Headlines

Uniform Civil Code in Uttarakhand - Page No.1 , GS 2

Union government’s reins on financial transfers to States - Page No.6 , GS 2
Mint Street musings - Page No.6 , GS 3
The severe erosion of fiscal federalism - Page No.7 , GS 2
Maldives accelerates plan to lower dependence on India - Page No.7 , GS 2
Lok Sabha passes anti-cheating Bill - Page No.10 , GS 2
Text and Context - Understanding the delimitation exercise

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 Pg no. 1 GS 2
Uniform Civil Code in Uttarakhand - Page No.1 , GS 2
Uniform Civil Code (UCC)
• News: The Uttarakhand Assembly is likely to pass the State’s
Uniform Civil Code (UCC) Bill during its four-day-long session this
week.

• A State-appointed panel constituted to draft the UCC submitted

its final report to Chief Minister Pushkar Singh Dhami on February
2.

• The report has also been passed by the State Cabinet.

• The introduction of a UCC was a key poll promise of the BJP in the
run-up to the 2022 elections in Uttarakhand.
What does a UCC aim to do?
• A Uniform Civil Code (UCC) aims to establish a consistent set of
laws, replacing diverse personal laws of various religions,
particularly in areas such as marriage, divorce, adoption, and
inheritance.

• The foundation for UCC is laid in Article 44 of the Constitution,

part of the Directive Principles of State Policy. Although not
enforceable, it plays a crucial role in governance.

• During the Constituent Assembly debates, the inclusion of UCC as

a fundamental right or a directive principle sparked intense
discussions.
• Opponents feared UCC might dilute the rights of religious
minorities and erode India's diverse cultural and religious fabric.

• Concerns were raised about its potential conflict with Article 19

(now Article 25) that guarantees the fundamental right to freedom
of religion, subject to reasonable restrictions.

Benefits Highlighted:
• Proponents, like K.M. Munshi, argued for UCC, emphasizing
benefits such as promoting equality for women and eliminating
discriminatory practices entrenched in personal laws.
• Dr. B.R. Ambedkar advocated for a "purely voluntary"
approach to UCC during its initial stages, suggesting that its
implementation should be based on consent rather than
compulsion.

• Constitutional Decision:
• The matter was resolved by a 5:4 majority vote, deciding that
the establishment of a UCC should not be classified under
fundamental rights, settling the constitutional stance on the
issue.
What about the Uttarakhand UCC?
• In June 2022, the Uttarakhand government constituted an expert
committee headed by former Supreme Court judge Justice
Ranjana Prakash Desai to examine ways for the implementation of
a UCC.

• The move followed Mr. Dhami’s promise that he would implement

a UCC in the State if re-elected.

• The committee was supposed to submit its report in November

2022 but the deadline was extended multiple times despite the
Chief Minister announcing in June last year that a draft UCC was
ready.
What changes can be expected?
• The draft Uniform Civil Code (UCC) emphasizes gender equality,
particularly in matters related to inheritance, with provisions
treating men and women equally.

• The UCC is set to eliminate practices like polygamy, iddat

(mandatory waiting period for women after Muslim marriage
dissolution), and triple talaq governing marriage and divorce.

Equal Property Share for Muslim Women:

• The proposed UCC is expected to extend equal property shares to
Muslim women, surpassing the current 25% share dictated by
Muslim personal law.
What changes can be expected?
• While addressing gender issues, the draft UCC maintains the minimum age
for marriage at 18 for women and 21 for men.

• The UCC is designed to cover various aspects, including divorce, marriage

registrations, adoption, and provisions for social security for ageing parents.

• The committee reportedly recommends the mandatory registration of live-in

relationships under the proposed UCC.

• According to Mr. Dhami, the UCC is not intended to appease any specific
community but aims to empower all sections of society.

• Assurances are given that after implementation, reservation, marital rights,

customs, etc., will not be affected.
What has the Supreme Court said?
• Over the years, the Supreme Court has deliberated upon the UCC
in several judgments, but refused to issue any directive to the
government since law-making falls within the exclusive domain of
Parliament.

