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DAILY CURRENT AFFAIRS, 21 FEBRUARY 2025

UNION GOVERNMENT AND DELHI

 
 
1. Context
 
Bharatiya Janata Party’s MLA Rekha Gupta took oath as the ninth Chief Minister of Delhi at the Ramlila Maidan on Thursday. A six-member Council of Ministers were also sworn into office in the presence of Prime Minister Narendra Modi and other senior BJP leaders.
 
2.Evolution of Delhi Government
 
When the Constitution was enacted in 1950, Delhi was classified as a Part C State. Following the States Reorganisation in 1956, Delhi was designated as a Union Territory under the governance of an administrator.
The Municipal Corporation of Delhi (MCD) was established in 1958, and a limited local government was set up in 1966. Later, based on the recommendations of the Balakrishnan Committee in 1989, the 69th Constitutional Amendment in 1991 introduced a Legislative Assembly and a Council of Ministers for the National Capital Territory (NCT) of Delhi.
However, the powers related to public order, police, and land were retained by the Union government. The Government of NCT of Delhi Act, 1991, outlines the detailed provisions regarding Delhi's legislature, executive, and administration
  • Part C State: When the Constitution of India came into force in 1950, Delhi was categorized as a Part C state. Part C states were centrally administered territories governed by a Chief Commissioner appointed by the President of India
  • Union Territory: In 1956, the States Reorganisation Act restructured the states and territories of India. As a result, Delhi was transformed from a Part C state into a Union Territory, directly administered by the central government through an appointed administrator
  • Local Governance: The Municipal Corporation of Delhi (MCD) was established in 1958 to manage civic services and urban infrastructure in Delhi. This marked the beginning of local governance in Delhi
  • Delhi Metropolitan Council: In 1966, a limited form of local government was introduced with the establishment of the Delhi Metropolitan Council. It was a partially elected body, and its role was largely advisory, with limited legislative powers. The real executive power remained with the central government-appointed Chief Commissioner and later the Lt. Governor
  • Proposal for Greater Autonomy: The Balakrishnan Committee was formed in 1989 to review the administrative and political setup of Delhi. The committee recommended granting Delhi a legislative assembly and a council of ministers to enhance its self-governance capabilities.
  • National Capital Territory (NCT) of Delhi: Based on the Balakrishnan Committee's recommendations, the 69th Constitutional Amendment Act, 1991, was enacted. This amendment granted Delhi special status as the National Capital Territory (NCT) of Delhi and provided for the creation of a Legislative Assembly and a Council of Ministers.
  • Limited Powers: The amendment, however, restricted the powers of the Delhi government, especially in areas of public order, police, and land, which remained under the control of the Union government
  • Legislative and Executive Structure: This act laid down the detailed provisions for the functioning of Delhi's legislature, executive, and administration. It established the framework for a functioning legislative assembly, outlining the powers and responsibilities of the elected representatives and the chief minister
  • Centre-State Relations: Over the years, the relationship between the Delhi government and the central government has seen various tensions, particularly concerning control over critical areas like police, land, and public order. These have led to legal battles and political debates about the extent of autonomy that should be granted to the Delhi government.
  • Government of NCT of Delhi (Amendment) Act, 2021: This recent amendment further clarified the roles of the Lt. Governor and the elected government, reinforcing the Lt. Governor's authority in matters where there is a difference of opinion between the Delhi government and the central government
 
 
3.Balakrishna Committee
 
The 1989 Balakrishnan Committee, formally known as the S. Balakrishnan Committee, was established to examine the administrative and political structure of Delhi. The committee's primary task was to review the governance framework of Delhi and recommend changes that could enhance its self-governance, given its unique status as the national capital.
 
Key recommendations:
 
  • The committee recommended the establishment of a Legislative Assembly for Delhi. This body would allow for greater local representation and legislative powers to address the needs and concerns of the people of Delhi
  • Alongside the Legislative Assembly, the committee proposed the creation of a Council of Ministers, headed by a Chief Minister, to exercise executive powers. This would enable more localized decision-making and governance, giving the elected representatives the ability to manage Delhi's day-to-day affairs
  • The committee suggested granting Delhi a special status as a National Capital Territory (NCT), recognizing its unique role as the capital of India. This status would differentiate it from other Union Territories and states, allowing for a tailored governance structure
  • Despite advocating for greater autonomy, the committee recommended that certain key areas should remain under the control of the Union government due to Delhi's national significance. These areas included:
    • Public Order: Ensuring the maintenance of law and order in the capital.
    • Police: Control over the police force, which is crucial for national security.
    • Land: Regulation of land and its usage, which has implications for national institutions and foreign missions located in the capital.
The recommendations of the Balakrishnan Committee laid the foundation for the 69th Constitutional Amendment Act of 1991. This amendment provided Delhi with a Legislative Assembly and a Council of Ministers, giving it a unique governance structure as a National Capital Territory with limited statehood. However, as recommended, the key subjects of public order, police, and land remained under the Union government's jurisdiction, reflecting the balance between local self-governance and national control
 
 
4. Way Forward
 
In its 2023 ruling, the Supreme Court highlighted that democracy operates through a triple chain of accountability: officials answer to ministers, the council of ministers is collectively responsible to the legislative assembly, and members of the legislative assembly are accountable to the people. However, ongoing conflicts between different levels of government can disrupt this chain of accountability.
 
