GS Analyst: Daily Current Affairs

The chief prosecutor of Bangladesh’s International Crimes Tribunal (ICT) announced plans to seek the extradition of ousted Prime Minister Sheikh Hasina from India. This follows her departure to India amid mass protests that forced her resignation, resulting in multiple criminal charges against her, including murder and crimes against humanity. The backdrop of this extradition request is the existing bilateral extradition treaty between India and Bangladesh.

What is India-Bangladesh extradition treaty?

• The India-Bangladesh extradition treaty, established in 2013 and amended in 2016, allows for the extradition of individuals charged with crimes punishable by a minimum of one year’s imprisonment.
• It operates on the principle of dual criminality, meaning that the offenses must be punishable in both nations.
• This framework has previously facilitated the exchange of political prisoners, such as those involved in the assassination of Sheikh Mujibur Rahman.
• Conditions for Extradition: The treaty's 2016 amendment lowered the threshold for extradition by removing the requirement for concrete evidence, allowing an arrest warrant from a competent court in the requesting country to suffice.
  • Given the nature of charges against Hasina, including serious allegations of murder and torture, she meets the criteria for extradition.
• Potential Refusals: Under Article 6, extradition may be refused if the crime is of a political nature, but many charges against Hasina do not fall under this exemption.
  • Additionally, Article 8 allows refusal if the request lacks good faith or if it pertains to military offenses. India might consider denying extradition on these grounds, especially due to concerns about political persecution and the fairness of trials in Bangladesh.

The Union cabinet has accepted a high-level committee's recommendations on ‘One Nation, One Election’ for holding simultaneous polls for the Lok Sabha, state assemblies and local bodies in a phased manner after a countrywide consensus-building exercise.

What is One Nation, One Election?

• The 'One Nation One Election' proposal aims to hold simultaneous elections for the Lok Sabha (India's national parliament) and all state legislative assemblies.
• This synchronized system is expected to streamline the election process and reduce the frequency of elections across the country.
• Until 1967, independent India had witnessed four simultaneous elections for Parliament and state assemblies.
• Important Reports/Recommendations
  • The Election Commission first suggested the proposal in 1983. It was reiterated by the Law Commission in 1999, under Justice B.P. Jeevan Reddy.
  • Subsequent discussions by parliamentary committees in 2015 and the Law Commission's draft report in 2018 have also explored its feasibility, though the latter concluded that the current constitutional framework does not support it.

Amendments in Articles 83 and Article 172 recommended

• To ensure that simultaneous elections do not conflict with the Constitution, the Kovind committee has proposed amendments to
  • Article 83, which governs the term of the Lok Sabha, and
  • Article 172, which covers the tenure of state assemblies
• The committee suggested a one-time transitory measure to synchronise all elections and proposed when Lok Sabha is constituted after the general elections, the President would by notification on the same date as that of the first sitting bring into force the provisions for transition.
• This date would be called the appointed date.

One Nation One Election': Pros and Cons

The recent report by the Economic Advisory Council to the Prime Minister (EAC-PM) evaluates the economic trajectories of various Indian states post-liberalization. It emphasizes the significant economic growth of southern states and contrasts their progress with the stagnation or decline seen in some other regions, particularly West Bengal and certain northern states.

Key Highlights of the Report

• Economic Surge in Southern States
  • Southern states, namely Karnataka, Andhra Pradesh, Telangana, Kerala, and Tamil Nadu, now collectively contribute to 30% of India’s GDP.
  • These states exhibit higher-than-average per capita incomes, indicating robust economic performance since liberalization.
    • Before 1991, southern states did not show expectational performance. However, since the economic liberalization of 1991, the southern states have emerged as the leading performers.
  • Decline of West Bengal
    • West Bengal has experienced a notable decline in its GDP contribution, from 10.5% in 1960-61 to just 5.6% currently.
    • The state’s per capita income has plummeted from 127.5% of the national average to 83.7%, now trailing behind states like Rajasthan and Odisha.
    • Despite historical advantages, West Bengal's policies may have hindered its growth, marking it as an exception among maritime states, which have generally prospered.
  • Performance of Other Regions
    • While Bihar’s economic position has stabilized, it still lags behind in growth compared to other states. Conversely, Odisha has shown significant improvements, shedding its previous reputation as a laggard.
    • Maharashtra continues to be India’s largest contributor to GDP, though its share has decreased from over 15% to 13.3%. Despite this, its per capita income remains high at 150.7% of the national average.
  • Regional Disparities
    • In the north, Haryana and Delhi have consistently performed well, with Delhi having one of the highest per capita incomes in the country.
    • A stark contrast is noted between Punjab and Haryana, where Punjab has seen a decline in per capita income post-2000, while Haryana has surged ahead.
    • Following the Green Revolution, both states experienced a boom in agriculture, leading to increases in their shares. Punjab’s share rose to 4.4 per cent and Haryana’s to 2.7 per cent by 1970-71.
      • However, Punjab’s share plateaued around 4.3-4.4 per cent over the next two decades. It began to decline from 1990-91 onwards and reached 2.4 per cent in 2023-24.
      • In contrast, Haryana’s share continued to rise, although it has remained relatively stable since 2010-11. Haryana’s share in India’s GDP was 3.6 per cent in 2023- 24. It is likely that the success of Gurugram accounts for some part of Haryana’s increasing share.
    • This raises an interesting question: Did Punjab’s focus on agriculture contribute to a form of ‘Dutch disease’, hindering its transition to industrialisation?” asked the paper.
      • In economics, ‘Dutch disease’ is the apparent causal relationship between the increase in the economic development of a specific sector and a decline in other sectors.

