9 PM Daily Current Affairs Brief – March 17th, 2023

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Mains Oriented Articles
GS PAPER - 1
The colonial past is still relevant
Source– The post is based on the article “The colonial past is still relevant” published in “The Hindu” on 16th March 2023.
Syllabus: GS1- Colonization and decolonization
Relevance– Colonial legacies and associated challenges
News– Colonialism remains a relevant factor in understanding the problems and the dangers of the present world.
What are the challenges related to colonialism in modern times?
The residual problems from the end of the earlier era of colonization remain unresolved. The conflicts in western Sahara, Jammu and Kashmir, Cyprus and Palestine are legacies of colonialism. The factors responsible for these events in the colonial era have the potential to reignite conflicts. The war between Ethiopia and Eritrea was due to undefined colonial borders.
Intellectual history of colonialism– It is the cause of more recent conflicts. For example – the Belgian classification of Hutus and Tutsis in Rwanda and Burundi continues to haunt the region of the African Great Lakes.
The British invention of “martial races” in India is another example. Colonial rulers promoted the policy of “divide and rule”. It promoted political divisions between Hindus and Muslims that led to the tragedy of Partition.
Colonial-era distinctions: Such colonial era distinctions were accompanied by an unequal distribution of the resources of the state within colonial society. For example, Belgian colonialists favoured Tutsis. It led to Hutu rejecting them as foreign supporters.
In the present such example, Sinhalese were against privileges enjoyed by the Tamils in the colonial era in Sri Lanka. It prompted the discriminatory policies after Independence and the Tamil revolt.
Mixed colonial history– It is also a potential source of danger. When a state has more than one colonial past, its future is vulnerable.
Ethnicity or language hardly seem to be a factor in the secessions of Eritrea, Ethiopia and Somalia. Rather, it was different colonial experiences that separated them from the rest of their ethnic compatriots.
A similar example is Yugoslavia, made up of regions that had been under different empires. A Part of the country had been under Austro-Hungarian rule for 800 years. Other regions were under Ottoman suzerainty. in 1991, a war erupted between these 2 regions in the country.
Border issues– Boundaries drawn in colonial times still create enormous problems of national unity, especially in Africa. Civil conflict along ethnic or regional lines can arise when the challenge of nation building within colonial drawn boundaries becomes insurmountable.
colonial powers drew national boundaries in an arbitrary way. Older tribal and clan loyalties in Africa were destroyed by the boundaries drawn by the west. Civil wars happen when local leaders challenge a “national” leader whose nationalism fails to resonate across his country.
Crisis of governance– State failure in the wake of colonialism is another evident source of conflict. It is a byproduct of the newly independent state’s inability to govern.
The crisis of governance in many African countries is cause for concern in world affairs today. The collapse of effective central governments in Sierra Leone and South Sudan, Liberia and Somalia can lead to alarming possibilities.
Underdevelopment in post colonial societies is itself a cause of conflict. The uneven development of infrastructure in a poor country for the benefit of the colonialists has led to uneven distribution of resources. It leads to increasing fissures in a society between neglected regions” and better served regions.
Advancing underdevelopment in many countries of the South has created conditions of desperate poverty, ecological collapse and rootless, unemployed populations. These are beyond the control of state systems.
Indus Valley Civilisation differs from others as inequality levels were far lower
Source: The post is based on an article “Indus Valley Civilisation differs from others as inequality levels were far lower… likely because the Indus changed course often” published in The Times of India on 17th March 2023.
Syllabus: GS 1 – Ancient History
Relevance: About Ancient Civilizations
News: The article explains the similarities and differences amongst the ancient civilizations.
What were the similarities and differences amongst the ancient civilizations?
The big cities in the ancient civilizations grew in places that could support large populations such as where there were plenty of good soil and lots of water to support the people.
Population densities grew in the early cities of the Indus Valley, the Nile, Mesopotamia, and the civilizations around the Yellow River in China because the climatic conditions of those cities provided food to people.
Due to which, people in these civilizations lived close to each other. However, living close to each other also caused disease to spread amongst the large number of people.
