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Amid the debate over freebies touched off by Prime Minister Narendra Modi’s “revadi culture” jibe with the Supreme Court and the Election Commission stepping into it, now the Comptroller and Auditor General (CAG) is weighing in as well.
The CAG is exploring how to devise parameters that will “red-flag” the burden of subsidies, off-budget borrowings, discounts and write-offs which may pose challenges to the economy of states.
The board, headed by CAG Girish Chandra Murmu, provides “suggestions” to the body on matters relating to “audit, including coverage, scope and prioritization of audits.”
The 21-member board, headed by Murmu, has 10 external members: Ashok Gulati, agriculture economist; Dr Devi Prasad Shetty, Chairman and Executive Director, Narayana Health; H K Dash, retired IAS officer; Makarand R. Paranjape, academician; Manish Sabharwal, Chairman, Team Lease Services; Maroof Raza, retired Indian Army officer; Nitin Desai, fellow, TERI; Ravindra H. Dholakia, economist; Suresh N Patel, Central Vigilance Commissioner; and S M Vijayanand, retired IAS Officer.
The CAG’s suggestion comes after the EC asked political parties to spell out ways and means of raising additional resources to finance their promises and their fiscal impact. To that effect, it prescribed a standardised disclosure proforma. The Supreme Court is also hearing petitions on freebies.
Arguing that most of the states have become “revenue deficit” post pandemic, sources said the meeting discussed how such states are not able to manage their expenditure from their revenue resources.
The top audit body is also looking at the repayment liabilities of states in the next six years. “We have seen most of the states will have a real issue — repayment.
Whatever they have borrowed earlier, the repayment burden is so much that half of their budget will go, in many places, in only repaying. That is not sustainable.
The CAG has been highlighting issues related to subsidies and other expenditures in the states’ budgets but in the proposed mechanism it will also focus on off-budget borrowings, discounts and write-offs.
We are going very strictly from the current year… We are saying that this is not sustainable. Whatever you are doing, your financial management will go haywire. You will not be able to sustain this and the state will have a problem.
For instance, interest subvention on loans, money given to discoms, loan waiver, are among some elements that are captured by the CAG “occasionally but not systematically.
Express Network
ISRO’s dedicated commercial satellite mission lifts off (Page no. 4)
(GS Paper 3, Science and Tech)
The heaviest rocket of the Indian Space Research Organisation — LVM3-M2/OneWeb India-1 blasted off from this spaceport on Sunday to place 36 broadband communication satellites into the Low Earth Orbit (LEO) for a UK-based customer.
NewSpace India Limited (NSIL), a central public sector enterprise under the Department of Space, had earlier signed two launch service contracts with the London-headquartered Network Access Associated Limited (OneWeb) for launching OneWeb LEO satellites on board ISRO’s LVM3.
The mission assumes significance as this was LVM3’s maiden commercial mission and also NSIL’s first with the said launch vehicle.
OneWeb is a private satellite communications company, in which India’s Bharti Enterprises is a major investor and shareholder.
The vehicle is also dubbed as one of the heaviest for its ability to carry satellites upto 8,000 kg. The mission assumes significance as this was LVM3’s maiden commercial mission and also NSIL’s first with the said launch vehicle.
According to ISRO, the mission has the heaviest payloads with 36 satellites of OneWeb, becoming the first Indian rocket with a payload of 5,796 kg.
The launch is also first for LVM3-M2 to place the satellites in the Low Earth Orbit (up to 1,200 kms above the earth) unlike Geosynchronous Transfer Orbit (GTO).
ISRO scientists have rechristened the launch vehicle its present name from GSLV-MKK III as the newest rocket is capable of launching 4,000 kilogram class of satellites into GTO and 8,000 kgs of payloads into LEO.
LVM3-M2 is a three-stage launch vehicle consisting of two solid propellant S200 strap-ons on its sides and core stage comprising L110 liquid stage and C25 cryogenic stage.
OneWeb Ltd is a global communication network powered from space, enabling internet connectivity for governments and businesses.
The City
3 factors that could come together to make Delhi’s air quality ‘severe’ (Page no. 6)
(GS Paper 3, Environment)
Additional firecracker emissions on Diwali day could push the air quality into the ‘severe’ category on Monday and the day after, according to a forecast issued by SAFAR (System of Air Quality and Weather Forecasting and Research).
Three factors that are crucial in determining air quality around this time of the year are likely to “act together” resulting in deterioration of air quality — wind speed and direction that favours transport of stubble burning smoke from the northwest, calm local weather conditions that trap pollutants, and firecrackers, if any.
The contribution of stubble burning-related emissions in Delhi is likely to increase from October 24 onwards, the forecast indicates.
The forecast has been issued considering current fire counts and trend recorded over past years, as per Gufran Beig, founder project director, SAFAR.
According to the forecast, “even a smaller increase in additional local emissions due to firecrackers is likely to have a significant deterioration impact during October 24-25 and may put AQI in the severe category on October 25 if stubble fire is not controlled.”
Since stubble burning fire counts have remained low so far and transport level winds have been slow and unfavourable for carrying the smoke into Delhi, contribution of crop-residue burning to Delhi’s air has remained low — below 5% — so far this season. However, the fire count in Punjab has been on the rise.
Punjab recorded the highest single-day fire count of 582 so far this harvest season, according to the Indian Agricultural Research Institute’s monitoring system based on NASA satellite data.
