Daily Prelims Notes 7 September 2021

September 7, 2021
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Daily Prelims Notes

7 September 2021

Table Of Contents

1. Budget making exercise set kick off

Subject: Polity

Context:

Preparation for the Budget by the Finance Ministry is set in motion with issuance of the Budget circular.
The Budget Division of Economic Affairs Department issues this circular between the third and fourth week of September or by the first week of October.
The circular sets the timeline for submission of estimate, pre-Budget consultations with Ministries and other stakeholders and finalisation of revised estimate for the current fiscal and budget estimate for the next fiscal, besides

Why important?

In order to contain rising fiscal deficit is likely that central ministries/departments may beset lower revised estimates for the current fiscal (2021-22) along with a lower allocation for the next fiscal (2022-23).

Concerns:

Lower RE, truncated allocation may leave growth under-fueled.

Budgetary Terms

Budget Estimates: Amount of money allocated in the Budget to any ministry or scheme for the coming financial year.

Revised Estimates: Revised Estimates are mid-year review of possible expenditure, taking into account the rest of expenditure, New Services and New instrument of Services etc. Revised Estimates are not voted by the Parliament, and hence by itself do not provide any authority for expenditure. Any additional projections made in the Revised Estimates need to be authorized for expenditure through the Parliament’s approval or by Re-appropriation order.

Fiscal deficit: Total additional borrowings made by the government every year to bridge the gap between its income and expenditure.

Capital and revenue expenditure: Expenditure that does not create any asset, such as subsidies and interest payments, is revenue expenditure. Spending to create assets such as highways, buildings and dams as well as loans given by the centre to the states come under capital expenditure.

Revenue Deficit: The difference between revenue expenditure and revenue receipt is known as revenue deficit. It shows the shortfall of government’s current receipts over current expenditure.

Tax revenue: The primary source of income for the government. The government funds its expenditure by either directly taxing income of individuals/companies or by taxing goods and services consumed by people (indirect taxes).

Non-tax revenue: Additional sources of revenue for the government other than taxes. This includes revenues from interest receipts, spectrum auction and disinvestment, among other things.

Capital Budget: The Capital Budget consists of capital receipts and payments. It includes investments in shares, loans and advances granted by the central Government to State Governments, Government companies, corporations and other parties.

Revenue Budget: The revenue budget consists of revenue receipts of the Government and it expenditure. Revenue receipts are divided into tax and non-tax revenue. Tax revenues constitute taxes like income tax, corporate tax, excise, customs, service and other duties that the Government levies. The non-tax revenue sources include interest on loans, dividend on investments.

Finance Bill: The Bill produced immediately after the presentation of the Union Budget detailing the Imposition, abolition, alteration or regulation of taxes proposed in the Budget.

Vote on Account: The Vote on Account is a grant made in advance by the parliament, in respect of the estimated expenditure for a part of new financial year, pending the completion of procedure relating to the voting on the Demand for Grants and the passing of the Appropriation Act.

Excess Grants: If the total expenditure under a Grant exceeds the provision allowed through its original Grant and Supplementary Grant, then, the excess requires regularization by obtaining the Excess Grant from the Parliament under Article 115 of the Constitution of India. It will have to go though the whole process as in the case of the Annual Budget, i.e. through presentation of Demands for Grants and passing of Appropriation Bills.

2. Fall of Panjshir

Subject: IR

Context: The fall of Panjshir, the last remaining holdout controlled by the Northern Alliance forces, means curtains for the armed opposition to the new rulers of Afghanistan for now.

Concept:

The Panjshir Valley literally Valley of the Five Lions is a valley in north-central Afghanistan.
It is divided by the Panjshir River. The valley is home to more than 100,000 people, including Afghanistan’s largest concentration of ethnic Tajiks
The Panjshir has always been an important highway. Nearly 100 kilometres long, it leads to two passes over the Hindu Kush the Khawak Pass ) leading to Afghanistan’s northern plains, and the Anjuman Pass that crosses into Badakhshan – used by the armies of Alexander the Great and Timur.
Located 150 km north of Kabul, the Valley is near the Hindu Kush Mountain range.
It’s divided by the Panjshir River and ringed by the Panjshir Mountains in the north and the Kuhestan mountains in the south.
The mountain tops are covered by snow throughout the year.

3. Climate change and adverse health impacts

Subject: Environment

Context: In a first-of-its-kind effort, editors of more than 220 leading health journals from all over the world have published a joint editorial asking governments to take immediate and more ambitious climate action to hold global temperatures from rising beyond 1.5°C from pre-industrial times.