Urban settlements of these civilizations later shifted towards property rights; writing systems; social and economic hierarchies and more.
However, the Indus Valley Civilisation differs from others because inequality levels were far lower than other civilizations. This was because the Indus, unlike the other rivers, changed its course often.
This changed the structure of the society of the Indus Valley Civilization.
Must Read: Indus valley Civilization: Important aspects and new developments
GS PAPER - 2
Global law, local practice – BCI’s move recognises India’s corporate globalisation
Source: The post is based on the article “Non-essential curbs – Policy focus must shift from imports to exports” published in the Business Standard on 17th March 2023.
Syllabus: GS – 2: Structure, organization and functioning of the Executive and the Judiciary.
Relevance: About BCI’s decision to permit foreign lawyers and firms.
News: Recently, the Bar Council of India (BCI) permitted foreign lawyers and law firms to practice in India.
About the BCI decision to permit foreign lawyers
Read here: Foreign lawyers, firms can operate in India: BCI |
The principle of reciprocity will not be applicable if a foreign service works on a “fly-in-fly-out” basis to advise an Indian client. The restriction here is that such services which cannot establish offices in India and their practice cannot exceed 60 days in any 12-month period.
Note: Advisory and contractual work form the bulk of corporate legal services anywhere in the world.
What are the challenges in BCI’s decision to permit foreign lawyers and firms?
Ambiguity over Indian lawyers: The permissions are contingent on whether Indian lawyers will be permitted similar opportunities to practise in countries from where law firms are coming here.
Put the burden on BCI: The BCI will need to formulate specific regulations to ensure that foreign lawyers do not stray into Indian legal territory. For instance, Singapore has many foreign law firms.
Rise in legal fees: Permitting foreign lawyers and firms will increase the legal fees. As foreign law firms will need to attract and retain talent, which could raise transaction costs for small and medium firms.
What are the advantages of in BCI’s decision to permit foreign lawyers and firms?
At present, foreign law firms tying up with Indian companies or accessing domestic services prefer overseas centres such as Singapore or the UK for arbitration. This raises transaction costs. But permitting foreign lawyers and firms will provide India with a competitive advantage.
This will increase foreign direct investment, aid in India’s ambitions to become India a hub of international commercial arbitration and enhance the ease of doing business in India.
State Of Head Governors have been seen as partisan for decades. They should be accountable to Centre, state & Rajya Sabha
Source: The post is based on the article “State Of Head – Governors have been seen as partisan for decades. They should be accountable to Centre, state & Rajya Sabha” published in The Times of India on 17th March 2023.
Syllabus: GS – 2: Structure, organization and functioning of the Executive and the Judiciary.
Relevance: About friction points between governor and state governments.
News: The Supreme Court has questioned the Maharashtra governor’s rationale in calling for a trust vote that led to the resignation of the Chief Minister.
What was the issue about?
Read more: Governors cannot precipitate the fall of elected governments: Supreme Court |
What are the various friction points between governor and state governments?
-The biggest issues against the governors are they are not giving assent to bills passed by assemblies. In some cases, governors are delaying assent to bills which directly affect governance in the states. For instance, the Telangana government recently moved to SC as their Governor has not signed seven bills and has not cleared the state budget.
-The SC is hearing a Punjab CM vs governor case. In that, the SC has said that the levels of discourse should not degenerate into a “race to the bottom”.
-Tamil Nadu, Kerala, Rajasthan, Chhattisgarh and Bengal have all protested governors’ using their office in a manner that’s seen as slowing down or meddling in state government function.
-The other friction point include governors’ refusal to convene assembly sessions, and vice-chancellor appointments.
Read more: Issues Related to the Office of Governor – Explained, pointwise |
What should be done to reduce friction points between governor and state governments?
Governors have been perceived to be following the Centre’s writ, whichever the party in the Centre. To correct this, governors should be made accountable to not just the Centre but also the state and Rajya Sabha.
Read more: The Supreme Court’s Judgment on Pardoning Powers of the Governor – Explained, pointwise |
Legalising Same-sex marriages in India and associated challenges – Explained, pointwise
Contents
- 1 Introduction
- 2 What is same-sex marriage?
