Last Update: June 2025 (Water and Irrigation (Agricultural Inputs))
Table of Contents
Water and Irrigation (Agricultural Inputs)
This article deals with ‘Water and Irrigation (Agricultural Inputs).’ This is part of our series on ‘Economics’ which is an important pillar of the GS-3 syllabus. For more articles, you can click here.
Introduction
Water is a critical input for successful agriculture. This water can be provided naturally through rainfall or artificially through human efforts.
Irrigation is the process of supplying water to the crops by artificial means such as canals, wells, tubewells, tanks, etc., from freshwater sources such as rivers, tanks, ponds, or underground reserves.
India and Irrigation
India has 18% of the world population but just 4% of freshwater resources. Hence, freshwater is a scarce resource in India.
55% of India’s total area under agriculture has irrigation facilities & the rest 45% is rainfed.
There are regional disparities in irrigation facilities. While Punjab, Tamil Nadu and UP have more than 50% of agricultural land under irrigation, other states like Maharashtra and Rajasthan have less than 50%.
Due to lower levels of irrigation,
Indian agriculture is vulnerable to the vagaries of nature. E.g., due to El-Nino induced drought conditions in 2014, the agriculture growth rate dipped to -0.2%.
Farmers can’t grow multiple crops, reducing the overall productivity of farms and farmers.
It is a core scheme in which the Union give some funds, and the rest of the funds are to be provided by the states.
It aims to bring 2.85 million hectares of agricultural land under irrigation.
3 objectives to be achieved under PMKSY
Objective 1: Har Khet ko Paani
Increase Irrigated Area so that every farm gets an irrigation facility.
It is to be achieved through Accelerated Irrigation Benefit Program (AIBP).
Objective 2: Per Drop More Crop
Improve the efficiency of water usage by promoting Micro-Irrigation.
E.g., Drip Irrigation, Sprinkler Irrigation etc.
Financial assistance is provided at 55% of the total project cost for small and marginal farmers, and 45% for other farmers for installation of micro irrigation
Objective 3: Watershed Management
It includes
Setting up Water Harvesting Structures like check dams, tanks etc.
Conserve Soil Moisture
Ground Water Recharge
Municipal Water Treatment and re-use
Suggestions to improve Irrigation
River inter-linking project must be completed to transfer water from water surplus basins to water-deficit basins.
Electricity subsidies for tubewells should be eliminated as they encourage the wastage of water.
Pulse cultivation should be encouraged in drought-prone areas.
There should be cost-based water pricing, and canal water theft should be dealt with strictly.
Rainwater Harvesting should be encouraged to capture and store rainwater.
Watershed Management should be promoted for the recharge of surface and groundwater.
Last Updated: June 2025 (Seeds (Agricultural Inputs))
Table of Contents
Seeds (Agricultural Inputs)
This article deals with ‘Land (Agricultural Inputs).’ This is part of our series on ‘Economics’ which is an important pillar of the GS-3 syllabus. For more articles, you can click here.
Introduction
High-yielding varieties (HYV) of seeds are one of the most crucial factors for enhancing agricultural productivity. 20-25% of farm productivity relies on seed quality.
But the issue with HYV seeds is that they need to be replaced every year for the best results. It is not possible in India because
Farmers are poor, and they can’t afford to buy HYV seeds.
Due to infrastructural issues, HYV seeds of the best quality aren’t available to meet the demand of all farmers.
As a result, India’s Seed Replacement Ratio (SRR) is low, and most farmers use farm-saved seeds.
Side Topic: Seed Replacement Ratio (SRR)
SRR is the percentage of sown area covered by the certified seeds rather than the farm-saved seeds.
In India, SRR is low, varying between 20-35% for various seeds.
Type of Quality Seeds
Quality Seeds are of the following types
Breeder Seeds
Breeder seeds are produced in laboratories either by ICAR, Agricultural Universities, or MNCs like Monsanto.
These seeds can be High Yielding Variety (HYV) or Genetically Modified (GM) Seed.
Foundation Seeds
Breeder seeds can’t be produced on a large scale. Hence, the industry produces Foundation seeds from Breeder seeds at a large scale.
In the government sector, National Seeds Corporation produces the Foundation Seeds using Breeder Seeds made by ICAR or Agricultural Universities.
Certified Seeds
Foundation seeds are then distributed in villages to large farmers and Farmer Producer Organisations. They use foundation seeds to produce certified seeds.
Breeder, Foundation and Certified Seeds are collectively called Quality Seeds.
They are better than Farm Saved Seeds because, according to Mendel’s Laws, dominant genes will dominate in the next generation, and the efficacy of seeds reduces.
Hybrid Seeds and Genetically Modified (GM) Seeds
HYV seeds can either be Hybrid Seeds or Genetically Modified Seeds. The difference between them is as follows:-
Hybrid Seeds
– Hybrid Seeds are developed by cross-breeding or cross-pollination with other plants.
GM Seeds
– GM Seeds are developed by transferring selected genes from one organism into another. – E.g., In BT Cotton, a gene from bacteria named Bacillus Thuringenesis (BT) is transferred to cotton so that it can produce natural pesticides to kill the insects and pests.
Benefits of HYV Seeds
HYV seeds have a higher yield and productivity than ordinary seeds.
HYV has a shorter life cycle, allowing farmers to venture for multiple cropping.
Per quintal requirement of irrigation is lower in the case of HYVs.
It increases the income of farmers. Per hectare income of farmers increases significantly by using HYV seeds.
Government Initiatives wrt Seeds
1. Sub Mission on Seed
It is a sub-scheme under Umbrella Green Revolution Scheme.
It aims
To enhance the Seed Replacement Ratio (SRR).
To upgrade the quality of farm-saved seeds.
To increase the production of certified quality seeds.
Upgradation of public sector seed producing agencies.
2. 100% FDI allowed in Seed Companies
100% FDI is permitted through the automatic route for the development of seeds.
3. Bhartiya Beej Sahakari Samiti Ltd. (BBSSL)
It was established in 2023 to provide certified and scientifically prepared seeds to every farmer in the country.
4. Seed Village Concept
A group of farmers in a village are given the training to produce seeds of various crops to fulfil the needs of their village and neighbouring villages.
