26-July-2024-Daily-Current-Affairs

STATES HAVE UNLIMITED RIGHT TO TAX MINERAL-RICH LANDS: SC

TOPIC: (GS2) POLITY AND GOVERNANCE – SOURCE: THE HINDU

The Supreme Court of India, in a landmark judgment, has upheld the states’ unlimited right to tax mineral-rich lands. This ruling reinforces the principle of fiscal federalism, emphasizing the autonomy of state legislatures to levy taxes on mining activities within their jurisdictions.

Key Judgment

• Supreme Court Ruling: A nine-judge Constitution Bench, led by Chief Justice D.Y. Chandrachud, ruled 8:1 that Parliament cannot limit state legislatures’ power to tax mineral-bearing lands and quarries.
• Verdict Basis: The decision aligns with federalism principles, allowing states to levy taxes within their legislative domain as per the Constitution.

Impact on Fiscal Federalism

• Chief Justice’s Statement: Fiscal federalism requires states to have the power to levy taxes for raising government revenues. This is essential for investing in physical infrastructure, health, education, human capacity, and research.
• Unconstitutional Interference: The Constitution must protect states’ rights to tax without Parliament’s interference.

Details of the Judgment

• Taxation Autonomy: States have unlimited rights to tax mining lands and quarries, enhancing their ability to raise revenues and deliver services to the populace.
• Royalty Clarification: The court clarified that royalty paid by mining leaseholders to states is not a tax but a contractual consideration for the enjoyment of mineral rights.

Broader Context

• Economic Implications: The judgment benefits mineral-rich states like Chhattisgarh, Jharkhand, and Odisha, potentially boosting their per capita income.
• Case Origin: The ruling stems from disputes involving multiple state governments, mining companies, and public sector undertakings, highlighting the importance of state autonomy in economic governance.

Legislative Framework of the Mining Sector in India

Constitutional Provisions

• List II (State List) Serial No. 23: State governments own minerals within their boundaries.
• List I (Central List) Serial No. 54: Central government owns minerals in the Exclusive Economic Zone (EEZ).

Key Legislation

Mines and Minerals (Development and Regulation) Act (MMDR Act) 1957: Governs mining activities in India.

MMDR Amendment Act 2015:

• Mineral Concessions: Grants through auctions for transparency.
• District Mineral Foundation (DMF): Addresses grievances of those affected by mining.
• National Mineral Exploration Trust (NMET): Incentivizes regional and detailed exploration.
• Measures Against Illegal Mining: Enhanced enforcement to curb illegal activities.

National Mineral Policy 2019

• Private Sector Encouragement: Exploration on a revenue-sharing model.
• Mergers and Acquisitions: Streamlines transfer of mining leases and creation of mineral corridors.
• Infrastructure Development: Utilizes coastal waterways and inland shipping for mineral transport.
• Import-Export Policy: Provides stability for business planning.
• Harmonization of Taxes: Aligns with global benchmarks.
• E-Governance: IT systems for regulation and information dissemination.
• District Mineral Fund Utilization: Supports equitable development of affected areas.
• Intergenerational Equity: Focuses on sustainable development for future generations.
• Inter-Ministerial Body: Proposed for ensuring sustainable mining practices.

Challenges and Concerns

• Displacement and Rehabilitation:
• Large-scale displacement and inadequate rehabilitation.
• Loss of cultural heritage and rise in left-wing extremism.
• Human Rights Violations: Mine-related deaths and inadequate rehabilitation.
• Illegal Mining: Rathole mining in Meghalaya and other regions.
• Environmental and Health Issues:
• Pollution: Air, water, and soil contamination.
• Health Risks: Diseases like fibrosis, pneumoconiosis, and silicosis.

Administrative Issues:

• Arbitrary mine allocation and delays in clearances.
• Judicial interventions causing delays and penalties.

FISCAL FEDERALISM Definition: Division of financial powers and responsibilities between different government levels. Key Aspects: Determining the functions of central and state governments, revenue sharing, and allocation of grants for efficiency and equity. Provisions for Centre-State Financial Relations ·       Part XII of the Constitution (Articles 268 to 293): Distribution of tax and non-tax revenues, borrowing powers, and grants-in-aid. ·       Finance Commission (Article 280): Recommends tax revenue distribution and methods to augment state finances and promote fiscal discipline. ·       Seventh Schedule: Divides taxing powers between the Centre and States (Union List, State List, Concurrent List).

