September 2023 : Yojana Magazine GIST : Micro Notes or Revision Notes : Yojana Magazine Summary

 

Accountability and Financial Administration

Comptroller and Auditor General (CAG) of India

• Established in 1860, gained constitutional status in 1950 (Article 148).
• Independent of legislature and executive.
• Plays a key role in public financial management.

CAG’s Functions

• Advises government on maintaining accounts.
• Audits accounts of Union and State Governments.
• Submits audit reports to President, Governors, and UT administrators.
• Audit jurisdiction includes:
  • Union Government
  • State/UT Governments
  • Local bodies
  • Attached & subordinate offices
  • Autonomous bodies
  • Statutory authorities
  • Public Sector Undertakings (PSUs)

Types of CAG Audits

• Financial attest audit: Ensures accuracy of financial statements.
• Compliance audit: Checks adherence to rules and regulations.
• Performance audit: Assesses efficiency and effectiveness of systems.

Significance of CAG Audit

• Reports significant observations to Parliament and state legislatures.
  • Union Government Appropriation and Finance Accounts
  • State Finances Audit Reports
  • General Purpose Financial Reports on PSUs
  • Compliance and Performance Audit Reports
• Provides macro fiscal analysis of key indices.
• Promotes good governance through recommendations.
• Identifies under-assessment of taxes and ensures recovery.
• Audits government companies and highlights financial irregularities.

Recent Steps

• CAG audits use Integrated Financial Management System (IFMS) for digitalisation.
• Established framework for digital audit of GST revenues.
• Conducted audits of financial systems in government schemes.

Conclusion

• CAG upholds trust of taxpayers and investors.
• Contributes to robust financial administration.
• Institutional values, professionalism, and social awareness are key to CAG’s legacy.

 

 Parliamentary Committees – Strengthening Scope and Role

Parliamentary Committees: Strengthening Scrutiny

• Parliament functions in two ways: on the floor of the House and in Committees.
• Committees scrutinize specific issues and inform Parliament debates.
• They build consensus, develop expertise, and consult with stakeholders.

Types of Standing Committees

• Four main categories:
  • Department-related/Subject Committees (24 committees)
  • Financial Committees (Estimates, Public Undertakings, Public Accounts)
  • Accountability Committees (Government Assurances, Subordinate Legislation, Petitions)
  • Administrative Committees (e.g., Business Advisory Committee – manages daily agenda)

Department-related/Subject Committees

• Oversee each ministry (Minister cannot be a member).
• 31 members (21 Lok Sabha, 10 Rajya Sabha).
• Proportional membership based on party strength in Parliament.
• Review proposed laws, select subjects for examination, and scrutinize ministry budgets.

Financial Committees

• Estimates Committee: Examines pre-budget ministry estimates.
• Committee on Public Undertakings (COPU): Examines functioning of public undertakings.
• Public Accounts Committee (PAC): Reviews government’s spending statement.
• Ministers cannot be members of these committees.

Areas for Improvement

1. Referring All Bills to Committees:
   • Currently, referral is discretionary (Speaker/Chairman’s decision).
   • Automatic referral would ensure minimum level of scrutiny for all laws.
2. Attendance of MPs:
   • Low attendance (average 47% for subject Committees in 17th Lok Sabha).
   • High absenteeism noted by National Commission to Review the Working of the Constitution (2002).
3. Shortage of Technical Staff and Experts:
   • Limited technical support for Committees (scheduling, note-taking).
   • Other democracies (e.g., Canada) provide research staff to Committees.
4. Public Transparency:
   • Committee meeting minutes are included in reports (measure of transparency).
   • National Commission (2002) recommends discussing major reports in Parliament, especially in case of disagreements.

Conclusion

Parliamentary Committees play a vital role in scrutinizing government work, improving bills, and facilitating expert/stakeholder consultations. Further reforms can enhance their effectiveness.

 

Direct Tax Reforms

Importance of Tax Collection

• Funds government spending on education, healthcare, housing, etc.
• Improves quality of life and addresses poverty, unemployment, and slow development.
• Needs to be balanced to avoid impacting trade and industry growth.
• Every citizen should pay their fair share.