For Prelims: National Capital Territory of Delhi (Amendment) Bill, 2021, Lok Sabha, Lieutenant Governor, Article 239, Article 239AA, Article 239BB, and Article 145(3).
For Mains: 1. Whether the Supreme Court Judgement (July 2018) can settle the political tussle between the Lt. Governor and the elected government of Delhi? Examine. (UPSC 2018)

 

Previous year Question

1. In the context of India, which one of the following is the characteristic appropriate for bureaucracy? (UPSC 2020)

A. An agency for widening the scope of parliamentary democracy

B. An agency for strengthening the structure of federalism

C. An agency for facilitating political stability and economic growth

D. An agency for the implementation of public policy
 
Answer: D
 
 
Source: The Hindu
 

RAGGING GUIDELINES

 
 
 
1. Context
Supreme Court guidelines to eradicate ragging from 15 years ago that haven’t gone much beyond tokenism on college campuses; government regulations that remain on paper; a regulatory system that, authorities say, is undermined by complaints that are either “frivolous” or difficult to track down — and the challenge of coming up with a widely accepted legal definition of ragging itself.
 
2. What is 'Ragging'?
  • Any conduct by a student or group of students where words spoken, written or an act has the effect of teasing, treating or handling someone with rudeness
  • A student or group of students indulging in rowdy or indiscipline activities causing annoyance, hardship, physical or psychological harm, raise fear or apprehension to other students
  • Asking any student to do an act that generates a sense of shame, torment or embarrassment adversely affecting the physique or psyche of a student
  • Any act by a senior student that would prevent, disrupts or disturbs the regular academic activity of any student
  • Exploiting services of a student for completing academic tasks assigned
  • Any act of financial extortion or forceful expenditure burden put on other students by students
  • Any act of physical abuse: sexual abuse, homosexual assaults, stripping, forcing obscene and lewd acts, gestures, causing any kind of bodily harm or any other danger to health or person
  • Any act of abuse by spoken words, emails, posts, or public insults which would also include deriving perverted pleasure, vicarious or sadistic thrill from actively or passively participating in the discomfiture to any student
  • Any act that affects the mental health and self-confidence of any student
3. Punishment for Ragging
  • There are several actions that can be taken by a head of an institution against ragging incidents. First, they should determine if the case falls under penal laws or not
  • If it does, either the head themselves or through a member of the Anti-Ragging Committee should file an FIR within 24 hours of receiving the receipt from the police or local authorities. There are 15 penal provisions under which a case can be filed
  • If any student is found guilty of ragging, the institution shall punish the student depending on the facts, nature and gravity of each incident
  • The punishment can range from suspension from attending classes to expulsion from the institution and subsequent debarring from admission to any other institution
  • Any incidents of ragging will adversely affect the institution’s accreditation, ranking or grading by NAAC or any other authorised accreditation agency
4. Roles and responsibilities of UGC
  • The UGC has to undertake certain responsibilities such as informing the head of any institution, warden of hostels and nodal officers of the affiliated university, and the concerned district authorities if required as soon as they receive a distress call
  •  The Commission shall maintain an appropriate database to create affidavits, it should be affirmed by the students and their parents and it should be stored electronically
  • And, in order to build confidence in the public, the database shall be made available to a non-governmental agency to be nominated by the Centre
  • All institutions have been asked by the UGC to add a mandatory column in the admission form pertaining to Anti Ragging Undertaking Reference number. Also, they are supposed to fill online compliance on antiragging.in.
  • The UGC has asked the institutions to make it compulsory for every student and parent to submit an undertaking at antiragging.in
  • The revised procedure for students to file online anti-ragging affidavits has to be implemented by the institutions.
  • An email with the registration number will be sent to the student, who in turn will forward that email to the nodal office in their university.
5. University Grants Commission (UGC)
 
The University Grants Commission (UGC) is a statutory body under the Department of Higher Education, Ministry of Education, Government of India. It was set up in accordance to the UGC Act 1956 and is charged with coordination, determination and maintenance of standards of higher education in India
The UGC is working to address these challenges. It is expanding the number of universities and colleges, increasing the number of scholarships and fellowships, and investing in research. The UGC is also working to improve the quality of teaching and learning through a variety of initiatives
5.1. Roles and responsibilities

The UGC has the following roles and responsibilities:

  • To determine and maintain standards of teaching, examination and research in universities. This includes setting up norms and standards for teaching, learning, and assessment; conducting inspections and evaluations of universities and colleges; and taking disciplinary action against institutions that do not meet the required standards.
  • To provide financial assistance to universities and colleges. This includes funding for infrastructure development, research, and scholarships.
  • To promote and coordinate research in universities and colleges. This includes funding research projects, organizing conferences and workshops, and providing fellowships to researchers.
  • To advise the central and state governments on matters relating to higher education. This includes providing policy recommendations on issues such as curriculum development, teacher training, and student welfare.
  • To set up standards for the establishment and recognition of universities and colleges. This includes approving the establishment of new universities and colleges, and withdrawing recognition from institutions that do not meet the required standards.
  • To regulate the functioning of universities and colleges. This includes ensuring that universities and colleges comply with the UGC Act and the regulations issued by the UGC.
  • To undertake measures to improve the quality of higher education. This includes promoting innovation in teaching and learning, developing new courses and programs, and strengthening the research infrastructure in universities and colleges.
 
 
Source: indianexpress
 

ISLAM AND INDIA

 
 
1. Context
 
Islam originated in Arabia in the 7th century and spread westwards towards the Mediterranean and eastwards into Persia. By the 8th century, it had expanded its reach from Spain to Sindh. But how did it reach India? 
 
2. Early Signs of Islam in India
 
  • The presence of Islam in India dates back to the 7th century, with the establishment of significant mosques such as the Cheraman Juma Mosque in Kerala, the Palaiya Jumma Palli in Tamil Nadu, and the Barwada Mosque in Gujarat— the latter uniquely oriented towards Jerusalem.
  • These places of worship were constructed by Arab sailors and merchants, often with the patronage of local Hindu rulers, marking the initial introduction of Islamic teachings to Indian shores.
  • A Persian text from the 13th century recounts the Arab expeditions in the 7th and 8th centuries, attempting to capture regions such as Thana near present-day Mumbai.
  • However, these incursions were successfully resisted by ruling dynasties like the Pratiharas.
  • While Islam primarily expanded in India through trade networks, it also entered the subcontinent via military campaigns, particularly in the Sindh region during the 7th century.
  • By the 10th century, Central Asian raiders, notably Mahmud of Ghazni, began crossing the Hindu Kush mountains, launching raids on North Indian temples in search of wealth.
  • Unlike the earlier Arab traders, these invaders were predominantly Turkic groups from Central Asia.
  • From the 12th century onward, they established settlements and began exploiting India’s agricultural resources. By the 15th century, the dominance of the Turks and Afghans had waned, giving way to the emergence of the Mughal Empire
3. Sultans and Sufis
 
  • The arrival of the Sultans in India brought with it a new Persian-influenced court culture, which gradually replaced the earlier Sanskritic traditions. Their mastery of cavalry warfare made them a dominant military force, which is why Rajasthan has many folk deities associated with horse-riding, known as ‘pirs’ and ‘virs,’ revered by both Hindus and Muslims.
  • In South India, this cultural synthesis is reflected in temple traditions where Muslim warriors, such as Vavar and Ravuttan, are depicted as protectors of Hindu gods and goddesses.
  • Similarly, in Vishnu temples like Srirangam, the presence of Bibi-Nachiyar—a Muslim princess believed to be a consort of the deity—highlights the deep cultural interconnections of the time.
  • From the 12th century onward, Sufi mystics from Central Asia began arriving in India, gaining widespread popularity, especially after the Mongol invasions disrupted the old Arabic empire.
  • These Sufis traveled extensively along trade routes, bringing with them not only spiritual teachings but also practical knowledge in law, medicine, and agriculture. While some were warriors or ghazis, others were preachers who provided solace and guidance to local communities, making them highly respected figures.
  • Upon their passing, their tombs, known as dargahs, became centers of spiritual devotion, attracting people from diverse backgrounds seeking divine blessings. Over time, these Muslim pirs integrated with Hindu virs, becoming an integral part of India's rich folk traditions and religious landscape
 
4. Islam through agriculture
 
  • Beyond trade and conquests, Islam also expanded in India through agricultural innovations. From the 10th century onward, Sufi settlers introduced advanced farming techniques, such as underground water canals and water wheels, which had been developed in regions like Persia and Spain.
  • These innovations enabled cultivation in arid areas, particularly in Sindh and Punjab, transforming previously barren lands into fertile fields. As a result, landless peasant communities, such as the Jats, gained access to land and experienced economic upliftment. Over time, these regions developed significant Muslim populations, eventually forming the foundation of what later became Pakistan.
  • During the Mughal era in eastern India, a shift in the Ganga River’s course exposed new tracts of land suitable for cultivation. The Mughal administration encouraged farming in these areas to boost revenue, drawing in frontier communities that had previously remained on the periphery of mainstream society.
  • Many Sufi scholars, who had been marginalized in Delhi, supported these settlers in building new agricultural settlements, which later contributed to the formation of Bangladesh.
  • This period also saw the emergence of unique cultural and religious traditions, such as the veneration of Panch Pir—five revered Muslim saints who were often identified with the Five Pandavas of Hindu mythology.
  • Additionally, figures like Bon Bibi, a guardian spirit of the Sunderbans, became central to local belief systems.
  • Architecturally, the mosques built in Bengal during this time featured terracotta designs resembling traditional Bengali huts, reflecting a distinct departure from the Arabic-Persian styles seen elsewhere
 
