THE CONTEXT: A few months ago, India’s drug regulator Central Drugs Standard Control Organisation (CDSCO), approved the market authorisation for NexCAR19, India’s first indigenously-developed CAR-T cell therapy. This paves the way for the commercial launch of this therapy in India, where it is expected to be available to cancer patients at a tenth of the cost abroad. Recently, a 64-year-old former army doctor has become the first patient in the country to be free of cancer cells after being administered this therapy.

RECENT DEVELOPMENTS:

• For decades, oncologists have relied on chemotherapy, radiation and surgery to treat cancer patients which the primary methods to treat the dreaded disease. In the past two decades, however, research has extended the frontiers of anti-cancer interventions.
• Drugs have been developed to home in on the molecules cancer cells require to survive and spread. Immune system-boosting drugs have shown the ability to shrink tumours in some patients with advanced malignancy.
• CAR T-cell therapy is among the most promising recent developments, especially because it has shown the ability to eradicate advanced leukemias and lymphomas. Most of the early research in this field was conducted in laboratories in the US, Europe and China.
• In October, 2023, India joined this elite list after the country’s drug regulator approved a CAR T-cell therapy incubated at Tata Memorial Centre and IIT Bombay laboratories.

WHAT IS CAR-T CELL THERAPY, AND HOW DO CAR-T CELLS FIND AND DESTROY CANCER CELLS?

• CAR-T is a revolutionary therapy that modifies immune cells, specifically T-cells, by turning them into potent cancer fighters known as CAR-T cells.
• T-cells are special cells (white blood cells) whose primary function is cytotoxic, meaning it can kill other cells.
• T-cells are then put back into the body, and they go after cancer cells especially in blood cancers like leukaemia and lymphomas.
• CAR T-cell therapies are customised for each patient. The treatment is far less difficult for the patient compared to several sessions of chemotherapy.
• Laboratory and animal studies have shown that India’s homegrown therapy has significantly fewer side effects compared to those developed in the West.

How effective and different is this from other cancer treatments like, say, chemotherapy?

• While chemotherapy and immunotherapy may add a few months or years to a cancer patient’s life, cell-and-gene therapy is designed to cure and provide lifelong benefit.
• It makes treatment easier with a one-time therapy unlike several sessions of chemotherapy. It is a lifeline for non-responsive cancer patients.

NEXCAR19:

• NexCar19 is a type of CAR-T and gene therapy developed indigenously in India by ImmunoACT, which is a company incubated at IIT Bombay.
• The therapy is designed to target cancer cells that carry the CD19 protein. This protein acts like a flag on cancer cells, which allows CAR-T cells to recognise and attach themselves to the cancer cells and start the process of elimination.
• India is now one of the first developing countries to have its indigenous CAR-T and gene therapy platform.
• The therapy is for people with B-cell lymphomas who didn’t respond to standard treatments like chemotherapy, leading to relapse or recurrence of the cancer.
• Recovery typically occurs within two weeks after one cycle of the treatment. Approximately 70% of patients respond to the treatment, with variations between leukaemia and lymphoma cases. About 50% of these responsive patients achieve a complete response.

SIGNIFICANCE OF THERAPY:

• Lower drug-related toxicities: Laboratory and animal studies have shown that it leads to significantly lower drug-related toxicities.
• Minimal damage to neurons: It causes minimal damage to neurons and the central nervous system, a condition known as neurotoxicity. However, neurotoxicity can sometimes occur when CAR-T cells recognise the CD19 protein and enter the brain, potentially leading to life-threatening situations.
• Minimal Cytokine Release syndromes: The therapy also results in minimal Cytokine Release Syndrome (CRS), which is characterised by inflammation and hyperinflammation in the body. Inflammation are caused due to the death of a significant number of tumour cells, as CAR-T cells are designed to target and eliminate cancer cells.

ISSUES RELATED TO THERAPY:

• Affordability: Cancer incidence and mortality continue to rise driven by spikes in the Global South. In India, where the disease claims about 8 lakh people every year, treatment is expensive for an overwhelming section of the population. Critics argue that developing CAR T-cell therapy in India may not be as cost-effective as it will still be unaffordable for most people.
• Accessibility: High costs and the need for specialized infrastructure for production and administration remain significant barriers to widespread adoption and accessibility.
• Preparation: One of the issue faced by CAR T-cell therapies is its preparation that has been major hindrance to their widespread use. CAR T-cell therapy requires technical and human resources, making it challenging to administer.
• Side Effects: The potential side-effects of CAR T-cell therapy is also significant which are associated with cytokine release syndrome and neurological symptoms.

THE CONCLUSION:

The development of indigenous CAR-T cell therapy in India marks a significant advancement in the country’s healthcare landscape. Researchers and planners must work to cut costs of the therapy to lower the cancer mortality rates in the coming decades.

UPSC PREVIOUS YEAR QUESTIONS

Q.1 What are the research and developmental achievements in applied biotechnology? How will these achievements help to uplift the poorer sections of society? (2021)

Q.2 COVID-19 pandemic has caused unprecedented devastation worldwide. However, technological advancements are being availed readily to win over the crisis. Give an account of how technology was sought to aid the management of the pandemic. (2020)

MAINS PRACTICE QUESTION

Q.1 Highlight the significance of the development of indigenous CAR-T cell therapy in India. Discuss the challenges in terms of its accessibility and affordability for cancer treatments in the country.