Tax Reforms in India

• Goal: Increase tax collection in a non-adversarial manner through a stable and predictable regime.
• Four Pillars of Reform:

1. Removing Exemptions/Deductions and Reducing Tax Rates

• Reduces complexity and encourages investment (study by IMF, OECD, UN, World Bank).
• Corporate tax rates reduced (2019):
  • 17% for existing companies (no exemptions/deductions).
  • 16% for new manufacturing companies (certain conditions).
• Similar reforms for personal income tax (2020 with option for new tax regime).
• Reduced tax rates in the new tax regime (Finance Act, 2023).
• Lower tax rates with fewer deductions are showing positive results.

2. Widening and Deepening Tax Base

• Introduced new TDS/TCS provisions:
  • Rent payments by individuals/HUFs.
  • E-commerce operations.
  • Cash withdrawals above a threshold.
  • Large payments by individuals/HUFs.
  • Purchase of goods.
  • Benefits/perquisites received during business/profession.
• Removed arbitrage in specific areas (debt mutual funds, business trusts).
• Capped long-term capital gains tax benefit from real estate investment.
• Higher surcharge for high-net-worth individuals.
• Black Money (Undisclosed Foreign Income & Assets) Act, 2015.
• Strengthened third-party information collection for undeclared income/assets.
• Encouraged use of digital transactions over cash transactions.

3. Using Technology to Increase Efficiency

• Pre-populated tax returns with third-party information (AIS).
• E-verification scheme for filing tax returns.
• Faceless assessment and appearance system for convenience.
• End-to-end technology-driven services for taxpayers and tax processing.

4. Reducing Litigation by Providing Tax Certainty

• Tax litigation wastes time and resources for taxpayers, government, courts, and tribunals.
• Advance Pricing Agreements (APAs) have reduced transfer pricing disputes.

Results of Reforms

• Significant increase in direct tax collection with buoyancy exceeding 1 for several years.
• Direct tax growth consistently outpaces GDP growth.
• Direct tax collection grew 160% from 2013-14 to 2022-23, compared to 140% GDP growth.
• Tax buoyancy of 1.15 signifies efficient tax administration and successful reforms.

Future Challenges

• Continuous tax policy reform is needed.
• Further reforms required to reduce tax litigation and ensure early tax certainty.
• Maintaining ease of doing business through tax policies.
• Ensuring everyone pays their fair share of indirect taxes.

 

Protecting Interests of Consumers and Businesses

Competition Law: Balancing Interests

• Protects consumers and businesses by fostering competition and preventing unfair practices.
• Creates a level playing field, encouraging innovation and efficiency.
• Enforced by Competition Commission of India (CCI) for fair competition and consumer welfare.
• Complements Consumer Law (different angles, same goal: consumer wellbeing).

CCI: Role and Tools

• Established in 2003 to promote healthy competition in the Indian economy.
• Acts as a watchdog for fair competition conditions.
• Uses various tools to enforce competition laws and protect consumer interests:

1. Advocacy:Educates stakeholders (businesses, consumers, policymakers) on competition principles.
2. Anti-Competitive Agreements Detection:Investigates agreements that may violate the Competition Act (cartels, price-fixing, etc.).
3. Abuse of Dominance Assessments:Ensures dominant firms don’t misuse market power to harm competitors.
4. Digital Tools and Data Analytics:Uses technology for evidence-based decision-making.
5. Fines and Penalties:Deters violations through penalties on those who break competition laws.
6. International Cooperation:Collaborates with other competition authorities for cross-border issues and best practices.
7. Market Studies:Identifies areas requiring market correction and informs policy formulation.
8. Merger Control:Reviews mergers, acquisitions, and amalgamations efficiently (e.g., Green Channel for ease of business).
9. Leniency Programmes:Offers reduced penalties to parties who report involvement in anti-competitive practices.
10. Remedies:Requires companies to take corrective actions (divestment, structural changes) to address competition concerns.

Relationship Between Competition and Consumer Protection

• Both aim to correct market failures and ensure effective market functioning.
• Consumer laws (demand-side) focus on consumer rights.
• Competition laws (supply-side) ensure consumer choice and affordable prices.
• Fair competition is a pillar of consumer welfare by offering diverse products and services at lower costs.

