Carving, Carpets, Sozni embroidery and Pashmina and Kani shawls.

About World Craft Council (WCC International)

Details
What is it? Non-profit, Non-governmental organization
Working
  • Establishment in 1964;
  • Registered in Belgium as an international association without lucrative purpose (AISBL).
  • Affiliated to the UNESCO
Founders Kamaladevi Chattopadhay and Aileen Osborn Webb
Purpose To promote fellowship among craftspersons worldwide, foster economic development through craft-related activities, organize exchange programs, workshops, conferences, seminars, and exhibitions, and offer encouragement and advice to artisans.
Legal Status
  • Registered in Belgium as an international association without lucrative purpose (AISBL)
  • WCC is organized into five regions: Africa, Asia Pacific, Europe, Latin America, and North America.
Meetings
  • European branch meets annually;
  • The General Assembly occurs every four years (took place in Chennai in 2012).

What is World Craft City (WCC) Designation?

  • The WCC initiative was launched in 2014 by the World Crafts Council AISBL (WCC-International).
  • It recognizes the pivotal role local authorities, craftspeople, and communities play in cultural, economic, and social development worldwide.
  • India has only 3 cities designated as World Craft City:
  1. Jaipur (Kundan Jadai (Gem setting), Meenakari Jewellery, Lac-based craft, Gotta Patti Work etc. )
  2. Mysuru (Kinnal paintings, Sandalwood carvings, Rosewood Inlay etc. )
  3. Mamallapuram (Stone Carving continuing since Pallava dynasty (275 CE to 897 CE))

PYQ:

[2018] Safeguarding the Indian art heritage is the need of the moment. Comment (10M) 

[2018] Consider the following pairs:

  1. Puthukkuli shawls — Tamil Nadu
  2. Sujni embroidery — Maharashtra
  3. Uppada Jamdani saris — Karnataka

Craft Heritage of which of the pairs given above is/are correct?

(a) 1 only

(b) 1 and 2

(c) 3 only

(d) 2 and 3

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Indian Missile Program Updates

Philippines hails BrahMos Missiles as a ‘game changer’

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Brahmos Missile

Why in the News?

  • The BrahMos cruise missiles so inducted are termed a “game changer” by the Philippines envoy. The missiles provide credible defence and deterrent capabilities to the Philippines’ armed forces.

About BrahMos Missiles

  • BrahMos is a joint venture between the DRDO and Russia’s NPO Mashinostroyeniya.
  • The name BrahMos comes from the two rivers, the Brahmaputra of India and the Moskva of Russia.
  • The first successful test in 2001 was conducted from a specially designed land-based launcher.

Capabilities:

  • BrahMos is a medium-range ramjet supersonic cruise missile.
  • Launched from: submarines, ships, aircraft, or land.
  • It is the fastest supersonic cruise missile in the world.
  • It has two stages:
  1. The first stage comprised a solid-fuel rocket booster and
  2. The second stage comprises a liquid-fueled ramjet. ( because it provides the capability to manoeuvre and increase the range of missiles)

Warhead:

  • Ship-launched and land-based missiles can carry a 200 kg warhead,
  • Aircraft-launched variant (BrahMos A) can carry a 300 kg warhead.

Variants and Range 

  • The missile travels at speeds of Mach 2.8 to 3.0, which is being upgraded to Mach 5.0.
  • A hypersonic version of the missile, BrahMos-II, is also presently under development with a speed of Mach 7-8 to boost aerial fast strike capability.
  • Initially restricted by the Missile Technology Control Regime to a range of 290km, the BrahMos missile’s range was extended to 450km following India’s entry into the regime in June 2016.
  • Ongoing efforts aim further to extend the missile’s range beyond 600km, enhancing its operational reach and effectiveness in various scenarios.

India-Philippines Relations: A quick recap

  • Context: 2023 marked the 75th anniversary of bilateral relations between India and the Philippines.
  • Equipment Transfers: These agreements facilitated government-to-government procurement of defence material and equipment.

Details of the BrahMos Deal

A MoU on defence cooperation was signed in 2006, reinforced by a 2017 MoU on defence industry and logistics cooperation.

  • Contract Details: In January 2022, the Philippines signed a $375 million deal with India for three batteries of shore-based anti-ship BrahMos missiles.
  • First Export Customer: The Philippines became the first export customer for the joint India-Russia venture.
  • Delivery Milestone: The first batch of missiles was delivered in April 2024.
  • Boost to India’s Defence Export: This deal marks India’s first overseas export of the BrahMos, showcasing India’s growing defence industry capabilities.