5. Seed Bank
It is the depository of seeds to preserve genetic diversity for future generations.
6. Beej Bachao Andolan
It is a movement that started in the 1980s for saving the indigenous varieties of seeds from modern agriculture.
It was a community-led movement that started in Uttarakhand with the objectives of
Promote traditional methods of farming.
Increase agro-biodiversity.
Protect an indigenous variety of seeds.
Increase farmer’s income because the indigenous seeds are less costly and require fewer inputs like fertilizers, insecticides etc.
7. Protection of Plant Varieties and Farmers’ Rights Act, 2001 (PPVFR Act)
It protects the intellectual property rights of plant breeders and seed companies.
Under the Indian Patent Act, seeds and plant varieties can’t be patented. To deal with that issue, the PPVFR Act was introduced, which grants Intellectual Property Rights to the company to charge royalty if others use its method to produce the seed.
This issue came to the limelight in the 2019 PepsiCo Controversy. PepsiCo has developed the FC5 variety of potatoes for the production of Lays. Under the contract, PepsiCo supplied FC5 variety seeds to the farmers. But after the PepsiCo contract expired, farmers continued using the hybrid seeds and sold potatoes to rival companies.
8. Atmanirbhar Clean Plant Program
The scheme was announced in Budget 2023.
The government has initiated the Atmanirbhar Clean Plant Program to enhance the accessibility of high-quality planting material for horticultural crops that are free from diseases.
9. Biofortification
Biofortification is used to improve the nutritional quality of food crops.
E.g., ICAR developed CR Dhan 310 – a rice variety with higher protein and zinc content than traditional rice and Dhan Shakti – a variety of Bajra that has higher Iron content.
Issues with the Indian Seed sector
India has a low Seed Replacement Ratio and high use of farm-saved seeds, negatively impacting farm productivity.
Low investment in R&D by Seed Companies: Investment in R&D is just 3-4% of profits against the international norm of 10-12%.
India has a weak IPR regime to protect the rights of seed companies. Hence, companies are not interested in investing in India.
The efficacy of certified seeds is also doubtful in many cases.
Seed Monopoly Issues: Monsanto and other MNCs indulge in seed monopolization. It has become the cause of farmer suicides in Vidarbha.
Issue of Terminator Genes: Seed companies use Terminator genes in the GM seeds. Such seeds can be used only once and lose their vigour next season. In this way, farmers are forced to buy expensive seeds every season.
Issue of Trait Fees: Under the Indian Patent Act, Seed companies can’t patent particular seed and plant varieties. But companies like Monsanto can charge Trait Fees if other companies use their technology to produce the seeds. BT Cotton is produced by Indian Seed Companies using Monsanto’s Bollgard technology, and in return, Indian seed companies pay a type of royalty to Monsanto, called Trait Fees. The government of India decides the ceiling on Trait fees. But the government has no fixed policy in this regard, causing many legal issues.
Loss of genetic diversity of seeds as local varieties have not been preserved.
Last Update: June 2025 (Land (Agricultural Inputs))
Table of Contents
Land (Agricultural Inputs)
This article deals with ‘Land (Agricultural Inputs).’ This is part of our series on ‘Economics’ which is an important pillar of the GS-3 syllabus. For more articles, you can click here.
Introduction
India has 18% of the world’s population but 2.5% of the world’s land. Hence, land is a scarce resource in India.
Net sown area in India is 141 million hectares out of India’s total geographical area of 368 million hectares.
Due to the tradition of equal division of land among heirs each passing generation, the issue of small-sized farms and land fragmentation has come to the forefront.
The average size of farm holdings has declined from 2.3 hectares in 1970-71 to 1.08 hectares in 2015-16 to 0.512 hectares in 2019 (SAS,2021)
The distribution of land is not a consolidated one, but its nature is fragmented. Different tracts have different levels of fertility, and it is distributed accordingly. If there are four tracts to be distributed between two sons, both sons will get smaller plots from all four tracts. Hence, landholdings have become fragmented.
Agricultural holdings are classified into three categories:
Economic Holding
Holding which ensures a minimum satisfactory standard of living in a family.
Family Holding
Holding which gives work to an average size family having one plough.
Optimum Holding
Maximum size of the holding which must be possessed and owned by a family
Problems due to Small Landholdings
Small landholdings lead to the major limitation to reap the benefits of economies of scale in agriculture operations.
Small and marginal farmers have low bargaining power since they have a minimal marketable surplus. Hence, they are the price takers (not price makers) in a market.
The income of small and marginal farmers is very low, forcing them to live below the poverty line.
The small and marginal farmers can’t adopt new technology as it requires capital investment.
It also exacerbates the problem of disguised unemployment in the economy.
Wayout
Land Consolidation: Reallocation of holdings to create farms comprising only one or a few parcels instead of many patches. However, all states have passed such legislations, but it has been implemented only in Punjab, Haryana and some parts of UP.
Land Leasing: Union has circulated the Model Land Leasing Act providing security to the owner of land against illegal occupation by a tenant farmer. Provisions of the Model Land Leasing Act will encourage owners of land who have moved to some other sector for employment to lease their land to tenant farmers for cultivation.
This article deals with ‘Pre-History, Proto-History and Historical Age’ . This is part of our series on ‘Ancient History’ which is important pillar of GS-1 syllabus . For more articles , you canclick here.
Introduction
First, we will look into the meaning of Pre-History, Proto-History and Historical age to clarify these words.
Pre-History
Pre-History deals with the pre-historic cultures, which are identified as illiterate cultures of the past without the development of the art of writing. For this reason, we don’t find written records or literary resources for their historical reconstruction, which is solely based on archaeological resources like tools, pottery, cave paintings, bones, and other material remains.
Pre-Historic Cultures of India
In the Indian subcontinent, all Stone Age cultures, such as
Neolithic (like Burzahom (Kashmir) and Mehrgarh (Baluchistan))
Some metal age cultures, such as Chalcolithic (Jorwe (Maharashtra)) and Megalithic (Brahmagiri (Karnataka) and Adichanallur (Tamil Nadu))
are considered as Pre-Historic cultures.
Proto-History
Proto-History deals with proto-historic cultures or proto-historic times.
