Supreme Court on Fiscal Federalism, India-Maldives Ties, Shukrayaan Current Affairs Analysis 25 July
Comprehensive Daily Affairs Analysis: 25th July 2025 (UPSC Civil Services Special)
"The future belongs to those who believe in the beauty of their dreams." - Eleanor Roosevelt
Part A: General Studies Paper II - Polity, Governance, and International Relations
1. Landmark Judgment on Fiscal Federalism: State's Power to Tax Minerals
Introduction: A New Chapter in Fiscal Federalism
In a verdict with profound implications for India's federal structure, the Supreme Court of India on July 25, 2024, delivered a landmark judgment that significantly enhances the taxation powers of state governments in the crucial mining sector. This ruling settles a decades-long debate over the financial rights of states on their mineral resources, tilting the balance of power in favour of the states and reinforcing the principles of fiscal federalism.
The Core of the Judgment
A nine-judge Constitution Bench, presided over by the Chief Justice of India, D.Y. Chandrachud, delivered the verdict with an overwhelming 8:1 majority. The key tenets of the judgment are as follows:
- Royalty is Not a Tax: The Court definitively held that the royalty paid by mining leaseholders to the government is not a tax. Instead, it is a payment for the right to extract minerals. This distinction is crucial as it opens the door for states to levy separate taxes.
- States' Power to Tax: The judgment affirmed that State Legislatures possess the legislative competence to impose taxes on mines and mineral-bearing lands. This power is derived directly from the Constitution, specifically under Article 246 read with Entry 49 of the State List (List II) in the Seventh Schedule, which pertains to "Taxes on lands and buildings".
- Central Law Not a Constraint: The Court clarified that the states' power to tax is not limited or encroached upon by the Parliament's Mines and Minerals (Development and Regulation) Act of 1957 (MMDR Act). This central legislation governs the regulation of mines and mineral development but does not override the constitutional power of states to tax the land itself.
Analysis: Strengthening State Autonomy and Its Implications
The Supreme Court's verdict serves as a powerful judicial counterweight to the trend of fiscal centralization. This verdict carves out a significant, high-revenue sector and places it firmly within the states' exclusive taxation domain, outside the purview of the GST Council. It is likely to have significant economic repercussions for the mining industry, which could face an additional layer of taxation. For mineral-rich states such as Jharkhand, Odisha, and Chhattisgarh, this newfound fiscal autonomy could be used to fund welfare schemes, boost development, and reduce their dependence on central grants.
2. India's 'Neighbourhood First' Policy in Action: PM's Visit to the Maldives
Introduction: A Diplomatic Overture to a Key Maritime Neighbour
In a significant diplomatic move aimed at resetting and reinforcing bilateral ties, Prime Minister Narendra Modi arrived in Malé on July 25, 2025, for a two-day state visit. This visit is being closely watched as it comes at a critical juncture in the India-Maldives relationship, which has experienced considerable strain since the new government took office in Malé.
Key Agenda: Economics and Security Hand-in-Hand
The agenda for the visit is comprehensive, focusing on deepening economic integration and strengthening strategic cooperation.
- Economic Partnership: A primary focus is the negotiation of a bilateral Free Trade Agreement (FTA) and an investment treaty.
- Strategic Framework: The leaders are set to review the progress of the 'Comprehensive Economic and Maritime Security Partnership', a guiding framework adopted in October 2024.
- Policy Alignment: The visit is a practical manifestation of India's 'Neighbourhood First' policy and its maritime doctrine, 'Vision MAHASAGAR' (Security and Growth for All in the Region).
Analysis: Resetting Ties Through Pragmatism and Economic Statecraft
The visit represents a significant diplomatic reset. After an initial period of pro-China rhetoric, the Maldivian government's invitation marks a considerable symbolic reversal. By putting a comprehensive FTA and investment treaty at the center of the agenda, India is using its economic leverage to make partnership an attractive and indispensable proposition, effectively counterbalancing China's influence.
3. The State of Indian Democracy: Parliamentary Proceedings and Debates
Introduction: A Monsoon Session Marked by Deadlock
The Monsoon Session of the Indian Parliament has been characterized by persistent disruptions and a near-complete legislative deadlock. The proceedings on Friday, July 25, 2025, were no exception, with both the Lok Sabha and the Rajya Sabha witnessing repeated adjournments amidst vociferous protests from the Opposition benches.
Core Issue of Protest: The primary trigger for the Opposition's protest is the ongoing Special Intensive Revision (SIR) of voter rolls in the state of Bihar. The Opposition alleges that this exercise is a partisan attempt to manipulate the electoral rolls. Adding to the tense atmosphere, the Union Home Minister is scheduled to move a resolution to extend President's Rule in Manipur. In the Rajya Sabha, the Deputy Chairman declined to admit several notices filed by the Opposition under Rule 267 to debate these issues.
