UPSC Key—29th December, 2023: Urban local bodies in India, Financial stability report, India and Qatar

Syllabus:

Preliminary Examination: Current events of national and international importance.

Mains Examination: General Studies II: Effect of policies and politics of developed and developing countries on India’s interests

Key Points to Ponder:

• What’s the ongoing story-In a first but important step bringing relief to the families of eight former Indian Navy personnel on the death row in Qatar, the appellate court there commuted the death sentence Thursday. The detailed order of the Qatar court is awaited, but the Government of India said that the sentences have been “reduced”.

• Who are these Indians, and what were they doing in Qatar?

• When were the men arrested by the Qatari authorities, and why?

• For Your Information-The men were arrested in August 2022. At the time, MEA spokesman Arindam Bagchi said that questions of charges of arrest “should be directed to the Qatari authorities”. The family members and MEA officials also said that Qatar had not informed them of the charges. Sources said the Indians had been working in their private capacity with Dahra Global to oversee the induction of Italian small stealth submarines U2I2. According to a report in the Financial Times at the time of the death sentences being announced, “A person briefed on the case confirmed… that the eight Indians had been charged with spying for Israel.” The men met India’s Ambassador in Doha in October 2022 and received limited access to relatives via phone calls. It was later learnt that they were undergoing solitary punishment. In March 2023, the last of multiple bail pleas filed for the veterans was rejected. The trial began later that month and on October 26, the death sentence was handed. External Affairs Minister S Jaishankar then met the family members of the sentenced men. In November, the MEA announced it had filed an appeal and that its legal team had details of the charges. The Indian ambassador in Doha also met them in prison on December 3. This consular access came days after Prime Minister Narendra Modi met Qatar’s Emir Sheikh Tamim bin Hamad Al-Thani on the sidelines of the COP28 summit in Dubai on December 1.

• What is the nature of the relationship between India and Qatar?

• How many Indians are based abroad?

• How many Indians are lodged in foreign prisons?

• Where are most Indian prisoners lodged?

• What happens when an Indian is imprisoned abroad?

• Is legal assistance provided?

• What other steps do they take?

• How many pardons or reduction of prison sentences have come through so far?

• Is there a mechanism for exchange of prisoners?

• How effective have these agreements proven?

Other Important Articles Covering the same topic:

📍Qatar commutes 8 former Indian Navy men’s death sentence: What has happened, why it matters for India

📍Qatar court commutes ex-Navy men’s death sentence: How many Indians are in jails abroad, what help they get

Two in 3 civic bodies post jump in property tax higher than 5-year GSDP growth rate

Syllabus:

Preliminary Examination: Economic and Social Development-Sustainable Development, Poverty, Inclusion, Demographics, Social Sector Initiatives, etc.

Mains Examination: General Studies III: Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment.

Key Points to Ponder:

• What’s the ongoing story- OVER THE PAST three years, a silent grassroots finance reform has been taking shape with at least 70 per cent of the total 4,900 urban local bodies in the country reporting an increase in property tax collection, The Indian Express has learnt.

• What is property tax?

• Is property tax collected by central government?

• Urban local bodies in India-Know in detail

• What are the urban local bodies?

• What are the functions of urban local bodies in India?

• What are the sources of revenue in urban local bodies?