SOURCE: https://indianexpress.com/article/opinion/editorials/express-view-on-indias-car-t-cell-therapy-taking-cancer-on-9149692/

TAG: GS 3: SCIENCE AND TECHNOLOGY

THE CONTEXT: A groundbreaking discovery at Stanford University has revealed the existence of microscopic entities named “obelisks” within the human mouth and gut.

EXPLANATION:

• These obelisks, described in a preprint study, exhibit unique characteristics, blurring the lines between viruses and viroids.
• As the scientific community delves into this intriguing world, a closer look is essential.

The Realm of Microscopic Entities

• Viruses and Viroids:
  • Viruses, perched on the boundary of life, manipulate hosts for replication.
  • Viroids, tiny RNA fragments, lack protective shells and protein-coding capabilities but can cause diseases in plants.
• Obelisks: A New Frontier:
  • The term “obelisks” is coined for these entities due to their rod-like shape, self-organizing abilities, and circular single-stranded RNA genome.
  • Positioned between viruses and viroids, obelisks possess genes predicting protein coding, distinguishing them from traditional viroids.

Key Characteristics of Obelisks

• Genetic Makeup:
  • Obelisks feature a circular single-stranded RNA genome akin to viroids but lack a protein coat, resembling viruses.
  • Their genomes encode proteins, with the major protein known as “obulin,” presenting an evolutionary mystery regarding its function.
• Abundance and Diversity:
  • Analyses from human gut and mouth microbiomes reveal nearly 30,000 distinct obelisk types, challenging previous assumptions about their scarcity.
  • Diverse niches globally house obelisks, with varying types in different body sites and donors.
• Host Relationships:
  • Obelisks likely rely on microbial host cells, potentially bacteria or fungi, for replication.
  • The specific hosts remain unidentified, but Streptococcus sanguinis in dental plaque is a promising candidate.

Implications and Unanswered Questions

• Potential Impact on Microbiome:
  • The effects of obelisks on the human microbiome remain uncertain—whether they act as parasites, bring benefits, or exist as neutral passengers.
  • Understanding their ecological and evolutionary significance is crucial for deciphering their potential impact on human health.
• Research Directions:
  • Laboratory experiments on Streptococcus sanguinis offer a promising model to unravel fundamental aspects of obelisk biology.
  • Long-term implications on human health, therapeutic potential, and the broader ecological role of obelisks warrant further exploration.
• Evolutionary Dynamics:
  • The evolutionary trajectory of obelisks, their interaction with hosts, and the role they play in microbiome dynamics are areas ripe for investigation.

Conclusion

• The discovery of obelisks introduces a new dimension to the microscopic world, challenging conventional classifications.
• As research unfolds, the peculiarities of obelisks and their intricate relationships with microbial hosts promise to unravel mysteries and contribute to our understanding of the intricate web of life at the smallest scales.

SOURCE: https://www.downtoearth.org.in/blog/health/a-new-virus-like-entity-has-just-been-discovered-obelisks-explained-94299

TAG: GS 2: POLITY

THE CONTEXT: The Lok Sabha has approved the Public Examinations (Prevention of Unfair Means) Bill, 2024, with a focus on curbing malpractices, including question paper leaks, document tampering, and network manipulation in public examinations.

EXPLANATION:

• The bill carries provisions for stringent penalties, with Union Minister emphasizing its importance during the discussion.

Key Provisions of the Bill

• Scope and Punishments:
  • The Bill targets officials or organizations involved in malpractices and proposes penalties, including a jail term of up to 10 years and fines exceeding Rs 1 crore.
  • Notably, students or candidates are excluded from the purview of the Bill, as clarified by Union Minister Jitendra Singh.
• Inspiration from Indian Express Investigation:
  • During the discussion, several members referred to The Indian Express investigation report highlighting 41 instances of question paper leaks affecting over 1.4 crore candidates across 15 states in the past five years.
• Applicability:
  • The bill is applicable to central recruitment and entrance exams conducted by:
    • the Union Public Service Commission (UPSC),
    • Staff Selection Commission (SSC),
    • Railway Recruitment Boards (RRBs),
    • Institute of Banking Personnel Selection (IBPS), and
    • National Testing Agency (NTA).
  • The NTA conducts exams for admission to higher educational institutions, like the Joint Entrance Examination (JEE) for engineering, National Eligibility Cum Entrance Test (NEET) for medical, and Common University Entrance Test (CUET) for undergraduate and post-graduate studies.
  • Apart from these designated public examination authorities, all central ministries and departments, as well as their offices for recruitment, will also come under the purview of the new law.
• Defines unfair means
  • Section 3 of the Bill defines unfair means.
  • It proposes 20 offences and unfair means including impersonation, manipulation of answer sheets and tampering with documents.
• Nature of offences
  • Section 9 of the bill states that all offences shall be cognizable, non-bailable and non-compoundable.
• Investigation
  • The bill proposes that officers not under the rank of deputy superintendent of police or assistant commissioner of police must head up such matters.
  • The government under the bill also holds the power to send the probe to a Central agency.
  • In essence, this frees up to the police to act on its own and arrest suspects without a warrant.