Concept:

Climate change has several adverse health impacts, both direct and indirect.
Heat-related diseases triggered by extreme heat events, which are on the rise because of changing climate, are an example of direct health impacts of climate change.
Changing crop patterns, declining yields, water scarcity, and extreme precipitation are expected to have health consequences as well. Food shortages and resultant malnutrition are considered major side-effects of rising temperatures.
The World Health Organization estimates that about 250,000 excess deaths are likely to be caused by climate change-induced factors malnutrition, malaria, diarrheas’, and heat stress between 2030 and 2050.
Higher temperatures have led to increased dehydration and renal function loss, dermatological malignancies, tropical infections, adverse mental health outcomes, pregnancy complications, allergies, and cardiovascular and pulmonary morbidity and mortality.
It emphasis on the need to hold global rise in temperatures to 1.5°C not just 2°C. The recent IPCC report had mentioned that the 1.5°C target was likely to be reached in less than two decades.

4. Mexico Oil spills

Subject: Environment

Context: Divers searching for the origin of a substantial oil spill in the Gulf of Mexico one of several spotted off Louisiana’s coast after Hurricane Ida have discovered three damaged pipelines near the leak.

Concept:

What is an Oil Spill?

An oil spill refers to any uncontrolled release of crude oil, gasoline, fuels, or other oil by-products into the environment. Oil spills can pollute land, air, or water, though it is mostly used for oceanic oil spills.
They have become a major environmental problem, chiefly as a result of intensified petroleum exploration and production on continental shelves and the transport of large amounts of oils in vessels.

Environmental Impacts

Oil on ocean surfaces is harmful to many forms of aquatic life because it prevents sufficient amounts of sunlight from penetrating the surface, and it also reduces the level of dissolved oxygen.
Crude oil ruins the insulating and waterproofing properties of feathers and fur of birds, and thus oil-coated birds and marine mammals may die from hypothermia (decrease in body temperature to below-normal levels).
Moreover, ingested oil can be toxic to affected animals, and damage their habitat and reproductive rate.
Saltwater marshes and mangroves frequently suffer from oil spills.
Experts say that despite best efforts, generally less than 10% of oil spilled in incidents like these is successfully

Different methods of cleaning sea after an oil spill

Oil Booms: These are also called “Containment Booms” which encloses the oil to a smaller area and not let it spread further. This method is employed when the area of spill is comparatively smaller.
Skimmers: Once the oil is bounded by oil booms, it can be extracted or skimmed easily with the help of skimmers or oil scoops. These skimmers are fitted onto boats and remove the floating oil or greasy contaminants. It is an economical method of oil clean-up because the equipment used for skimming oil are relatively cheaper.
Oil Zapper is a cocktail of bacteria that feed on the oil and degrade the hydrocarbons.
Newer methods and technologies like Nanosheets that could revolutionize oil spill clean ups and water purification needs to be deployed.
Sorbents: The materials which can adsorb or absorb the liquid are termed as sorbents. It is an easy process of oil cleanup. Most common sort of sorbents we all are familiar with are peat moss, vermiculite (straw) and hay.
Burning: It is similar to burning rice husk after yielding rice crop. In this method, the floating oil is set to fire by igniting it safely. It is the most proficient method of oil clean up as it can efficiently remove 98% of total spilt oil.
Dispersants: When oil cannot be confined with booms then we are left with the last option of oil disintegration. Dispersals are the chemicals which are spread over spilt oil to initiate disintegration of oil.
Other Methods: Some other methods employed for safer oil spill clean-ups from the sea are hot water washing or washing with high-pressure water; manual labour; bioremediation and natural recovery.

Gulf of Mexico

It is the largest gulf in the world. It is bordered by the United States, Mexico, and the island nation of Cuba. It has a coastline of about 5,000 km.
The Gulf dead zone owes its size to the mighty Mississippi River, which collects tons of nutrients from agricultural and urban runoff from cities through its course.
Dead zone in the Gulf of the Mexico is the world’s second largest. The world’s largest dead zone is in the Baltic Sea.

International Convention on Civil Liability for Bunker Oil Pollution Damage, 2001 (Bunker Convention)

The Convention was adopted to ensure that adequate, prompt, and effective compensation is available to persons who suffer damage caused by spills of oil, when carried as fuel in ships’ bunkers. The Convention applies to damage caused on the territory, including the territorial sea, and in exclusive economic zones of States Parties.
The bunkers convention provides a free-standing instrument covering pollution damage only. In 2015 India ratified the International Convention on Civil Liability for Bunker Oil Pollution Damage, 2001 (Bunker Convention). Convention ensures adequate, prompt and effective compensation for damage caused by oil spills.

