UPSC  >  Indian Economy for UPSC CSE  >  February 2021: Current Affairs Polity & Economy- 1

February 2021: Current Affairs Polity & Economy- 1 | Indian Economy for UPSC CSE

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Lateral Entry Into the Administrative Services

Recently, the Union Public Service Commission (UPSC) has issued an advertisement to recruit 30 persons at the Joint Secretary and Director level in the Central administration through Lateral Entry.

Key Points


  1. The term lateral entry relates to specialists' appointment, mainly those from the private sector, in government organisations. 
  2. Government is looking for outstanding individuals, with expertise in revenue, financial services, economic affairs, agriculture, cooperation and farmers' welfare, road transport and highway, shipping, environment, forests and climate change, and new and renewable energy, civil aviation and commerce.

Advantages of Lateral Entry: 

  1. Addresses Complexity:
    • People with expertise and specialist domain knowledge are required to navigate the complex needs of present day administrative challenges.
  2. Meets Personnel Requirement:
    • Lateral entry will help address the shortage of IAS officers at the Centre.

➤ Organisation Culture:

  1. It will help bring the values of economy, efficiency and effectiveness in the Government sector.
  2. It will help build a culture of performance within the Government sector.
  3. Participatory Governance:
    • In the present times, governance is becoming more participatory and a multi actor endeavour, thus lateral entry provides stakeholders such as the private sector and non-profits an opportunity to participate in the governance process.

Issues Involved:

  1. Need for Transparent Process:
    • The key to this scheme's success would lie in selecting the right people in a manner that is manifestly transparent.
  2. Difference in Organisational Values:
    • The value systems between the government and the private sector are quite different.
  3. It is important to ensure that the people who come in are able to have the skills to adjust to a totally different system of functioning. This is because the government imposes its own limitations.
  4. Profit Motive vs Public Service:
    • Private sector approach is profit oriented. On the other hand, the motive of Government is public service. This is also a fundamental transition that a private sector person has to make while working in government.
  5. Internal Resistance:
    • Lateral entry is likely to face strong resistance from in service Civil Servants and their associations. It may also demotivate existing officials.
  6. Issue of Conflict of Interest:
    • The private sector's movement raises issues of potential conflict of interest. Thus, a stringent code of conduct for entrants is required.
  7. Narrow Scope:
    • Lateral entry at only top level policy-making positions may have little impact on field level implementation, given the multiple links in the chain of command from the Union Government to a rural village.

Odisha's Border Disputes

Recently, a border dispute between Odisha and Andhra Pradesh once again resurfaced when Andhra Pradesh announced panchayat polls in three villages of Kotia panchayat in Koraput district of Odisha.

Key Points

Border Disputes of Odisha:

  • Odisha was carved out of the Bengal-Bihar-Odisha province on 1st April, 1936, but the inter-state border disputes continue even today.
  • Odisha continues to have unresolved border disputes with four neighbouring States in its 8 out of 30 districts.
  • 14 of the 30 districts share borders with Andhra Pradesh, West Bengal, Chhattisgarh and Jharkhand. However, the disputes over Kotia villages in Koraput district bordering Andhra Pradesh is the only major border conflict.

About the Kotia Dispute:

  1. Odisha and Andhra Pradesh are locked in a territorial dispute over Kotia gram panchayat since 1960. Disputes pertain over 21 villages in Kotia gram panchayat.
  2. Residents of Kotia panchayat receive benefits from both Pottangi block in Koraput and Salur in Vizianagaram district of Andhra Pradesh.

 They depend on both the blocks for their day to day activities.

Water Dispute with Andhra Pradesh:

  • In 2006, Odisha sent a complaint to the Central Government under Section 3 of the Inter-State River Water Disputes (ISRWD) Act, 1956 regarding its water disputes with Andhra Pradesh pertaining to Inter-State River Vamsadhara.

Disputes with Other States: 

  1. West Bengal:
    • Odisha and West Bengal have disputes over 27 plots in Balasore District and some areas in Mayurbhanj district of Odisha.
    • Mayurbhanj district is known for its iron ore reserves and Chhau dance (a tribal dance in which dancers wear colorful masks).
  2. Jharkhand:
    • The border dispute between Odisha and Jharkhand arises due to change in course of river Baitarani.
    • The Baitarani river originates from the hill ranges of Keonjhar district of Odisha.
    • It is an east flowing river of peninsular India, flowing eastward and joining the Bay of Bengal.
    • Major portion of its catchment lies in the state of Odisha and a small patch of the upper reach falls in Jharkhand.
  3. Chhattisgarh:
    • With Chhattisgarh, Odisha has disputes relating to villages in Nabarangpur and Jharsuguda district.
    • The Central Government constituted Mahanadi Water Disputes Tribunal in 2018.

