GS 1/GS2


  1. No bonus for those facing sex abuse charges: New wage code

The issue in news

As per a provision in the Code on Wages, those indulging in sexual harassment of any form could run the risk of losing out on bonus dues from their employers.

Main points

  • The Code on Wages lays down norms for annual bonus dues that accrue to employees, replacing the Payment of Bonus Act, 1965.
  • As per the extant law, bonus dues are barred only in case of employees dismissed for fraud, violent conduct and theft or sabotage.
  • The new Code includes ‘conviction for sexual harassment’ as a ground for denying bonus payouts to employees.



  • This a step forward towards creating seriousness towards instances of sexual harassment. The prospect of losing one’s benefits may make employees more careful of their conduct.
  • This is believed to be a great nudge to get people to be on their best behaviour in the workplace.
  • This would serve as an additional deterrent apart from the Prevention of Sexual Harassment (PoSH) law of 2013.


Prevention of Sexual Harassment (PoSH) law

  • As per the PoSH law guidelines, firms are required to form an Internal Complaints Committee (ICC) to inquire into complaints.
  • The Committee is required to make recommendations to employers on the action required pursuant to its inquiry in such complaints.
  • If the ICC upholds a complaint, it could be taken as a conviction.
  • Though not all sexual harassment cases translate into a police case, ICC has the power to decide if someone is guilty and report it further to the police.


Way forward:

  • The rules should clarify whether the conviction would cover cases of outcomes of the investigation by the ICC arriving at a conclusion to pay compensation to the victim or not.
  • It is not clear if sexual harassment incidents or related crimes against women outside the workplace could lead to dismissal of employees with loss of bonus payments. Harassing a co-worker irrespective of where it is done, should come under this provision’s purview.


  1. Fifteenth Finance Commission to hand in report on Nov. 9

The issue in news

The Fifteenth Finance Commission has finalised its report for fund devolution from the Centre to States for the five years from 2021-22 to 2025-26.

Fifteenth Finance Commission

  • Finance Commission is a constitutional body for the purpose of allocation of certain revenue resources between the Union and the State Governments.
  • The Finance Commission is constituted by the President under article 280 of the Constitution.
  • The Fifteenth Finance Commission was constituted in November 2017, by a Presidential Order against the backdrop of:
  • The abolition of the Planning Commission.
  • Abolition of the distinction between Plan and non-Plan expenditure.
  • Introduction of the Goods and Services Tax (GST).
  • It is chaired by N.K. Singh.



  • The panel also had to determine the viability of a separate defence and national security fund.
  • It also had to deliberate on the issue of GST compensation.
  • Although its original remit was to recommend the fund-sharing formula between the Centre and States from 2020-21 to 2024-25, the commission’s term was extended by 11 months.



  • The commission comes out with its reports highlighting reforms relating to the fiscal scenarios. 
  • The 15th FC has been set up in a time when huge reforms have been taken under the fiscal federalism.
  • Replacement of Planning Commission with NITI Aayog.
  • Implementation of GST reforms
  • Abolition of the planned and non-planned expenditure

Article 280 of the Indian Constitution

  • President after two years of the commencement of Indian Constitution and thereafter every 5 years, has to constitute a Finance Commission of India.
  • It shall be the duty of the Commission to make recommendations to the President in relation to the:
    • the distribution between the Union and the States of the net proceeds of taxes which are to be, or maybe, divided between them and the allocation between the States of the respective shares of such proceeds;
    • the principles which should govern the grants in aid of the revenues of the States out of the Consolidated Fund of India;
    • any other matter referred to the Commission by the President in the interests of sound finance
    • The Commission shall determine their procedure and shall have such powers in the performance of their functions as Parliament may by law confer on them

Note: President can also constitute Finance Commission before the expiry of five years as he considers necessary

Article 281 of the Indian Constitution

  • It is related to the recommendations of the Finance Commission:
    • The President has to lay the recommendation made by Finance Commission and its explanatory memorandum before each house of Parliament

Who Constitutes Finance Commission of India?

President of India constitutes the Finance Commission every five years or on time considered necessary by him.

composition of Finance Commission of India

Finance Commission Chairman and Members

  • Chairman: Heads the Commission and presides over the activities. He should have had public affairs experience.
  • Four Members.
  • The Parliament determines legally the qualifications of the members of the Commission and their selection methods.

Qualifications of Finance Commission Chairman and Members

  • The 4 members should be or have been qualified as High Court judges, or be knowledgeable in finance or experienced in financial matters and are in administration, or possess knowledge in economics.
  • All the appointments are made by the President of the country.
  • Grounds of disqualification of members:
  • found to be of unsound mind, involved in a vile act, if there is a conflict of interest
  • The tenure of the office of the Member of the Finance Commission is specified by the President of India and in some cases, the members are also re-appointed.
  • The members shall give part-time or service to the Commission as scheduled by the President.
  • The salary of the members is as per the provisions laid down by the Constitution.