• In its 1985 judgment in the Shah Bano Begum case, the Court
observed that “it is a matter of regret that Article 44 has remained
a dead letter” and called for its implementation.

• Such a demand was reiterated in subsequent cases such as Sarla

Mudgal versus Union of India (1995), and John Vallamattom versus
Union of India (2003) among others.
What has the Supreme Court said?
• In January last year, the Court dismissed a petition challenging the
Uttarakhand government’s move to set up an expert committee on the UCC.

• The court emphasized that Article 162 permits such actions, citing Entry 5 of
the Concurrent List in the Seventh Schedule of the Constitution.

Article 162 Powers:

• Article 162 indicates that the executive power of a State extends to matters
within the legislative powers of the State.

• Entry 5 of the Concurrent List encompasses “marriage and divorce; infants

and minors; adoption; wills, intestacy, and succession; joint family and partition;
all matters in respect of which parties in judicial proceedings were
immediately before the commencement of this Constitution subject to their
personal law.”
 Pg no. 6 GS 2
Union government’s reins on financial transfers to
States - Page No.6 , GS 2
• Ever since the start of the Fourteenth Finance Commission award period (2015-16),
the Union government has been reducing financial transfers to States.

• This is particularly strange given that the Fourteenth Finance Commission

recommended devolving 42% of Union tax revenues to States, which is a clean 10
percentage points increase over the 13th Finance Commission’s recommendation.

• The Fifteenth Finance Commission retained this recommendation of 41%, excluding

the devolution to Jammu and Kashmir (J&K) and Ladakh, which were recategorised
as Union Territories.

• If we include the shares of J&K and Ladakh, it should be 42%. The Union government
not only reduced the financial transfers to States but also increased its own total
revenue to increase its discretionary expenditure.

• The discretionary expenditures of the Union government are not being routed through
the States’ Budgets, and, therefore, can impact different States in different ways.
• The Union government is increasing tax collection under cess and
surcharge categories mainly to implement its own schemes in specific
sectors, and at the same time, the revenues so raised need not be shared
with the States.
 Pg no. 6 GS 3

Mint Street musings - Page No.6 , GS 3

Monetary Policy Committee
News:
• The RBI's six-member MPC is scheduled to meet from February
6 to 8.

• It's anticipated that the MPC will maintain the repo rate, its key
policy rate, at 6.5%.

• The decision to keep the repo rate unchanged aims to meet the
4% consumer price-based inflation (CPI) target.

• The MPC is likely to retain the monetary policy stance as

'withdrawal of accommodation'.
What is Repo rate ?
• Repo rate, or repurchase rate, is the rate at which the central bank (RBI) lends
money to commercial banks for short-term fund requirements to maintain
liquidity and control inflation.

Functioning of Repo Rate:

• Commercial banks seek short-term funds from the RBI during financial crunches.
• RBI charges interest on the funds lent to commercial banks, known as the repo
rate.
• The transaction involves commercial banks offering securities such as Treasury
Bills to the RBI in exchange for short-term funds, agreeing to repurchase the
securities at a predetermined price.

Reverse Repo Rate:The reverse repo rate is the opposite of the repo rate,
representing the rate at which the RBI borrows money from banks in the short term.
Impact of Repo Rate on Economy:
• Repo rate is a crucial tool in the nation's monetary policy, used to
regulate liquidity, inflation, and money supply. It influences
borrowing patterns of banks.

Effect on Borrowing Patterns:

• Higher repo rates result in higher borrowing costs for banks,

leading to reduced borrowing and investment activities during
times of high inflation.

• Lower repo rates facilitate increased borrowing by businesses for

investment purposes, thereby boosting money supply and
economic growth.
Impact of Repo Rate on Economy:
• During periods of high inflation, RBI increases the repo rate
to limit borrowing and investment, curbing inflationary
pressures.