Relationship Between Competition and Business

• Competition creates an environment for businesses to improve, innovate, and meet consumer needs.
• Increased competition leads to greater productivity, growth, and international competitiveness for domestic businesses.
• A distorted market with anti-competitive practices harms businesses and the economy.

Conclusion

Competition law benefits both businesses and consumers. It helps businesses identify consumer needs and develop products/services, while consumers gain access to better choices.

 

 Administrative Reforms in India (2014-2023)

Introduction

• Administrative reforms aim to improve the relationship between bureaucracy and citizens.
• India has undertaken e-Governance initiatives to simplify citizen-government interactions.
• Government aims to create a “Digitally Empowered Citizen” and “Digitally Transformed Institutions.”

Effective Grievance Redressal

• Centralized Public Grievance Redress and Monitoring System (CPGRAMS):
  • Allows citizens to file complaints online.
  • 17 lakh registered users, 84,449 grievance officers mapped on the platform.
  • In 2022:
    • 2 million grievances received.
    • 7 million grievances redressed.
    • Average redressal time for central ministries improved from 32 days (2021) to 19 days (Jan-June 2023).

Benchmarking Governance

• Assessing governance at state and district levels:
  • Good Governance Index (GGI) – 10 sectors, 58 indicators.
  • District Good Governance Index.
  • National e-Services Delivery Assessment (NeSDA).

Secretariat Reforms

• Initiatives to improve efficiency and decision-making:
  • Delayering and delegation of financial powers.
  • Adoption of e-office (89.66% adoption rate in June 2023).
  • Special Campaign 2.0 for file review, grievance redressal, and cleanliness.

Chintan Shivir

• Internal deliberations within ministries to improve governance models.

Civil Services Day

• Celebrated on April 21st to rededicate civil servants to public service.
• 2023 theme: “Viksit Bharat – Empowering Citizens and Reaching the Last Mile.”

Prime Minister’s Awards for Excellence in Public Administration

• Recognize innovative work by districts, governments, and organizations.
• 2022 award categories:
  • Promoting Swachh Jal (clean water).
  • Promoting Swastha Bharat (health and wellness).
  • Promoting quality education.
  • Holistic development through Aspirational District Programme.

Replication of Good Governance Practices

• National Good Governance Webinars to share award-winning initiatives.

National Conferences on e-Governance and National e-Governance Awards

• Annual conferences for collaboration and knowledge sharing.
• 25th National e-Governance Conference emphasized open digital platforms for affordable technology access.

Conclusion

• India has implemented various administrative reforms (2014-2023) to improve governance and public service delivery.

 

 

 Women Empowerment Recent Reforms

Importance of Women Empowerment

• Empowering women benefits entire generations, not just individuals.

Government Initiatives

• Focus on empowering women as equal partners in society.
• Addressing domestic and professional abuse, ensuring security.

Key Areas of Reform

• Combating Domestic Violence:
  • Legal frameworks, awareness campaigns, support services for survivors (helplines, safe houses, counseling).
• Ending Child Marriage:
  • Enforce laws, promote girls’ education, raise awareness about negative consequences.
• Political Empowerment:
  • Affirmative action policies (quotas) for women in decision-making.
  • Encourage parties to nominate women, provide leadership training, address systemic barriers.
• Economic Empowerment:
  • Promote equal pay, maternity leave, childcare, access to finance and entrepreneurship training.
  • Encourage women in male-dominated sectors, dismantle barriers to career advancement.
• Sexual and Reproductive Health and Rights:
  • Comprehensive sex education, family planning services, safe abortion services.
  • Invest in healthcare infrastructure, address stigmas to reduce unintended pregnancies and empower women.
• Land Rights:
  • Legislation for equal access to land, property rights, and inheritance.
  • Strengthen land tenure systems, provide legal assistance, promote awareness campaigns.
• Gender Budgeting:
  • Allocate resources to address women’s needs and challenges.
  • Implement transparent and accountable systems for progress.

Overall Goal

• Achieve gender equality through these reforms.