Bilateral Trade and Economic Cooperation

  • Trade Milestone: In 2023, bilateral trade crossed the $3 billion mark for the first time, with a trade balance in India’s favour.
  • Preferential Trade Agreement (PTA): Ongoing negotiations for a PTA aim to enhance trade balance and diversification.
  • Trade Partnerships: India is among the top 15 trade partners for the Philippines.

Modernisation of the Philippines Armed Forces

  • Phase-3 Modernisation: The Philippines armed forces are in phase-3, termed Horizon-3, of their modernisation programme.
  • Focus Areas: They are looking at acquiring ships, aircraft, and radars, and enhancing Maritime Domain Awareness (MDA).
  • Strategic Goals: Aiming to defend entitlements and secure their Exclusive Economic Zone (EEZ) against China over its claims for the South China Sea.

 

PYQ:

[2014] Which reference to the Agni-IV Missile,

which of the following statements is/are correct?

  1. It is a surface-to-surface missile.
  2. It is fuelled by liquid propellant only.
  3. It can deliver one-tonne nuclear warheads about 7500 km away.

Select the correct answer using the code given below.

(a) 1 only

(b) 2 and 3 only

(c) 1 and 3 only

(d) 1, 2 and 3

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Medical Education Governance in India

NTA Reform Panel to Check Irregularities in Exams

Note4Students

From UPSC perspective, the following things are important :

Prelims level: NTA

Why in the News?

A seven-member high-level committee was constituted under the chairmanship of K. Radhakrishnan, former ISRO Chairman, by the Ministry of Education to reform the National Testing Agency (NTA).

About National Testing Agency (NTA)

  • NTA is a premier, specialist, autonomous and self-sustained testing organization to conducts entrance examinations for admission/fellowship in higher educational institutions.
  • It was established in 2017 with a grant amount of Rs.25 crore from the Union Government.
  • NTA is responsible for conducting exams such as:
    • Joint Entrance Examination – Main (JEE Main)
    • National Eligibility cum Entrance Test-Undergraduate (NEET-UG) as well as NEET PG
    • National Eligibility Test (NET)
    • Common Management Admission Test (CMAT)
    • Graduate Pharmacy Aptitude Test (GPAT).
  • The NTA is chaired by an eminent educationist who will be appointed by the Ministry of Education.
  • There will be a Board of Governors comprising members from user institutions.

National Testing Agency (NTA) Under Scrutiny

  • The NTA has been criticized after the NEET paper leak controversy and the subsequent scrapping of exams like UGC-NET due to “lack of integrity”.
  • The committee aims to establish a robust process for conducting various entrance examinations end to end.

NTA Reform Panel: Committee Composition

  • Committee Head: K. Radhakrishnan, former Chairman of ISRO and Chairman of the Board of Governors at IIT-Kanpur.
  • Two-Month Timeline: The committee aims to meet ten times over the next two months to develop comprehensive recommendations.
  • Key Issues and Focus Areas:
    • Data Security Protocol: Develop a manual to fix a data security protocol to prevent question paper leaks.
    • Printing and Process Integrity: Review processes for printing question papers, onboarding printers, and training staff to minimize external participation.
    • Organisational Restructuring: Consider adding a data security vertical in the NTA organogram and implementing transparent processes, requiring organizational restructuring.
  • Examination Investigation and Security:
    • Root Cause Analysis: The committee will investigate the initial cause of question paper leaks to identify and plug gaps.
    • Modes of Examination: Examine different modes of conducting examinations:
  1. JEE (Mains) and JEE (Advanced) are computer-based tests.
  2. NEET-UG is conducted in pen-paper Optical Mark Recognition (OMR) mode.

Challenges faced by NTA

  • Infrastructure Limitations: Currently, India lacks the infrastructure to conduct computer-based tests online for more than three lakh students simultaneously.
  • Large-Scale Exams: NEET-UG involves up to 24 lakh students appearing in pen and paper OMR mode at once.

Conclusion

  • The reforms are critical to restoring the integrity of entrance examinations in India, ensuring secure and fair testing processes.
  • The committee’s recommendations will play a pivotal role in shaping the future operations of the NTA and entrance examination protocols.