- 3 What is the global acceptance of same-sex marriages?
- 4 About the case and Centre’s affidavit on legalising Same-sex marriages in India
- 5 What are the issues in the centre’s affidavit on legalising same-sex marriages?
- 6 What are the arguments in favour of legalising same-sex marriages?
- 7 What are the arguments against legalising same-sex marriages?
- 8 What are the challenges in legalising same-sex marriages?
- 9 What should be done?
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Introduction
The Supreme Court received petitions to allow same-sex marriage under the Special Marriage Act. The court sent notices to the government and took over similar cases that were already in other high courts. In response to it, the government filed an affidavit expressing its view on the matter.
At the same time, the Supreme Court of India has referred the petitions seeking legal validation of same-sex marriages to a five-judge constitutional bench for adjudication. Same-sex marriage is a sensitive issue in India, with the potential to pose legal, socioeconomic, and ethical concerns.
What is same-sex marriage?
A same-sex marriage is a legal union between two people of the same gender. The government usually recognises it and grants them the same legal rights and protections as heterosexual couples. It is also known as homosexual marriage or gay marriage.
Note: LGBTQ+ stands for lesbian, gay, bisexual, transgender, queer (or sometimes questioning), and others. The “plus” represents other sexual identities including pansexual and Two-Spirit.
What is the global acceptance of same-sex marriages?
As of 2023, marriage between same-sex couples is legally performed and recognised in 34 countries, with the most recent being Andorra. Most countries in North and South America and Europe have legalised same-sex marriage.
Read more: The practice followed in other countries on rights of LGBTQ community |
About the case and Centre’s affidavit on legalising Same-sex marriages in India
Read here: Same-sex marriages can rock societal values: Centre |
What are the issues in the centre’s affidavit on legalising same-sex marriages?
Read here: About legalising same-sex marriages: Inaction and intervention: On the handling of social issues |
What are the arguments in favour of legalising same-sex marriages?

There are several arguments in favour of legalising same-sex marriages in India:
Providing Equality: Legalising same-sex marriages is crucial in promoting equality and non-discrimination. All individuals, regardless of their sexual orientation or gender identity, should have the right to marry and have their relationships recognised under the law.
This is supported by Articles 14 and 15 of the constitution, which prohibits discrimination on the basis of sex. The Supreme Court has even interpreted “sex” to include “sexual orientation” in the Navtej Singh Johar (2018) case. Thus, denying same-sex couples the right to marry is a clear case of discrimination based on sexual orientation.
Ensure Right to privacy: The right to privacy encompasses the ability to make choices regarding one’s body and intimate relationships. This applies to same-sex couples as well. The Supreme Court’s Puttaswamy verdict in 2017 acknowledged this as part of the right to life and liberty under Article 21 of the Constitution. This right should be respected without any discrimination or persecution towards individuals.
Enlarge Human Rights: Same-sex marriage is a human rights issue. The United Nations has recognised the importance of LGBT (lesbian, gay, bisexual, and transgender) rights and has called for the protection of the human rights of LGBT individuals, including the right to marry.
Love and commitment: Same-sex couples are just as capable of loving and committing to each other as heterosexual couples. They deserve to have their love and commitment recognized and protected under the law.
Provide Legal protection: Legalising same-sex marriages would provide legal protection and recognition for same-sex couples, including access to benefits such as inheritance, joint ownership of property, and healthcare.
Promote Social acceptance: Legalising same-sex marriages would promote social acceptance of LGBT individuals and relationships, and help reduce discrimination and stigma.
What are the arguments against legalising same-sex marriages?
Some arguments against legalising same-sex marriages in India include:
Against religious and cultural beliefs: As different from many liberal democracies, in India, aspects of marriage, succession and adoption are governed by religious personal laws. As far as marriage is concerned, the Hindu, Christian and Shariat laws, in addition to customary law, govern religious marriages with heterosexual couples alone.
Against the definition of marriage: The traditional definition of marriage is between a man and a woman, and changing this definition could have negative consequences for society.