• For Your Information-Urban local bodies had many revenue sources, but once these merged with the GST, it was the states which benefited, not municipalities. For local bodies, property tax is a big revenue source, but politics stalled any hike in tax rates. A carrot and stick approach, incentivising increase in tax rates with more funds, advocated by the Finance Commission three years ago, seems to be slowly bearing fruit. With over Rs 1 lakh crore in Central funding tied to property tax reform in the coming years, 3,086 ULBs across 22 states reported an increase in property tax collection in 2022-23 commensurate with their state’s five-year GSDP (Gross State Domestic Product) growth rate, sources in the Union Ministry of Housing and Urban Affairs (MoHUA) said. In fact, this is a criterion for municipalities to be eligible for funds. In total, the 15th Finance Commission had recommended Rs 1,21,055 crore for urban local bodies over five years ending 2025-26. So far, out of Rs 21,791 crore allocated for ULBs under the 15th Finance Commission for this financial year, Rs 5,705 crore has been given, MoHUA officials said.
Out of the 4,771 ULBs that report to the MoHUA, 3,417 ULBs registered an increase in property tax collection in 2022-2023 over the previous year as on December 20. This is for the first time that the Ministry, along with the non-profit group Jaanagraha, is collecting the annual audited accounts of all ULBs, standardising them to enable comparison, and digitising the records to make them public. This practice has evolved after the 15th Finance Commission’s recommendations in 2020 for devolutions to ULBs from 2021-2026. The conditions for accessing the funds get more stringent every year – starting with the requirement that states notify the floor rates of property tax, then submit their annual audit accounts showing property tax collection and finally, have an increase in collections. Among the cities which have reported an increase in collection are 40 out of the 50 cities that have a population over 1 million, including Mumbai, Chennai and Hyderabad. Delhi, Srinagar and Chandigarh are not part of the million-plus cities under MoHUA as they are in Union Territories. According to 15th Finance Commission Chairman NK Singh, property tax was one obvious way to make ULBs sustainable. “You cannot really have a viable third tier without, in the long run, financial sustainability on their own. You cannot genuinely have the devolution of the three Fs – functions, finance and functionaries, embedded in the Constitutional amendment, without their becoming financial entities,” he told The Indian Express. Before the Goods and Services Tax (GST) was implemented in 2017, the ULBs had multiple sources of revenue, many of which were merged with the GST. While states benefited from this, the ULBs did not, Singh pointed out. He said the commission held meetings with the ULBs in every state and recognised that there was “huge reluctance” on their part to increase property tax collection. On the impact of the exercise, Jannagraha CEO Srikanth Viswanathan said: “There has been a tremendous change in property tax reforms since 2020 as the amount of money at stake has never been this high – there is over Rs 1 lakh crore under the 15th Finance Commission, Rs 5,000 crore in the form of the credit worthiness grant under Special Assistance Scheme, Rs 50,000 crore of additional borrowing for states that was linked to property tax reform, and further incentives available under AMRUT.” According to him, state governments have played an important role. “There is leadership from the state governments as in many cases the state governments have to set the base rates. Individual mayors and municipal commissioners are also taking initiative to increase collections.” With a sample of 201 municipal corporations, an RBI report in November 2022 found that municipal corporations’ own revenue, including property tax, was 31-34 per cent of the total revenue from 2017-2018 to 2019-2020.

Other Important Articles Covering the same topic:

📍Local bodies can be allocated a portion of GST collections, says N K Singh

THE EDITORIAL PAGE

An AI for the people

Syllabus:

Preliminary Examination: Current events of national and international importance.

Mains Examination: General Studies III: Science and Technology- developments and their applications and effects in everyday life.

Key Points to Ponder:

• What’s the ongoing story- Anupam Guha Writes: 2023 was perceived by both industry leadership and the populace as one where artificial intelligence had a significant impact on social and economic relations. This was, in particular, due to the apparent success of large language models, a family of generative models, in solving complex tasks, and if the claims of organisations like OpenAI are to be believed, making progress towards artificial general intelligence (AGI). Whether this perception is accurate is a debate for researchers — as of now, AGI is speculation. However, the intensity of how capital reacted to the sentiment around AI in 2023 itself bears comment.

• AI and Year 2023-Know in detail

• ‘Around this point, both industry and state actors started to verbalise what had been insisted on for a decade by AI academics, policy scholars, and social scientists, but was being soundly ignored by the industry’-Discuss

• ‘At the end of 2023, we observe that not only are there significant challenges to AI policy’-Comment

• “AI is already everywhere”-Elaborate

Other Important Articles Covering the same topic:

📍When real gets the power of artificial

THE IDEAS PAGE

She is going places

Syllabus:

Preliminary Examination: Indian Polity and Governance-Constitution, Political System, Panchayati Raj, Public Policy, Rights Issues, etc

Mains Examination: 

• General Studies I: Role of women and women’s organization

• General Studies II: Parliament and State legislatures—structure, functioning, conduct of business, powers & privileges and issues arising out of these.

Key Points to Ponder:

• What’s the ongoing story-Shazia Ilmi Writes: In a special session of Parliament in September, after a wait of nearly three decades, the Nari Shakti Vandan Adhiniyam was passed, making possible a more women-friendly House. It envisaged reservation of one-third of the seats in Lok Sabha and state assemblies for women. After presidential assent on September 29, it became law.