Part B: General Studies Paper III - Economy, Environment, S&T, and Security
4. The Indian Economy Amidst Global Headwinds: RBI's July Bulletin
Introduction: Cautious Optimism in a Volatile World
The Reserve Bank of India (RBI), in its July 2025 bulletin, presented a nuanced assessment of the Indian economy, painting a picture of domestic resilience holding firm against a backdrop of escalating global uncertainties. The report signals a message of cautious optimism, highlighting steady economic activity while warning of external risks.
Key Findings from the "State of the Economy" Report
- Global Trade Warning: The RBI highlighted the emergence of a "rising tariff era," with average trade tariff rates poised to reach levels "unseen since the 1930s."
- Domestic Resilience: Economic activity remained steady, supported by favourable kharif crop prospects and strong momentum in the services sector.
- Inflation Dynamics: Headline retail inflation remained below the 4% mark for the fifth consecutive month in June, but the report flags that inflationary pressures are resurfacing.
- External Sector Fragility: The external sector has turned "fragile," with capital inflows insufficient to finance the current account deficit, leading to a drawdown in foreign exchange reserves.
5. Climate Change as a Clear and Present Danger: The Himalayan GLOF Threat
Introduction: The Ticking Time Bombs in the Himalayas
As climate change accelerates the melting of Himalayan glaciers, a new and perilous threat is emerging: Glacial Lake Outburst Floods (GLOFs). In response to the escalating risk, the Central Water Commission (CWC) has issued a new set of comprehensive guidelines aimed at mitigating GLOF risks for over 100 dams in Himalayan states.
Details of the New CWC Guidelines: The directive adopts a two-pronged approach, mandating both structural and non-structural interventions. This includes retrofitting existing dams, constructing robust spillways for new ones, and mandating advanced Early Warning Systems (EWS) and Emergency Action Plans.
Analysis: A Policy Shift Towards Proactive Risk Mitigation
The CWC guidelines mark a significant evolution in India's disaster management approach, shifting from a reactive stance to a proactive strategy of risk mitigation. This aligns with the Sendai Framework for Disaster Risk Reduction. However, retrofitting over 100 dams is a monumental and expensive task, highlighting the immense financial burden of climate adaptation.
6. India's Final Frontier: The Venus Orbiter Mission (Shukrayaan)
Introduction: After Moon and Mars, India Sets Sights on Venus
The Government of India has given its formal approval for the Venus Orbiter Mission (VOM), popularly known as 'Shukrayaan'. The mission aims to unravel the deep mysteries of Venus, often called Earth's "twin."
Mission Status and Timeline: ISRO has set a provisional launch date of March 29, 2028. The orbiter is designed for a scientific operational life of four years. The mission will carry a sophisticated payload of 100 kg, including the Venus S-Band Synthetic Aperture Radar (VSAR) to map the Venusian surface through its thick cloud cover.
Part C: Social Issues, History, and Governance
7. Social Justice in Focus (I): Deconstructing Mission Shakti
Introduction: An Integrated Approach to Women's Empowerment
'Mission Shakti' is the Government of India's flagship umbrella scheme for women's safety, security, and empowerment. It is strategically divided into two sub-schemes:
- 'Sambal' (For Safety and Security): This vertical includes schemes like One Stop Centres (OSCs), Women Helplines, Beti Bachao Beti Padhao, and a new component called Nari Adalats (women's collectives for dispute resolution).
- 'Samarthya' (For Empowerment): This vertical includes schemes like Shakti Sadan (shelter homes), Sakhi Niwas (hostels), Palna (crèches), PMMVY, and a new component called the Hub for Empowerment of Women (HEW) to facilitate access to government schemes.
8. Social Justice in Focus (II): Accountability and the Nirbhaya Fund
Introduction: A Decade of Funding for Women's Safety
The Nirbhaya Fund was established in 2013 as a non-lapsable corpus fund to finance initiatives for women's safety. While substantial funds have been allocated, the fund has been criticized for under-utilization, pointing to administrative bottlenecks at the state level. The fund supports key schemes like the Emergency Response Support System (ERSS-112), Safe City Projects, One Stop Centres, and Fast Track Special Courts (FTSCs).
Part D: UPSC Exam Corner
9. This Day in History: July 25
- 2007: Pratibha Patil was sworn in as India's first female President.
- 1978: Louise Joy Brown, the world's first 'test-tube baby', was born.
- 1984: Soviet cosmonaut Svetlana Savitskaya became the first woman to perform a spacewalk.
- 1920: Birth of Rosalind Franklin, whose work was critical to discovering the DNA double helix structure.
10. Mains Practice Question
Question: The recent Supreme Court judgment on mineral taxation and the Central Water Commission's new guidelines for dam safety both highlight the growing complexities in India's resource management and federal polity, driven by economic aspirations and climate-induced pressures. Critically analyze this statement. (250 words)
11. Daily Current Affairs Quiz
(a) 1 and 2 only
(b) 3 only
(c) 2 and 3 only
(d) 1, 2 and 3
(a) 1 only
(b) 2 and 3 only
(c) None
(d) 1, 2 and 3
(a) Beti Bachao Beti Padhao
(b) Nirbhaya Fund
(c) Mission Vatsalya
(d) Mission Shakti
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