Proto-historic cultures are supposed to be literate, but their scripts remain undeciphered. In the absence of the decipherment of the script, the reconstruction of the protohistoric cultures is based on archaeological resources.
At times, even some illiterate cultures are considered proto-historic, provided that they are mentioned in the literary sources of some contemporary literate societies.
Indus Valley Civilization or Harappan Civilization mainly represents the Proto-Historic Age in the Indian subcontinent.
Historical Age
The historical phase starts when we find both literary and archaeological resources for the historical reconstruction.
In north India, it began with the Vedic literature or Vedic civilization, whereas, in South India, it started with the Sangam literature.
This article deals with ‘Space Junk‘. This is part of our series on ‘Science and Technology, which is an important pillar of the GS-3 syllabus. For more articles, you can click here.
Introduction
Space Junk is the collection of defunct objects in orbit around Earth.
Two primary debris fields exist, i.e. (1) the ring of objects in the Geostationary Orbit and (2) the cloud of objects in the Low Earth Orbit (LEO).
Kessler’s Syndrome
Matter in the orbit travels at ridiculously high speeds. If this matter were to travel in the same plane and direction indefinitely, it would be impossible for any matter to collide. However, in space, uncontrolled objects do not follow a straight path. Instead, each piece of debris is subject to drift and decay and can collide with each other at any time.
The chance of collision is influenced by the number of objects in space. Beyond a certain point, a runaway chain reaction may occur that would rapidly increase the number of debris objects in orbit and significantly increase the risk to operational satellites. This is known as Kessler’s Syndrome.
Risks associated with Space Debris
Kessler Syndrome (explained above)
Increased cost of space launches due to extra protective and mitigation measures.
Interference with astronomical observations.
Risk to space assets and astronauts
Large space debris re-entering the atmosphere in an uncontrolled way can create a risk to the population on the ground.
Steps to Combat Space Junk
Steps by India
Project NETRA (Network for Space Object Tracking and Analysis): It is a joint project of ISRO and the Indian Institute of Astrophysics (IIA). Under the project, optical telescope facilities, connected radars, data processing units, and a control centre will be established to track space objects as small as 10 cm up to an orbit of 2,000 km.
Debris-Free Space Missions (DFSM) 2030: It aims to achieve debris-free space missions by all Indian space actors by 2030.
Space Situational Awareness Control Centre (SSACC): It assimilates tracking data of inactive satellites
International Level
Inter-Agency Debris Coordination Committee (IADC): It is an international governmental forum for worldwide coordination related to man-made and natural debris in space.
Zero Debris Charter: Signed by 12 countries, it contains high-level guiding principles and jointly defined targets to become debris-neutral by 2030.
This article deals with ‘Dr. Hargobind Khorana – UPSC.’ This is part of our series on ‘Science and Technology’ which is an important pillar of the GS-3 syllabus. For more articles, you can click here.
Initial Life
Dr Hargobind Khorana was born in Raipur village of Multan district (Punjab) in 1922. He later became a naturalized citizen of the US.
His early training was in chemistry, but later, he started applying chemistry to solve problems in biology, beginning the field of Chemical Biology.
Major Achievements
Interpretation of the Genetic Code
He received the 1968 Nobel Prize for Physiology or Medicine (shared with Nirenberg and Holley) for interpreting genetic codeand its function in protein synthesis.
Synthetic DNA
Dr Khorana constructed the world’s first synthetic gene, paving the way for further advancements in the field of genetic engineering and biotechnology.
Exploration of DNA Polymerase
DNA Polymerase are enzymes that help in replicating DNA. He contributed to the science of Polymerase Chain Reaction (PCR) tests, used to detect genetic material from a specific organism, like a virus.
Discovery of tRNA
Dr. Khorana discovered the structure of transfer-RNA, or tRNA (small RNA molecule that participates in protein synthesis).
Vision Studies
He had an interest in investigating the molecular process behind vision.
He investigated rhodopsin mutations associated with retinitis pigmentosa, which causes night blindness. Rhodopsin is a light-sensitive protein found in the retina of the vertebrate eye.
This article deals with ‘Union Public Service Commission (UPSC)– Indian Polity.’ This is part of our series on ‘Polity’ which is important pillar of GS-2 syllabus . For more articles , you can click here.
Introduction
The Union Public Service Commission (UPSC) serves as the central recruiting agency in India and is responsible for conducting examinations and selecting candidates for various government posts.
The Constitution of India directly created this body, highlighting its significance and constitutional mandate.
The provisions related to the UPSC are outlined in Articles 315 to 323, which fall under Part XIV of the Indian Constitution.
Article 315 establishes the UPSC and outlines its composition, functions, and powers.
Articles 316 to 319 detail the appointment, removal, suspension, prohibition to hold office after ceasing to be member and term of office of members of the UPSC, ensuring their independence and impartiality.
Article 320 empowers the UPSC to conduct examinations for appointments to civil services and other positions, ensuring a merit-based selection process.
Article 321 provides for the power to extend the functions of Public Service Commission.
Articles 322 and 323 deal with the expenses and annual reports of the UPSC
Composition
UPSC consists of a Chairman and other Members appointed by the President of India.
The Constitution hasn’t specified the strength of the Commission & left the matter to the discretion of the President.
No qualifications are prescribed except that one-half of the members of the Commission should be persons who have held office for at least ten years, either under the Government of India or the Government of a state.
The Constitution also authorizes the President to determine the conditions of service of the Chairman and other members.
Term of Chairman and Members
The
Chairman and members of the Commission hold office for
Term of 6 years or
Until they attain the age of 65 years
Whichever is earlier.
However, members of
the UPSC have the option to relinquish their positions at any time by
submitting their resignation to the President of India.
Removal of Chairman and Members
The President can remove the Chairman or Members of UPSC.
If he is adjudged insolvent (that is, has gone bankrupt)
If he engages in any paid employment outside of his office
Infirmity of mind or body
The President can also remove them due to misbehaviour. However, in this case, the President has to refer the matter to the Supreme Court for an enquiry and act according to the advice.
Independence
The manner of
removal of
members of the UPSC ensures their independence, as they can only be
removed on the grounds mentioned above, safeguarding their security of
tenure.
Conditions of service for UPSC members cannot be
altered to their disadvantage after their appointment, ensuring stability and
protection against arbitrary changes.