Marriage is a matter of policy: The Union government, in its affidavit to the Supreme Court, has argued that recognizing same-sex marriages could cause havoc in the system of personal laws. The government has also claimed that marriage is a matter of policy to be decided by Parliament and the executive alone.
Children’s rights: Some argue that children are better off being raised by opposite-sex parents, and that legalising same-sex marriages would harm the welfare of children.
Has legal complications: Legalising same-sex marriages could lead to legal complications. For example, issues related to adoption and child custody still be there.
Create social unrest: Same-sex marriage is not widely accepted in Indian society and legalising it could create social unrest and have the potential to disrupt social norms and values.
What are the challenges in legalising same-sex marriages?
There are several challenges in legalising same-sex marriages in India, including:
Legal hurdles: The current legal framework in India does not recognise same-sex marriages, and amending the existing laws could be a lengthy and difficult process.
Absence of SC’s direction in civil rights issues: In 2018, the Supreme Court ruled that being gay is no longer illegal, but they did not talk about civil rights issues. As a result, while same-sex partnerships are legal, civil rights like marriage, inheritance, and adoption are not guaranteed to the lesbian, gay, bisexual, transgender, queer, and intersex populations.
Cultural and religious attitudes: India is a culturally and religiously diverse country, and many people still hold conservative beliefs about same-sex relationships, which could make legalising same-sex marriages a challenging task.
Lack of political will: Some politicians may be hesitant to support the legalisation of same-sex marriages due to fear of losing support from conservative voters.
Social stigma and discrimination: Despite efforts to promote LGBT rights, many LGBT individuals still face discrimination and stigma in Indian society. This could create barriers to legalising same-sex marriages.
Public opinion: While attitudes towards LGBT rights have been changing in India, many people still do not support same-sex marriages. This could make it difficult for politicians to pass legislation legalising same-sex marriages.
What should be done?
Recognition by the government: The government needs to recognise that denying same-sex couples the right to marry is a violation of their constitutional rights to equality and privacy. The government needs to acknowledge that the right to marry is not just a policy matter but an important legal and social issue that requires attention and action.
Amendment in the Special Marriage Act: This will require changes in language to make it gender-neutral and remove references to the terms “husband” and “wife.” The courts can either accept this reinterpretation of the Act or declare a right to same-sex marriage and direct the state to recognise them under the Act.
Expand the institution of marriage: The reform of the Hindu Marriage Act, 1955 to include self-respect marriages is a significant step towards dismantling caste-based practices within the institution of marriage. Likewise, it is crucial to recognise same-sex marriage and expand the institution of marriage to include all gender and sexual identities.
Address the concerns of opponents: The government needs to address the concerns raised by opponents of same-sex marriage. The argument that same-sex marriage disrupts the sanctity of marriage is a religious one and does not apply to secular laws like the Special Marriage Act. Similarly, the argument that same-sex marriage goes against prevailing social values is not a valid reason to deny constitutional rights to a minority group.
Education and awareness campaigns: There needs to be a shift in societal attitudes towards same-sex marriage. Education and awareness campaigns need to be launched to help people understand that same-sex relationships are natural and normal. The media can play an important role in promoting positive representations of LGBTQ+ individuals and couples.
Sources: LiveMint, Business Standard, The Hindu and Indian Express
Syllabus: GS 2 – Social Justice: Mechanisms, laws, institutions and Bodies constituted for the protection and betterment of vulnerable sections.
GS PAPER - 3
Non-essential curbs – Policy focus must shift from imports to exports
Source: The post is based on the article “Non-essential curbs – Policy focus must shift from imports to exports” published in the Business Standard on 17th March 2023.
Syllabus: GS – 3: Effects of liberalization on the economy.
Relevance: About curbing imports in India.
News: The expanding trade deficit has prompted the government to curb imports.
About India’s trade deficit
Merchandise exports: The global economic slowdown has impacted India’s merchandise exports. The exports contracted 8.8% in February compared to the same period last year. Merchandise imports also contracted by 8.2% in February. The merchandise trade deficit also increased.