National Coal Index

Recently, the Ministry of Coal has started the commercial auction of coal mines on a revenue share basis using the National Coal Index (NCI).

  • NCI was rolled out in June 2020.

Key Points


  • It is a price index that reflects the change of price level of coal in a particular month relative to the fixed base year.
  • The base year for the NCI is Financial Year 2017-18.


  • Prices of coal from all the sales channels of coal, including import, as existing today are taken into account for compiling the NCI. 
  • The amount of revenue share per tonne of coal produced from auctioned blocks would be arrived at using the NCI utilizing defined formula.

Sub-Indices: NCI is composed of a set of five sub­indices:

  • Three for Non Coking Coal and two for Coking Coal. 
  • The three sub-indices for Non Coking Coal are combined to arrive at the Index for Non Coking Coal and the two sub-indices for Coking Coal are combined to arrive at the Index for Coking Coal. 
  • Thus, indices are separate for Non Coking and Coking Coal.
  • As per the grade of coal about a mine, the appropriate sub-index is used to arrive at the revenue share.


  • Coal is the most abundant fossil fuel which holds 55% of India's energy need.
  • Based on the uses, coal is divided into two types: 

➤ Coking Coal: 

  1. This type of coal when subjected to high temperature carbonisation i.e. heating in the absence of air to a temperature above 600 degree Celsius, forms a solid porous residue called coke.
  2. Coke is fed into a blast furnace and iron ore and limestone to produce steel in steel plants.
  3. Coking coal is desired to be of low ash percentage.

➤ Use:

  1. Mainly used in steel making and metallurgical industries.
  2. Also used for hard coke manufacturing.

Non-Coking Coal:

  • These are coals without coking properties.


  • This is the coal used in thermal power plants to generate electricity, also known as steam coal or thermal coal.
  • It is also used for cement, fertilizer, glass, ceramic, paper, chemical and brick manu­facturing, and other heating purposes. 

Coal is also classified into four ranks: anthracite, bituminous, subbituminous, and lignite. The ranking depends on the types and amounts of carbon the coal contains and on the amount of heat energy the coal can produce.

Low Convictions Rate Under UAPA Act

According to data recently presented by the Ministry of Home Affairs in the Rajya Sabha, only 2.2% of cases registered under the Unlawful Activities (Prevention) Act, 1967 between 2016-2019 ended in convictions by court.

  • The Ministry quoted figures from the 2019 Crime in India Report compiled by the National Crime Records Bureau (NCRB).

Key Points


  • The UAPA was originally passed in 1967. It is an upgrade on the Terrorist and Disruptive Activities (Prevention) Act - TADA (lapsed in 1995) and the Prevention of Terrorism Act-POTA (repealed in 2004).

Main Provisions:

  • Till the year 2004, "unlawful" activities referred to actions related to secession and cession of territory. Following the 2004 amendment, "terrorist act" was added to the list of offences. 
  • The Act assigns absolute power to the central government, by way of which if the Centre deems an activity as unlawful then it may, by way of an Official Gazette, declare it so. 
  • Under the UAPA, the investigating agency can file a charge sheet in maximum 180 days after the arrests and the duration can be extended further after intimating the court. 
  • Both Indian and foreign nationals can be charged. It will apply to the offenders in the same manner, even if crime is committed on a foreign land, outside India.
  • It has death penalty and life imprisonment as highest punishments.

Amendment in 2019:

  1. In August 2019, Parliament cleared the Unlawful Activities (Prevention) Amendment Bill, 2019 to designate individuals as terrorists if the individual commits or participates in acts of terrorism, prepares for terrorism, promotes terrorism or is otherwise involved in terrorism.
  2. A similar provision already existed in Part 4 and 6 of the legislation for organisations designated as a "terrorist organisation".
  3. The Act empowers the Director General of National Investigation Agency (NIA) to approve seizure or attachment of property when the said agency investigates the case.
  4. The Act also empowers the NIA officers, of the rank of Inspector or above, to investigate cases of terrorism in addition to those conducted by the DSP or ACP or above rank officer in the state.