Conclusion

The Supreme Court’s verdict reinforces the financial autonomy of states, allowing them to effectively utilize their mineral resources for revenue generation and development. This decision underscores the importance of maintaining a balance between central oversight and state autonomy in India’s federal structure.

Multiple Choice Question:

1. Which of the following subjects are exclusively under the State List as per the Seventh Schedule of the Indian Constitution?
2. Police
3. Public Health and Sanitation
4. Agriculture
5. Railway
6. Education

Select the correct answer using the code given below:

1. 1, 2, and 3 only
2. 1, 2, 4, and 5 only
3. 1, 3, 4, and 5 only
4. 2, 3, 4, and 5 only

ANSWER: A

EXPLANATION:

Police (Subject 1) is exclusively under the State List.

Public Health and Sanitation (Subject 2) is exclusively under the State List.

Agriculture (Subject 3) is exclusively under the State List.

Railway (Subject 4) falls under the Union List.

Education (Subject 5) is a part of the Concurrent List (both State and Union).

THE KARNATAKA BILL IS A SYMPTOM OF A LARGER PROBLEM

TOPIC: (GS2) POLITY AND GOVERNANCE – SOURCE: THE HINDU

The Karnataka Reservation Bill has sparked significant controversy and debate.

Known officially as the Karnataka State Employment of Local Candidates in the Industries, Factories, and Other Establishments Bill, 2024, it mandates a 50% to 70% reservation for local candidates in both management and non-management categories.

While the Bill aims to address local employment issues, it has been criticized for its potential economic and social repercussions.

1. The Downside of Inequitable Growth

• India’s growth model has not effectively linked job creation with economic expansion.
• High-end services and capital-intensive industries have not sufficiently provided employment for the large youth population.
• Globalization, financialization, and technological advancements have led to a small set of highly-skilled individuals reaping benefits while others face diminishing job opportunities.

2. Regional and Socio-Economic Disparities

• The Bill highlights the regional disparities in job availability and economic growth.
• There is a noticeable trend of political responses to job crises manifesting as regionalism and backlash against internal migration.

3. Issue of Accountability

• The Bill raises questions about federalism and political accountability.
• Local reservation initiatives often cater to unskilled jobs, neglecting higher skill tiers.
• The reluctance of industries to hire local unskilled labor indicates deeper issues such as distress migration and inadequate development.

4. Impacts on National Unity and Economic Health

• Domicile-based reservations challenge the constitutional freedom to move and work anywhere in India.
• These reservations may foster parochialism and weaken national unity.

5. Larger Implications and Need for Discussion

• The debate on local reservations should be part of a larger conversation about India’s job crisis and socio-economic disparities.
• Political accountability and effective development policies are crucial to address the underlying issues.

Conclusion

The Karnataka Reservation Bill is a symptom of broader issues within India’s economic and political landscape. While it aims to address local employment, it risks exacerbating regionalism and socio-economic disparities. A comprehensive national dialogue is needed to address these underlying problems and develop sustainable solutions for India’s job crisis.

INDIA’S ILLEGAL COAL MINING PROBLEM

TOPIC: (GS2) POLITY AND GOVERNANCE – SOURCE: THE HINDU

Illegal coal mining in India is a widespread issue with significant legal, social, and economic implications.

Despite the existence of stringent laws and regulations, illegal mining continues to thrive due to various factors, including poverty, high demand for coal, and inadequate enforcement.

This problem is particularly severe in states with abundant coal reserves, such as Jharkhand, West Bengal, and Gujarat.

The recent deaths of workers in illegal coal mines have brought this issue into the spotlight, highlighting the urgent need for effective solutions.

1. Prevalence of Illegal Coal Mining

• Illegal coal mining is most commonly carried out in abandoned mines or shallow coal seams in remote or isolated areas.
• India’s coal reserves account for 55% of the country’s energy needs, making coal mining highly profitable and, thus, a target for illegal activities.

2. Recent Incidents

• In July 2023, three workers died of asphyxiation in an illegal coal mine in Surendranagar, Gujarat.
• Similar incidents occurred in June and October 2023, resulting in fatalities in Dhanbad, Jharkhand, and West Bengal, respectively.

3. Legal Framework

• Coal mining in India is regulated under the Coal Mines (Nationalisation) Act, 1973.
• The law initially restricted coal mining to government entities, but amendments have allowed private sector participation under strict regulations.

4. Factors Contributing to Illegal Coal Mining

• Poverty and Unemployment: High poverty levels and lack of employment opportunities drive people to illegal mining.
• High Demand for Coal: India’s energy needs and industrial demands ensure a continuous market for illegally mined coal.
• Lax Enforcement: Insufficient policing and collusion between local officials and illegal miners facilitate the persistence of illegal mining activities.