5. Immigrant Way
 
  • The influx of Muslim migrants from Central Asia and Persia increased significantly after the Mongol invasions of the 13th century. Many were drawn to India due to the vast job opportunities offered by the Delhi and Bahmani sultanates.
  • Some arrived with their families, while others married local women. These immigrants took on various roles, serving as naukars (paid soldiers) and chakars (accountants), bringing Islam along with them.
  • As members of the elite, they predominantly spoke Persian and constructed Persian-style mosques in the Deccan, such as the renowned Gawan Madarsa in Bidar.
  • However, tensions arose between local Indian Muslim elites and the newly arrived immigrant Muslims. The latter often viewed Indian Muslim converts, particularly those from marginalized backgrounds, with disdain.
  • Over time, Islam in India began to reflect the existing caste hierarchy, with Sayyids—those claiming descent from the Prophet Muhammad—occupying a superior status, while Pasmandas (a Persian term for marginalized Muslim communities) were regarded as lower caste. In between were groups who traced their lineage to Arab merchants and Persian nobility.
  • The introduction and expansion of Islam in India was not a singular event but rather a complex, multi-layered process spanning over seven centuries. It involved a combination of trade, warfare, missionary efforts, agricultural advancements, and migration, each contributing to the diverse and evolving landscape of Islam in the Indian subcontinent
 
For Prelims: Religion, Art , Culture
 
For Mains: GS I - Art & Culture
 
Source: Indianexpress
 

IRON AGE

 
 
1. Context
 
Releasing a report on the antiquity of iron, Tamil Nadu Chief Minister M.K. Stalin proclaimed that the iron age began on “Tamil soil”, placing the date 5,300-odd years ago (4th millennium BCE), and that the “history of Indian subcontinent could no longer overlook Tamil Nadu”.
 
2. What is an Iron Age?
 
  • The Iron Age marks a transformative period in human civilization when societies transitioned from using bronze to iron for making tools, weapons, and other essential implements.
  • This shift played a crucial role in shaping technological advancements, social structures, and economic developments across different regions. The emergence of iron as the primary metal for tool-making was largely due to its abundance and durability compared to bronze, which required both copper and tin—two metals that were not always easily available.
  • The beginning of the Iron Age varied across regions. The earliest evidence of ironworking dates back to around 1200 BCE in Anatolia and the Near East, where the Hittites are believed to have pioneered iron smelting techniques.
  • Over time, iron usage spread to other parts of the world, reaching India around 1200–1000 BCE, Europe by 800 BCE, and China by 600 BCE. As the knowledge of ironworking expanded, it led to significant changes in warfare, agriculture, and daily life.
  • One of the key reasons for the rapid adoption of iron was its strength and availability. Unlike bronze, which required the extraction and combination of two different metals, iron ore was more widely accessible.
  • Even though early iron tools were initially less effective than bronze ones, advancements in metallurgy, such as carburization (adding carbon to iron to create steel), improved their quality. This made iron tools sharper, more durable, and ideal for both farming and combat.
  • The Iron Age was also marked by the rise of powerful kingdoms and empires. As societies gained access to superior weapons and agricultural tools, they were able to expand their territories, strengthen their economies, and develop more complex political systems.
  • In India, for example, the use of iron contributed to the rise of the Mahajanapadas, powerful kingdoms that laid the foundation for later Indian empires. Similarly, in Europe, the Celts and other civilizations thrived due to their iron-based weaponry and farming tools.
  • Another significant development during this period was the growth of trade and urbanization. The increased use of iron led to the expansion of trade networks, as civilizations exchanged iron goods along with other commodities. Cities grew in size and complexity, with specialized craftsmen, traders, and warriors playing key roles in society.
  • Despite its many advantages, the Iron Age also had challenges. The process of iron smelting required high temperatures and advanced knowledge, making it more complex than working with bronze. Additionally, the increased competition for resources and the rise of stronger armies led to frequent conflicts and territorial expansions.
  • In conclusion, the Iron Age revolutionized human civilization, bringing significant advancements in technology, agriculture, warfare, and trade. It laid the foundation for the development of great empires and shaped the course of history in profound ways.
  • As societies mastered the use of iron, they moved towards more sophisticated governance systems and economic structures, ultimately setting the stage for the classical civilizations that followed
 
Indian Scenario
 
Excavations carried out by the U.P. State Archaeological Department at sites such as Raja Nala-ka-tila (1996–98), Malhar (1998–99), and Dadupur (1999–2001) unearthed iron artefacts, furnaces, and tuyeres, which were carbon-dated to between 1800 and 1000 BCE. The discoveries at Malhar, in particular, provided strong indications of large-scale iron tool production due to the presence of tuyeres, slags, and finished iron objects. Based on this collective evidence, scholars concluded that iron smelting and the manufacture of iron tools were well understood in the Eastern Vindhyas and that iron may have been in use in the Central Ganga Plain as early as the early second millennium BCE
 