Parliamentary Discussion Highlights

• Reference to Indian Express Report:
  • One of the MP brought a copy of The Indian Express to the House, linking it to the Bill.
  • The report focused on the widespread issue of question paper leaks, bringing the magnitude of the problem to the forefront.
• Minister’s Response:
  • The Union Minister acknowledged the pervasive nature of malpractices across states, emphasizing the need for legislation.
  • He highlighted administrative deficits in states like Rajasthan and affirmed the Bill’s relevance.
• Addressing “Jami Jamai Vyavastha”:
  • Members referred to the entrenched system depicted in the movie “12th Fail.”
  • Union Minister clarified that the Bill is designed to combat such systemic issues.
• Clarification on Separate Legislation:
  • Members questioned the necessity of a standalone Bill when existing provisions in the IPC and the new BNS already cover malpractices.
  • The Bill is a specific legislation with defined provisions exclusively targeting examination malpractices.

Concerns and Ministerial Responses

• Handling Technology-Driven Malpractices:
  • Members raised concerns about addressing malpractices involving new technologies.
  • The plans to establish a committee of experts for surveillance, understanding, and updating regulations periodically has been outlined.
• Regional Language Examinations:
  • DMK members highlighted the absence of examinations in regional languages as a potential reason for cheating.
  • The government has initiated examinations in 13 languages, including Tamil, with plans to include all 22 gradually was the response.
• Commitment to Meritorious Students:
  • Minister Singh emphasized that the Bill aims to safeguard the interests of meritorious students, ensuring they are not adversely affected by malpractices.

Conclusion

• The passage of the Public Examinations Bill reflects a concerted effort by the government to address the pervasive issue of malpractices in examinations.
• The legislative measures, coupled with ongoing technological surveillance plans, underscore the commitment to ensuring the integrity of the examination system in the country.

SOURCE: https://indianexpress.com/article/india/lok-sabha-passes-anti-cheating-bill-govt-recruitment-exams-9147103/

TAG: GS 3: ECONOMY

THE CONTEXT: India’s Revenue Secretary has projected a record high tax-to-GDP ratio of 11.7% for the fiscal year 2024-25.

EXPLANATION:

• This surge is attributed to a focus on direct taxes, perceived as more ‘equitable,’ with ongoing efforts to simplify the tax structure, minimize disputes, and enhance enforcement efficiency.

Direct Taxes and Rationalization Efforts

• Equitable Direct Taxes:
  • Revenue Secretary emphasizes the importance of direct taxes in driving the anticipated increase in the tax-to-GDP ratio.
  • Recent reductions in corporate and personal income taxes aim to create a more balanced and taxpayer-friendly regime.
• New Tax Regime:
  • The introduction of a new tax regime, devoid of deductions but offering a higher tax-free income threshold, is expected to attract a significant number of income taxpayers.
  • The growth in Personal Income Tax collections stands at an impressive 28% year-to-date, with a projected moderation to 20%-22% by the fiscal year-end.

Goods and Services Tax (GST) Considerations

• Rate Structure Review:
  • The GST Council, responsible for reviewing the rate structure, has been reconstituted, indicating ongoing efforts to rationalize GST rates.
  • Small adjustments to rationalize rates on various items remain a continual focus within the Council.
• Quarterly Meetings:
  • The GST Council is expected to convene quarterly, providing a platform for ongoing discussions on tax-related matters.

Tax-to-GDP Ratio Projections

• Historic High Projection:
  • Revenue Secretary anticipates the tax-to-GDP ratio to reach an all-time high of 11.7% in 2024-25, building on the 11.6% recorded in the current year and 11.2% in 2022-23.
  • The surge is primarily attributed to a rise in direct taxes from 6.1% of GDP in 2022-23 to 6.6% in the current year and a further increase to 6.7% in the next fiscal year.
• Economic Growth Impact:
  • As the economy expands and per capita income rises, the tax-to-GDP ratio is expected to grow, aligning with the experiences of other countries.
  • The projection reflects India’s developmental trajectory, with an emphasis on sustaining tax revenue growth.

Revenue Growth Projections and Corporate Tax Insights

• Buoyancy and Growth Projections:
  • Acknowledging the cyclicality of revenue buoyancy, a shift from a 1.4 buoyancy this year to a projected 1.1 buoyancy in 2024-25 has been noticed.
  • The anticipation is for tax revenues to grow at 11.5% fueled by a nominal GDP growth of 10.5%.
• Corporate Tax Landscape:
  • Companies availing the 15% corporate tax rate for new manufacturing units, ending in March 2023, will be revealed in next year’s tax returns.
  • About 57% of corporate tax income is currently filed at the reduced rate of 22%, introduced in 2019 for firms not opting for deductions.

Regulatory Oversight and Enforcement

• Money Laundering Concerns:
  • The Revenue Department does not examine lapses at Paytm Payments Bank, but the Enforcement Directorate steps in when money laundering issues arise, enforcing legal consequences for any flouting of the law.