The Madras High Court has recently dismissed a petition seeking to officially recognize the birthday of Tamil saint-poet Thiruvalluvar on the 'Anusham' star day in the month of Vaikasi instead of the currently observed date on the second day of Thai. The court emphasized the lack of concrete evidence to substantiate claims regarding Thiruvalluvar’s actual date of birth.

About Tamil Saint-Poet Thiruvalluvar

• Thiruvalluvar is a revered figure in Tamil literature and culture, known primarily for his work, the Tirukkural, a classic text composed of 1,330 couplets that encompass ethics, morality, and governance.
• His teachings advocate for virtuous living and are celebrated for their universal relevance, transcending regional and cultural boundaries.
• Thiruvalluvar is often depicted as a symbol of Tamil identity and pride, and his contributions are honored through various celebrations, including Thiruvalluvar Day.
  • This day, observed on the second day of Thai, serves as a tribute to his philosophical teachings and impact on Tamil literature.
• Despite the absence of concrete historical records regarding his life and exact date of birth, Thiruvalluvar remains an iconic figure, with numerous statues, temples, and public spaces dedicated to him across Tamil Nadu and beyond.
• Some accounts place him in the 3rd or 4th century CE; others date him to around 500 years later, in the 8th or 9th century.

Citing “fundamental and unforeseen” changes in the circumstances, India has sent a formal notice to Pakistan to seek a review of the Indus Water Treaty (IWT).

What is Indus Water Treaty?

• The Indus Water Treaty (IWT) was signed in 1960 between India and Pakistan with the World Bank as a signatory.
• Division of Water Resources: Under the provisions of the treaty:
  • Eastern rivers—the Sutlej, the Beas and the Ravi—are available for unrestricted use by India
  • Western rivers—the Indus, the Jhelum and the Chenab—are available for unrestricted use by Pakistan
• In effect, the treaty gave India about 30% of the water carried out by the “Indus Rivers System” while Pakistan got 70% of the waters.
• This arrangement aimed to ensure equitable water sharing, fostering cooperation between the two nations.
• Dispute Resolution Process: Article 9 of the treatyoutlines a dispute resolution process, breaking it down into three categories: question, differences and disputes.
  • Under the treaty, the two countries have agreed to first attempt to resolve disputes through the permanent commission and seek the World Bank’s assistance in appointing a neutral expert or set up an arbitration at the Permanent Court of Arbitrage in The Hague, Netherlands, if required.

Why India Wants to Renegotiate the Indus Water Treaty?

• Changing Circumstances: Key concerns include shifts in population demographics, environmental challenges, and the imperative to advance clean energy development to meet emission targets.
• Hydroelectric Projects Controversy: The push for renegotiation comes amidst a prolonged dispute over two hydroelectric projects in Jammu & Kashmir—Kishanganga and Ratle.
  • Both projects are designed to utilize the natural flow of rivers for electricity generation without obstructing them.

The Union Cabinet approved the continuation of the Pradhan Mantri Annadata Aay Sanrakshan Abhiyan (PM-AASHA) scheme, allocating Rs. 35,000 crore for the 15th Finance Commission Cycle, extending until 2025-26.

What is PM-AASHA?

• Pradhan Mantri Annadata Aay SanraksHan Abhiyan’ (PM-AASHA) is an umbrella scheme to ensure Minimum Support Price (MSP) to farmers.
• It comprises the erstwhile Price Support Scheme (PSS) with certain modifications and rolling out of new schemes of Price Deficiency Payment Scheme (PDPS) and pilot of Private Procurement and Stockist Scheme (PPSS).