The
entire expenses of the UPSC are charged on the Consolidated Fund
of India,
ensuring financial autonomy.
The Chairman of UPSC (on ceasing to
hold office) is not eligible for further employment in the Government of
India or a state.
Member of
UPSC (on ceasing to hold office) is eligible for appointment as the
Chairman of UPSC or a State Public Service Commission (SPSC), but not for
any other employment in the Government of India or a state.
Neither the
Chairman nor a member of the UPSC is eligible for reappointment to that
office.
Functions
The
UPSC conducts examinations for appointments to the All-India
Services, Central Services, and Public Services of centrally administered
territories, ensuring merit-based selection.
It assists
the States in Joint Recruitment for any services for which candidates
possessing special qualifications are required.
It serves
the needs of a state at the request of the State Governor and with
the approval of the President of India.
It is consulted on
matters related to personnel management (like suitability of candidates,
promotions, transfers, extension of service etc. of civil servants).
The
jurisdiction of UPSC can be extended by an act made by the Parliament.
The UPSC annually presents a report on its
performance to the President. The President places this report before both
Houses of Parliament, along with a memorandum explaining the cases where the
advice of the Commission was not accepted and the reasons for such
non-acceptance.
Limitations
The following matters are kept outside the functional jurisdiction
of UPSC. In other words, the UPSC is not
consulted
While making reservations of appointments or posts in favour of any backward class of citizens.
While taking into consideration the claims of SCs & STs in making appointments
Posts of the highest diplomatic nature and a bulk of group C and D services.
With regard to the selection for temporary post (less than a year.)
The President holds
the authority to exempt certain posts, services, and issues from the
jurisdiction of the UPSC. However, any regulations established by the President
for this purpose must be presented before both Houses of Parliament for a
minimum of 14 days. Parliament retains the power to modify or revoke these
regulations as deemed necessary.
Role of UPSC
The Constitution visualises the UPSC to be the ‘watchdog of the merit system‘ in India, ensuring that recruitment to various civil services is based on merit and fairness.
UPSC’s responsibilities are specifically focused on the selection process. It does not involve itself in matters such as service conditions, cadre management, training, and other administrative aspects. These areas fall under the jurisdiction of the Department of Personnel and Training (DoPT).
The recommendations made by UPSC are advisory in nature and are not binding on the government. However, the government is answerable to Parliament if it chooses to deviate from UPSC’s recommendations.
The emergence of the Central Vigilance Commission (CVC) in 1964 affected the role of UPSC in disciplinary matters. This is because both are consulted by the government while taking disciplinary action against a civil servant. However, the UPSC, being an independent constitutional body, has an edge over the CVC, which is a statutory body.
This article deals with ‘Comptroller and Auditor General (CAG) – Indian Polity.’ This is part of our series on ‘Polity’ which is important pillar of GS-2 syllabus . For more articles , you can click here.
Introduction
The Constitution of India (Article 149) provides for an independent office of CAG
CAG is the head of the Indian Audit and Accounts Department
CAG is the guardian of the public purse at both levels—Centre and State.
Appointment and Term
CAG is appointed by the President of India by a warrant under his hand and seal.
CAG holds office for a period of six years or up to the age of 65 years, whichever is earlier.
He can also be removed by the President on the same grounds and in the same manner as a judge of the Supreme Court.
To ensure the Independence of Office
CAG is provided with the security of tenure. He can be removed by the President only in the same manner as the Judge of the Supreme Court. Thus, the CAG doesn’t hold his office till the pleasure of the President, although the President appoints CAG.
CAG is not eligible for further office under the Government of India or any state after he ceases to hold his office (controversy erupted when former CAG Vinod Rai was appointed as Head of Bank Board Bureau )
Neither his salary nor his rights regarding leave of absence, pension, or age of retirement can be altered to his disadvantage after his appointment.
Administrative expenses of the office of the CAG are charged upon the Consolidated Fund of India.
System of Auditing in India
Articles 148 to 151 of the Indian Constitution institutionalized the Auditing Mechanism and office of CAG. But this system is a continuance of British rule. The same Auditing System is continuing in India.
The Comptroller and Auditor General (CAG) of India is a constitutional authority responsible for auditing. CAG operates independently of the Government and reports directly to the Parliament or State Legislatures, thereby ensuring impartiality and objectivity in its auditing processes.
The Indian Audit and Accounts Department (IA&AD) is the primary body through which CAG conducts audits.
Issue with the System
CAG (IAAD) conducts Audit on behalf of Parliament. Principally, it should be entirely out of the influence of the Executive. However, the Government of India is the Cadre controlling Authority of the Indian Audit and Accounts Department (IAAD), which is headed by CAG and with whose help CAG conducts audits. This is a continuance of the British Era Model (1937 rules) in which the Executive indirectly controlled CAG.
Duties and Powers of the CAG
Article 149
Constitution (Article 149)
authorises the Parliament to prescribe the duties and powers of the
CAG. Accordingly, Parliament enacted CAG’s
(Duties, Powers and Conditions of Service) Act, 1971. The Act was
amended in 1976 to separate accounts from audits in the Central government.
The duties and functions of the CAG
CAG audits the accounts related to all expenditures from
Consolidated Fund of the Union of India and each state
Contingency Fund of the Union of India and each state
Public Account of the Union of India and each state
CAG audits the balance sheets of the departments of the Central Government and state governments.
CAG can audit the accounts of any other authority when requested by the President or Governor. For example, audit of local bodies
Earlier,
CAG used to compile and maintain accounts of the Central Government as
well. In 1976, he was
relieved of his responsibility to compile and maintain accounts of the Central
Government due to the separation of accounts from Audit.
Article 150
CAG advises the President with regard to the prescription of the form in which the accounts of the Centre and states shall be kept.
Article 151
CAG submits the audit reports related to the accounts of the Centre to the President, who shall, in turn, place them before both Houses of Parliament
He acts as a guide, friend and philosopher of the Public Accounts Committee of the Parliament.
Role of CAG
The role of the CAG is to
uphold the Constitution of India and the laws of Parliament in the field
of financial administration. The audit reports of the CAG secure
accountability in the sphere of financial administration of the
executive.