5. Safety Risks

• Illegal mines lack proper safety equipment and structural support, making conditions hazardous and prone to accidents.
• Workers face high exposure to toxic substances like lead and mercury, leading to severe health issues.

6. Government and Regulatory Challenges

• Jurisdictional issues place the responsibility of addressing illegal mining on state governments, leading to inconsistent enforcement.
• Despite discussions in Parliament, effective measures to curb illegal mining remain elusive due to social, economic, and political complexities.

Conclusion

Illegal coal mining in India is a multifaceted issue that requires a comprehensive approach to address. Effective enforcement of existing laws, improved socio-economic conditions, and enhanced safety measures are crucial to mitigating this problem.

Collaborative efforts between state and central governments, coupled with strong regulatory frameworks, are essential to curb illegal mining activities and ensure the safety and well-being of workers involved.

Multiple Choice Question:

1. Which of the following statements accurately describe the different types of mining methods used in the extraction of minerals?
2. Open-Cast Mining: Involves the extraction of minerals from below the earth’s surface using shafts and tunnels.
3. Strip Mining: A type of surface mining where overburden is removed in strips to access mineral deposits lying close to the surface.
4. Underground Mining: Involves the removal of minerals from the earth’s surface through open pits or quarries.
5. Mountaintop Removal Mining: Involves blasting the tops off mountains to expose underlying coal seams.

Select the correct answer using the codes below:

1. 1 and 3 only
2. 2 and 4 only
3. 2 and 3 only
4. 1 and 4 only

ANSWER: B

EXPLANATION:

Open-Cast Mining: Also known as open-pit mining, involves removing large quantities of earth from the surface to access minerals. This method is not used for underground mining but rather for surface extraction.

Strip Mining: Correctly described as a surface mining technique where minerals are extracted from the surface in strips.

Underground Mining: Involves the extraction of minerals from beneath the earth’s surface using shafts and tunnels, not from the surface.

Mountaintop Removal Mining: Involves blasting away the tops of mountains to reach coal seams, a method primarily used for coal extraction.

IMPACT OF CAPITAL GAINS TAX HIKE ON FOREIGN PORTFOLIO INVESTORS

TOPIC: (GS3) ECONOMY – SOURCE: THE HINDU

The recent Union Budget has introduced tax reforms that significantly affect Foreign Portfolio Investors (FPIs), leading to a notable withdrawal of investments from the Indian stock market.

Capital Gains Tax Changes

• Long-Term Capital Gains (LTCG) Tax: Increased from 10% to 12.5% for listed securities.
• Short-Term Capital Gains (STCG) Tax: Raised from 15% to 20% for equity investments.
• Uniform Tax Rate: A 12.5% tax rate is now applied to all asset types, irrespective of the transferor’s residency status.

CAPITAL GAINS TAX Capital Gains Tax is levied on the profit realized from the sale of assets or investments. It is an essential component of the tax system and affects various types of assets, including stocks, bonds, and real estate. Types of Capital Gains Tax ·       Short-Term Capital Gains (STCG) Tax: Applied to gains from assets held for a short period, typically less than one year. The tax rate for STCG is generally higher compared to long-term gains. ·       Long-Term Capital Gains (LTCG) Tax: Imposed on profits from assets held for a longer duration, usually over one year. The tax rate for LTCG is often lower than that for STCG. Recent Reforms: ·       Budget 2024: Introduced a uniform capital gains tax rate of 12.5% for all asset types. The long-term capital gains tax for listed securities was increased from 10% to 12.5%, and the short-term capital gains tax was raised from 15% to 20%.

Market Reactions

FPI Outflows: FPIs withdrew approximately $1.27 billion (Rs 10,710 crore) over three days due to the tax hikes.

• July 23: Sold equities worth Rs 2,975 crore.
• July 24: Sold equities worth Rs 5,130 crore.
• July 25: Sold equities worth Rs 2,605 crore.

Domestic Institutional Investors (DIIs): Bought stocks worth Rs 6,900 crore, helping to stabilize the market despite a 463-point fall in the Sensex.

Additional Factors

• Securities Transaction Tax (STT): Increased on Futures and Options, raising trading costs for FPIs.
• Treaty Benefits: Non-residents may benefit from capital gains tax exemptions due to treaty agreements.

