GS 2


Bill on right to recall panchayat member

The issue in news

The Haryana Assembly passed the Haryana Panchayati Raj (Second Amendment) Bill, 2020.

Main points

  • It gives women 50% reservation in the rural bodies.
  • It is aimed at enhancing participation of women in the three-tier panchayati raj system.
  • It allows 50% reservation to them in gram panchayats, panchayat samitis and zila parishads
  • The Bill allows the recall of village sarpanches and members of the block-level panchayat samitis and district-level zila parishads if they fail to perform.
  • The right to recall gives the power to ensure accountability of a person in a democracy.
  • To recall a sarpanch and members of the two bodies, 50% members of a ward or gram sabha have to give in writing that they want to initiate proceedings.
  • This will be followed by a secret ballot, in which their recall will require two-third members voting against them.
  • The amendment is aimed at increasing their accountability to the voters.
  • The Bill also proposed 8% reservation to the “more disadvantaged” among the Backward Classes.


GS 3

Category: ECONOMY

  1. Rising GST dues for States

The issue in news

The Fifteenth Finance commission has finalised its report proposing a framework for sharing revenues between the Centre and the States for the next five years i.e, 2020-21 to 2025-26.

Main points

  • Given the uncertainty created by the pandemic and the economic slowdown, the panel has had to rely on variable growth projections for each of the five years rather than assuming a steady trend.
  • The panel has also delivered on its more unusual terms of reference, including the question of creating a separate mechanism for funding defence and internal security proposed by the Centre.
  • The Commission has examined and responded to the proposal:
  • To set up a non-lapsable fund for security-related expenditure.
  • Whether it should be funded by a cess or a surcharge and supplemented by monetisation of surplus defence land, issue of tax-free defence bonds and disinvestment of defence public sector units.
  • The commission is learnt to have recommended a unique fiscal glide path for each State for the five year period, in a separate volume dedicated to the States.



  • According to the finance commission, the gap between GST cess collections and the revenue shortfall faced by the States for implementing the Goods and Services Tax (GST) could snowball to anywhere between 5 lakh crore to 7 lakh crore by June 2022 from the 2.35 lakh crore estimated for the Financial Year (FY) 2020-21.
  • The Centre has allowed States to borrow from the market to meet part of the shortfall for the current FY, with the assurance that loans will be serviced and repaid from future GST cess collections.


  1. NBFCs with high systemic risks need more regulation: RBI DG

The issue in news

Reserve Bank Deputy Governor said that Non-Banking Financial Companies (NBFCs) with significant externalities and which contribute substantially to systemic risks must be identified and subjected to a higher degree of regulation.

Main points

  • Observing that the NBFCs currently enjoy a great degree of regulatory arbitrage vis-a-vis banks, he said these entities could contribute to a build-up of systemic risks because of such arbitrage and hence there was a need to revise the regulations.
  • He opined that the design of prudential regulatory framework for such NBFCs can be comparable with banks – so that beyond a point of criticality to systemic risks, such NBFCs should have incentives either:
  • To convert into a commercial bank (or) Scale down their network externalities within the financial system. He asserted that it would make the financial sector sound and resilient while allowing a majority of NBFCs to continue under the regulation-light structure.
  • Also, the share of NBFC-MFIs (microfinance institutions) in the overall microfinance sector has come down to a little more than 30% as several large MFIs had converted into Small Finance Banks.
  • He asserted that there is a need to re-prioritise regulatory tools in the microfinance sector so that our regulations are activity-based rather than entity-based.



  1. ‘Meet targets to get air pollution funds’

The issue in news

Based on the recommendations of the 15th Finance Commission, the Centre has released exactly half (₹ 2,200 crore) of the budgetary allotment for combating air pollution, to 15 States. The States, in turn, have to release money to local municipal bodies in 42 cities to take steps to monitor and mitigate air pollution.

Main points

  • 4,400 crore was allocated as a budgetary allotment for combating air pollution for 2020-2021. The decision to release only half of the budgetary allotment was because of the Centre’s plan to link the money disbursed to the States achieving certain performance targets.
  • The parameters for the incentives would be notified by the Ministry of Environment, Forests and Climate change.
  • The funds are being disbursed by the Ministry of Housing and Urban Affairs and the Environment Ministry’s role is to set the performance parameters.

National Clean Air Programme (NCAP)

  • The National Clean Air Programme or NCAP is a government programme launched by the Union Ministry of Environment, Forests and Climate Change in 2019.
  • The programme is a pollution control initiative with a major goal of reducing the concentration of coarse and fine particulate matter in the atmosphere by at least 20% by the year 2024.
  • The programme aims:
  • To expand the national air quality monitoring network.
  • To build capacity for air pollution management
  • To raise public awareness about the hazards of air pollution
  • The NCAP also aims to have a feasible plan for the prevention, management and control of air pollution.
  • At the national level, the implementation of the programme will be done by an apex committee at the Environment Ministry level. At the state level, committees at the Chief Secretary level will oversee the implementation of the scheme.
  • The NCAP is a joint collaboration between:
    • Ministry of Road Transport and Highways
    • Ministry of New and Renewable Energy
    • Ministry of Petroleum and Natural Gas
    • Ministry of Heavy Industry
    • Ministry of Health
    • Ministry of Housing and Urban Affairs
    • Ministry of Agriculture
    • Central Pollution Control Board
    • NITI Aayog
  • The programme also ropes in academia, philanthropic foundations, civil society, etc.
  • The Smart Cities Mission of the Central Government will also be leveraged to start clean air programmes for the 43 smart cities among the 102 cities.

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