Back2Basic:  University Grants Commission (UGC)

Details
Establishment
  • Came into existence on 28th December, 1953.
  • Became a statutory organization by an Act of Parliament in 1956.
Legislation The UGC Act, 1956.
Nodal Ministry Ministry of Human Resource Development (now Ministry of Education).
Responsibilities
  • Providing funds to universities and colleges.
  • Coordination, determination, and maintenance of standards of teaching, examination, and research in institutions of higher education.
Mandate
  • Promoting and coordinating university education.
  • Determining and maintaining standards of teaching, examination, and research in universities.
  • Framing regulations on minimum standards of education.
  • Monitoring developments in collegiate and university education.
  • Disbursing grants to universities and colleges.
  • Serving as a link between the Union and state governments and institutions of higher learning.
  • Advising Central and State governments on measures necessary for the improvement of university education.
Unique Distinction Only grant-giving agency in India with the dual role of funding and maintaining standards in higher education institutions.
Functions
  • Promoting and coordinating university education.
  • Determining and maintaining standards of teaching, examination, and research in universities.
  • Framing regulations on minimum standards of education.
  • Monitoring developments in collegiate and university education.
  • Disbursing grants to universities and colleges.
  • Serving as a link between the Union and state governments and institutions of higher learning.
  • Advising Central and State governments on measures necessary for the improvement of university education.
Link Role Acts as a vital link between Union and State governments and institutions of higher learning.
Advisory Role Advises the Central and State governments on necessary measures for the improvement of university education.

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Surrogacy in India

Centre amends Maternity Leave Rules for Surrogacy

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Surrogacy (Regulation) Act, 2021

Why in the News?

  • The Centre has notified amended rules allowing women government employees to take 180 days of maternity leave for children born through surrogacy.
    • Changes are introduced in the Central Civil Services (Leave) Rules, 1972.
    • There were previously no rules granting maternity leave to women government employees for children born through surrogacy.

Back2Basics: Surrogacy (Regulation) Act, 2021 

  • Purpose: The Act aims to regulate surrogacy in India by prohibiting commercial surrogacy and allowing only altruistic surrogacy.
  • Eligibility Criteria:
    • Only Indian couples who have been legally married for at least five years can opt for surrogacy.
    • The woman must be between 25 to 50 years old, and the man must be between 26 to 55 years old.
    • Both partners must not have any living biological, adopted, or surrogate children.
  • Surrogate Mother Criteria:
    • The surrogate mother must be a close relative of the intending couple.
    • She should be a married woman having her own child and must be 25 to 35 years old.
  • Prohibitions:
    • Commercial surrogacy is banned under this Act.
    • Any form of payment to the surrogate mother beyond medical expenses and insurance coverage is prohibited.
  • Penalties:
    • Engaging in commercial surrogacy can lead to imprisonment up to 10 years and a fine up to Rs 10 lakhs.
  • Regulatory Bodies:
    • The Act establishes a National Surrogacy Board at the national level and State Surrogacy Boards at the state level to oversee the implementation of the law.

About the Central Civil Services (Leave) (Amendment) Rules, 2024

  • The amendment is issued under this notification, exercising the powers conferred by the proviso to Article 309 of the Constitution.
    • Article 309 provides that acts of the appropriate Legislature may regulate the recruitment and conditions of service of persons appointed to public services and posts in connection with the affairs of the Union or any State.
  • Authority: The President of India has made these amendments to the Central Civil Services (Leave) Rules, 1972.

Features and Benefits:

  • Surrogacy Inclusion: These amendments specifically address the needs of surrogacy, providing equitable maternity, paternity, and childcare leave benefits to government employees involved in surrogacy.
  • Enhanced Leave Entitlements:
    • Maternity Leave: 180 days for both the surrogate and the commissioning mother.
    • Paternity Leave: 15 days for the commissioning father within six months of the child’s birth.
    • Child Care Leave: Available to the commissioning mother. Female government servants and single male government servants are already allowed childcare leave for a maximum of 730 days (2 years!) during their entire service for the care of their two eldest surviving children.
  • Flexibility and Inclusivity:
    • The amendments aim to provide more flexible and inclusive leave options for government employees, recognizing diverse family structures and reproductive choices.
  • Support for Families:
    • These changes enhance support for government employees, ensuring they can adequately care for their children and family needs, especially in cases of surrogacy.
  • Administrative Implementation:
    • The rules simplify the process for applying for and approving leave, ensuring that employees can easily access their entitlements.