Transport level winds from Punjab, Haryana and Western Uttar Pradesh towards Delhi are set to pick up from October 24 onwards, as per the forecast, and the contribution of stubble burning to PM 2.5 levels in Delhi could rise from around 5% on October 23 to 8% on October 24, and 16% to 18% on October 25.
To add to this, calm conditions and little ventilation are expected over the next three days, making dispersion of pollutants difficult. Stable conditions trap pollutants near the surface.
Even if there are no firecracker emissions, the city’s PM 2.5 level could be in the ‘very poor’ category on Diwali day, the forecast says. However, if weather conditions bring firecracker-related emissions from “surrounding regions of Delhi” and there are zero firecracker emissions in Delhi, the AQI could still hit the lower end of the ‘severe’ category on October 25 with around 15% to 18% of contribution from stubble burning.
If there are firecracker emissions in Delhi as well similar to what was seen last year, the AQI is set to be in the ‘severe’ category on Diwali day and the day after, according to the forecast.
Being added that the forecast has been issued without factoring in any measures that may be imposed to “put a break” on the way that pollution levels are rising. The forecast also mentions that the impact of control measures has not been factored in and that if fire counts reduce, AQI may improve.
The World
China may ramp up nuclear arsenal: Experts (Page no. 13)
(GS Paper 2, International Relation)
China is expected to boost its nuclear arsenal after President Xi Jinping’s remarks at the key Congress of the ruling Communist Party for the first time that Beijing will establish strong strategic deterrence.
We will establish a strong system of strategic deterrence,” Xi, who is widely expected to be endorsed for a record third five-year term by the Congress of the CPC.
Xi, who also heads the Central Military Commission (CMC) – the overall high command of the two million-strong People’s Liberation Army (PLA) – devoted a special section to the military titled Achieving the Central Goal of the PLA and Further Modernising National Defence and Military.
He also called for accelerated development of unmanned, intelligent combat capabilities, promotion of coordinated development and application of the network information system.
There was no mention of the concept of strategic deterrence in Xi’s last party Congress report in 2017 or in his historical resolution last year.
But the country’s 14th five-year plan report released last year emphasised the need to “build a high-standard strategic deterrence”, the Hong Kong-based South China Morning Post reported.
Analysts said Xi’s mention indicated China would improve its nuclear deterrence capability amid its increasing rivalry with the US, which is a major nuclear power.
Song Zhongping, a former People’s Liberation Army instructor, said the statement meant China would “strengthen its development of strategic nuclear forces” to safeguard its national security.
Song said the PLA must strengthen its “nuclear triad” forces – its combination of ground-based intercontinental ballistic missiles (ICBMs), submarine-launched missiles and air-launched weapons – as well as its second-nuclear strike capability to respond to a nuclear attack.
All of these require the PLA to have a modern nuclear-armed force … and to moderately increase the nuclear arsenal.
The US has warned of the expansion of China’s nuclear weapons in the past, with a report released by the Pentagon in November estimating China could have up to 700 deliverable nuclear warheads by 2027 and at least 1,000 by 2030.
Song said the need for strong strategic deterrence had arisen as the US had challenged the bottom line of both China and Russia over the Taiwan issue and the Ukraine war, and “only when China has a strong nuclear capability can it effectively safeguard our national security”.
Economy
Energy prices a concern but economy on strong footing, says FinMin report (Page no. 14)
(GS Paper 3, Economy)
The finance ministry said global energy prices and supplies continue to remain sources of concern and geopolitical conflicts may yet intensify, reigniting supply-chain pressures that have eased recently.
If so, inflation may yet see a resurgence rather than a decline in 2023,” the department of economic affairs said in its report for September, as it cautioned against any premature celebration. Retail inflation in September hit a five-month high of 7.41%.
Nevertheless, it asserted that growth and stability concerns for India are less than that of the world at large halfway into FY23 and the country’s medium-term growth rate is likely higher than 6%.
According to the International Monetary Fund, India’s real growth could be 6.8% in FY23 and 6.1% in FY24, way above the G-20 levels.
The report said growth and stability concerns for India are less than that of the world at large halfway into FY23 and the country’s medium-term growth rate is likely higher than 6%. According to the International Monetary Fund, India’s real growth could be 6.8% in FY23 and 6.1% in FY24.
A long-awaited domestic investment cycle that had started will accelerate once current external shocks – geopolitical conflicts and monetary tightening – fade.
Corporate and bank balance sheets in India are ready for it,” the ministry said in the report. Further, recent developments elsewhere in the region further bolster the relative attractiveness of India as an investment destination.
Economic activity, as measured by the PMI composite index, was higher for India at 56.7 in the first half of this fiscal, way above the global level of 51.
Retail inflation for India in the first half of FY23 stood at 7.2%, lower than the world inflation of 8%, as represented by the median inflation of major economies, the report said.
Similarly, the rupee weakened by 5.4% against the greenback during this period, much lower than the depreciation of 8.9% of six major currencies in the dollar index.
The government’s thrust on the productive capital expenditure remained uninterrupted this fiscal, as capex until August was 46.8% higher than a year earlier.
The ratio of revenue expenditure to capital outlay, in fact, dropped to 4.5 from 6.4 in the last year, reflecting an improvement in the quality of spending, according to the report.
Rising capital expenditure of the Centre also induced capital formation in the private sector, mirrored in the “robust performance” of the manufacturing industry in the last six months, the report added.
Business sentiment also rose as input cost inflation fell to a 23-months low on the back of declining prices of industrial metals, leading to an increase in profits of the private corporate sector, it said.