5. Composition Scheme

Subject: Economy

Context: The Goods and Services Tax (GST) Council is likely to consider a ministerial group’s report on introducing a differentiated regime for sectors where tax evasion is very high, such as brick kilns, sand mining, and gutkha and pan masala production, even as experts have urged caution about such carve-outs.

Concept:

Tax evasion is high in the sectors such as brick kilns, sand mining, and gutkha and pan masala production, for instance, ₹830 crore of evasion was detected at a single pan masala unit earlier this year.
The 7-member GoM, is tasked with examining the feasibility of a capacity-based tax regime and other alternatives to plug tax leakages.

Composition Scheme

Taxpayers under the composition scheme of the GST will now have more relaxed rules with an increased turnover limit for the applicability, inclusion of service providers and reduced tax rates.
This scheme is also applicable to the real estate sector with respect to under-construction, ready and affordable homes.
The composition scheme is an alternative method of tax levy under GST designed to simplify compliance and reduce compliance costs for small taxpayers.
The main feature of this scheme is that the business or person who has opted to pay tax under this scheme can pay tax at a flat %age of turnovers every quarter, instead of paying tax at a normal rate every month.

Eligibility

The composition scheme is applicable to manufacturers or traders whose taxable business turnover is up to ₹1.5 crore (₹75 lakh in case of North-Eastern States).
A service provider can opt for the scheme if his taxable turnover is up to ₹50 lakh.
Businesses with inter-State supplies, manufacturers of ice cream, pan masala and tobacco, and e-commerce players cannot opt for the composition scheme.

Importance

The composition scheme effectively acknowledges the importance of the MSME sector, by granting relief to it on GST filings, procedures and tax rates.

6. Section 109 of the GST Act

Subject: Economy

Context: The Supreme Court on Monday said the government had no option but to constitute the Goods and Services Tax (GST) Appellate Tribunal

Concept:

Section 109 of the GST Act mandates the constitution of the Tribunal
The Government shall, on the recommendations of the Council, by notification, constitute with effect from such date as may be specified therein, an Appellate Tribunal known as the Goods and Services Tax Appellate Tribunal for hearing appeals against the orders passed by the Appellate Authority or the Revisional Authority.
The National Bench of the Appellate Tribunal shall be situated at New Delhi which shall be presided over by the President and shall consist of one Technical Member (Centre) and one Technical Member (State).
The National Bench or Regional Benches of the Appellate Tribunal shall have jurisdiction to hear appeals against the orders passed by the Appellate Authority or the Revisional Authority in the cases where one of the issues involved relates to the place of supply.
The State Bench or Area Benches shall have jurisdiction to hear appeals against the orders passed by the Appellate Authority or the Revisional Authority
The President and the State President shall, by general or special order, distribute the business or transfer cases among Regional Benches or, Area Benches in a State.
If the Members of the National Bench, Regional Benches, State Bench or Area Benches differ in opinion it shall be decided according to the opinion of the majority, if there is a majority.
The appeals against the orders in first appeals issued by the Appellate Authorities under the Central GST (CGST) and State GST (SGST) Acts lie before the GST Appellate Tribunal.
CGST Act provides for the Appeal and Review Mechanism for dispute resolution under the GST Regime.
The act empowers the Central Government to constitute, by notification, an Appellate Tribunal known as the Goods and Services Tax Appellate Tribunal for hearing appeals against the orders passed by the Appellate Authority.

7. Debt levels of many States precarious: Crisil

Subject: Economy

Context:

According to a report by Crisil most States have precarious debt levels, which will constrain their ability for higher spending on capital expenditure.
Debt for eight States (Tamil Nadu, Andhra Pradesh, West Bengal, Rajasthan, Madhya Pradesh, Uttar Pradesh, Uttarakhand, and Bihar) has surpassed a quarter of their Gross\ State Domestic Products (GSDPs) in the pandemic-impacted fiscal 2021.
Only three States (Gujarat, Telangana and Assam) had comfortable debt (that is lower than one fifth of their respective GDP as per the 2017 Fiscal Responsibility and Budget Management/FRBM review committee recommendations) following revised estimates of fiscal 2021. (The review Committee had recommended that debt trajectory for individual states: The Committee recommended that the 15th Finance Commission should be asked to recommend the debt trajectory for individual states. This should be based on their track record of fiscal prudence and health)
Four States (Maharashtra, Karnataka, Odisha and Haryana) had debt less than or equal to 25 per cent of their GSDPs, said the report.