 
3. Iron age through the prism of Tamilnadu
 
  • In Tamil Nadu, several archaeological excavations have been actively conducted in recent years. In 2022, prior to the latest report released by Chief Minister M.K. Stalin that further revised the antiquity of iron usage, the site of Mayiladumparai in Krishnagiri district gained significant attention.
  • The Chief Minister had announced that the introduction of the Iron Age in Tamil Nadu dates back 4,200 years (third millennium BCE), based on the findings of the State Archaeological Department’s report, ‘Mayiladumparai - Beginning of Agrarian Society; 4,200-year-old Iron Age Culture in Tamil Nadu.’ This revelation led experts to observe that the Iron Age in Tamil Nadu aligns with the Copper or Bronze Age in other regions.
  • A more recent report by the State Archaeology Department, titled ‘Antiquity of Iron: Recent Radiometric Dates from Tamil Nadu,’ supports this claim. It highlights that while cultural zones north of the Vindhyas were still in the Copper Age, southern regions, particularly Tamil Nadu, may have already transitioned into the Iron Age due to the limited availability of commercially viable copper ore.
  • In an effort to gain a comprehensive understanding of Tamil Nadu’s Iron Age, extensive excavations have been carried out by the State Archaeology Department, the Archaeological Survey of India (ASI), and other institutions at locations such as Sivagalai, Adichanallur, Kilnamandi, and Mayiladumparai. Based on these findings, the Iron Age in Tamil Nadu has been dated between 3,345 BCE and 2,953 BCE
 
4. Sequence of the Stone Age, Bronze Age, and Iron Age
 

Human history is broadly divided into different ages based on the materials used for tools and technology. The three major prehistoric periods—Stone Age, Bronze Age, and Iron Age—mark significant advancements in human civilization.

1. Stone Age (Prehistoric - c. 3300 BCE)

The Stone Age is the earliest known period of human history, during which stone was the primary material used for tools and weapons. It is further divided into three phases:

  • Paleolithic (Old Stone Age): Characterized by hunter-gatherer societies, simple stone tools, and the discovery of fire.
  • Mesolithic (Middle Stone Age): A transitional period with refined tools and early domestication of plants and animals.
  • Neolithic (New Stone Age): Marked by agriculture, permanent settlements, pottery, and more advanced stone tools.

The Stone Age ended with the advent of metallurgy, leading to the next phase—the Bronze Age.

2. Bronze Age (c. 3300 BCE – 1200 BCE)

The Bronze Age began when humans discovered how to smelt and mix copper with tin to create bronze, a much stronger metal than stone. This period saw the rise of early civilizations, urbanization, trade, and written records. Notable Bronze Age civilizations include the Indus Valley Civilization, Mesopotamia, Ancient Egypt, and the Shang Dynasty in China.

The Bronze Age ended when iron metallurgy advanced, leading to the Iron Age.

3. Iron Age (c. 1200 BCE – onwards)

The Iron Age began when iron replaced bronze as the dominant material for tools and weapons. Iron was more durable and widely available, making it a crucial advancement. This period saw the rise of large empires, advanced warfare, improved agriculture, and widespread trade networks. Civilizations like the Mauryan Empire in India, the Roman Empire, and various Chinese dynasties flourished during this time.

The Iron Age gradually transitioned into historical periods with the rise of written records and organized states, leading to the classical civilizations of antiquity.

Thus, the sequence of ages follows the Stone Age → Bronze Age → Iron Age, each representing a milestone in human progress and technological development

 
For Prelims: Indus Valley Civilisation, Pre-Harappan Phase from 7000 to 3300 BCE, Early Harappan Phase from 3300 to 2600 BCE, Mature Harappan Phase from 2600 to 1900 BCE, and Late Harappan Phase from 1900 to 1300 BCE, Lothal, Sutkagendor, Allahdino, Balakot, Kuntasi.
For Mains: Discuss the phases of the Indus Valley Civilisation and explain the Political and Social life during the Indus Valley civilization. (250 Words).

Previous year Questions

1. Regarding the Indus Valley Civilization, consider the following statements: (UPSC 2011)
1. It was predominantly a secular civilization and the religious element, though present, did not dominate the scene.
2. During this period, cotton was used for manufacturing textiles in India.
Which of the statements given above is/are correct?
A. 1 only
B. 2 only
C. Both 1 and 2
D. Neither 1 nor 2
Answer: C
 
Source: The Hindu

 

CAPITAL EXPENDITURES (CapEx)

 
 
1. Context
Knowing that the disappointing financial numbers will not be touched upon, rail watchers, industry and markets clung to one lifeline — capital expenditure. However, the much-anticipated capex push failed to materialise beyond last two years’ ₹2.62 lakh crore, signalling that even the government is pausing to reassess
 
2. What Are Capital Expenditures (CapEx)?
 
Capital expenditures, often abbreviated as CapEx, refer to the funds that a company or organization invests in acquiring, upgrading, or maintaining physical assets that are expected to generate future economic benefits over an extended period of time. These assets are typically used in the company's operations to generate revenue and are not meant for immediate consumption. 