CAG is an agent of the
Parliament and conducts an Audit of expenditure on behalf of the
Parliament. In
addition to legal and regulatory Audit, CAG can also conduct the propriety
audit; that is,
he can look into the ‘wisdom, faithfulness and economy’ of expenditure and
comment on the wastefulness and extravagance of such expenditure. However,
legal and regulatory Audits are obligatory, but propriety audit is
discretionary (but CAG can’t audit Secret service expenditure).
The Constitution of India
visualises the CAG as the Comptroller as well as the Auditor General.
However, in practice, the CAG is fulfilling the role of an
Auditor-General only and not that of a Comptroller, as the CAG has no control
over the issue of money from the Consolidated Fund and is concerned only
at the audit stage when the expenditure has already taken place (unlike
Britain)
Problems with CAG
Paralysing Unwillingness to Act: The Comptroller and Auditor General’s (CAG) presence in India is often cited as a primary cause of bureaucratic inertia. Officials fear making decisions due to the scrutiny they may face from the CAG, leading to indecision and stagnation in governance processes.
Post-Mortem Examination: CAG audits often serve as post-mortem examinations of government expenditures. CAG is concerned only at the audit stage when the expenditure has already taken place
Appointment of Generalists: The practice of appointing generalist bureaucrats, such as those from the Indian Administrative Service (IAS), as the CAG is criticized. Many argue that specialists from services like the Indian Audit and Account Service, Indian Economic Service, Indian Statistical Service, or Indian Revenue Service would be better suited for the role due to their expertise in auditing and financial matters.
CAG & Defence: CAG reports have sometimes been accused of jeopardizing national security, as seen in instances where revelations about defence preparedness were made public. For example, a CAG report in 2017 warned that the Indian Army’s ammunition stock would be depleted within 10 days of the war, potentially compromising the country’s defence capabilities.
Issue of Notional Loss: The CAG’s estimation of notional losses, such as in the 2G spectrum case, has been a subject of controversy. These estimates, which are based on assumptions and methodologies that may not always align with legal standards, can lead to inflated figures and subsequent legal challenges.
CAG Activism: Some critics perceive the CAG’s involvement in high-profile cases like the 2G spectrum and Coalgate as examples of activism beyond its mandate. While the CAG’s role is primarily to audit government expenditures and ensure accountability, its involvement in such cases has been seen as overstepping boundaries and encroaching into policy and regulatory domains.
Much of the government expenditure is kept out of CAG Audit by Governments.
CAG’s Authority doesn’t extend to Government Corporations created with special laws. Parliament or State Legislature can make provisions regarding Audit within the Act itself. Additionally, new organizational structures in the form of public-private partnerships are also out of the scope of CAG’s Audit. E.g., GMR Airport
NGOs and Private Agencies take up many Government works at delivery points. These private agencies and NGOs are also out of the ambit of CAG.
Issue of Redactment: CAG, in the Audit Report of Acquisition of Rafale, redacted, i.e. removed sensitive information from the document citing security concerns expressed by the Government.
Politicization of CAG’s office: The politicization of the Comptroller and Auditor General (CAG) post in India has become a subject of concern in recent years. The Constitution of India explicitly states that the CAG should not be given a post-retirement posting, emphasizing the need for the CAG to maintain impartiality and independence from political influence. However, there have been instances where former CAGs have been appointed to positions that raise questions about their independence and neutrality. For example
Former CAG Vinod Rai (who unearthed the Coal Scam) was appointed as Chairman of the Bank Board Bureau.
TN Chaturvedi (CAG from 1984 to 89) joined the BJP after retirement and contested the election using BJP’s ticket. He was later made Governor of Kerala too.
Appleby’s Criticism
Paul H. Appleby was highly critical of the role of the Comptroller and Auditor General (CAG) in India, going as far as recommending its abolition.
He argued that the institution of the CAG was inherited from colonial rule, implying it may not be suitable for modern governance needs.
Appleby criticized the CAG for fostering a paralysing unwillingness to act within government circles, suggesting that its oversight role may stifle decision-making and action.
He questioned the competence of auditors to understand the nuances of good administration, asserting that their expertise lies in auditing rather than administration.
Side Topic: Presumptive Loss / 2G Spectrum Case
The theory of presumptive and notional loss involves calculations by the CAG to estimate the potential revenue lost by the Government due to irregularities or lack of adherence to proper procedures in resource allocations, such as natural resources like spectrum and coal.
Using the Theory of Presumptive and Notional Loss
In the case of the 2G Spectrum
Allocation, the CAG calculated a notional loss of Rs 1.76 lakh crore due
to the use of a “first come, first served” policy instead of an
auction, which could have potentially generated higher revenue.
In the Coal Scam, the CAG
initially estimated a notional loss of ₹10 lakh crore, later revised to Rs
1.86 lakh crore, highlighting discrepancies in the allocation process.
However, in December 2017, a Special CBI Court acquitted A Raja and Kanimozhi and rejected the presumptive loss theory proposed by the CAG.
It’s also important to recognize that the Government’s objectives extend beyond profit maximization; considerations such as socio-economic factors and job creation also play a significant role in decision-making.
Hence,
CAG has failed to accommodate the changing
dynamics of doing business in the LPG Era
This article deals with ‘Inter-State River Water Disputes – Indian Polity.’ This is part of our series on ‘Polity’ which is important pillar of GS-2 syllabus. For more articles , you can click here
Constitutional Provisions
Status of Water in the Constitution
State List
Entry 17: Water, that is to
say, water supplies,
irrigation & canals, etc., subject to provisions of Entry 56
of List 1
Union List
Entry 56:Regulation and Development of
Inter-State Rivers & River Valleys
When a water dispute arises between two states, Article 262 is invoked & in pursuance of Article 262, two Acts were passed by the Parliament.
River Boards Act,1956
The Act
is designed to regulate and facilitate the development of inter-state rivers to
ensure effective water resource management. The key features of the River
Boards Act 1956 are
Establishment of River Boards: These boards are instrumental in coordinating efforts to regulate and develop rivers that flow through multiple states.
Board Establishment on State Government Request: River Boards are not unilaterally imposed but are established based on requests from State Governments.