• To stimulate economic growth and increase liquidity, RBI

lowers the repo rate, encouraging borrowing and investment
by businesses.
The three stances of monetary policy are:
Accommodative Stance:

• This stance is adopted when the central bank aims to

stimulate economic growth and increase liquidity in the
financial system.

• It involves lowering interest rates and implementing other

expansionary measures to encourage borrowing, investment,
and consumer spending.
The three stances of monetary policy are:
Neutral Stance:

• A neutral stance indicates that the central bank's monetary

policy is balanced and neither expansionary nor
contractionary.

• In this stance, the central bank maintains stability in interest

rates and monetary policy measures to support sustainable
economic growth while keeping inflation in check.
The three stances of monetary policy are:
Hawkish Stance:

• A hawkish stance is characterized by a more aggressive

approach to monetary policy, aimed at controlling inflation
and preventing excessive economic growth.

• It involves raising interest rates and tightening monetary

policy to curb inflationary pressures, even if it means
slowing down economic activity.
Monetary Policy Committee
• The Monetary Policy Committee (MPC) is formed by the Central
Government and led by the Governor of the Reserve Bank of India (RBI).

• Objective: The primary goal of the MPC is to set the benchmark policy
interest rate (repo rate) to control inflation within a specified target level.

• Before the establishment of the MPC, interest rate decisions were made
solely by the RBI Governor. The MPC brings transparency and
accountability to monetary policy decisions.

• The MPC meets at least four times a year to review monetary policy.

• After each meeting, the monetary policy decisions are published, with each
member of the committee explaining their opinions.
Monetary Policy Committee
• Monetary policy regulates the supply of money in the economy. It
adjusts inflation rates and interest rates to maintain price stability
and predictable exchange rates.

• The Reserve Bank of India, along with the central government,

controls monetary policy under the Reserve Bank of India Act,
1934.

• Contractionary and Expansionary Policies: Monetary policy can be

contractionary or expansionary.

• A rapid increase in the money supply is expansionary, while a

slower increase or decrease is contractionary.
Structure of the Monetary Policy Committee
• The Monetary Policy Committee (MPC) was established under Section 45ZB of the RBI
Act of 1934 by the Central Government.

• The inaugural meeting of the MPC took place on October 3, 2016, in Mumbai.

• The committee sets the policy interest rate necessary to achieve the inflation target.

• MPC is mandated to convene at least four times annually.

• A minimum of four members is needed to constitute a quorum for MPC meetings.

• Each MPC member holds one vote, and in case of a tie, the Governor has a second or
casting vote

Every six months, the Reserve Bank publishes a document named the Monetary Policy
Report. This report elaborates on the sources and forecasts of inflation for the upcoming 6-
18 months.
 Pg no. 7 GS 2
The severe erosion of fiscal federalism - Page No.7 ,
GS 2
• Kerala has moved the Supreme Court contending that the Centre’s
imposition of a Net Borrowing Ceiling (NBC) on the State, which limits
borrowings from all sources, violates Article 293 of the Constitution.

What is net borrowing ceiling?

• The NBC limits the borrowings of States from all sources including
open market borrowings. The Centre has decided to deduct liabilities
arising from the public account of the States to arrive at the NBC.

• In addition, borrowings by state-owned enterprises, where the

principal and/or interest are serviced out of the Budget, or through
assignment of taxes or cess or any other State revenue, are also
deducted from the NBC.
• Kerala is particularly agitated by the inclusion of debt taken by state-owned
enterprises as the State’s own debt. Major infrastructure projects initiated by the
State government are funded by the government statutory body called the Kerala
Infrastructure Investment Fund Board (KIIFB), primarily through extra-budgetary
borrowings.

• Since the debt of KIIFB is now included in the NBC, the State government claims
that it is not even able to fund pensions and meet expenses for welfare schemes.

• According to Article 293(3) of the Constitution, the State has to obtain the
consent of the Centre to raise ‘any loan’, if ‘any part of the previous loan’
extended by the Centre is outstanding. The imposition of the NBC is done by
invoking the powers of the Centre under Article 293(3).

