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The Central government has constituted a committee to review the implementation of the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) scheme, especially to assess the programme’s efficacy as a poverty alleviation tool. The committee, headed by former Rural Development secretary Amarjeet Sinha, had its first meeting on November 21, 2022, and has been given three months to submit its suggestions.
The Mahatma Gandhi National Rural Employment Guarantee Act was passed in 2005, and the demand-driven scheme guarantees 100 days of unskilled work per year for every rural household that wants it. There are currently 15.51 crore active workers enrolled under the scheme.
The Sinha committee has now been tasked to study the various factors behind demand for MGNREGA work, expenditure trends and inter-State variations, and the composition of work. It will suggest what changes in focus and governance structures are required to make MGNREGA more effective.
“MGNREGA was launched as a poverty alleviation instrument for the rural region, providing them with a safety net in the form of guaranteed work and wages.
It was felt that states like Uttar Pradesh and Bihar where there is higher level of poverty, they haven’t been able to utilise the scheme optimally,” a senior official aware of the developments said.
In 2015, Prime Minister Narendra Modi had famously called MGNREGA as a “living monument of Congress government’s failure”.
In a speech in parliament, he had said, “After so many years in power, all you were able to deliver is for a poor man to dig ditches a few days a month.”
The scheme has also been criticised by economists like Jagdish Bhagwati and Arvind Panagariya as an “inefficient instrument of shifting income to the poor”.
Supreme Court seeks government view on allowing same-sex marriage (Page no. 1)
(GS Paper 2, Polity and Governance)
The Supreme Court sought the government’s response to pleas to allow solemnisation of same-sex marriage under the Special Marriage Act.
The Special Marriage Act of 1954 provides a civil form of marriage for couples who cannot marry under their personal law.
A Bench of Chief Justice of India D.Y. Chandrachud and Justice Hima Kohli agreed to hear partners Supriyo @ Supriya Chakraborty and Abhay Dang, who said the non-recognition of same sex marriage amounted to discrimination that struck at the root of dignity and self-fulfillment of LGBTQ+ couples. A separate petition was also filed by Parth Phiroze Mehrotra and Uday Raj Anand.
The Bench issued separate notices to the Union of India and the Attorney General of India and listed the case for hearing after four weeks.
It transferred various pending issues before various High Courts, including in Kerala and Delhi, to itself. The government too had said in the High Courts that the issue should be taken up by the apex court.
Senior advocates Mukul Rohatgi, Neeraj Kishan Kaul, Menaka Guruswamy and advocate Arundhati Katju argued that this was a sequel to the 2018 Constitution Bench judgment in the Navtej Johar case in which homosexuality was de-criminalised.
A plethora of living issues arise out of this case… Your Lordships have also upheld privacy as a constitutional right in the Puttaswamy case.
The petitioners said the 1954 Act should grant same sex couple the same protection it allowed inter-caste and inter-faith couples who want to marry.
Mr. Rohatgi said the petition did not touch on the personal laws but only sought to make the 1954 Act gender-neutral. The Act only says marriage should be between ‘two persons’. It does not say it is a union of A and B.
Mr. Kaul said there were about 15 legislations which guaranteed the rights of wages, gratuity, adoption, surrogacy, etc, which was not available to the LGBTQ+ citizens.
States
Russia offers advanced fuel options for the Kudankulam plant (Page no. 5)
(GS Paper 3, Nuclear Technology)
The Russian state-owned nuclear energy corporation Rosatom has offered a more advanced fuel option to India’s largest nuclear power station at Kudankulam, which will allow its reactors to run for an extended two-year cycle without stopping to load fresh fuel.
Rosatom’s nuclear fuel division, TVEL Fuel Company, is the current supplier of TVS – 2 M fuel for the two VVER 1,000 MWe reactors generating power in the Kudankulam Nuclear Power Project (KKNPP).
This fuel has an 18-month fuel cycle, meaning that the reactor has to be stopped for fresh fuel loading every one-and-a-half years.
TVEL has now offered the more modern Advanced Technology Fuel (ATF), whose fuel cycle is a whopping 24 months.
Hence, it will ensure more efficiency, additional power generation due to prolonged operation of the reactor and sizable savings of the foreign exchange need to buy fresh fuel assemblies from Russia.
At a recent conference in Hyderabad, the senior vice-president of TVEL’s Research and Development Wing, Alexander Ugryumov, presented the new fuel technology to the Indian nuclear reactors, particularly for the 1,000 MWe pressurised water reactors of KKNPP.
TVEL, which initially supplied the Kudankulam reactors with the UTVS fuel system which has a fuel cycle of 12 months, had offered the new, advanced and more reliable fuel system TVS – 2 M to KKNPP reactors earlier in 2022, which took the fuel cycle from 12 months to 18 months.
In other words, the newer fuel extended the continuous operation of the nuclear reactor between two refueling instances from 12 months to 18 months, boosting power generation and the reactor’s performance significantly.
Moreover, it also saved a lot of resources for the Nuclear Power Corporation of India Limited, the project proponent, needed for buying fuel from Russia to ensure the continuous operation of the KKNPP reactors..
Editorial
COP27 and the ambiguity about responsibility (Page no. 6)
(GS Paper 3, Environment)
This year, at COP27 in Egypt, a dizzying array of topics was on the table for discussion — from the more familiar emissions reductions to the more detailed rules to govern carbon markets.