FOREIGN PORTFOLIO INVESTMENT (FPI) Definition: FPI involves investments made by foreign individuals, corporations, and institutions in Indian financial assets, including stocks, bonds, and mutual funds. Purpose: Unlike Foreign Direct Investment (FDI), which focuses on long-term asset ownership, FPI aims for short-term gains and portfolio diversification. Benefits: ·       Capital Inflow: FPI brings foreign capital into Indian markets, enhancing liquidity and available capital. ·       Stock Market Impact: Increased FPI can drive up stock market valuations and bolster investor confidence. ·       Technology Transfer: Investments often target technology-driven sectors, fostering technology transfer and industry advancements. ·       Global Integration: FPI facilitates the integration of Indian markets with global financial trends, attracting more foreign investors. Risks: ·       Market Volatility: FPI flows can be unpredictable, influenced by global economic and geopolitical developments. ·       Capital Flight: Rapid inflows or outflows may cause market instability and affect currency stability, impacting both domestic investors and the economy. ·       Regulatory Challenges: Tracking the ultimate beneficiaries of complex FPI structures can be difficult, posing risks of fund misuse and tax evasion.

Conclusion

The budget’s tax revisions have led to significant FPI outflows due to higher taxes and trading costs, while DIIs have continued to support market stability through consistent investments.

Multiple Choice Question:

1. With reference to Foreign Direct Investment in India, which one of the following is

considered its major characteristic?

1. It is the investment through capital instruments essentially in a listed company.
2. It is a largely non-debt creating capital flow.
3. It is an investment which involves debt-servicing.
4. It is the investment made by foreign institutional investors in the Government securities.

ANSWER: B

EXPLANATION:

Foreign Direct Investment (FDI) in India is characterized by the following:

Non-Debt Creating Capital Flow: FDI is a major source of capital that does not involve debt and does not require repayment or interest payments. This makes option (b) the correct choice. FDI typically involves investing in equity capital or ownership stakes in Indian companies, rather than creating debt obligations.

(a) It is the investment through capital instruments essentially in a listed company: This describes Foreign Portfolio Investment (FPI), not FDI. FDI involves direct investment and control over business operations, whereas FPI usually involves buying shares in listed companies without significant control.

(c) It is an investment which involves debt-servicing: FDI does not involve debt-servicing; it involves equity investment or ownership, which is not repayable and does not incur regular interest payments.

ENVIRONMENTAL CONCERNS OF ARTIFICIAL INTELLIGENCE (AI)

TOPIC: (GS3) ENVIRONMENT – SOURCE: DOWN TO EARTH

The rise of Artificial Intelligence (AI) poses significant environmental challenges, particularly due to increased energy consumption in data centers and associated emissions.

Current Impact

• Energy Consumption: Data centres, crucial for AI operations, account for 1% to 1.3% of global electricity demand. This is projected to increase to 1.5% to 3% by 2026 (International Energy Agency).
• Google’s Emissions: In 2023, Google reported a 13% increase in emissions, largely due to higher electricity use in data centres, driven by AI tool deployment.

Reasons for Higher Emissions

• Energy Intensity of AI: AI processes require significantly more energy compared to simpler operations like Google searches. For instance, an AI query can consume 10 to 33 times more energy than a standard search.
• Data Processing: AI models involve extensive data processing, leading to greater electrical signal use for data retrieval and storage.

Regional Concerns

• Data Centre Consumption: In regions like Ireland, data centers account for up to 18% of electricity use. The U.S. figures range from 1.3% to 4.5%. Data for India is currently unavailable but expected to rise.

Water Usage

• Cooling Requirements: Data centres also demand substantial water for cooling. For example, a data centre in Iowa consumed 6% of the district’s water supply in July 2022.

Future Outlook

• India’s Scenario: The rapid growth of AI and data centers in India necessitates efficient planning to minimize environmental impacts.
• Potential Benefits: Despite the environmental toll, AI could help reduce global emissions by 5-10% by 2030 through improved efficiency and emissions monitoring.

Conclusion

AI’s environmental footprint, especially in energy and water consumption, underscores the need for sustainable practices and technological advancements to mitigate its impact.

THE LEGACY OF THE OLYMPICS IN PARIS AND INDIA’S JOURNEY

TOPIC: (GS2) POLITY AND GOVERNANCE– SOURCE: TIMES OF INDIA

Paris, the City of Love, holds significant historical value in the context of the Olympic Games and India’s participation in them. This year marks the 53rd modern Olympics in Paris, a city that has hosted the Games thrice since their revival in 1896.