Functions of Finance Commission

The Finance Commission makes recommendations to the president of India on the following issues:

  • The net tax proceeds distribution to be divided between the Centre and the states, and the allocation of the same between states.
  • The principles governing the grants-in-aid to the states by the Centre out of the consolidated fund of India.
  • The steps required to extend the consolidated fund of a state to boost the resources of the panchayats and the municipalities of the state on the basis of the recommendations made by the state Finance Commission.
  • Any other matter referred to it by the president in the interests of sound finance.
  • The Commission decides the basis for sharing the divisible taxes by the centre and the states and the principles that govern the grants-in-aid to the states every five years.
  • Any matter in the interest of sound finance may be referred to the Commission by the President.
  • The Commission’s recommendations along with an explanatory memorandum with regard to the actions done by the government on them are laid before the Houses of the Parliament.
  • The FC evaluates the rise in the Consolidated Fund of a state in order to affix the resources of the state Panchayats and Municipalities.
  • The FC has sufficient powers to exercise its functions within its activity domain.
  • As per the Code of Civil Procedure 1908, the FC has all the powers of a Civil Court. It can call witnesses, ask for the production of a public document or record from any office or court.




In the initial report that the commission had submitted just for the year 2020-21, it pared the States’ share of the divisible tax pool from 42%, as recommended by the Fourteenth Finance Commission, to 41%, citing the creation of the Union Territories of Jammu and Kashmir and Ladakh.


  1. Kerala, Tamil Nadu and Goa best governed States: report

The issue in news

Public Affairs Index-2020 has been released by the Public Affairs Centre.

  • The States are ranked on governance performance based on a composite index in the context of sustainable development defined by the three pillars of equity, growth and sustainability.


Public Affairs Centre (PAC)

  • The Public Affairs Centre (PAC) is a not-for-profit research think tank situated in Bengaluru, Karnataka.
  • It works at improving the quality of governance in India.
  • The institute conducts research activities in two major fields, public policy and participatory governance.


Key findings:

  • Kerala, Tamil Nadu, Andhra Pradesh and Karnataka stood in the first four ranks in the large State category in terms of governance.
  • Uttar Pradesh, Odisha and Bihar were at the bottom of the ranking.
  • In the small State category, Goa ranked first, followed by Meghalaya and Himachal Pradesh.
  • The worst performers in the index with negative points were Manipur, Delhi and Uttarakhand.
  • Chandigarh emerged at the top in the category of Union Territories followed by Puducherry and Lakshadweep.
  • Dadra and Nagar Haveli, Andaman, Jammu and Kashmir and Nicobar were the worst performers.


  1. star campaigner

The issue in news

The Election Commission (EC) revoked the status of a Congress leader kamal Nath as a star campaigner for the party in the ongoing State Assembly by-polls.

Main points

  • The reason for revocation was repeated violation of the Model Code of Conduct (MCC) and completely disregarding the advisory issued to him.
  • The expenditure of star campaigners’ events, travel and stay is borne by the party and is not added to the candidate’s spending, which is limited.
  • The EC said that the entire expenditure on any campaigning by him for the by-election would be borne by the candidate in whose constituency he campaigns.


Star campaigner:

  • They are people who are nominated by parties to campaign in a given set of constituencies. These persons are, in almost all cases, prominent and popular faces within the party.
  • There is no specific definition of a “star campaigner” according to law or the Election Commission of India.
  • A recognised political party can have 40 star campaigners and an unrecognised (but registered) political party can have 20.
  • The list of star campaigners has to be communicated to the Chief Electoral Officer and Election Commission within a week from the date of notification of an election.
  • If a candidate or her election agent shares the stage with a star campaigner at a rally, then the entire expenditure on that rally other than the travel expenses of the star campaigner is added to the candidate’s expenses. Even if the candidate is not present at the star campaigner’s rally, but there are posters with her photographs or her name on display, then too, the entire expenditure will be added to the candidate’s account.
  • The same applies when the star campaigner even mentions the candidate’s name during the event. When more than one candidate shares the stage, or there are posters with their photographs, then the expenses on such rally/meeting are to be equally divided among the expenditure account of all such candidates.



  1. China gears up for ‘strategic period’

The issue in news

A key annual conclave was conducted by China’s ruling Communist Party.

Main points

  • Eyeing what it called “an important strategic period” for fulfilling its ambitions at home and abroad, it outlined long-term targets for boosting innovation and military strength.
  • It announced three goals to be achieved by 2025, 2027 and 2035 — a 14th five-year plan (2021- 2025) that emphasises:
  • Boosting domestic consumption and innovation.
  • A national security and defence modernisation plan ahead of the People’s Liberation Army (PLA) centennial in 2027.
  • A ‘Vision 2035’ longer-term economic blueprint that calls for big leaps in economic strength and technological prowess.
  • This would require a real GDP growth of around 3.5% annually.
  • The communique said China’s GDP would cross 100 trillion yuan (around $15 trillion) in 2020-21. The new economic blueprint would push for China to double its GDP and current per capita GDP of $10,000 by 2035.
  • The communique mainly focused on economic issues. However, it also outlined China’s national security plans and a goal to establish the PLA as a modern force by 2027.


GS 3

Category: ECONOMY

  1. ‘Import barriers will not be perpetual’

The issue in news

NITI Aayog Vice-Chairman asserted that any tariff protection to promote local manufacturing in India will come with an in-built sunset clause.


  • A sunset provision provides for an automatic repeal of the entire or sections of the law once a specific date is reached.

Main points

  • He emphasised that the protection from imports won’t be perpetual.
  • He made it clear that India’s self-reliance mission must not be equated to it becoming a protectionist and closed economy.
  • The government is set to extend the production-linked incentive (PLI) scheme for manufacturing pharmaceuticals, medical devices and electronics announced under the Atma Nirbhar Bharat package to six more sectors.
  • This is meant to incentivise investors already in the country to put up globally comparable capacities in scale and competitiveness.
  • The incentives would operate within the multilateral trading rules framework.

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