Impact:

  • Employee Well-being: Improved leave policies contribute to better work-life balance and overall well-being for government employees.
  • Gender Equality: By providing paternity leave and child care leave in surrogacy cases, the rules promote gender equality and shared parenting responsibilities.
  • Organizational Efficiency: Streamlined leave procedures and clear guidelines help maintain productivity and efficiency within government departments.

PYQ:

[2020] In the context of recent advances in human reproductive technology, “Pronuclear Transfer” is used for:

(a) fertilization of egg in vitro by the donor sperm

(b) genetic modification of sperm-producing cells

(c) development of stem cells into functional embryos

(d) prevention of mitochondrial diseases in offspring

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Foreign Policy Watch: India-Maldives

From China tilt to a balancing with Beijing and Delhi  

Note4Students

From UPSC perspective, the following things are important :

Mains level: Economic difficulties in Male

Why in the news?

Amid mounting domestic and foreign policy challenges in Male, Mohamed Muizzu appears to be seeking reconciliation with India.

Economic Difficulties in Maldives

  • Debt Burden: Maldives faces severe economic strain with a debt-to-GDP ratio of 110% and significant debt servicing obligations, including around $512 million annually in 2024 and 2025.
  • Foreign Reserves: Foreign reserves are critically low at $622 million, insufficient to cover debt maturities and sustain imports amid rising inflation.
  • Dependence on Imports: Heavy reliance on imports for essential goods exacerbates economic vulnerabilities, particularly amidst food and fuel inflation.
  • Revenue Generation: The government struggles with low domestic revenue generation capacity, further complicating fiscal management and debt sustainability.
  • Diversification Efforts: Efforts to diversify economic partnerships beyond traditional allies like India and China reflect a strategy to mitigate economic dependencies and attract diverse investments.

What do the ties between India and China imply?

  • Geopolitical Competition: India and China’s engagements in countries like the Maldives reflect a broader competition for influence in the Indian Ocean region. Both countries strategically invest in infrastructure and security partnerships to enhance their regional foothold.
  • Economic Leverage: China’s substantial investments in the Maldives, including infrastructure projects under the Belt and Road Initiative (BRI), provide economic leverage but also raise concerns about debt sustainability and strategic dependencies.
  • Strategic Alignment: While India emphasizes developmental assistance and strategic partnerships focused on security and governance, China’s engagements often prioritize infrastructure development and economic cooperation, reflecting different strategic priorities.
  • Regional Stability: Both India and China play pivotal roles in ensuring stability and security in the Indian Ocean region. Their respective approaches influence regional dynamics and perceptions among neighbouring countries regarding economic partnerships and security alignments.

India’s stand

  • Balanced Approach: India continues to engage with the Maldives despite geopolitical shifts and maintains a stance of constructive diplomacy, offering economic support and emphasizing mutual respect.
  • Long-term Engagement: Inviting President Muizzu to Prime Minister Modi’s swearing-in signals India’s commitment to long-term bilateral relations and stability in the Indian Ocean region.
  • Strategic Importance: India views the Maldives as crucial for maritime security and regional stability, underpinning its continued diplomatic efforts and economic assistance.

Conclusion: India can increase its economic assistance to the Maldives through grants, concessional loans, and capacity-building initiatives aimed at improving fiscal management and revenue generation capabilities. And focus on projects that enhance infrastructure resilience, promote sustainable development, and support economic diversification efforts beyond traditional sectors.

Mains PYQ:

Q Discuss the political developments in Maldives in the last two years. Should they be of any cause of concern to India? (UPSC IAS/2013) 

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Finance Commission – Issues related to devolution of resources

Finance Commission and Indian cities     

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Finance commission

Mains level: 16th Finance Commission can catalyse municipal-level financial reforms

Why in the news? 

With the new Lok Sabha and Union government in place, this final piece focuses on how the 16th Finance Commission can drive substantive public finance reforms for India’s cities.

Note: The Sixteenth Finance Commission has been requested to make its recommendations available by October 31, 2025, covering an award period of 5 years commencing 1st April, 2026.