• Women’s Reservation Bill 2023 [The Constitution (One Hundred Twenty-Eighth Amendment) Bill, 2023]-what are the key provisions?

• The Constitution (One Hundred Twenty-Eighth Amendment) Bill, 2023 seeks to reserve how many seats for women?

• Will the reservation of seats be permanent or limited to a set time period?

• The Bill will be brought in the ongoing session but there are many ifs and buts-What are those?

• What is the historical context surrounding the implementation of reservations for women in politics in India?

• What are the issues and challenges with the bill?

• Quota within Quota and Women’s Reservation Bill-Connect the dots

• What Global Gender Gap Report 2022 says about women Political Empowerment in India?

• What is the current state of women’s representation in politics in India?

• One of the most remarkable experiments in building inclusive democratic institutions has been the attempt to improve the representation of women in local government in India-what do you know about that?

• The 73rd amendment to the Indian constitution, passed in 1992, mandated some seats etc-can you recall and tell what was that all about?

• The 73rd amendment to the Indian constitution was an successful attempt for inclusive participation of women in politics-comment

• Why is women’s participation in politics important?

Other Important Articles Covering the same topic:

📍Power is a He

EXPLAINED

Land deals in London, Faridabad: ED’s claims about Vadra ‘associate’

Syllabus:

Preliminary Examination: Current events of national and international importance.

Mains Examination: General Studies III: Money-laundering and its prevention.

Key Points to Ponder:

• What’s the ongoing story- A special court in New Delhi on December 22 took cognisance of a prosecution complaint filed by the Enforcement Directorate (ED) against CC Thampi, an alleged aide of Sonia Gandhi’s son-in-law Robert Vadra, in connection with its money laundering probe against fugitive arms dealer Sanjay Bhandari.

• What are ED’s allegations?

• What is the London property matter?

• For Your Information-In 2018, the ED raided premises associated with Skylight Hospitality, a firm linked to Robert Vadra, in connection with a case of money laundering it had registered against Bhandari for holding undisclosed assets abroad.
Soon, Vadra was questioned by the agency on multiple occasions. According to the ED, the matter was linked to a Petroleum Ministry deal in 2008, under the UPA government, in which alleged kickbacks flowed into a UK-based company named Santech, of which Bhandari was Director. The ED told a court then that Bhandari bought a property at Bryanston Square from the money that flowed into the company. The money was allegedly routed through another company named Vortex, the ED had told the court. The ED claimed that shortly after the Petroleum Ministry deal, Santech received close to US $49.9 lakh in its account via a single transaction on June 13, 2009. ED has claimed that of this money, 1.9 million GBP (British pound sterling) were siphoned off into Vortex and then used by Bhandari to buy the Brynston Square property, which is currently held by Skylight FZE, which shares its name with Skylight Hospitality. Skylight FZE is promoted by CC Thampi, who was arrested by the ED in the case in 2020. The ED has claimed that the property was sold to Thampi in 2010 at the same price despite carrying out renovations of over 65,000 GBP.
Vadra had earlier denied any wrongdoing and having any connection with the London properties.

• What is the Faridabad property matter?

• What is the petroleum ministry deal?

• What are the other cases against Vadra?

Other Important Articles Covering the same topic:

📍Robert Vadra ‘renovated and stayed’ at London property which is proceeds of crime: ED

ECONOMY

Das: Economy resilient, RBI to act decisively to prevent risk build-up

Syllabus:

Preliminary Examination: Economic and Social Development-Sustainable Development, Poverty, Inclusion, Demographics, Social Sector Initiatives, etc.

Mains Examination: General Studies III: Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment.

Key Points to Ponder:

• What’s the ongoing story-The Indian economy and the domestic financial system remain resilient, supported by strong macroeconomic fundamentals, healthy balance sheets of financial institutions, moderating inflation, an improving external sector position and continuing fiscal consolidation, the Reserve Bank of India (RBI) has said in a report.

• What is a financial stability report?

• Financial stability report-What are the key takeaways?