Service exports: However, sustained growth in services exports has helped narrow the overall (merchandise and services) trade deficit.
Current account deficit (CAD): According to experts, the current account deficit will remain around 2.5% of the gross domestic product this fiscal year. This will pose challenges in financing.
Overall balance of payments: The flow of foreign direct investment has slowed. Foreign portfolio investors are also continually selling their stakes.
Read more: MoD bans imports from 18 top defence platforms, items to be made in India |
About government policy on curbing imports
The government has been working on reducing imports for several years and has raised tariffs along with other barriers. The government would now be issuing fresh quality-control orders to curb imports.
The government is also working on strategies to contain “non-essential imports”. The idea broadly is import substitution.
Why government’s plan of curbing imports is wrong?
Curbs do not provide immediate macroeconomic stability: India has sufficient foreign-exchange reserves. This will help to overcome near-term challenges and maintain stability on the external front.
Previous efforts have not yielded enough results: All efforts so far have not led to any meaningful decline in imports. For instance, India has tried such measures for decades before liberalization.
Issues with classifications in a market economy: It is hard to determine non-essential imports in a functioning market economy. This will only lead to higher costs and affect the overall competitiveness of the economy. Further, the approach also opens the scope for lobbying.
Import does not mean it is bad: It is normal for a market economy to import goods and services in areas where it has domestic capabilities. For example, corporations are importing services from Indian firms not necessarily because of a lack of capability. They are doing so because the outcome is more efficient.
Read more: Blanket ban on imports of drones may disrupt industry |
What should be done to improve macroeconomic stability instead of curbing imports?
Instead of focusing on imports, Indian policymakers have to spend more time and energy on exports. This is because sustained export growth will address the current account deficit and also increase private investments and job creation. Thus, leading to higher sustainable economic growth.
Tested but tired, this force could be in distress
Source– The post is based on the article “Tested but tired, this force could be in distress” published in “The Hindu” on 16th March 2023.
Syllabus: GS3- Various security forces
Relevance– Issues faced by paramilitary forces
News– On Pulwama day, former personnel of CRPF and their families turned up in large numbers in different parts of the country. They demand the old pension scheme to serving members of the fraternity.
The old pension scheme was stopped for personnel joining service after December 31, 2003.
Why is there an increasing burden on paramilitary forces?
The internal security situation has not improved significantly in left-wing extremism areas and terrorism-affected Kashmir. The deinduction of the Indian Army has taken place. The void was filled mainly by the CRPF.
The huge and continuous deployment of the regular army creates adverse attention from the international press.
What are the challenges faced by paramilitary forces?
The central government has been compelled to entrust a number of assignments. It is becoming riskier to these forces, especially to the CRPF.
Personnel of these forces are tasked with carrying out hard duties. Their schedule is overstretched without any rest or respite. As a consequence, training becomes compromised. It is reflected in their operational capabilities. This makes them vulnerable to attacks by anti-national forces.
There have been higher casualty rates suffered by the paramilitary.
These forces can maintain the optimum level of performance needed only if the training and the morale of their personnel are taken care of.
The government does not provide them benefits enjoyed by the army. They don’t enjoy pension benefits, and service facilities such as the Canteen Stores Department.
Will the national champions model of infrastructure development work?
Contents
- 1 How is infrastructure perceived in emerging economies?
- 2 What are the constraints in infrastructure building?
- 3 What has been the approach towards infrastructure financing in India?
- 4 What are the new aspects of the “national champions” model?
- 5 What are the problems associated with the “national champions” model?
Source– The post is based on the article “Will the national champions model of infrastructure development work?” published in “The Indian Express” on 16th March 2023.
Syllabus: GS3- Infrastructure
Relevance– Different models for infrastructure creation
News– Infrastructure is understood as an important necessity in modern times. But, providing functional and efficient infrastructure has always been a struggle for developing economies.
How is infrastructure perceived in emerging economies?
Infrastructure in emerging economies is considered a magic bullet. It works as a national aspiration, a barometer of national progress, a mechanism for job creation, a vehicle for crowding in private investment.
