GS Analyst
Daily Current Affairs

• Even nine years after the bifurcation of the combined State, the lingering disagreement over the Krishna River’s water distribution between Andhra Pradesh and Telangana remains unsolved.

Key Highlights:

Origin of the Krishna water dispute:

• The dispute dates back to the formation of Andhra Pradesh in November, 1956.
• Four senior leaders from different regions of Andhra, including the Rayalaseema Region and the Telangana region, signed a Gentlemen’s Agreement on February 20, 1956.
• However, the focus of the combined dispensation with respect to irrigation facilities was on Andhra, which already had systems developed by the British at the cost of in-basin drought-prone areas in Telangana.
• KWDT-I: In 1969, the Bachawat Tribunal (KWDT-I) was constituted to settle the dispute around water share among the riparian States of Maharashtra, Karnataka and Andhra Pradesh.
  • The Tribunal allocated 811 tmcft dependable water to Andhra Pradesh and the Andhra Pradesh government later apportioned it in the 512:299 tmcft ratio between Andhra and Telangana.
• However, this was not followed through, leading to discontent among the people.
• Telangana had repeatedly reiterated how it had been meted out with injustice in Andhra Pradesh when it came to the matter of distributing water resources.

Water sharing after the bifurcation:

• The Andhra Pradesh Reorganisation Act, 2014 had no mention of water shares.
• At a meeting convened by the then Ministry of Water Resources in 2015, the two States agreed to share water in the 34:66 (Telangana:A.P.) ratio.
• However, the KRMB continued the same ratio year after year in spite of Telangana's opposition.
• In October 2020, Telangana raised its voice for an equal share and refused to continue the existing arrangement. The river Board has referred the matter to the Ministry of Jal Shakti (MoJS).

States claim:

• Telangana has been asking the Centre to finalise water shares, citing treaties and agreements.
• It is entitled for at least a 70% share in the allocation of 811 tmcft, while Andhra Pradesh has been diverting 300 tmcft water to areas outside the basin.
• Andhra Pradesh is also claiming a higher share of water to protect command areas.

Stand of the Centre

• The Centre has convened two meetings of the Apex Council of Telangana and Andhra Pradesh in 2016 and 2020 without making any attempt to resolve the issue.
• Telangana has withdrawn its petition in the Supreme Court, but the Centre has been sitting over the issue for over two years.

• Recently, the central government promulgated an Ordinance that Aam Aadmi Party government of Delhi has control over the transfer and posting of officials in the National Capital Territory (NCT), except with regard to public order, police, and land.

Key highlights:

• The Ordinance promulgated by the President of India gave the Lieutenant Governor of Delhi power over services and established a "National Capital Civil Service Authority" consisting of the Chief Minister and two senior IAS officials.

Supreme Court: Re-promulgation of Ordinance

• Krishna Kumar Singh and Another v. State of Bihar: If, for whatever reason, an Ordinance lapses, the only option for the government is to reissue or repromulgate it.
  • In 2017, the Supreme Court examined a case where the state of Bihar re-promulgated an Ordinance several times without placing it before the legislature.
• The Supreme Court held that the Governor's power to issue an Ordinance is an emergency power, and that repeated re-promulgations without bringing the Ordinance to the legislature would usurp the legislatures function and be unconstitutional.
• This was in violation of the SC judgment in Dr D C Wadhwa and Ors v. State of Bihar and Ors (1986).
• A Constitution Bench of the Supreme Court headed by then CJI P N Bhagwati held that an Ordinance promulgated by the Governor to meet an emergent situation shall cease to be in operation at the expiration of six weeks from the reassembly of the Legislature.
• If the government wishes for the Ordinance to continue in force beyond the six-week period, it “has to go before the Legislature”, which is the constitutional authority entrusted with law-making functions.

• Recently, the White House and Republicans in Congress are in a standoff over US government borrowings.

Key highlights:

• The US government made the decision following Treasury Secretary Warnings of an "unprecedented economic and financial storm" and yet another meeting with Republican counterparts to reach an agreement on the US debt ceiling.
• Without lifting the debt ceiling, the US government will default on its obligations, a historic first with potentially disastrous implications.
• Furloughs would be issued to federal employees, worldwide stock markets would plummet, and the US economy would very certainly enter a recession.