Concerns:

Rising debt will reduce the space of capex (Capital expenditure).

8. National Sports Development Fund

Subject: Government Schemes

Context: (CIL) has signed an MoU with the Department of Sports, Ministry of Youth Affairs & Sports, Govt. of India at New Delhi for the betterment of sports infrastructure in the country. Under the MoU, CIL, under its Corporate Social Responsibility (CSR) program will contribute Rs. 75 crores towards the National Sports Development Fund (NSDF).

Concept:

What is National Sports Development Fund?

It was established in 1998 under the Charitable Endowments Act, 1890.

Objective:

To impart momentum and flexibility in assisting the cause of sports.
The Fund helps sportspersons excel by providing those opportunities to train under coaches of international repute with technical, scientific and psychological support and giving them exposure to international competitions.
It also provides financial assistance for the development of infrastructure and other activities for the promotion of sports.
The Fund is managed by a Council constituted by the Central Government.

Composition:

Chairperson: Union Minister in charge of Youth Affairs and Sports.
Members: Senior Officers of the Department of Sports, Chairman & Managing Directors of Private and Public Sector Companies/Corporations, representatives of Sports Promotion Boards.

9. Three new heatwave hotspots in India put large population at immediate health risk

Subject: Environment

Context: A team of researchers led by Prof. R.K. Mall and including Saumya Singh and Nidhi Singh from the Department of Science & Technology, Govt. of India-Mahamana Centre of Excellence in Climate Change Research (MCECCR) at Banaras Hindu University studied the change in spatial and temporal trends in Heatwaves (HW) and Severe heatwaves (SHW) over the past seven decades in different meteorological subdivisions of India.

Highlights of the study

New hotspots of intense heatwave events over the past half-century have emerged
There is an increase in deadly Indian heat waves in recent years.
These hotspots are in the North-Western, Central, and further to south-central region of India.
The study also highlights the need for developing effective heat action plans in the three heatwave hotspot regions with a focus on different vulnerabilities among the inhabitants.
The study showed a shift in the Spatio-temporal trend of HW events from the eastern region of Gangetic West Bengal and Bihar to North-Western, Central and further to south-central region of India.
The research also observed an alarming southward expansion and a spatial surge in SHW events in the last few decades that may put a greater population at additional risk of heat stress in a region already characterized by low Diurnal temperature range (DTR), or the difference between the maximum and minimum temperatures within one day and high humidity.
Importantly, the HW/SHW events were found to be positively correlated with mortality in Odisha and Andhra Pradesh, highlighting that human health is highly susceptible to severe heatwave disasters.

Concept:

About heat wave

A Heat Wave is a period of abnormally high temperatures, more than the normal maximum temperature that occurs during the summer season in the North-Western parts of India.
Heat Waves typically occur between March and June, and in some rare cases even extend till July.
Urban heat island effects, deforestation, global warming leading to higher daily peak temperature etc. are major causes of heat waves.
The extreme temperatures and resultant atmospheric conditions adversely affect people living in these regions as they cause physiological stress, dehydration, heat cramps, heat exhaustion and/or heat stroke and sometimes resulting in death.
Children, the elderly and those with pre-existing morbidities are particularly vulnerable.

IMD defines Heat Waves as:

Heat Wave need not be considered till maximum temperature of a station reaches at least 40°C for Plains and at least 30°C for Hilly regions
When normal maximum temperature of a station is less than or equal to 40°C Heat Wave Departure from normal is 5°C to 6°C Severe Heat Wave Departure from normal is 7°C or more
When normal maximum temperature of a station is more than 40°C Heat Wave Departure from normal is 4°C to 5°C Severe Heat Wave Departure from normal is 6°C or more
When actual maximum temperature remains 45°C or more irrespective of normal maximum temperature, heat waves should be declared.

10. Fuel Stacking in India

Subject: Environment

Context:

According to a report by the Council on Energy, Environment and Water (CEEW).highlighted that a majority of households that use traditional solid fuels along with LPG

What is fuel stacking?

A phenomenon of using multiple stove-and-fuel cooking combinations within the same household.

Reasons for fuel stacking:

High price of cooking Cylinder
Preference for cooking on traditional chulhas
Availability of free biomass
Limited availability of LPG refills.

Concerns:

It would delay achieving DSG 7 (Affordable and Clan Energy)