Integration of Schemes:

• The government has merged the Price Support Scheme (PSS) and the Price Stabilisation Fund (PSF) under PM-AASHA to enhance efficiency in supporting both farmers and consumers.
• PM-AASHA will now have the components of:
  • Price Support Scheme (PSS): Starting from the 2024-25 season, the government will procure pulses, oilseeds, and copra at Minimum Support Price (MSP), covering 25% of national production. A 100% procurement policy will be implemented for Tur, Urad, and Masur to prevent distress sales.
  • Price Stabilisation Fund (PSF): The PSF aims to protect consumers from volatile price changes by maintaining a buffer stock of essential commodities like pulses and onions. The Department of Consumer Affairs (DoCA) will procure these commodities when market prices exceed the MSP, discouraging hoarding and speculative trading.
  • Price Deficit Payment Scheme (PDPS): The coverage for this scheme has increased from 25% to 40% of state production for oilseeds, with the implementation period extended from three to four months. The Central Government will cover up to 15% of the difference between the MSP and market price.
  • Market Intervention Scheme (MIS): The MIS has been adjusted to support perishable horticultural crops by raising coverage from 20% to 25% of production. The government will now handle transportation and storage costs for tomato, onion, and potato (TOP) crops, aiding price stability during peak harvesting periods.

The Union Cabinet has approved the development of the first module of the Bharatiya Antariksh Station (BAS-1) by expanding the scope of the Gaganyaan programme. This decision marks a crucial step towards establishing India's own space station by 2035 and paves the way for a crewed lunar mission by 2040.

About the revised Gaganyaan programme

• The Gaganyaan Programme was approved in 2018. It envisages undertaking the human spaceflight to Low Earth Orbit (LEO) and to lay the foundation of technologies needed for an Indian human space exploration programme in the long run. 
• The revised Gaganyaan programme now encompasses eight missions to be completed by December 2028, including the launch of the BAS-1 unit.
  • This expansion involves additional uncrewed missions and hardware requirements to support the ongoing human spaceflight initiatives.
• The total funding for the Gaganyaan programme has been increased to Rs 20,193 crore, with an additional allocation of Rs 11,170 crore to accommodate the expanded scope.
• The programme aims to develop and demonstrate critical technologies for long-duration human space missions, with four missions under the ongoing Gaganyaan programme scheduled by 2026, followed by the development of the BAS-1 module and four additional missions for technology demonstration and validation by 2028.
• Significance of Bharatiya Antariksh Station
  • The Bharatiya Antariksh Station is expected to boost microgravity-based scientific research and technology development, fostering innovations in key areas. This initiative is also anticipated to generate increased employment opportunities in high-technology sectors related to space and allied industries. Beyond its technological and scientific objectives, the expanded programme aims to inspire India's youth to pursue careers in science and technology, offering unique opportunities in microgravity research and development.
  • The resulting innovations and technological spin-offs are expected to benefit society at large, positioning India as a leading nation in space exploration and research.
• The Cabinet also approved theChandrayaan-4 mission to Moon and the Venus Orbiter Moon to Earth's mysterious twin. 

The leaders of the Quad (Australia, India, Japan, and the United States) are convening for their fourth summit in Wilmington, Delaware. This summit occurs against pressing global challenges and significant leadership transitions in member countries, aiming to consolidate the Quad's strategic direction before these changes take effect.

Leadership Dynamics

• Hosting Transition: India originally scheduled to host this year’s summit deferred to the U.S. for practical reasons, allowing for a smoother engagement amid Biden's busy election cycle following his recent G-20 attendance.
• Global Context: The summit is set against the United Nations General Assembly backdrop, emphasizing its importance in shaping international responses to contemporary global issues.
• Geopolitical Landscape: The summit is pivotal as it responds to increasing threats in the Indo-Pacific, including China’s assertive behavior and ongoing conflicts, emphasizing the Quad's role in regional stability and economic resilience.

Strategic Focus Areas

• Maritime Domain Awareness (MDA): One key agenda is reinforcing the Quad’s framework on MDA, crucial for regional security, supply chains, and technology initiatives, following the July 2024 expansion to the Indian Ocean.
• Legal Frameworks: The summit will explore launching the Quad Maritime Legal Dialogue under the Quad Maritime Security Working Group, aiming to consolidate expertise in international maritime law for the benefit of member states and the broader region.
• Operational Initiatives: Operationalizing the South Asia programme through India’s Information Fusion Centre-Indian Ocean Region (IFC-IOR) is expected to enhance real-time information sharing among Quad partners, promoting a free and open Indo-Pacific.