• For Your Information-According to the FSR, macro stress tests for credit risk reveal that banks would be able to comply with minimum capital requirements, with the system-level capital to risk-weighted assets ratio (CRAR) in September 2024 projected at 14.8 per cent, 13.5 per cent and 12.2 per cent, respectively, under baseline, medium and severe stress scenarios. Under the baseline scenario, the GNPA ratio of all banks may improve to 3.1 per cent by September 2024 from the current level of 3.2 per cent. If the macroeconomic environment worsens to a medium or a severe stress scenario, the ratio may rise to 3.6 per cent and 4.4 per cent, respectively, the FSR said. At the bank group level, the GNPA ratios of PSU banks may swell from 4.4 per cent in September 2023 to 5.1 per cent in September 2024, whereas it may go up from 2.1 per cent to 3.6 per cent for PVBs and from 1.6 per cent to 1.8 per cent for FBs under the severe stress scenario. He said India is one of the fastest growing major economies in the world with a rising potential growth profile. “The sharp rebound in growth is underpinned by sound macroeconomic fundamentals, robust domestic demand and prudent public policies,” Das said. Achieving durable price stability, ensuring medium-term debt sustainability, further strengthening financial sector resilience, creating new growth opportunities and promoting inclusive and green growth remain key policy priorities, the Governor said. However, the global economy faces multiple challenges: prospects of slowing growth; large public debt; increasing economic fragmentation; and prolonging geopolitical conflicts, he said. The health of the Indian financial system is steadily improving on the back of multiyear high earnings, low level of stressed assets, and strong capital and liquidity buffers with financial institutions. “We have made significant progress since the onset of the Covid-19 pandemic in steering the economy and the financial system. Now is the time to consolidate these gains and enable the economy to move to a higher growth trajectory with macroeconomic and financial stability,” Das said. The improvement in asset quality of banks has been broad-based, the FSR said. The GNPA ratio of the agriculture sector remains high at 7 per cent. At an overall level, asset quality in the personal loans segment has improved, although there has been a marginal impairment in credit card receivables. Within the industrial sector, asset quality improved across all major sub-sectors barring infrastructure (other than electricity) and petroleum.

Other Important Articles Covering the same topic:

📍Bad assets of banks decline multi-year low to 0.8% in Sept: RBI report

NYT vs OpenAI, Microsoft: The debate on AI, copyright

Syllabus:

Preliminary Examination: Current events of national and international importance.

Mains Examination: General Studies III: Awareness in the fields of IT, Space, Computers, robotics, nano-technology, bio-technology and issues relating to intellectual property rights.

Key Points to Ponder:

• What’s the ongoing story- The New York Times (NYT) has become the first major news publisher to sue OpenAI and Microsoft, the creators of ChatGPT and other popular artificial intelligence (AI) platforms, citing “unlawful” use of copyrighted content.

• What is NYT’s main contention against OpenAI and Microsoft?

• For Your Information-The lawsuit, filed in the Federal District Court in Manhattan, contends that millions of articles published by the publication were used to train automated chatbots which now compete with the news outlet as a source of reliable information. NYT has reported that it approached Microsoft and OpenAI in April to raise concerns about the use of its intellectual property and explore “an amicable resolution,” possibly involving a commercial agreement and “technological guardrails” around generative AI products. But the talks had not produced a resolution, the publication said.
The publication also alleges that OpenAI and Microsoft’s large language models, which power ChatGPT and Copilot, “can generate output that recites Times content verbatim, closely summarises it, and mimics its expressive style.” This “undermine[s] and damage[s]” the Times’ relationship with readers, while also depriving it of “subscription, licensing, advertising, and affiliate revenue.” The “unlawful use” of the paper’s “copyrighted news articles, in-depth investigations, opinion pieces, reviews, how-to guides, and more” to create artificial intelligence products “threatens The Times’s ability to provide that service”, the lawsuit says.
The lawsuit highlights the potential damage to The Times’s brand through A.I. “hallucination”, a phenomenon in which chatbots respond with false information that is then wrongly attributed to a source. In August, NYT had blocked OpenAI’s web crawler, preventing the company from using content from the publication to train its AI models.

• AI and IP rights-Connect the dots

Other Important Articles Covering the same topic:

📍New York Times sues OpenAI, Microsoft over use of its stories to train chatbots

For any queries and feedback, contact priya.shukla@indianexpress.com
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