Historical Significance for India

• 1924 Paris Olympics: This event was notable as it marked India’s formal entry into the Olympic arena. The Indian contingent, comprising track athletes and wrestlers, was led by Dorabji Tata, who played a crucial role in organizing the team and establishing the Indian Olympic Committee.
• 1900 Paris Olympics: An Indian athlete, Norman Gilbert Pritchard, won two silver medals in track events, making him the first Indian to achieve Olympic success.

Development of Indian Olympic Participation

• Early Challenges: India’s first Olympic team, sent to the 1920 Antwerp Games, faced ad hoc selection and lack of organization. However, the 1924 Paris Games saw a more structured approach with careful planning and national selection.
• First Women Competitors: The 1924 Paris Olympics also marked the debut of Indian women athletes at the Games, highlighting progress in Indian sports.

Baron Pierre de Coubertin and Olympic Legacy

• Founder’s Vision: Baron Pierre de Coubertin, a Paris native, was instrumental in the revival of the Olympics and saw the Games hosted in his birth city twice—1900 and 1924.

Norman Pritchard’s Legacy

• Achievements: Norman Gilbert Pritchard, a Calcutta-born athlete, won silver medals in the 200m sprint and hurdles in the 1900 Olympics. Despite myths suggesting he was a casual participant or represented Great Britain, historical evidence confirms his representation of India and his significant athletic prowess.

Conclusion

Paris’ role in Olympic history, coupled with India’s evolving participation, underscores the significance of these global sports events in fostering international and cultural connections.

The legacy of early Indian athletes and the meticulous organization of Olympic teams reflect the growth and development of India’s sports infrastructure.

KARGIL VIJAY DIWAS 2024

TOPIC: (GS3) SECURITY– SOURCE: INDIAN EXPRESS

Date and Historical Context

• Observed Date: July 26 each year.
• 2024 Date: Friday, July 26, marking the 25th anniversary of the Kargil War victory.

Historical Background

• Kargil War: Fought between India and Pakistan from May to July 1999 in the Kargil district of Jammu and Kashmir.
• Operation Vijay: The Indian Army’s operation to reclaim territories occupied by Pakistani soldiers and militants. It successfully concluded with the recapture of strategic positions, including Tiger Hill.

Events Leading to the War

• Post-1971 Tensions: Following the creation of Bangladesh, India and Pakistan experienced ongoing tensions, including a dispute over the Siachen Glacier and nuclear arms tests in 1998.
• Lahore Declaration: A bilateral agreement signed in February 1999 aimed at resolving the Kashmir issue peacefully.
• Infiltration and Conflict: Infiltration by Pakistani forces across the Line of Control (LoC) in May 1999 led to the outbreak of the Kargil War.

Casualties and Outcomes

• Indian Losses: Nearly 490 soldiers lost their lives during the conflict.
• Victory: India successfully repelled the intruders and restored control over the occupied areas by July 26, 1999.

Significance and Celebrations

• National Unity and Patriotism: Kargil Vijay Diwas symbolizes national pride and unity, celebrating the collective resilience and support for the Armed Forces.
• Inspiration: The bravery and heroism displayed during the war serve as an inspiration for future generations.
• Commemorative Activities: The day is marked by nationwide ceremonies, educational activities, and memorial events to honour the sacrifices of Indian soldiers.

Conclusion

Kargil Vijay Diwas serves as a poignant reminder of the valour and sacrifice of Indian soldiers in the 1999 Kargil War. The annual observance fosters national pride and remembrance, ensuring that the heroes’ contributions to India’s sovereignty are honoured and celebrated.

SANGAMESWARA TEMPLE

TOPIC: (GS1) HISTORY – SOURCE: INDIAN EXPRESS

The Sangameswara Temple, a significant Hindu shrine dedicated to Lord Shiva, is located in Nandyal district, Andhra Pradesh. It recently became submerged due to high inflows from the Krishna River into the Srisailam project.

Key Points:

• Location: Originally situated at the confluence of the Tungabhadra and Krishna Rivers, now located at a new site 10 km away due to the Srisailam Dam.
• Construction: Built in 740 AD by the Chalukya monarch Pulakesi II.The temple was relocated and reconstructed rock-by-rock at its current site in 1979.
• Architecture: The temple follows the Nagara style with an elevated platform and a fortified wall.
• Features: Includes a large hall with 12 pillars, a sanctum with a circumambulatory path, and detailed carvings of deities like Vishnu, Brahma, and Kumaraswamy. Unique crocodile carvings are present at all four corners.
• Relief: The ceiling displays a large relief of Nagaraja, typical of Chalukya temples.