Issues With UAPA:

  1. Undermines Individual Liberty: It gives the state authority vague powers to detain and arrest individuals who believe to be indulged in terrorist activities. Thus, the state gives itself more powers vis-a-vis individual liberty guaranteed under Article 21 of the Constitution.
  2. Indirect Restriction on Right to Dissent: The right of dissent is a part and parcel of fundamental right to free speech and expression. Therefore, it cannot be abridged in any circumstances except for mentioned in Article 19 (2).
    • The UAPA, 2019 empowers the ruling government, under the garb of curbing terrorism, to impose indirect restriction on dissent right, which is detrimental for a developing democratic society.
  3. Undermines Federalism: Some experts feel that it is against the federal structure since it neglects state police's authority in terrorism cases, given that 'Police' is a state subject under 7th schedule of Indian Constitution.

Sedition Law

Recently, the Supreme Court protected a political leader and six senior journalists from arrest in multiple sedition FIRs registered against them.

Key Points

Historical Background of Sedition Law:

  • Sedition laws were enacted in 17th century England when lawmakers believed that only good government opinions should survive, as bad opinions were detrimental to the government and monarchy.
  • The law was originally drafted in 1837 by Thomas Macaulay, the British historian-politician, but was inexplicably omitted when the Indian Penal Code (IPC) was enacted in 1860. o Section 124A was inserted in 1870 by an amendment introduced by Sir James Stephen when it felt the need for a specific section to deal with the offence.
  • It was one of the many draconian laws enacted to stifle any dissent voices at that time.

Famous sedition trials during freedom movement:

  • Some of the most famous sedition trials of the late 19th and early 20th century involved Indian nationalist leaders. The initial cases that invoked the sedition law included numerous prosecutions against nationalist newspapers' editors.
  • The first among them was the trial of Jogendra Chandra Bose in 1891. Bose, the newspaper editor, Bangobasi, wrote an article criticizing the Age of Consent Bill for posing a threat to the religion and its coercive relationship with Indians.
  • The most well-known cases are the three sedition trials of Bal Gangadhar Tilak and Mahatma Gandhi's trial in 1922. Gandhi was charged, along with Shankerlal Banker, the proprietor of Young India, for three articles published in the weekly. 

 Sedition Law Today: Sedition is a crime under Section 124A of the Indian Penal Code (IPC).

  1. Section 124A IPC:
    • It defines sedition as an offence committed when "any person by words, either spoken or written, or by signs, or by visible representation, or otherwise, brings or attempts to bring into hatred or contempt, or excites or attempts to excite disaffection towards the government established by law in India".
    • Disaffection includes disloyalty and all feelings of enmity. However, comments without exciting or attempting to excite hatred, contempt or disaffection, will not constitute an offence under this section.
  2. Punishment for the Offence of Sedition:
    • Sedition is a non-bailable offence. Punishment under the Section 124A ranges from imprisonment up to three years to a life term, to which fine may be added.
    • A person charged under this law is barred from a government job.
    • They have to live without their passport and must produce themselves in the court at all times as and when required.

Major Supreme Court Decisions on Sedition Law:

  1. The SC highlighted debates over sedition in 1950 in its decisions in Brij Bhushan vs the State of Delhi and Romesh Thappar vs the State of Madras.
    • In these cases, the court held that a law that restricted speech on the ground that it would disturb public order was unconstitutional.
    • It also held that disturbing the public order will mean nothing less than endangering the State's foundations or threatening its overthrow.
    • Thus, these decisions prompted the First Constitution Amendment, where Article 19 (2) was rewritten to replace "undermining the security of the State" with "in the interest of public order".
  2. In 1962, the SC decided on Section 124A in Kedar Nath Singh vs State of Bihar.
    • It upheld the constitutionality of sedition but limited its application to "acts involving intention or tendency to create disorder, or disturbance of law and order, or incitement to violence".
    • It distinguished these from "very strong speech" or the use of "vigorous words" strongly critical of the over-powerful 1995, in Balwant Singh vs the State of Punjab, the SC held that mere sloganeering that evoked no public response did not amount to sedition.

Arguments in Support of Section 124A:

  • Section 124A of the IPC has its utility in combating anti-national, secessionist and terrorist elements. 
  • It protects the elected government from attempts to overthrow the government with violence and illegal means. The government's continued existence is an essential condition of the stability of the State. 
  • If contempt of court invites penal action, contempt of government should also attract punishment. 
  • Many districts in different states face a Maoist insurgency and rebel groups virtually run a parallel administration. These groups openly advocate the overthrow of the state government by revolution. 
  • Against this backdrop, the abolition of Section 124A would be ill-advised merely because it has been wrongly invoked in some highly publicized cases.