Conclusion

• Revenue Secretary insights provide a comprehensive view of India’s tax landscape, showcasing efforts to balance tax structures, promote equitable taxation, and project a robust tax-to-GDP ratio.
• Ongoing reforms, coupled with prudent fiscal management, position India for sustained economic growth and revenue enhancement.

SOURCE: https://www.thehindu.com/business/Economy/indias-tax-to-gdp-ratio-to-hit-a-record-high-of-117-of-gdp-in-2024-25/article67818536.ece

TAG: GS 3: SCIENCE AND TECHNOLOGY

THE CONTEXT: The phenomenon of zodiacal light, characterized by sunlight scattering due to interplanetary dust, has long intrigued astronomers. A recent study conducted by a scientist at the Physical Research Laboratory (PRL), Ahmedabad, delves into the origins of this mysterious dust, using insights gained from NASA’s Juno spacecraft’s encounter with fast-moving particles.

EXPLANATION:

• Juno, launched in 2011 to explore Jupiter, experienced damage to its solar panels due to dust particles encountered around Mars.
• A 2021 paper highlighted this issue, providing valuable data. Dr. Jayesh P. Pabari from PRL seized this opportunity, utilizing the data to calculate the number of dust particles encountered by Juno between 1 and 5 Astronomical Units (AU).
• Astronomical Units (AU): The distance between Earth and the Sun. Mars and Jupiter are situated at 1.52 AU and 5.2 AU, respectively.

Zodiacal Dust and Source Identification

• Zodiacal Light:
  • The faint, diffuse glow observed as sunlight scatters through interplanetary dust.
  • Visible along the ecliptic, the path of the Sun over a year.
• Flux Calculation:
  • Pabari’s analysis revealed a tenfold increase in dust flux at 1.5 AU, a crucial finding in understanding the source of zodiacal dust.
• Possible Origin – Mars’s Moons (Deimos and Phobos):
  • Pabari compared dust flux near Mars, ruling out other phenomena and highlighting the potential role of Mars’s moons.
  • Mars’s moons, Deimos and Phobos, named after the gods of dread and panic, respectively, were identified as potential sources due to observed dust dynamics.

Characteristics of Mars’s Moons

• Phobos:
  • Larger of the two moons.
  • Drifting towards Mars and may eventually collide or break up into a ring.
  • Features Stickney crater, named after Asaph Hall’s wife, and experiences significant temperature variations.
• Deimos:
  • Surface likely buried under nearly 100 meters of dust.
  • Differences in shape and characteristics compared to Phobos.

Mechanism Explaining Dust Production

• Pabari’s models incorporated moon shapes, gravitational effects, spacecraft ejecta impact, and other parameters.
• Micrometeorites, small but fast-moving dust particles, collide with Mars’s moons. Lack of atmospheres allows these particles to create small dust clouds.
• Moons’ low gravity facilitates the escape of smaller dust particles into space, contributing to the observed increase in dust flux.

Implications and Future Confirmatory Mission

• A potential explanation for the zodiacal dust mystery.
• Future missions to Phobos and Deimos could validate findings, specifically examining mass loss and confirming the calculated dust dynamics.
• The study underscores the importance of understanding celestial dust dynamics for future space exploration endeavors.

Conclusion

• PRL Ahmedabad’s study, leveraging unexpected data from Juno’s encounter, unravels the potential contribution of Mars’s moons to the enigmatic zodiacal dust.
• The findings open avenues for further exploration and emphasize the significance of interdisciplinary studies in unraveling celestial mysteries.

SOURCE: https://www.thehindu.com/sci-tech/science/zodiacal-dust-mystery-prl-ahmedabad-study-spots-source/article67795421.ece

TAG: GS 2: POLITY

THE CONTEXT: Uttarakhand Chief Minister accompanied by Finance Minister tabled the Uniform Civil Code (UCC) Bill in the state Assembly, proclaiming it as a “historic moment.”

EXPLANATION:

• However, the Opposition criticized the move, labeling it a “poll gimmick” and questioning the urgency of its presentation.

Landmark Legislation with Exclusions

• If passed, Uttarakhand will be the first state in independent India to implement a uniform law covering marriage, divorce, succession, and live-in relationships.
• Notably, the Scheduled Tribes, constituting 2.9% of the state’s population, have been excluded from the ambit of the UCC Bill.