Inter-State River Water Disputes Act,1956
The
Inter-State River Water Disputes Act of 1956 provides a mechanism for resolving
disputes related to the sharing of river waters between different states in
India.
Initiation of Tribunal: If a Riparian State believes that its interests are adversely affected by the actions or plans of another state, it can request the government of India to establish a Tribunal to address the dispute.
Timeline for Tribunal Setup: The government of India is mandated to set up the Tribunal within one year of receiving such a request.
Composition of Tribunal: The Tribunal comprises three members, each of whom must be a Judge of either the Supreme Court or a High Court.
Final and Binding Decision: The decision rendered by the Tribunal holds ultimate authority and is deemed final and binding. The Supreme Court or any other court don’t have any jurisdiction in this regard.
A total
(9) such tribunals have been established
till date. Important ones are
Ravi & Beas: Involving Punjab and Haryana, formed in 1986 and still pending the award.
Kaveri: Involving Karnataka, Tamil Nadu, Kerala & Pondicherry, with time period 1990-2007
Mahanadi: The most recent tribunal, formed in 2018, involving the states of Odisha and Chhattisgarh.
Causes of these Disputes
Agriculture
and Water Scarcity: Riparian
states depend on river water for agriculture. Such issues intensify during
low rainfall seasons. Examples include disputes over the Kaveri, Krishna,
Ravi, and Beas rivers, primarily revolving around sharing water for
agricultural purposes.
Multipurpose
Projects and Dams: Conflicts often arise between upstream and downstream
states regarding multipurpose projects and dams. The Mahanadi issue serves
as an illustration of such disputes.
River
Joining: It
is usually done to divert river water from sufficient to deficient river
basins, but many issues arise, such as environmental assessment,
submergence of surrounding lands, etc. Mahadayi/ Mandovi (Goa vs
Karnataka) is an example of such a dispute.
Unborn States
Share: Disputes
arise when a tribunal’s judgment on a contested river involves states that
later undergo division or creation. The Krishna water tribunal is an
example where the parties were Andhra Pradesh, Maharashtra, and
Karnataka. But as the new state Telangana has come into being, it
approached the Supreme Court for its right to get a proper share.
Why Tribunals for Inter-State Water Disputes?
Article 262 of the Constitution lays down that the Parliament may by law provide for the adjudication of any dispute with respect to any Inter-State River (ISR). Accordingly, the Parliament enacted the Inter-State River Water Dispute Act 1956, which provides for the reference of such a dispute to a Water Tribunal. The said Act bars the Supreme Court or any other Court from exercising jurisdiction in respect of any water dispute.
The main reasons for keeping River Disputes out of the
purview of the court’s jurisdiction were that (the whole of the
Constituent Assembly agreed that there is a need for Tribunals to settle
Inter-State River Disputes (but there wasn’t unanimity on Permanent Tribunal or
Temporary Tribunals)) :
Speedy Disposal: The Act
ensures the swift resolution of Inter-State River water disputes by making
the tribunal’s decision final and binding, thereby avoiding prolonged
legal processes.
Technical and Scientific Expertise: Since the
resolution of Inter-State River disputes hinges upon heaps of technical
and scientific data, the resolution of such disputes by specialized
tribunals would allow for a better appreciation of such data.
Flexible and Informal Proceedings: Unlike
courts bound by strict legal procedures, tribunal proceedings are
relatively informal. This flexibility allows for deliberative
decision-making and discretionary measures, fostering the potential for
mutually negotiated settlements.
In this
context, it can be argued that the rationale behind excluding the jurisdiction
of courts was fairly well-intentioned.
Main Problems with Present System and Remedies
The
problem lies elsewhere and has been well documented by many commissions,
including the Sarkaria Commission. These include:
Long delays & uncertain time frame: The existing system is plagued by prolonged delays, leading to uncertainty. For example, in the Ravi Beas case, referred to the Tribunal in 1986, the matter is still pending.
Issue of finality: The Tribunal acts as the arbiter for water disputes between states. Although courts are barred from interfering, matters are still taken to courts through Special Leave Petitions. E.g., the Cauvery Case, where the matter was brought to courts through Special Leave Petitions.
Enforcement Issues: Inadequate provisions for enforcing Tribunal awards lead to challenges in implementation. There is political resistance and reluctance from states to comply with Tribunal awards due to political considerations.
Politicization of Water Issues: Even after the award is announced, in times of coalition politics, sometimes the centre doesn’t publish it in the gazette.
Suggestions to improve this
Institutional Changes: Utilize the
Inter-State Council as a platform for resolving water conflicts
effectively.
Permanent Tribunal: Advocate the establishment of
a Permanent Tribunal, a concept supported by Ambedkar during
Constitutional Assembly Debates.
Mediation Approach: Reform the current adversarial
judicial process to mediation for a mutually acceptable resolution.
Mediation has solved a large number of River Disputes, even at the
international level. For example,
World Bank played the role of
mediator between India and Pakistan in the Indus Treaty.
The Vatican became a mediator
in solving the Zambezi River dispute involving eleven countries.
Declaring Rivers National Property: The
establishment of separate corporations on the pattern of the Damodar
Valley Corporation may be immensely useful in this direction.
Bringing Water to Concurrent List: As
suggested bythe Ashok Chawla Committee, water resources
should be included in the concurrent list for better coordination and
management.
Proposed Changes in Inter State River Water Disputes Act
The following changes have been proposed in the Inter-State River Water Disputes Act of 1956 to resolve the deficiencies the present mechanism faces.
Single Permanent Tribunal
Establish a single, Permanent
Tribunal for adjudicating all inter-state river water disputes.
Awards will be notified
automatically.
Composition
of the Tribunal: Chairperson, Vice-Chairperson, and not more than six other Members
Members from both judicial (3)
and technical backgrounds (3).
Even in Constituent Assembly
debates, the setting of the Permanent Tribunal to resolve Inter-State
River Water Disputes was greatly favoured, and BR Ambedkar
was in favour of the Permanent Commission. The act favouring the Temporary Commission
was favoured on the basis of experience that such issues would not come
up. This is not the case now, and such disputes are rising very
frequently.
Dispute Resolution Committee (DRC)
DRC will handle
disputes prior to the tribunal, with a resolution timeline of one year.