Arguments against Section 124A:

  1. Section 124A is a relic of colonial legacy and unsuited in a democracy. It is a constraint on the legitimate exercise of constitutionally guaranteed freedom of speech and expression.
  2. Dissent and government criticism are essential ingredients of robust public debate in a vibrant democracy. They should not be constructed as sedition.
    • Right to question, criticize and change rulers is very fundamental to the idea of democracy.
  3. The British, who introduced sedition to oppress Indians, have themselves abolished the law in their country. There is no reason why India should not abolish this section.
  4. The terms used under Section 124A like 'disaffection' are vague and subject to different interpretations of the investigating officers' whims and fancies.
  5. IPC and Unlawful Activities Prevention Act 2019 have provisions that penalize "disrupting the public order" or "overthrowing the government with violence and illegal means". These are sufficient for protecting national integrity. There is no need for Section 124A.
  6. The sedition law is being misused as a tool to persecute political dissent. A wide and concentrated executive discretion is inbuilt into it which permits the blatant abuse.
  7. In 1979, India ratified the International Covenant on Civil and Political Rights (ICCPR), which sets forth internationally recognized standards for protecting freedom of expression. However, misuse of sedition and arbitrary slapping of charges are inconsistent with India's international commitments.

15th Finance Commission Recommendations: Resource Allocation

Recently, the government accepted the 15th Finance Commission's recommendation to maintain the States' share in the divisible pool of taxes to 41% for the five years starting 2021-22.

  • The Commission's Report was tabled in the Parliament.

Key Points

  1. Vertical Devolution (Devolution of Taxes of the Union to States): 15th Finance Commission
  2. The Finance Commission (FC) is a constitutional body that determines the method and formula for distributing the tax proceeds between the Centre and states and states as per the constitutional arrangement and present requirements.
  3. Under Article 280 of the Constitution, the President of India must constitute a Finance Commission at an interval of five years or earlier.
  4. The 15th Finance Commission was constituted by the President of India in November 2017, under NK Singh's chairmanship. Its recommendations will cover five years from the year 2021-22 to 2025-26.
    • It has recommended maintaining the vertical devolution at 41% - the same as in its interim report for 2020-21.
    • It is at the same level of 42% of the divisible pool as recommended by the 14th Finance Commission.
  5. It has made the required adjustment of about 1% due to the changed status of the erstwhile State of Jammu and Kashmir into the new Union Territories of Ladakh and Jammu and Kashmir.
  6. Horizontal Devolution (Allocation Between the States): 
    • For horizontal devolution, it has suggested 12.5% weightage to demographic performance, 45% to income, 15% each to population and area, 10% to forest and ecology and 2.5% to tax and fiscal efforts.
  7. Revenue Deficit Grants to States:
    • Revenue deficit grants emanate from the requirement to meet the States' fiscal needs on their revenue accounts that remain to be met, even after considering their own tax and non-tax resources and tax devolution to them.
    • Revenue Deficit is defined as the difference between revenue or current expenditure and revenue receipts, which includes tax and non-tax.
    • It has recommended post-devolution revenue deficit grants amounting to about Rs. 3 trillion over the five-year period ending FY26.
      (i) The number of states qualifying for the revenue deficit grants decreases from 17 in FY22, the first year of the award period to 6 in FY26, the last year.
  8. Performance-Based Incentives and Grants to States: 
    • These grants revolve around four main themes. 
    • The first is the social sector, where it has focused on health and education.
    • Second is the rural economy, where it has focused on agriculture and rural roads' maintenance.
    • The rural economy plays a significant role in the country as it encompasses two-thirds of the country's population, 70% of the total workforce and 46% of national income.
    • Third, governance and administrative reforms under which it has recommended grants for judiciary, statistics, aspirational districts, and blocks.
    • Fourth, it has developed a performance-based incentive system for the power sector, which is not linked to grants but provides an important, additional borrowing window for States.
  9. Fiscal Space for Centre:
    • Total 15th Finance Commission transfers (devolution + grants) constitute about 34% of estimated Gross Revenue Receipts to the Union, leaving adequate fiscal space to meet its resource requirements and spending obligations on national development priorities.
  10. Grants to Local Governments:
    • Along with grants for municipal services and local government bodies, it includes performance-based grants for incubation of new cities and health grants to local governments.
    • In grants for Urban local bodies, basic grants are proposed only for cities/towns with less than a million. For Million-Plus cities, 100% of the grants are performance-linked through the Million-Plus Cities Challenge Fund (MCF).
    • MCF amount is linked to these cities' performance in improving their air quality and meeting the service level benchmarks for urban drinking water supply, sanitation, and solid waste management.
The document February 2021: Current Affairs Polity & Economy- 1 | Indian Economy for UPSC CSE is a part of the UPSC Course Indian Economy for UPSC CSE.
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