What is the debt ceiling?

• The debt ceiling is the limit on the amount of money the US government can borrow to pay for services, such as social security, Medicare and the military.
• The deficit left at the end of the year is tacked on to the country’s total debt.
• Congress is in charge of setting the debt limit, which currently stands at $31.4tn.
• The ceiling has been raised 78 times since 1960, under both Democrat and Republican presidents.
• At times, the ceiling was briefly suspended and then reinstated at a higher limit, a retroactive raising of the debt ceiling.
  

What happens if the US defaults?

• The US has never defaulted on its payments before, so what will happen is unclear.
• Investors would lose faith in the US dollar, job cuts would be imminent, and the US federal government would not have the means to continue all its services.
• Mortgage rates would likely soar, tanking the housing market.

Why is the US debt so high?

• The US debt grows when the government is spending more money or when its revenue is lower.
  
  
• The US has had a debt problem since the 80s, when Ronald Reagan's tax cuts caused it to grow.
• In the early 2000s, the dotcom bubble burst, George W Bush cut taxes, and in the 2008 Great Recession, the government had to bail out banks and increase social services.
• In 2017, Donald Trump passed a major tax cut, raising the debt by $7.8tn.
• And then the Covid-19 pandemic hit. The US government passed a series of stimulus bills to offset the worst of the pandemic’s impacts that ultimately totaled $5tn.
  
  

What are the main contributors to federal government spending?

• US government spending is dominated by mandatory programs such as social security, Medicaid and Medicare, with military spending taking up 12% of the budget.
• Other big-ticket items include education, employment training and benefits for veterans.

Why isn’t Congress raising the debt ceiling?

• Republicans passed a bill in April that would raise the debt ceiling by $1.5tn and mandate $4.8tn in spending cuts over a decade.
• Democrats have refused to negotiate spending cuts over the debt ceiling, but Republicans are using the high-stakes timeline towards default to pressure Democrats into agreeing to spending cuts. This stalemate could bring the US economy closer to disaster.

• Recently, the co-legislators at the European Commission signed the Carbon Border Adjustment Mechanism (CBAM).

Key Highlights:

• The regulation will put a fair price on carbon emitted during the production of carbon intensive goods entering the EU and encourage cleaner industrial production in non-EU countries.
• Importers will start paying the financial levy from 2026.
  

About: Carbon Border Adjustment Mechanism (CBAM)

• The European Green Deal is a plan to reduce carbon emissions by 55% by 2030 and become a climate neutral continent by 2050.
• It aims to avert 'carbon leakage', where EU manufacturers move carbon-intensive production to countries outside the region with less stringent climate policies.
• Importers in the EU would have to buy carbon certificates corresponding to the payable carbon price of the import had the product been produced in the continent.
• The Commission would be responsible for reviewing and verifying declarations and managing the central platform for the sale of CBAM certificates.
• Importers would have to annually declare the quantity and embedded emissions in the goods imported into the region in the preceding year.

Mechanism:

• The CBAM would be introduced in parallel with the phasing out of the allocation of free allowances given out under the EU Emissions Trading System (ETS).
• The ETS had set a cap on the amount of greenhouse gas emissions that can be released from industrial installations in certain sectors, but some allowances were given out for free to prevent carbon leakage.
• The EU concluded that this dampened the incentive to invest in greener production, so an import-based tariff was proposed.

Why are countries worried?

• CBAM would initially apply to imports of certain goods and precursors whose production is carbon-intensive and at risk of 'leakage'.
• Eventually, it would capture more than half of the emissions in ETS covered sectors.
• India, Brazil and South Africa would be most affected, while Mozambique would be the least-developing country.
• India's exports in the five segments represented less than 2% of the total exports to the EU between 2019 and 2021, but its long-term effects can be severe due to the EU being India's third largest trade partner and its projected growth trajectories.
• The two sides have agreed to intensify their engagement on carbon border measures.