Most disputes will get
resolved at the DRC’s level itself. But if the state is not satisfied, it
can approach the tribunal.
Data Agency
Establish an agency to collect
and maintain updated water data in each river basin in the country.
The collected data will aid in
the timely resolution of water disputes
Timeline
The Tribunal must give a
decision within two years, with a possible extension of one more year.
The decision of the Tribunal
shall be final and binding.
Case Study: Cauvery Issue
1924
The agreement was signed
between Madras Presidency and Mysore to build a dam in Mysore. The
agreement was valid for 50 years, and it led to the
construction of the Krishnaraja Sagar Dam.
Note: The agreement was
heavily in favour of the Madras Presidency. Mysore was allowed to
construct just one dam.
1960s
Karnataka wanted to
make more dams on Cauvery, but Tamil Nadu didn’t allow it on the basis of the
1924 Agreement.
1974
The Water Sharing
Agreement lapsed after 50 years. Karnataka decided to go ahead with making
dams. 4 dams were made by Karnataka in quick succession.
1986
Tamil Nadu
approached the Centre for setting up a Tribunal
2 June
1990
The Cauvery Water
Dispute Tribunal (CWDT), headed by Justice Chittosh Mookerjee, was set after
the Supreme Court’s direction.
2007
CWDT issued its
final order, allocating water shares (in tmcft):
– Tamil Nadu: 419
– Karnataka: 270 (Karnataka claimed 312,
but CWDT considered earlier agreements)
– Kerala: 30
– Puducherry: 7
Karnataka and Tamil
Nadu contested the order in the Supreme Court via Special Leave Petitions
(SLPs).
It also recommended
the establishment of a Cauvery Management Board. But
it was just a recommendation.
2013
2013
was a drought year. Tamil Nadu moves Supreme Court seeking directions to
Water Ministry for Constitution of Cauvery
Management Board as Karnataka wasn’t following orders of CWDT.
2016
The year 2016 was a
drought year, with Karnataka not releasing adequate water. Tamil Nadu went to
the Supreme Court again. SC ordered the formation of the Cauvery Water
Management Board.
Point to Note – The
main issue in this case (& other River Disputes, too) is a shortage of
water. Whenever there are drought-like conditions, states start to fight over
the division of Rivers.
This article deals with ‘Financial Relations between Centre and States – Indian Polity.’ This is part of our series on ‘Polity’ which is important pillar of GS-2 syllabus. For more articles , you can click here
Introduction
Articles 268 to 293 in Part XII of the Indian constitution deal with financial relations.
Allocation of Taxing Powers
The
division of taxing powers is as follows
Parliament
Parliament can levy taxes on subjects in the Union List (13 items).
State Legislature
State Legislatures can levy taxes on subjects enumerated in the State List (18 items)
Both
– Both Parliament and State Legislatures can levy taxes on subjects enumerated in the Concurrent List. – Initially, the Concurrent List had no tax entries, but the 101st Amendment Act of 2016 introduced a special provision for GST. Parliament and State Legislatures now have concurrent power to make laws related to GST.
Residuary
The residual power of taxation is vested in the Parliament.
There is a difference between the power to levy taxes, collect taxes & appropriate the proceeds of taxes. For example, the income tax is levied and collected by the Centre, but its proceeds are distributed between the Centre and the states.
The Indian Constitution has placed various restrictions on the state’s taxing powers. These are as follows:-
Tax on Professions, Trades, Callings, and Employments: State legislatures can levy taxes on professions, trades, callings, and employments, but there’s a cap of ₹2,500 per year on the total amount imposed on any individual.
Prohibition on Taxing Goods and Services: State legislatures cannot impose tax on goods or services in two instances: (1) when the transaction happens outside the state and (2) when it occurs in the course of import or export.
Tax on Consumption or Sale of Electricity: States have the authority to levy taxes on the consumption or sale of electricity.
No tax can be imposed on electricity consumed or sold to the Centre
No tax can be imposed on electricity utilised in the construction, maintenance, or operation of railways
Tax on Water or Electricity by Interstate Authorities: State legislatures can levy taxes on water or electricity generated, consumed, sold or distributed by authorities established by Parliament for regulating or developing interstate rivers or river valleys.
Distribution of Tax Revenues
Major changes in the scheme to distribute tax revenue between the
Centre and the States were introduced by the 80th and 101st Constitutional
Amendments.
80th Constitutional Amendment, 2000 (Alternative Scheme of Devolution)
The 80th Amendment was passed to implement the 10th Finance Commission’s suggestion of allocating 29% of specific central taxes and duties to the states.
It was retroactively applied from April 1, 1996, and brought various central taxes, including corporation taxes and customs duties, in line with income tax regarding their constitutional sharing with the states.
101st Constitutional Amendment
The 101st Amendment enables the implementation of a new tax system, Goods and Services Tax (GST), in the country. It grants both the Parliament and State Legislatures the authority to enact laws for imposing GST on transactions involving the supply of goods or services.
The proceeds of GST are divided between the Center and the state on the recommendation of the GST Council.
The present situation regarding tax distribution between the Centre and states is as follows
Article 268 (Taxes levied by the Centre but collected and appropriated by States): It includes stamp duties on cheques, bills of exchange, promissory notes, insurance policies, transfer of shares, and similar transactions.
Article 269 (Taxes levied and collected by Centre but assigned to States): There are two categories of taxes under this category
Taxes on interstate sale or purchase of goods (excluding newspapers)
Taxes on the consignment of goods in interstate trade.
Article 269-A (Levying and Collecting of GST in the Course of Inter-State Trade): The responsibility for levying and collecting this tax rests with the Centre. However, the distribution of this tax between the Centre and the States is determined by Parliament based on the recommendations of the GST Council.
Article 270 (Taxes Levied and Collected by the Centre but Distributed between the Centre and the States): This category includes all taxes and duties listed in the Union List, excluding those mentioned in Articles 268, 269, and 269-A, surcharge on taxes in Article 271, and specific-purpose cess. Based on the Finance Commission’s recommendation, the President determines the distribution of the net proceeds of these taxes and duties.
Article 271 (Surcharges for the purpose of the Centre): The Parliament has the authority to impose surcharges on certain taxes and duties mentioned in Articles 269 and 270. The funds generated from these surcharges are allocated exclusively to the Centre. However, the Goods and Services Tax (GST) is exempted from such surcharges.