16th Finance Commission can catalyse municipal-level financial reforms     

  • Strengthening State Finance Commissions: The Commission should emphasize the need for state governments to constitute state finance commissions on time, provide them with adequate resources, and ensure their recommendations are taken seriously.
  • Fiscal Decentralization: The 16th FC should recommend a formula-based approach for predictable fiscal transfers from state governments to municipalities, moving away from the current practice of ad hoc, discretionary grants. This will enhance the financial autonomy of urban local bodies.
  • Revenue Optimization: The Commission should incentivize municipalities to enhance their own revenues through measures like property tax reforms, user charges, and leveraging land assets. This will reduce their dependence on state grants and promote fiscal responsibility.
  • Fiscal Responsibility and Budget Management: The 16th FC can provide incentives for municipalities to adopt fiscal responsibility and budget management frameworks to accelerate municipal borrowings for infrastructure development. This will enable cities to access capital markets for financing their growth.
  • Transparency and Citizen Participation: The 16th FC can encourage municipalities to enhance transparency and citizen participation in urban governance for improved accountability at the neighbourhood level. This will make urban local bodies more responsive to the needs of citizens.

Need for the Reforms

  • Inadequate Funding and Resource Utilization: Indian cities face significant financial shortfalls and struggle to effectively utilize the funds they have, leading to underdeveloped infrastructure and services.
  • Lack of Accountability: There is minimal accountability regarding how municipal spending improves citizens’ lives, resulting in inefficient use of resources and unmet public needs.
  • Fiscal Decentralization: Cities need predictable fiscal transfers for effective planning, but state governments often delay constituting State Finance Commissions (SFCs) and implementing their recommendations.
  • Revenue Optimization: Cities underutilize their revenue-generating powers due to outdated valuation processes controlled by state governments. Comprehensive reforms are needed at all stages of revenue collection.
  • Transparency and Fiscal Responsibility: The legal framework for financial accounting, reporting, and budgeting is inconsistent across states. Standardized formats, mandatory accounting standards, and management accounting systems are necessary to improve transparency and fiscal responsibility.

Activities by State Governments

  • Timely Constitution and Implementation of State Finance Commissions: State governments must ensure the timely establishment and effective implementation of SFC recommendations to support fiscal decentralization and provide predictable funding to cities.
  • Updating Valuation Processes: States should regularly update guidance values or circle rates to reflect current market values, enabling cities to optimize revenue collection and ensure financial sustainability.
  • Enhancing Legal and Institutional Frameworks: States should establish and enforce standardized formats for financial accounting, reporting, and budgeting to ensure consistency, transparency, and comparability across municipalities.
  • Empowering Local Governments: States should delegate reasonable expenditure authority to city councils, reducing dependency on state-level approvals and enabling more efficient and responsive local governance.
  • Mandating Transparency and Citizen Participation: States should mandate public disclosure of municipal financial data and project details in machine-readable formats and support the implementation of participatory budgeting to enhance transparency and citizen involvement in governance.

Conclusion: The 16th Finance Commission can drive critical municipal-level financial reforms by strengthening state finance commissions, promoting fiscal decentralization, optimizing revenues, enhancing fiscal responsibility, and encouraging transparency and citizen participation in governance.

Mains PYQ:

Q How is the Finance Commission of India constituted? What do you know about the terms of reference of the recently constituted Finance Commission? Discuss. (15) (UPSC IAS/2018)

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Panchayati Raj Institutions: Issues and Challenges

How the PESA has boosted Forest Conservation in India?

Note4Students

From UPSC perspective, the following things are important :

Prelims level: PESA Act

Mains level: How PESA ensures Equitable Representation

Why in the News?

Conservation policies in India have long wrestled with dual conflicts: balancing conservation goals against local communities’ resource extraction needs, and reconciling conservation with the imperative of economic development.

Structural Mandate of Panchayat (Extension to Scheduled Areas) Act (PESA):

  • PESA was passed in 1996 and it mandates local government councils in Scheduled Areas to reserve all chairperson positions and at least half of the seats for Scheduled Tribes (ST).
  • This legislative framework is designed to empower marginalized communities by giving them a direct say in local governance and resource management.

Implementation in India:

  • Unlike the 73rd Amendment (which applies to non-Scheduled Areas), PESA ensures mandated representation for STs in decision-making bodies.
  • Variations in PESA implementation across states highlight challenges and successes in translating legislative intent into effective governance structures.