Key Provisions of the UCC Bill

• Marriage Restrictions:
  • The UCC prohibits multiple spouses and mandates that marriages occur only between one man and one woman.
  • The age of marriage is set at 21 years for boys and 18 years for girls.
• Equal Rights in Divorce:
  • Men and women will have the same rights in matters related to divorce, aimed at ending practices like ‘Halala’ and ‘Iddat.’
  • The Bill proposes a three-year imprisonment or a fine of ₹1 lakh, or both, for those found committing ‘Halala.’
• Registrations Mandatory:
  • The UCC makes it mandatory to register marriages and divorces. Failure to comply will result in the couple being deprived of government facilities.
• Changes in Religion and Divorce:
  • If one spouse changes their religion without the other’s consent, the affected party has the right to file for divorce and maintenance allowance.
• Live-in Relationships:
  • The UCC Bill introduces stringent provisions for the registration of live-in relationships.
  • Failure to register within a month may lead to imprisonment of up to three months.
  • Providing false information during registration may result in imprisonment or a fine not exceeding ₹25,000, or both.
• Children’s Rights:
  • Children born out of live-in relationships will be considered legitimate, and the Bill proposes equal property inheritance rights for sons and daughters, eliminating distinctions between legitimate or illegitimate children, biological or adopted children, and those born through surrogacy or assisted reproductive technologies.
• Post-Death Property Rights:
  • After a person’s death, the UCC ensures equal property rights for the wife, children, and parents, a departure from previous laws where only the mother had rights in the deceased’s property.

Opposition’s Critique and Government’s Response

• Leader of Opposition questioned the urgency of passing the UCC Bill, suggesting that the government may be attempting to conceal certain aspects.
• Despite having a majority, the government is urged to allow the Opposition time for preparation and a thorough debate.

Conclusion

• Uttarakhand’s move towards a Uniform Civil Code, if successfully enacted, could set a precedent for other states in India.
• The Bill aims to bring uniformity while addressing contemporary issues related to marriage, divorce, and inheritance, but its exclusion of Scheduled Tribes and the Opposition’s skepticism raise questions about the broader consensus and effectiveness of the proposed legislation.

SOURCE: https://www.thehindu.com/news/national/other-states/uniform-civil-code-bill-tabled-in-uttarakhand-assembly/article67816803.ece

(Newspapers, PIB and other important sources)

Prelim and Main

1. Uttarakhand tables Uniform Civil Code Bill amid Opposition protest READ MORE

2. In zodiacal dust mystery, PRL Ahmedabad study points to a familiar source READ MORE

3. India’s tax-to-GDP ratio to hit a record high of 11.7% of GDP in 2024-25: Revenue Secretary READ MORE

4. EC rules Ajit faction is real NCP, Sharad Pawar faction will go to Supreme Court READ MORE

5. How the Uniform Civil Code came to be included in the Indian Constitution READ MORE

6. Weather disasters behind 95% natural calamities in 2023 that cost over $1 billion, finds report READ MORE

7. A new virus-like entity has just been discovered – ‘obelisks’ explained READ MORE

8. Hindu Kush Himalaya is a ‘biosphere on the brink’: ICIMOD READ MORE

Main

GS Paper- 1

1. Role of diaspora in furthering India’s religious nationalism globally READ MORE

2. Population priorities: On Interim Budget statement and the Census READ MORE

3. The Earth’s tectonic plates made the Himalayas — and could rip them apart READ MORE

4. Deep Seabed Mining in the Arctic READ MORE

GS Paper- 2

POLITY AND GOVERNANCE

1. Travesty in Chandigarh: On mayoral election and the Supreme Court of India’s remarks READ MORE

2. The severe erosion of fiscal federalism READ MORE

3. The Union’s reins on financial transfers to States READ MORE

SOCIAL ISSUES

1. A failed attempt at denying backward groups their place in India’s universities READ MORE

2. Are Anganwadis ready to provide quality early childhood education? READ MORE

3. Going Beyond the Gap in Foundational Skills, ASER 2023 Report Raises 3 Important Questions READ MORE

INTERNATIONAL ISSUES

1. Active non-alignment in a changing world READ MORE

2. NAM at a crossroads: Analysing India’s diplomatic choices and priorities READ MORE

3. Maldives, China and a challenge to India’s soft power diplomacy READ MORE

4. India–Maldives Ties in Choppy Waters READ MORE

GS Paper- 3

ECONOMIC DEVELOPMENT

1. Mint Street musings: On the interim Budget and the RBI READ MORE

2. Wages of inequality: The income-growth gap READ MORE

3. Bond route to improving female presence in labour READ MORE

4. High tide of youth unemployment: Joblessness among the youth cannot be addressed through fiat READ MORE

5. Can India overtake the US economy? READ MORE

6. India’s infrastructure sector has a skilled labour problem READ MORE

ENVIRONMENT AND ECOLOGY

1. Delhi’s waste needs to be managed better READ MORE

2. Sustaining cities amid climate change READ MORE

SCIENCE AND TECHNOLOGY

1. The perilous age of disinformation READ MORE

INTERNAL SECURITY

1. China’s ‘Three Warfares’ Strategy in Action: Implications for the Sino-India Boundary, the Arctic, and Antarctica READ MORE    

DISASTER MANAGEMENT

1. In Morbi’s debris, the role of the State in PPP projects READ MORE

GS Paper- 4

ETHICS EXAMPLES AND CASE STUDY

1. Power of silence READ MORE

2. Supreme Court’s ‘murder of democracy’ remarks on Chandigarh mayor polls give ammo to Oppn READ MORE

3. To link or delink neural connections READ MORE

Questions for the MAIN exam

1. The power to make laws on, administer and determine aspects of the public debt of the State falls squarely on the State Legislature, and borrowing restrictions in States is an example of ‘annihilative federalism’. Critically Examine.