Capital expenditures can cover a wide range of items and projects, including:

  1. Property and Real Estate: Purchasing or renovating buildings, land, or other real estate properties for business use.

  2. Machinery and Equipment: Buying, upgrading, or maintaining machinery and equipment used in manufacturing, production, or other operational processes.

  3. Vehicles: Acquiring and maintaining vehicles for business purposes, such as delivery trucks or company cars.

  4. Technology and Software: Investing in computer hardware, software, and IT infrastructure to improve efficiency and productivity.

  5. Infrastructure: Building or upgrading infrastructure projects like roads, bridges, and utility systems that are essential for business operations.

  6. Research and Development (R&D): Allocating funds to develop new products, services, or technologies that will benefit the company in the long term.

  7. Acquisitions: Purchasing other companies or assets that are expected to contribute to the company's growth and profitability.

  8. Leasehold Improvements: Making improvements to leased properties or facilities to meet the company's specific needs.

3. What are the types of capital expenditures?

Capital expenditures (CapEx) can be categorized into several types based on the nature of the investment and the assets being acquired or improved. Here are some common types of capital expenditures:

  1. Maintenance Capital Expenditures: These are expenditures made to maintain the existing physical assets in their current condition. They are necessary to keep assets operational and extend their useful life. Maintenance CapEx includes routine repairs, servicing, and replacement of worn-out parts. It helps prevent asset deterioration and ensures ongoing business operations.

  2. Expansion Capital Expenditures: Expansion CapEx involves investments made to increase the productive capacity of a business or to enter new markets. This can include building new facilities, purchasing additional machinery and equipment, and expanding existing operations. Expansion CapEx is typically aimed at growing the business and increasing revenue.

  3. Replacement Capital Expenditures: Replacement CapEx involves replacing existing assets with new ones of similar or improved functionality. This is done when the old assets become obsolete, inefficient, or unreliable. For example, replacing outdated computer servers or upgrading manufacturing equipment to improve efficiency.

  4. Strategic Capital Expenditures: These are investments made to achieve specific strategic objectives of the company. This can include investments in research and development (R&D) to develop new products or technologies, entering new markets, or acquiring another company to gain a competitive advantage.

  5. Compliance and Safety Capital Expenditures: Some CapEx is required to ensure that a business complies with safety regulations and industry standards. This can include investments in safety equipment, environmental compliance, or upgrades to meet changing regulatory requirements.

  6. Information Technology (IT) Capital Expenditures: Investments in IT infrastructure, software, and hardware fall into this category. It includes spending on servers, computer systems, software development, and data center facilities.

  7. Infrastructure Capital Expenditures: Governments and businesses may invest in infrastructure projects like building or repairing roads, bridges, airports, railways, and utility systems. These projects contribute to the overall development and functioning of a region or business.

  8. Research and Development (R&D) Capital Expenditures: Companies invest in R&D to develop new products, services, or technologies. R&D CapEx can include expenditures on laboratory facilities, equipment, and personnel involved in research and product development.

  9. Leasehold Improvements: These expenditures involve customizing and improving leased properties or facilities to meet a company's specific needs. They may include renovations, interior design, and installation of equipment for leased spaces.

  10. Marketing and Advertising Capital Expenditures: While marketing and advertising expenses are typically considered operating costs, certain marketing investments may be classified as CapEx if they have a long-term impact, such as building a brand or expanding market reach through the acquisition of assets like trademarks or copyrights.

 
4. Capital Spending
Capital spending, also known as capital investment or capital expenditure (CapEx), refers to the allocation of financial resources by individuals, businesses, or governments to acquire, upgrade, or expand physical assets and infrastructure with the aim of generating future economic benefits.
Capital spending can encompass a wide range of investments in tangible and intangible assets, including machinery, buildings, technology, research and development, and infrastructure.
 
The impact of capital spending on an economy:
  1. Capital spending can stimulate economic growth by increasing the productive capacity of an economy. When businesses invest in new machinery, technology, or infrastructure, they become more efficient and can produce more goods and services. This increased production can lead to higher economic output and GDP growth.

  2. Capital investments often require labor for construction, maintenance, and operation. This can lead to job creation, reducing unemployment rates and boosting consumer spending as more people have income to spend.

  3. Capital spending typically results in the adoption of advanced technology and improved processes. This enhances productivity, which is a key driver of long-term economic growth. Higher productivity means more can be produced with the same or fewer resources.

  4. Investments in research and development (R&D) and technology can foster innovation and increase a country's competitiveness on the global stage. This can attract foreign investment and strengthen an economy's position in international markets.