How it Ensures Equitable Representation:

  • Impact on Forest Conservation: The study employs a “difference-in-differences” methodology to analyze the effect of PESA on forest cover. Findings indicate that areas with mandated ST representation under PESA experience lower rates of deforestation and higher afforestation rates compared to areas without such representation.
  • Economic Incentives for Conservation: ST communities, dependent on forest resources for livelihoods, are incentivized to protect forest cover under PESA. This “forest stewardship” mechanism emerges as STs engage in sustainable practices and resist deforestation pressures driven by mining and commercial interests.

On Democratic Decentralization:

  • Comparison with Administrative Decentralization: The paper distinguishes between administrative decentralization (focused on efficiency) and democratic decentralization. Democratic decentralization, as exemplified by PESA, emphasizes representative and accountable local governance structures with decision-making autonomy over resource management.
  • Single Umbrella Institution: Advocates for consolidating power into a single, empowered institution that integrates both conservation and development objectives. Such an institution would better navigate the complexities of balancing local economic interests with sustainable conservation practices.

Conclusion: PESA serves as a critical example of how legislative mandates for political representation can drive positive environmental outcomes while addressing socio-economic disparities among forest-dwelling communities in India.

Mains PYQ:

Q What are the two major legal initiatives by the state since Independence, addressing discrimination against Scheduled Tribes (ST)? (UPSC IAS/2017)

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Coal and Mining Sector

Power markets in India: their working, advantages, and the road ahead

Note4Students

From UPSC perspective, the following things are important :

Mains level: Power markets working and Power exchanges in India

Why in the news?

Amid rising summer demand, the government has permitted the trading of excess electricity produced from “linkage coal” within the nation’s power markets.

What is the Power Market?

  • A power market is a platform where electricity is bought and sold, enabling generators and consumers to trade electricity based on market-driven prices and conditions.

Types of Markets related to Power exchanges in India include:

  • Spot Markets: These include real-time markets (RTM) and day-ahead markets (DAM). RTM allows for immediate buying and selling of electricity, while DAM involves bidding for electricity to be delivered the next day.
  • Term-Ahead Markets: These markets facilitate trades for longer durations, ranging from hours to several days in advance, providing more certainty and planning for market participants.

Their working and Power exchanges in India

  • Market Operation: Power exchanges in India operate as platforms where electricity generators (sellers) and consumers (buyers) participate in trading electricity. Generators submit offers indicating the quantity of electricity they can supply at various prices, while buyers submit bids indicating the quantity they wish to purchase at various prices.
  • Renewable Energy Certificates (REC): Power exchanges also manage the trading of Renewable Energy Certificates (RECs). RECs represent the environmental attributes of renewable electricity generated and can be sold to utilities to meet their renewable purchase obligations (RPOs).
  • Regulation: Power exchanges are regulated by the Central Electricity Regulatory Commission (CERC) in India. The regulatory framework ensures fair and transparent trading practices, oversees market operations and sets rules to promote market integrity.
  • Market Dominance: The Indian Energy Exchange (IEX) is the dominant power exchange in India, handling the majority of electricity trading volume. Other exchanges include Power Exchange India Limited (PXIL) and Hindustan Power Exchange Ltd (HPX), though IEX holds more than 90% of the market share.

Their advantages 

  • Flexibility: Enables generators to respond swiftly to fluctuating electricity demand by selling surplus power at market-driven prices, enhancing grid stability.
  • Efficiency: Optimizes utilization of coal-based power generation assets, minimizing wastage and maximizing revenue through market-based transactions.
  • Transparency: Promotes transparent pricing mechanisms in the electricity sector, fostering competitive market dynamics and benefiting consumers with potentially lower electricity costs.

The Road Ahead for Power Exchanges:

  • Market Coupling: It matches bids from different power exchanges to discover a uniform market clearing price, promoting efficiency and reducing price disparities across regions.It enhances price discovery, market stability, and regional grid integration by providing a reliable reference price for policymakers.
  • Capacity Markets: It compensates generators for maintaining available capacity, incentivizing investment in reliable generation infrastructure. They ensure long-term grid reliability, especially during peak demand periods, aligning India’s power market with international standards and attracting investment.
  • International Alignment and Competitiveness: India’s adoption of advanced market structures (like market coupling and capacity markets) aims to align with mature international markets.These developments can foster greater competition, attract investment, and enhance overall sector efficiency and reliability.

Mains PYQ: 

Q Write a note on India’s green energy corridor to alleviate the problem of conventional energy. (UPSC IAS/2013)

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