2. Budget management of the State is the discretion of the State government and it cannot be ceded to the Union executive and Parliament in the name of fiscal management. Examine the statement in the light of recent stand-off between Kerala and Center.

3. The character of India’s federalism is moving rapidly from cooperative to destructive and annihilation, and recent borrowing restrictions are an example of ‘annihilative federalism’ at play. Critically examine.

4. Climate change poses a significant threat to the country in the coming decades and to address these challenges effectively, the Republic’s current structure needs to evolve by encouraging the devolution of powers to local government bodies (LGBs). Comment.

5. While, in 1993–94, attempts were made to devolve power to local authorities, the onus of decentralisation fell onto state governments, which lacked incentives to do so, and this setup diminished accountability and undermined governance objectives. Examine.

6. For an effective delivery system, the Indian Republic must be re-envisioned in such a way that the Union and states act as facilitators and coordinators of major policy challenges and imagine Local Government Bodies as public service delivery units. Comment.

7. The Indian Constitution has provided a framework for India’s enduring success as a unified nation with a vibrant democracy but it must evolve to grapple with the key challenges of the 21st century and for which a new approach that encourages devolution of power is the need of the hour. Comment.

QUOTATIONS AND CAPTIONS

• The pre-eminent obstacle to peace is Israel’s colonisation of Palestine.
• Only a verdict invalidating the election and ordering a fresh one, with safeguards against manipulation, will be in the interest of justice.
• Borrowing restrictions in States provide an example of ‘annihilative federalism’.
• With foreign capital inflows into Indian government bonds likely to spike following their inclusion in global bond indices, banks which are the major holders of these securities and are facing elevated credit to deposit ratio growth rates, should get more space to lend.
• All activities related to public accounts fall within the domain of the State Legislature and the Centre has no power to include the withdrawals from public accounts in the Net Borrowing Ceiling (NBC).
• Budget management of the State is the discretion of the State government. The territory occupied by the State executive and legislature cannot be ceded to the Union executive and Parliament in the name of fiscal management.
• The State’s responsibility to fund development work cannot come in the way of it delivering justice to pensioners and beneficiaries.
• Not permitting the State to borrow will affect the State’s spending on welfare schemes and it can lead to a catastrophic situation in the revenue-scarce State.
• The character of India’s federalism is moving rapidly from cooperative to destructive and annihilation, and recent borrowing restrictions are an example of ‘annihilative federalism’ at play.
• The Union government’s moves, which reduce the aggregate financial transfers to States, are weakening cooperative federalism.
• Gap between wage and GDP growth indicates a worsening of income distribution as well as weak improvements in welfare.
• Outcome-based financing tools like Development Impact Bonds show promise in addressing skilling challenges for Indian women.
• With local governments bearing the brunt of public service delivery, the Republic must be re-envisioned in such a way that the Union and states act as facilitators and coordinators of major policy challenges and imagine Local Government Bodies as public service delivery units.
• While Indian Republic has fulfilled its intended ambitions of nurturing national unity and democracy, it needs to empower lower levels of government to tackle 21st century challenges.
• Climate change poses a significant threat to the country in the coming decades, with the country being vulnerable to cyclones, heatwaves, flooding, and air pollution.
• While attempts were made in 1993–94 to devolve power to lower authorities, the onus of decentralisation fell onto state governments, which lacked incentives to do so.
• For an effective delivery system, the Indian Republic must be re-envisioned in such a way that the Union and states act as facilitators and coordinators of major policy challenges and imagine Local Government Bodies as public service delivery units as local governments bearing the brunt of service delivery.

ESSAY TOPIC

• Happiness is when what you think, what you say, and what you do are in harmony.

50-WORD TALK

• How consenting adults live and love is nobody’s business; certainly not the state’s. That couples wishing to live together must seek permission in Uttarakhand is a stunning erosion of individual liberties. The state is forcing itself into people’s bedrooms. Moral vigilantes will get a free-for-all, push India back in time.
• Karnataka has joined Kerala, Tamil Nadu and Telangana in protesting Centre’s tax devolution policies. The timing works since 16th Finance Commission’s deliberations have just started. But such concerted criticism is another sign of worsening Centre-State relations. If the Centre is serious about fiscal federalism, it needs to rebuild states’ trust.

Things to Remember:

• For prelims-related news try to understand the context of the news and relate with its concepts so that it will be easier for you to answer (or eliminate) from given options.
• Whenever any international place will be in news, you should do map work (marking those areas in maps and exploring other geographical locations nearby including mountains, rivers, etc. same applies to the national places.)
• For economy-related news (banking, agriculture, etc.) you should focus on terms and how these are related to various economic aspects, for example, if inflation has been mentioned, try to relate with prevailing price rises, shortage of essential supplies, banking rates, etc.
• For main exam-related topics, you should focus on the various dimensions of the given topic, the most important topics which occur frequently and are important from the mains point of view will be covered in ED.
• Try to use the given content in your answer. Regular use of this content will bring more enrichment to your writing.