But of significance to developing countries, India included, are the stories to do with climate finance. As developing countries have rising energy needs and vulnerable populations, they need financial support for low-carbon transformations, building resilience to inevitable climate impacts, and other steep challenges, important among these being loss and damage (L and D) from climate-induced impacts. Possibly the biggest headline after COP27 was the establishment of a new L and D fund.
The main L and D agendas for developing countries since the Paris Agreement (2015) have been to change the existing narrative of averting L and D to addressing losses that have already occurred, and to start holding developed countries morally responsible and financially liable for the same.
Widespread droughts in Africa, floods in Pakistan, and wildfires globally were the prelude to this COP. Given these climate events are rampant, developing countries have been trying to separate L and D from adaptation.
They argue that losses from these events have not and likely cannot be adapted to. And as scientists today are able to attribute these events to climate change, and derivatively, to greenhouse gas emissions, developing countries maintain that developed countries should inherit the resultant responsibility and liability.
L and D in ratified UN texts has mostly entailed prevention and pre-disaster preparation, thus conflating L and D with adaptation. This is in the interest of developed countries that do not want any new responsibilities.
The decision text accompanying the Paris Agreement even took liability and compensation for L and D off the table — and developing countries were only able to get L and D on the COP27 agenda by once again foregoing conversation about liability.
The Constitution of India deserves better (Page no. 6)
(GS Paper 2, Indian Constitution)
The Constitution of India was adopted by the Constituent Assembly on November 26, 1949 for ‘We the people of India’. After being unnoticed for long, the day began to be celebrated as Constitution Day since 2015. This day is indeed a historic day for the nation, with the framing of a Constitution for the governance of independent India.
But it is imperative to go beyond the celebrations and look at the substantive issues relating to the primary parchment of the nation.
For example, if we pose a question about the level of awareness about the Constitution among ‘we the people’, the answer may not be encouraging. It is understandable if unlettered people are not aware of the Constitution.
But the situation is not much different among the educated sections either, despite the fact that the Constitution is an integral part of our life.
The Constitution has a clear imprint on day-to-day life, though we may not be really conscious of it. If we ask a policeman why he is stopping us, it is because the Constitution has given us that right.
The newspaper we read, the TV channels we watch; our travel by bus, train or in our own car every time; getting a passport and flying; taking up a profession we like; eating the food we relish in a restaurant; and buying fashionable outfits in malls — it is the Constitution which made this possible through fundamental rights.
The freedom of movement, freedom of expression, freedom to choose a calling of our liking, freedom to buy, sell and carry-on any trade, freedom to wear garments of our choice; all these freedoms emanate from the Constitution in the form of fundamental rights. These freedoms were never available to us before we won independence from the British.
Business
IRDAI allows PE funds to invest directly in insurers (Page no. 12)
(GS Paper 3, Economy)
India’s insurance regulator IRDAI has approved a bouquet of proposals ranging from permission for private equity funds to directly invest in insurers, allowing promoters to dilute up to 26% stake to dispensing with its approval for raising capital such as subordinated debt and preference shares.
Besides measures to improve ease-of-doing business, the regulator green-lighted a proposal for increasing the limit on tie-ups for intermediaries.
The Insurance Regulatory and Development Authority of India also approved a reduction in solvency norms for general and life insurers, which is expected to provide them access to an additional ₹3,500 crore.
Towards facilitating general insurers to efficiently utilise capital and resources and increase crop insurance expansion, the period for considering State/Central government premium dues for calculation of solvency position has been increased from 180 days to 365 days.
The solvency factors related to crop insurance are also reduced to 0.50 from 0.70 which will release the capital requirements for insurers by about ₹1,460 crore.
In order to enable efficient utilisation of capital by life insurers, IRDAI said the factors for calculation of solvency provided in regulations are reduced — for unit linked business (without guarantees) — to 0.60% from 0.80%; and for PMJJBY from 0.10% to 0.05%. This will provide a relaxation in capital requirements by about ₹2,000 crore.
Among company-specific proposals that got the nod of Authority, at its 120th Board meeting here, were final approval to Go-digit General Insurance Company for listing; in-principle nod for India First Life Insurance Company to list as well as go ahead for merger of Exide Life Insurance Company with HDFC Life Insurance Company.
Centre likely to rationalise long-term capital gains tax structure (Page no. 12)
(GS Paper 3, Economy)
The Finance Ministry is looking at rationalising long-term capital gains tax structure by bringing parity between similar asset classes and revising the base year for computing indexation benefit to make it more relevant. Currently, shares held for more than one year attract a 10% tax on long-term capital gains.
Gains arising from sale of immovable property and unlisted shares held for more than 2 years and debt instruments and jewellery held for over 3 years attract 20% long-term capital gains tax.
The revenue department is now looking at rationalising the tax rates as well as holding period for calculating long-term capital gains and an announcement is likely in the 2023-24 Budget to be presented in Parliament on February 1.
Also, a change in base year for computing inflation-adjusted capital gains is being contemplated. The index year for capital gains tax calculation is revised periodically to make it more relevant. The last revision took place in 2017 when the base year was updated to 2001.
Since the prices of assets increase over time, the indexation is used to arrive at the inflation-adjusted purchasing price of assets to compute long-term capital gains for the purpose of taxation.
The whole effort is to make capital gains tax structure simple and tax-payer friendly and reduce compliance burden. There is scope for bringing parity in tax rates and holding periods for similar asset classes.
Under the Income Tax Act, gains from sale of capital assets — both movable and immovable — are subject to 'capital gains tax'.
The Act, however, excludes movable personal assets such as cars, apparels and furniture from this tax.