Practice Question

Q. Critically evaluate the evolving role of the Quad in addressing geopolitical challenges and enhancing regional stability in the Indo-Pacific.

Finance Ministers recently met in Thiruvananthapuram to advocate for increasing the divisible tax pool from 41% to 50%. This discussion is crucial given the current limitations on state revenues and the financial pressures from recent natural disasters.

Demands for Increased Tax Devolution

• Call for Higher Tax Share: The Finance Ministers are demanding a rise in the divisible pool of taxes from the Fifteenth Finance Commission’s recommended 41% to 50%. This increase aims to provide states with more financial autonomy.
• Concerns Over Cesses and Surcharges: They also seek a cap on cesses and surcharges collected by the Centre, which often fund specific projects but fall outside the standard devolution framework. This move aims to enhance transparency and fairness in revenue sharing.
• Backdrop of Budgetary Allocations: The urgency of these demands is underscored by inadequate allocations in the 2024-25 Union Budget for significant projects in states like Karnataka and Kerala, reflecting ongoing financial constraints.

Economic and Social Implications

• Impact on High-Performing States: States like Gujarat, Karnataka, Maharashtra, and Tamil Nadu, which contribute significantly to tax revenue, have seen reduced devolutions. This disparity hinders their ability to address specific developmental and climate-related needs effectively.
• Challenges from GST Framework: The GST framework limits states' autonomy in tax collection, exacerbating financial strains on high-performing states that require tailored capital and social investments for growth.
• Unaddressed Contingency Expenses: Neither the GST nor the Finance Commission has sufficiently accounted for contingency expenses, which are critical for managing extreme weather events and natural disasters affecting many states.

Need for Federal Reforms

• Urgent Call for Tax Devolution Reforms: Given India’s diverse social and economic landscape, there is a pressing need to amend the tax devolution framework. This would enhance state autonomy and promote a more participatory governance model.
• Federation and Governance Model: A reformed approach to tax devolution would facilitate a truly federal system, allowing states greater control over their financial resources to respond to unique regional challenges.
• Focus on Future Recommendations: With the Sixteenth Finance Commission’s recommendations expected by October 2025, there is an opportunity to advocate for frameworks that better accommodate the needs of various states and address ongoing financial challenges.

Practice Question

Q. Critically assess the implications of the current tax devolution framework on the financial autonomy of states in India and discuss potential reforms needed to enhance their governance and development capabilities.

Recent analysis from the Economic Advisory Council to the Prime Minister highlights significant shifts in economic contributions among Indian states over the past six decades. This scrutiny reveals the decline of historically dominant states and the rise of southern and western states as economic leaders, raising concerns about fiscal equity and federal dynamics.

Decline of Traditional Powerhouses

• Diminishing Contributions of Key States: States like Uttar Pradesh, West Bengal, and Punjab have seen a marked decline in their contributions to India’s GDP. For instance, Uttar Pradesh’s share fell from 14.4% in 1960-61 to 12.6% in 1990-91, with further declines post-bifurcation.
• West Bengal’s Economic Regression: West Bengal’s GDP share plummeted from 10.5% to 5.6%, with its per capita income now falling below the national average. This represents a significant economic regression for a state once considered a leader.
• Punjab’s Post-Green Revolution Slump: Punjab, which previously benefitted from the Green Revolution, has seen its GDP contribution decline from 4.4% in 1970-71 to 2.4% in 2023-24, indicating a substantial loss of economic vitality.

Rise of Southern and Western States

• Emergence of Southern States: In contrast, the southern states have capitalized on economic reforms post-1991, contributing roughly 30% to India’s GDP in 2023-24, demonstrating their rise as economic powerhouses through robust manufacturing and services sectors.
• Declining Fiscal Share Despite Growth: Despite their economic performance, southern states have experienced a decline in their share of the divisible tax pool, from 21.1% (2000-2005) to 15.8% (2021-2026), creating tensions in Centre-state financial relations.
• Concerns Over Political Representation: The impending delimitation exercise raises fears among southern states of reduced representation in the Lok Sabha, potentially exacerbating existing challenges in federal relations and resource distribution.

Practice Question

Q. Analyze the economic transformations of Indian states over the past six decades, focusing on the decline of traditional powerhouses and the rise of southern and western states, while assessing the implications for federal dynamics and fiscal equity in India.