THE CONTEXT: Ever since the start of the Fourteenth Finance Commission award period (2015-16), the Union government has been reducing financial transfers to States. This is in contrast given that the Fourteenth Finance Commission recommended devolving 42% of Union tax revenues to States, which is a clean 10 percentage points increase over the 13th Finance Commission’s recommendation. The Fifteenth Finance Commission retained this recommendation of 41%, excluding the devolution to Jammu and Kashmir (J&K) and Ladakh, which were recategorised as Union Territories.

ISSUES

• Weakening of cooperative federalism: The Union government’s moves are reducing the aggregate financial transfers to States. The Union government has not only reduced the financial transfers to States but also increased its own total revenue to increase its discretionary expenditure. The discretionary expenditures of the Union government are not being routed through the States’ Budgets, and, therefore, can impact different States in different ways.
• Lesser share for states in gross tax revenue: The Finance Commissions recommend the States share in the net tax revenue of the Union government. Though the Fourteenth and Fifteenth Finance Commissions recommended 42% and 41%, respectively, of the net tax revenue to be the shares of States, the share of the gross tax revenue was just 35% in 2015-16 and 30% in 2023-24. While the gross tax revenue of the Union government increased from ₹14.6 lakh crore in 2015-16 to ₹33.6 lakh crore in 2023-24, the States’ share in the Union tax revenue increased from ₹5.1 lakh crore to ₹10.2 lakh crore between these two years. In other words, the gross tax revenue of the Union government more than doubled while the share of States just doubled.
• Decline in Grants in aid: Grants-in-aid to States is another statutory grant recommended by the Finance Commission. The grants-in-aid to States declined in absolute amount from ₹1.95 lakh crore in 2015-16 to ₹1.65 lakh crore in 2023-24. Thus, the combined share of the statutory financial transfers in the gross tax revenue of the Union government declined from 48.2% to 35.32%.
• Increasing cess and surcharge: The Union government is increasing tax collection under cess and surcharge categories mainly to implement its own schemes in specific sectors, and at the same time, the revenues so raised need not be shared with the States.
• More centralisation of public expenditure: When the financial transfers to States either as tax devolution or grants-in-aid decline this leads to availability of larger discretionary funds for the Union government to spend. This could affect the equity in distribution of financial resources among States.
• Increase in allocation for CSS: The Union government has two other routes of direct financial transfers to States, i.e., Centrally Sponsored Schemes (CSS) and Central Sector Schemes (CSec Schemes). Between 2015-16 and 2023-24, the allocation for CSS increased from ₹2.04 lakh crore to ₹4.76 lakh crore through 59 CSS. Thus, the Union government compels the State to spend more.
• Inter state inequality: This creates two different effects in terms of inter-State equity in public finances. Wealthy States can afford to commit equivalent finances and leverage Union finances inwards through the implementation of CSS. Less wealthy States will have to commit their borrowed finances in these CSS, thus increasing their own liabilities. These differential trajectories of the public finances of States accentuate inter-State inequality in public finances, the major reason being CSS.
• Scope for anti-federal fiscal policies: Together with statutory grants, the total financial transfers as a proportion to gross tax revenue were only 47.9% in 2023-24. Further, the non-statutory grants are tied grants, i.e., they have to be spent on specific schemes for which the grants are allocated. This reduces the freedom of States in conducting public expenditure.
• More power to Union government: In addition to retaining more than 50% of gross tax revenue, the Union government incurs a fiscal deficit to the extent of 5.9% of Thus, the Union government wields enormous financial powers with limited expenditure responsibilities.

THE WAY FORWARD:

• Increase the devolution: There is a need to increase the devolution of states to bring the cess and surcharges collections under a divisible pool, given that these are legitimate revenues and states do not have these additional leverages. By this inclusion, States will get a bigger pie of devolution from the Centre’s net proceeds to meet their expenditure commitments.
• Consensus Building: There is a need for collaboration and consensus building between the Centre and States for open discussions on fiscal matters. Finance commission can act as a mediator and facilitator in fostering dialogue.
• More weightage to fiscal efficiency: The Finance commission can give more weightage to fiscal efficiency in its criteria for transfers. By emphasizing fiscal consolidation and measuring the tax effort of States, the FC can encourage responsible financial management.
• Addressing Fiscal Disparities: There is a need to address the disparities between states by providing financial transfers to less economically developed states. Revenue deficit grants and other means can help bridge the fiscal gap and supports states with limited revenue-raising capacity.
• Promoting Cooperative Federalism: There is a need for an institutional mechanism that fosters cooperative federalism by facilitating intergovernmental fiscal transfers. It encourages collaboration and coordination between the Centre and the States, fostering a sense of shared responsibility in fiscal matters.
• Strengthening Fiscal Discipline: There is a need to promote fiscal discipline and accountability of states as well. It can be done by assessing the fiscal performance and needs of the States, to encourage responsible fiscal behaviour and to discourages unnecessary spending practices.

THE CONCLUSION:

There is constant fall of finances allocated to state from the Union government which is harming not only federalism in the country but hitting fiscal health of the nation. There is a need for constant review of the financial health of States and make periodic recommendations based on the evolving economic scenario.