• Parliament does not have the power to legislate upon the ‘Public Debt of the
State’ as this finds place in Entry 43 of the State List of the Constitution.
Therefore, the power to make laws on, administer and determine aspects of the
public debt of the State falls squarely on the State Legislature.
• The Kerala Fiscal Responsibility Act, 2003, which is enacted by the State
Legislature, spells out the fiscal deficit targets for the State. It says that
Kerala shall reduce the fiscal deficit to 3% of the GSDP by 2025-2026.
When a State Act provides for budget management and fiscal discipline, it
is not desirable to have external supervision on the finances of the State
by the Centre.

• Under Article 202 of the Constitution, it is the State government that is

tasked with determining the revenue and receipts and corresponding
expenditure and with presenting the Budget of the State before the
Legislative Assembly.

• Budget management of the State is the discretion of the State

government.
 Pg no. 7 GS 2

Maldives accelerates plan to lower dependence on

India - Page No.7 , GS 2
• Just a few days after tensions between the Maldives and India flared up,
Mr. Muizzu visited China, met with Chinese President Xi Jinping, and
appealed to Chinese tourists to visit his nation in large numbers and
reclaim the top spot in tourist arrivals, which they once held.

• While the number of Indian tourists visiting the Maldives has declined
marginally, Chinese tourists have swifty filled this gap, resulting in an
overall increase in tourist inflows.

• Mr. Muizzu and Mr. Xi signed key agreements, including agricultural

schemes that would “end its [Maldives’] dependence on one country for
imported staple foods such as rice, sugar, and flour,” by growing them
locally. Currently, the Maldives relies heavily on India for a number of
products.
• The Maldives imports over 95% of its granite, 40% of its steel bars and
coils, over 30% of tubes/pipes, electric motors and cement, 65% of flat-
rolled iron and stainless steel sheets, and over 50% of bulldozers from
India (Chart 3).

• Moreover, it sources over 80% of rice, 60% of eggs, close to 30% of cattle
meat, 50% of onions, melons and nuts, 25% of wheat, over 45% of
crabs/shrimp/prawns and cabbages, and 40% of tomatoes from India.
Essentially, the tourism boom in the Maldives — from food to stay —
relies heavily on the supply of raw materials from India.

• India exports 70% of its cabbages/cauliflowers, over 20% of eggs, over

10% of its melons and live animals and nuts to the Maldives. The
archipelago’s key agreements with China after the fallout with India
threatens this mutually beneficial relationship, and gives China more
sway in the Indian Ocean region.
 Pg no. 10 GS 2

Lok Sabha passes anti-cheating Bill - Page No.10 ,

GS 2
Bill to prevent Unfair means in Public Examinations introduced
News:
• The Public Examinations (Prevention of Unfair Means) Bill, 2024, was
introduced in Lok Sabha on Monday (February 5).

• The Bill aims to prevent “unfair means” in order to “bring greater

transparency, fairness and credibility to the public examinations
system”.
What is meant by the use of “unfair means” in an examination?
• Section 3 of the Bill lists at least 15 actions that amount to using unfair
means in public examinations “for monetary or wrongful gain”.

These acts include:

• Leakage of question papers or answer keys.
• Colluding in the leakage of question papers or answer keys.
• Accessing or taking possession of question papers or Optical Mark
Recognition (OMR) response sheets without authority.
• Tampering with answer sheets, including OMR response sheets.
• Providing solutions to one or more questions by any unauthorized person
during a public examination.
• Directly or indirectly assisting a candidate in a public examination.
• Tampering with any document necessary for short-listing of candidates or
finalizing the merit or rank of a candidate.
• Tampering with computer networks, resources, or systems.
• Creation of fake websites.
• Conducting fake examinations.
• Issuing fake admit cards or offer letters to cheat or for monetary gain.
• Any act involving tampering with or falsifying examination materials or
records.
• Using unauthorized electronic devices or aids during an examination.
• Communicating with other candidates during an examination to share
answers or information.
• Any other action deemed to be unfair means in the context of public
examinations.
Which exams are “public examinations” as defined in the Bill?
• Definition of Public Examination: Under Section 2(k) of the Bill, a
public examination is defined as any examination conducted by a
public examination authority listed in the Bill's Schedule or any other
authority notified by the Central Government.