  5. Capital spending on infrastructure projects like roads, bridges, and utilities can enhance the overall business environment. Efficient infrastructure reduces transportation costs, facilitates trade, and attracts investment

5. Capital Expenditures vs Revenue expenditures
The key distinction between capital expenditure and revenue expenditure is that CapEx relates to investments in long-term assets that provide benefits over multiple periods and are recorded on the balance sheet, while revenue expenditure represents day-to-day operating expenses that are fully expensed in the income statement for the current period. Accurately distinguishing between these two types of expenditures is crucial for financial reporting, tax purposes, and decision-making within a business
Subject Capital Expenditure Revenue Expenditure
Nature CapEx represents investments in assets that are expected to provide economic benefits to a business over an extended period, typically more than one accounting period. These assets are used to generate revenue or provide long-term benefits to the company. Examples include the purchase of buildings, machinery, equipment, vehicles, and intangible assets like patents and trademarks. Revenue expenditure, on the other hand, represents day-to-day operating expenses that are incurred to maintain the normal business operations and generate immediate revenue. These expenses are considered part of the regular cost of doing business. Examples include salaries and wages, rent, utilities, office supplies, and advertising expenses.
Timing CapEx is incurred when a business acquires or improves a long-term asset. The benefits from the investment are expected to be realized over several accounting periods, and the asset's value is usually spread out through depreciation or amortization over its useful life. Revenue expenditure is incurred for ongoing, day-to-day operations and is typically related to the current accounting period. These expenses are fully recognized in the income statement in the period they are incurred.
Accounting  CapEx is recorded on the balance sheet as an asset. It is then depreciated (for physical assets) or amortized (for intangible assets) over its estimated useful life. The cost is gradually expensed over time, matching the cost with the revenue generated from the asset. Revenue expenditures are immediately expensed in the income statement in the period they occur. They reduce the company's net income for that period.
Profitability CapEx does not directly impact the current period's profitability to the same extent as revenue expenditure. Instead, it affects profitability over several accounting periods as depreciation or amortization expenses are recognized. Revenue expenditures directly impact the current period's profitability, as they are expensed immediately, reducing the net income for the period.
 
 
For Prelims: Economic and Social Development
For Mains: General Studies III: Government Budgeting and Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment
 
 
Previous Year Questions
1.With reference to the expenditure made by an organisation or a company, which of the following statements is/are correct ? (UPSC CSE 2022)
1. Acquiring new technology is capital expenditure.
2. Debt financing is considered capital expenditure, while equity financing is considered revenue expenditure.
Select the correct answer using the code given below :
A. 1 Only
B. 2 Only
C. Both 1 and 2
D. Neither 1 nor 2
Answer (A)
Source: indianexpress
 

ELECTRONIC VOTING MACHINE (EVM)

 
 
1. Context
The Supreme Court clarified that checking and verifying the burnt memory of microcontrollers of electronic voting machines (EVMs) for signs of tampering does not envisage the erasing or reloading of data in the machines.
 
2. What is an electronic voting machine (EVM)?
 
  • An electronic voting machine (EVM) serves as a portable device utilized in the electoral process for parliamentary, legislative, and local body elections, including panchayats and municipalities.
  • The EVM operates on microcontroller technology, aiming to modernize the election process while ensuring the elimination of invalid votes and maintaining the utmost secrecy of voting data. Additionally, it expedites the counting process, ensuring accuracy. The recorded voting data within EVMs can be stored for extended periods and retrieved when necessary.
  • This technological system is dependable for conducting elections where a single candidate must be elected from multiple options, as it is configured for one position and one vote per voter. Utilizing the EVM, voters can cast their ballots for their preferred candidate or select the "None of the Above" (NOTA) option, which is provided in each machine for voters who opt not to support any contestant.
  • In 1989, India's Election Commission (EC), in collaboration with two central government entities — the Electronics Corporation of India (ECIL) and Bharat Electronics Limited (BEL) — developed the nation's own Electronic Voting Machines (EVMs). These machines saw their inaugural use during the 1999 Goa State Assembly elections

3. How does it work?

 

  • To indicate their choice, a voter must press the button corresponding to the preferred candidate, prompting a red light to illuminate next to the candidate's name and symbol. Additionally, a prolonged beep will sound, confirming the successful casting of the vote.

  • Inside the polling booth, the presiding officer will activate the ballot unit once the voter enters the designated compartment.

  • To select a candidate, press the blue button adjacent to their name and symbol on the ballot unit.

  • Upon selection, the candidate's name or symbol will be highlighted by a glowing red light, accompanied by an audible beep.