Taxes Levied, Collected, & Retained by the States: These include taxes enumerated in the state list (18 in number).
Distribution of Non-tax Revenues
a. The Centre
The
primary contributors to the non-tax revenues of the Centre are the following.
b. The States
The
primary contributors to the non-tax revenues of the States are the following.
Grants-in-Aid to the States
The
Centre can give money to States via Grants in Aid. These are of two types
1 . Statutory Grants
General Provision: Under Article 275, Parliament can give money to states which need financial assistance on the recommendation of the Finance Commission. They are charged on the Consolidated Fund of India.
Specific Provision: The Constitution has provisions for specific grants aimed at enhancing the well-being of scheduled tribes within a state or improving the administrative standards of scheduled areas in a state, including the State of Assam.
2. Discretionary Grants
Under Article 282, the states & centre can make grants even if it is not in their Legislative competence. For example, the Central Funds given on the advice of the Planning Commission.
They are discretionary because the centre is under no obligation.
These grants serve a dual purpose: firstly, to assist the state in meeting its financial obligations for achieving plan targets, and secondly, to provide the Centre with a means to influence and coordinate state activities in line with the national plan.
3. Other Grants
These grants, stipulated by the Constitution, were temporary in nature.
For the initial 10 years following the commencement of the Indian Constitution, a provision of grant was made in lieu of export duties on Jute products to states of Assam, Bihar & Orissa & were charged on Consolidated Fund.
GST Council
GST Council is a Constitutional Body made under the provisions of Article 279-A.
Membership of GST Council
Its membership is as follows
Headed by Union Finance Minister
Union Minister of State of Finance / Revenue
1 Minister from each State and Union Territory with the Legislative Assembly
Weighted Voting Powers: 1/3rd of Voting Power is with the Union and 2/3rd with States.
In order to implement any decision, at least a three-fourths majority is necessary, which translates into votes of the Union and a minimum concurrence of 20 states.
Functions of GST Council
Determine the inclusion of Union and State Taxes, Cess, and Surcharge under the GST regime.
Establish standard rates for CGST, SGST, and UTGST within the GST framework.
Set the effective date for including Crude Oil, Petrol, Diesel, Aviation Turbine Fuel, and LPG under the GST regime, until which the Union and individual States will unilaterally determine Excise and State VAT on these hydrocarbons.
Define the categories of ‘Exempted Goods and Services’ under GST.
Determine ‘Special Rates’ applicable during calamities, exemplified by the GST Council allowing Kerala in January 2019 to impose a 1% Calamity Cess on Intra-State trade for the subsequent two years for the rehabilitation of flood victims from 2018.
Address dispute settlements within this system involving conflicts between states or between a state and the Union.
Finance Commission
Article 280 establishes the Finance Commission as a quasi-judicial entity.
The President forms the Finance Commission every five years, or sooner if necessary.
The Finance Commission is required to make recommendations to
the President of India on the following matters:
Distribution of the divisible pool of taxes between the Centre and states (Vertical Distribution) and among states (Horizontal Distribution).
It provides recommendations on the principles guiding grants-in-aid from the Centre to the states.
The Finance Commission suggests measures to enhance a state’s consolidated fund for supporting Panchayats and municipalities.
It can address any other finance-related matter referred to it by the President.
The Constitution permits the Finance Commission to make broader
recommendations in the interest of sound finance.
Protection of State’s Interests
To
protect the interest of States, certain bills can be introduced in Parliament only on the recommendation of the
President
Bill which imposes or varies any Tax in which states are interested
Bill, which varies the meaning of the expression Agriculture income
Bill, which affects the principle on which money is distributed to state
Bill which imposes any surcharge on any specified tax or duty for the purpose of the centre.
Borrowing and Loans by Centre & States
Borrowing
Centre can borrow either within India or outside upon security of the Consolidated Fund of India within the limit fixed by Parliament (no limit fixed yet)
State Government can borrow within India (& NOT ABROAD) upon security of the Consolidated Fund of State
Loans
The central government can make loans to any state or give guarantees regarding loans.
The state can’t raise a loan without the consent of the centre if any part of a loan made by the centre to the State or in which the centre has guaranteed is still outstanding.
Effects of Emergencies on Financial Relations
National Emergency
During a National Emergency, the President can modify the Constitutional distribution of revenues between the Centre & and the State.
Modification continues until the end of the financial year when emergencies cease to operate.
Financial Emergency
During
Financial Emergency, the centre can give direction to states
Observe specified canons of financial propriety
Reduce the salaries & allowances of all classes of persons in states
Reserve money bills & financial bills for consideration by the President.
Inter-Government Tax Immunities
There
are certain rules of IMMUNITY FROM MUTUAL
TAXATION
Property of the centre is exempted from all taxes imposed by the state or any authority within the state like Panchayat, Municipal Corporation, etc.
Property & income of the state is exempted from central taxation.
Property & income of local bodies like panchayat are not exempted from central taxation.
Analysis: Centre-State Financial Issues
Vertical Imbalance in Resource Sharing: The States feel that the resource transfers to them haven’t been commensurate with their growing responsibilities.
Growing Central Expenditure on Functions in the State List: The 12th Finance Commission estimated that a fifth of the expenditure incurred by the Centre was on subjects that were in the domain of the States.
Compliance and Enforcement Cost of Central Legislation: There are several Central legislations, the compliance and enforcement costs of which are entirely borne by the States. At present, States are not compensated for the cost of compliance and the revenue loss on account of compliance.
Impact of Pay Revision by the Central Government on State Finances: The periodic pay revision by the Central Government gives rise to demand on the part of State government employees for a similar pay hike. States have demanded that the Central government should bear at least 50 % of the increase.
Sharing of Offshore Royalty and Sale Proceeds of Spectrum: Under the present Constitutional arrangements, offshore royalty accrues entirely to the Centre.
Profession Tax: it can not exceed Rs. 2,500 per annum. As income and salary levels are increasing, a limit on the professional tax constraints revenue mobilization
FRBM Legislation: The deficit reduction targets are uniform across all States. This ‘one-size-fits-all’ approach has constrained fiscally strong States to raise more resources.