Designated Public Examination Authorities: The Schedule includes five

public examination authorities:
• Union Public Service Commission (UPSC)
• Staff Selection Commission (SSC)
• Railway Recruitment Boards (RRBs)
• Institute of Banking Personnel Selection (IBPS)
• National Testing Agency (NTA)
Which exams are “public examinations” as defined in the Bill?
• These authorities conduct various examinations for recruitment
or admissions, such as Civil Services Examination, Combined
Defence Services Examination, Railway recruitment, banking
exams, and national-level entrance tests like JEE (Main) and NEET-
UG.

• Apart from designated authorities, the Bill extends to all Ministries

or Departments of the Central Government and their attached
and subordinate offices involved in staff recruitment.

• The Central Government has the discretion to add new

examination authorities to the Schedule through notification as
needed.
What punishment does the proposed law provide for violations?
• Under Section 10(2), a service provider who is engaged to provide
“support of any computer resource or any material, by whatever
name it may be called” for the conduct of the examination can be
fined up to Rs 1 crore, along with other penalties.

• The Bill provides for harsher punishment in cases of organised

paper leaks, where “organised crime” is defined as unlawful activity
by a group of persons colluding in a conspiracy “to pursue or
promote a shared interest for wrongful gain in respect of a public
examination”.
Why has the government brought this Bill?
• The government introduced the Bill due to the widespread issue of
question paper leaks in recruitment exams nationwide in recent
years.

• Extent of Problem: Investigative reports revealed 48 instances of

paper leaks in 16 states over the last five years, affecting around
1.51 crore applicants for approximately 1.2 lakh job posts.

• The Bill aims to address malpractices in public examinations,

which cause delays, cancellations, and adversely impact millions of
youth.
Why has the government brought this Bill?
• Currently, there is no specific substantive law to address unfair
means or offenses committed in public examinations, necessitating
comprehensive central legislation.

• Objectives of the Bill: The Bill aims to enhance transparency,

fairness, and credibility in public examination systems, ensuring
that sincere efforts of youth are duly rewarded.

• It seeks to deter individuals, groups, or institutions exploiting

vulnerabilities in the examination system for monetary or
wrongful gains.
Text and Context - Understanding the delimitation
exercise
• Delimitation means the process of fixing the number of seats and boundaries
of territorial constituencies in each State for the Lok Sabha and Legislative
assemblies.

• The number of seats in the Lok Sabha based on the 1951, 1961 and 1971
Census was fixed at 494, 522 and 543, when the population was 36.1, 43.9 and
54.8 crore respectively. However, it has been frozen as per the 1971 Census in
order to encourage population control measures so that States with higher
population growth do not end up having higher number of seats.

• Article 82 and 170 of the Constitution provide that the number of seats in the
Lok Sabha and State Legislative assemblies as well as its division into
territorial constituencies shall be readjusted after each Census. This
‘delimitation process’ is performed by the ‘Delimitation Commission’ that is
set up under an act of Parliament.
• The number of seats in the Lok Sabha based on the 1951, 1961 and
1971 Census was fixed at 494, 522 and 543, when the population was
36.1, 43.9 and 54.8 crore respectively. This broadly translated to an
average population of 7.3, 8.4 and 10.1 lakh per seat respectively.

• 42nd Amendment Act till the year 2000 and was extended by the 84th
Amendment Act till 2026. Hence, the population based on which the
number of seats is allocated refers to the population as per the 1971
Census.

• This number will be re-adjusted based on the first Census after 2026.
The boundaries of territorial constituencies were readjusted (without
changing the number of seats) and seats for SC and ST were
determined as per the 2001 Census and will again be carried out after
2026.
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