  • Subsequently, the voter will receive a printed ballot slip featuring the selected candidate's name, symbol, and a serial number

4.Working Module of EVM
 
  • An Electronic Voting Machine (EVM) comprises two components: a control unit and a balloting unit, interconnected by a five-meter cable.
  • The control unit is assigned to a polling officer, while the balloting unit is placed within a compartment for voters to cast their votes. EVMs are adaptable even in areas lacking electricity, as they can operate using alkaline batteries.
  • In the polling station, the control unit remains under the supervision of the Presiding Officer and is positioned inside the voting compartment, responsible for tallying the votes. Conversely, the balloting units are stationed within the voting compartment to facilitate voters in casting their ballots.
  • The balloting unit offers voters blue buttons labeled horizontally with party symbols and corresponding candidate names. In contrast, the Control Unit provides the officer-in-charge with a 'Ballot' marked button, allowing them to proceed to the next voter without issuing a physical ballot paper

5.Controversy around the use of EVMs

The employment of Electronic Voting Machines (EVMs) has stirred controversy in various regions due to concerns over their reliability, security, and transparency. Some of the controversies surrounding EVMs include:

  • Security Concerns: Critics argue that EVMs are susceptible to tampering and hacking, which could compromise the integrity of election results. There have been allegations of EVM manipulation through malicious software or physical tampering, raising doubts about the fairness of elections.

  • Lack of Transparency: The opaque nature of EVMs, particularly regarding the inner workings of the software and hardware, has been a point of contention. Critics argue that without a paper trail or verifiable audit mechanism, it's challenging to ensure the accuracy of election outcomes and detect any potential malfunctions or manipulation.

  • Limited Accessibility: EVMs may pose challenges for certain demographics, such as elderly voters or those with disabilities, who may find it difficult to operate the electronic interface. This raises concerns about the inclusivity and accessibility of the electoral process.

  • Trust and Confidence: Public trust in EVMs is crucial for the legitimacy of election results. However, controversies surrounding EVMs, including allegations of malfunctioning or tampering, can undermine trust in the electoral process and lead to doubts about the validity of election outcomes.

  • Legal Challenges: In some cases, legal challenges have been filed questioning the legality or constitutionality of using EVMs in elections. These challenges often revolve around issues such as the absence of a paper trail, the reliability of electronic systems, and the potential for manipulation

6. What are VVPATs?
 

Voter Verifiable Paper Audit Trail (VVPAT) is a mechanism introduced to enhance the transparency and credibility of electronic voting systems, particularly Electronic Voting Machines (EVMs). VVPAT provides a physical paper trail that allows voters to verify that their vote has been accurately recorded by the EVM.

Here's how VVPAT works:

  • Paper Record: When a voter casts their vote using an EVM, the VVPAT system prints a paper slip containing the details of the vote, including the name and symbol of the candidate selected by the voter. This paper slip is visible through a transparent window for a few seconds before being automatically cut and dropped into a sealed box.

  • Verification by Voter: The voter can visually inspect the printed paper slip to confirm that it accurately reflects their chosen candidate. This allows voters to verify that their vote has been cast as intended.

  • Audit Trail: The paper slips collected in the sealed box serve as a physical audit trail of the electronic votes recorded by the EVM. In case of any dispute or recount, these paper slips can be used to verify the accuracy of the electronic results.

7. Representation of People Act, 1981
 
  • The Representation of the People Act, 1981 is a significant legislation in India that primarily deals with the conduct of elections and the qualifications and disqualifications for membership of Parliament and State Legislatures. However, there is no such legislation by the name "Representation of the People Act, 1981."
  • Instead, the primary legislation governing elections in India is the Representation of the People Act, 1951. This Act has been amended several times, including in 1981, to accommodate changes in electoral processes, procedures, and to address emerging issues related to elections.
  • The Representation of the People Act, 1951, covers various aspects of elections, including the preparation of electoral rolls, delimitation of constituencies, qualifications and disqualifications for membership of Parliament and State Legislatures, conduct of elections, election offences and disputes, and the powers and functions of the Election Commission of India.
  • It's important to note that while the Representation of the People Act, 1951, remains the primary legislation governing elections, there have been amendments and additions made over the years to address evolving electoral practices and challenges

 

For Prelims: Indian Polity and Governance

For Mains: Governance, Constitution and Polity.

 
Previous Year Questions

Consider the following statements: (UPSC CSE 2017)

1. The Election Commission of India is a five-member body.

2. The Union Ministry of Home Affairs decides the election schedule for the conduct of both general elections and bye-elections.

3. Election Commission resolves the disputes relating to splits/mergers of recognised political parties.

Which of the statements given above is/are correct?

(a) 1 and 2 only

(b) 2 only

(c) 2 and 3 only

(d) 3 only

Answer (d)

The election commission has three election commissioners, one Chief Election Commissioner and two Election Commissioners. Hence statement 1 is incorrect.Election commission decides the election schedule for the conduct of both general elections and bye-elections. Hence statement 2 is incorrect. It also decides the disputes relating to splits/mergers of recognized political parties. Hence only statement 3 is correct.

Mains

In the light of recent controversy regarding the use of Electronic Voting Machines (EVM), what are the challenges before the Election Commission of India to ensure the trustworthiness of elections in India? (2018)

 
Source: Indianexpress
 

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