What are the constraints in infrastructure building?
It needs to be built to a minimum scale, which makes it expensive.
It often has a public good component. The social value of infrastructure is higher than its private value to individual users. Hence, private investors tend to find such investments relatively unprofitable.
The traditional approach to financing infrastructure has relied on tax revenues or government borrowing. But poorer economies generate less tax revenue. It limits infrastructure investment.
The poor infrastructure due to limited investment reduces returns to private investment which further affects the growth of the economy.
Attempting to break the cycle by increasing public borrowing domestically tends to crowd out private investment.
What has been the approach towards infrastructure financing in India?
India introduced the PPP model in early 2000s. It incentivised private sector participation by providing targeted subsidies for infrastructure investments. Government facilitated the acquisitions of land and primary commodities, and access to credit from public sector banks for infrastructure projects.
The PPP model ended in creation of non-performing assets with public sector banks, private sector bankruptcies, accusations of widespread corruption, and a change in government in 2014.
The NDA government modified the PPP approach. It assigned the bulk of the infrastructure provisioning for roads, ports, airports, energy, and communications to a few chosen industrial houses.
This is the “national champions” model. The government picks a few large conglomerates to implement its development priorities.
What are the new aspects of the “national champions” model?
First, infrastructure projects take a long time before they start generating returns. The returns are also low. To incentivise their investment, infrastructure firms need to be given control over existing projects with strong cash flows. It helps them to maintain profitability.
Second, the public association of the champions with the government’s national development policy generates a competitive advantage for the champions. It helps them in getting domestic and foreign contracts. This too guarantees some stable cash flow.
Third, access to some cash-rich projects allows these national champions to borrow from external credit markets by using these entities as collateral. This lowers the cost of finance of the other projects. It also frees up domestic savings for private investment.
What are the problems associated with the “national champions” model?
First, there is direct association of these conglomerates with government policies. It creates the potential for markets and regulators to treat them as too big to fail. This opens the door to market hysteria, and spillovers of sectoral problems into systemic shocks.
Second, it encourages market concentration. This can often be bad for efficiency and productivity at the economy-wide level.
Third, these projects take a long time to generate large cash flows. The state needs to provide the champions with access to additional cash flows. The country can turn into industrial oligarchy.
Fourth, it can generate the perception of an uneven playing field in terms of market access and selective regulatory forbearance. It can become a significant deterrent for foreign investors.
The end of hyper-globalization should yield a better alternative
Contents
Source: The post is based on the article “The end of hyper-globalization should yield a better alternative” published in Mint on 17th March 2023.
Syllabus: GS 3 – Economy
Relevance: About different Global Economic Narratives
News: There are different narratives in the global economic system. The article discusses those narratives and provides alternatives to it.
What was the global economic narrative until the late 19th century?
The global economy till the late 19th century was self-adjusting, self-equilibrating system in which stability was best achieved if governments did not interfere. This global economic narrative was referred to as the gold standard.
It was thought that free capital movement, free trade and better macro-economic policies would achieve the best results for the world economy and countries alike.
However, the gold standard collapsed and the Great Depression made this narrative false. After the collapse, the global economic narrative changed towards the Bretton Woods regime.
What was the Bretton Woods economic narrative?
The Bretton Woods regime emerged after World War II. It relied on Keynesian macroeconomic management to stabilize the global economy and gave the state a much more prominent role.
The regime believed that only a strong welfare state could provide social insurance and support the market economy.
This system altered the relationship between domestic and global interests. It made the world to focus on achieving the goals of full domestic employment and establishing equitable societies.
However, other than this narrative, the narrative of neoliberal hyper-globalization became dominant in the 1990s.
What is Neoliberal Hyper-Globalization?
This narrative believes in free flow of finance and in many ways, it similar to the gold-standard narrative of self-adjusting markets.
It emphasized the role of the government in enforcing specific rules that made the world safe for large corporations and big banks.
It believed to end international conflict and strengthen democratic forces around the world, especially in communist countries such as China.
It also believed that goals of social equity, environmental protection and national security could be achieved through policy instruments that did not interfere with free trade and finance.
