The Hindu Editorial Summary

Editorial Topic : Finance Commission of India

 GS-3 Mains Exam : Economy

Revision Notes

Question :Examine the role and functions of the Finance Commission in the context of fiscal federalism in India. How do its recommendations impact the relationship between the Centre and the States?

• Function: Recommends distribution of central tax revenue between Centre  and states.
• Constituted: Every 5 years (approx).
• Recommendations valid for: 5 years, starting April 1st of the 6th year (e.g., recommendations in 2025 apply from April 1, 2026).
• Not binding: Central government can disregard recommendations.

What it decides:

• Vertical devolution: Proportion of central net tax revenue going to states.
• Horizontal devolution: Distribution of this share among states.

Horizontal devolution formula:

• Considers factors like population, income level, geography etc. (varies by commission).

Vertical devolution trends:

• Recent commissions recommended increased devolution:
  • 13th: 32% of divisible pool to states.
  • 14th: 42% of divisible pool to states.
  • 15th: 41% of divisible pool to states.

Additional points:

• Centre may provide additional grants for joint central-state schemes.
• 16th commission expected to suggest ways to increase revenue for local bodies (panchayats, municipalities).
• As of 2015, only 3% of public spending happened at local body level (compared to over 50% in China).

Friction between Centre and States:

• Reason: Disagreement on tax sharing.
• Centre collects major taxes (income, corporate, GST) while states rely on sales tax (liquor, fuel).
• States deliver key services (education, healthcare, police).
• States argue they lack tax collection power and receive insufficient funds from Centre.

Areas of disagreement:

• Percentage of tax revenue to states.
• Actual delivery of recommended funds (states argue Centre doesn’t even share fully what’s recommended).
• What portion of Centre’s tax revenue is part of the divisible pool.
• Cesses and surcharges (not shared with states) can be significant (up to 28% of central revenue).
• Increased devolution might be offset by rising cess/surcharge collection.
• Some argue more developed states are penalized to help states with poor governance.
• Some believe the commission might not be fully independent due to central government appointment of members.

Conclusion

There is a perspective that the central government is penalizing more developed states with superior governance to assist states with weaker governance. Critics also contend that the Finance Commission, whose members are appointed by the central government, may not operate with complete independence and might be susceptible to political influence.

 

 

The Hindu Editorial Summary

Editorial Topic : Assam’s Foreigners Tribunals (FTs)

 GS-2 Mains Exam : Polity

Revision Notes

Question : Evaluate the role and effectiveness of the Assam Police Border Organisation in managing illegal immigration and border security. How does this organization collaborate with other agencies, and what are its primary challenges?

• Established: 1964 through Foreigners (Tribunals) Order under the Foreigners Act, 1946.
• Purpose: Determine if a person is a foreigner residing illegally in India.
• Unique to Assam: Other states handle “illegal immigrants” under the Foreigners Act.
• Number:
  • Central government data (2021): 300 FTs in Assam.
  • Assam government website: 100 currently functioning FTs.
• Composition: Each FT headed by a member with judicial experience (judge, advocate, civil servant).

Assam Police Border Organisation

• Established: 1962 as part of State Police’s Special Branch (Prevention of Infiltration of Pakistani scheme).
• Became independent wing: 1974.
• Tasks:
  • Detect and deport illegal foreigners.
  • Patrol India-Bangladesh border with Border Security Force.
  • Monitor settlements in riverine and sandbar areas.
  • Refer people with doubtful citizenship to FTs.
  • Handle ‘D’ voter (doubtful voter) cases referred by Election Commission.
  • Address appeals from people excluded from National Register of Citizens (NRC).

FT Functioning

• Powers: Similar to a civil court (summoning witnesses, examining evidence, requiring documents).
• Process:
  • Border police refer cases to FTs.
  • FT issues notice (within 10 days) to the person suspected of being foreign.
  • Suspected person has 20 days to respond and provide evidence.
  • FT has 60 days to decide the case.
  • Without citizenship proof, FT can send the person to a detention center (transit camp) for deportation.

Recent Developments

• July 5, 2024: Assam government asked Border Police not to refer non-Muslim pre-2014 cases to FTs.
• July 11, 2024: Supreme Court criticized an FT order declaring a deceased farmer a foreigner, highlighting due process concerns in the Foreigners Act.