UPSC PREVIOUS YEAR QUESTION

Q. How have the recommendations of the 14th France Commission of India enabled the States to improve their fiscal position? (2021)

MAINS PRACTICE QUESTION

Q. The Centre’s tax devolution to the States, which has been consistently falling short of the Finance Commission’s recommendation is a bad sign for cooperative federalism. Comment.

SOURCE: https://www.thehindu.com/opinion/lead/the-unions-reins-on-financial-transfers-to-states/article67818520.ece

THE CONTEXT: The Reserve Bank of India imposed restrictions on Paytm Payments Bank due to non-compliance issues identified through audits, affecting its operations and parent company’s (One97 Communications) stock value. Regulatory measures have previously been enacted, indicating ongoing challenges with compliance, impacting customer onboarding and financial partnerships. The situation underscores the need to balance strict regulation and support for fintech innovation.

THE ISSUES:

RBI Sanctions on Paytm Payments Bank: The Reserve Bank of India (RBI) has imposed restrictions on Paytm Payments Bank, barring it from accepting new deposits and engaging in credit transactions. These measures were implemented due to a system audit report finding consistent non-compliance and supervisory concerns.

Impact on Paytm’s Parent Company Stock Value: One97 Communications, Paytm’s parent company, has seen a significant drop in its share value, which decreased by over 42% in just five days following the RBI’s actions.

Previous Instances of Non-Compliance: Paytm Payments Bank has had past issues with regulatory compliance, which led to the RBI imposing fines and halting the onboarding of new customers. Incidents included the bank’s inability to identify beneficial owners of entities on its platform and delays in reporting cybersecurity incidents.

Challenges in Maintaining and Building Financial Relationships: Due to ongoing compliance issues, it may become difficult for Paytm Payments Bank to sustain its existing financial relationships and create new ones. Analysts suggest lenders might reconsider their partnerships with the bank due to its regulatory track record.

Paytm Payments Bank’s Market Position: Paytm is a significant player in the Indian fintech space, with many wallets, bank accounts, and KYC-verified customers, and is the largest issuer of FASTags.

Consequences for Merchants and Consumers: CAIT has advised small traders to switch to other payment modes because of possible disruptions, underscoring the operational impact of the RBI’s measures on the wider market.

Compliance vs. Innovation: All financial entities adhering to regulatory standards without stifling innovation should be paramount. However, regulatory interventions need to be transparent and mindful of the effects on users to support the growth of the digital economy.

THE WAY FORWARD:

Address Compliance Concerns: Paytm Payments Bank should take immediate steps to address the non-compliance issues identified by the regulatory authorities. This includes improving their KYC processes and ensuring adherence to all regulatory requirements.

Enhance Regulatory Oversight: The RBI should monitor Paytm Payments Bank’s operations closely and conduct regular audits to ensure compliance. This will help identify potential issues early on and prevent them from escalating.

Improve Transparency and Communication: Paytm and the RBI should improve transparency by providing clear communication to customers, merchants, and other stakeholders regarding the regulatory actions taken and the steps being taken to rectify the compliance issues. This will help rebuild trust and confidence in the platform.

Strengthen Internal Controls: Paytm Payments Bank should strengthen its internal control mechanisms to prevent future non-compliance incidents. This may include implementing robust systems for identifying beneficial owners, improving cybersecurity incident reporting, and conducting regular internal audits.

Collaborate with Lending Partners: Paytm should proactively engage with its lending partners, addressing any concerns they may have regarding regulatory issues. Building strong relationships and assuring partners of the company’s commitment to compliance can help mitigate any potential reconsideration of partnerships.

Learning from the Crisis: The Paytm crisis teaches fintech startups the importance of good governance practices, building compliant and robust systems from day one, and avoiding regulatory pitfalls.

Cost Management and Operational Efficiency: Paytm may need to focus on cost management and improving operational efficiency to ensure sustainability and profitability in the long term.

THE CONCLUSION:

The authorities must aim for transparency in their regulatory interventions to ensure stakeholders understand the reasons behind such measures and the actions to resolve issues. While entities like Paytm Payments Bank must align with regulatory standards, the broader goal should be to foster an environment where innovation is not unduly restrained, ensuring the healthy growth of the digital economy.

UPSC PAST YEAR QUESTIONS:

Q1) Implementing information and Communication Technology (ICT) based Projects / Programs usually suffers regarding certain vital factors. Identify these factors and suggest measures for their effective implementation. (2019)

Q2) E-Governance is not only about utilizing the power of new technology but also much about the critical importance of the ‘use value’ of information. Explain. (2019)

Q3) In the light of the Satyam Scandal (2009), discuss the changes brought in corporate governance to ensure transparency and accountability. (2015)

MAINS PRACTICE QUESTION:

Q1) Examine the regulatory challenges faced by digital payments banks in India with a special focus on the recent actions taken by the Reserve Bank of India against Paytm Payments Bank. Discuss the implications of such regulatory measures on the digital economy and the innovation ecosystem.

SOURCE:

https://indianexpress.com/article/opinion/editorials/express-view-on-rbi-action-against-paytm-payment-blocked-9145840/https://indianexpress.com/article/opinion/columns/india-population-growth-nirmala-sitharaman-committee-on-population-growth-union-budget-2024-viksit-bharat-goal-9145815/

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