However, the Hyper-globalization narrative failed since the global crisis of 2008 because it could not overcome its inherent contradictions. Hence, the world might look for alternatives.
What can be the alternatives to Hyper-globalization narrative?
Productivism: It emphasizes the role of governments in addressing inequality, public health and the clean-energy transition. It emphasizes domestic political priorities along with supporting an open world economy.
Hyper-realism: It emphasizes the geopolitical rivalry between the US and China and applies a zero-sum logic to economic relations between major powers. This framework views economic inter-dependence not as a source of mutual gain but as a weapon to harm the global economic system.
What can be the way ahead?
It is anticipated that governments would move towards more protectionist approach, encouraging industrial policies for advanced manufacturing and more green measures that support domestic goods.
However, hyper-realist narrative would prevail if a country looks at the geopolitical aims. But this would endanger global economic stability.
Hence, it would be better to correct the wrongs of hyper-globalization and establish a better global order based on a vision of shared prosperity.
Fraternity, prosperity and polarisation
Contents
- 1 What is horizontal devolution of taxes?
- 2 What is the reasoning provided in favour of more allocation of resources to poorer states?
- 3 Are the arguments in favour of more resources allocation to poorer states still valid?
- 4 What are the reasons for the poor economic condition of northern states?
- 5 What is the end result of polarisation politics?
Source– The post is based on the article “Fraternity, prosperity and polarisation” published in “The Hindu” on 16th March 2023.
Syllabus: GS3- Indian economy
Relevance– Issues related to public finances
News– Recently, Tamil Nadu Finance Minister Palanivel Thiaga Rajan questioned the higher allocation to poorer states like UP and Bihar
What is horizontal devolution of taxes?
Finance Commissions recommend both the vertical devolution and the horizontal devolution of taxes.
Horizontal devolution is the share that each state gets. It is decided by a formula. The largest weight in this formula is given to what is called the “income distance” parameter.
It is essentially the inverse of the per capita income of a state. Thus, the lower the per capita income, the more the state gets.
This parameter has had between 48 and 60% weight in all Finance Commission recommendations since 1991.
The horizontal devolution is, therefore, massively redistributive. No state has objected to it.
What is the reasoning provided in favour of more allocation of resources to poorer states?
The most taxes on income and consumption could not apportion to the places where they were collected. A film made in Mumbai could be taxed in Karnataka. A multinational declaring profits in Bombay would be earning its income from sales across India.
Are the arguments in favour of more resources allocation to poorer states still valid?
These arguments are still relevant, but the situation is changing. Today Uttar Pradesh is poorer than Nepal, and Tamil Nadu almost as rich as Indonesia in terms of per capita income.
This means that the consumption and income tax bases are much larger in some states. If inequality between regions increases, it is more difficult to convince people that the tax base should be viewed as a singular entity.
The inequalities between rich and poor states are manifest in almost every economic dimension. Incomes, assets and discretionary purchasing power are higher in the richer states.
The overwhelming majority of foreign investment comes to the richer states. They have better healthcare, higher levels of literacy and better public services than the poorer states.
What are the reasons for the poor economic condition of northern states?
There exists a political faultline in northern states. The northern states have for long seen a politics of polarisation, unlike in the southern states.
Caste and majoritarian religious mobilization are the political agenda in northern states. This has been the central discourse used to contest and win elections.
Economic welfare, prosperity are not the issues of the elections. There is no pressure to achieve these objectives.
Muslim baiting, calling fellow citizens anti-national, using coercive power to jail, punish and suppress dissenting voices is used to justify polarisation.
What is the end result of polarisation politics?
No one has a monopoly on polarisation and divisive politics. When these things are promoted, they acquire politically competitive overtones. The entire political settlement impacts due to this.
The questioning of Article 1 of the Constitution, the perception of imposition of Hindi on southern states, the insistence on a singular national discourse and monoculture will all foster conflict and further polarisation in different dimensions.
Polarisation extracts a terrible price. Economic stagnation is only the initial result. The fraternity that is at the core of India’s successful existence will be impacted.
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