The 16th Finance Commission faces the complex task of balancing vertical and horizontal tax devolution. While the 14th Finance Commission increased the states' share to 42%, the 15th reduced it to 41% following Jammu and Kashmir's reorganization. A major concern is the Centre's increasing reliance on non-shareable cesses and surcharges, which reduces the effective divisible pool for states. The 16th Commission has introduced a new horizontal criterion based on GSDP share to reward economic efficiency. However, critics argue this may disadvantage less developed states and emphasize the need for Article 275 grants to equalize critical services like health and education.
The 16th Finance Commission has maintained the vertical devolution share to states at 41%.
The increasing use of cesses and surcharges by the Centre effectively lowers the actual revenue share transferred to states.
A new horizontal devolution criterion uses a state's share in national GSDP to reflect and reward economic efficiency.
Exam Points
Articles 270 and 280 of the Indian Constitution govern the Finance Commission's mandate.
The 14th Finance Commission significantly raised the states' share in the divisible pool from 32% to 42%.
The 15th Finance Commission adjusted the vertical share to 41% due to the change in status of Jammu and Kashmir.
India's demographic dividend is projected to end by 2040, making vocational training reforms urgent. Currently, only 1.3% of Indian students are in vocational streams, far below European and Chinese standards. The article criticizes the Pradhan Mantri Kaushal Vikas Yojana (PMKVY) for poor outcomes, citing a 2025 CAG report that found high rates of invalid trainees and low placement. It proposes shifting from supply-driven to demand-driven models using 'skill vouchers' and 'skill levies' (Reimbursable Industry Contribution), similar to successful models in Singapore and South Korea, to ensure industry ownership and sustainable funding for the workforce.
India's demographic dividend window is closing, with projections suggesting it will end by 2040.
A 2025 CAG report on PMKVY revealed that 94.5% of bank accounts were invalid and only 41% of trainees achieved placement.
The National Education Policy (NEP) aims for 50% of learners to have exposure to vocational education by 2025.
Exam Points
Pradhan Mantri Kaushal Vikas Yojana (PMKVY) is the flagship scheme for skill development in India.
The National Education Policy (NEP) 2020 sets a target for vocational exposure by 2025.
Reimbursable Industry Contribution (RIC) is a funding model used in over 90 countries to finance industrial training.
SEBI is enhancing market surveillance using Artificial Intelligence (AI) to identify fraud and manipulation. Key initiatives include 'SEBI Check,' a tool for investors to verify registered intermediaries, and AI-powered educational tools in multiple languages. The regulator is cracking down on 'finfluencers' promising unrealistic returns and is working on deepening the corporate bonds market. Additionally, SEBI is exploring the rejuvenation of agri-commodities markets through specialized working groups. A committee under Chief Economic Adviser V. Anantha Nageswaran is also studying the impact of regulations to make policy-writing more scientific and data-driven.
SEBI is integrating AI to enhance market surveillance and identify fraudulent brokers or traders.
The 'SEBI Check' tool allows investors to verify the credentials of financial intermediaries before investing.
The regulator is taking strict action against unregistered investment advisors and 'finfluencers' on social media platforms.
Exam Points
SEBI (Securities and Exchange Board of India) is the statutory regulator for the securities market in India.
The 'SEBI Check' tool is a new initiative for investor protection and verification.
V. Anantha Nageswaran is the current Chief Economic Adviser (CEA) of India.
India's Gross Goods and Services Tax (GST) collection reached over ₹1.83 lakh crore in February 2026, marking an 8.1% year-on-year increase. This growth was driven by higher revenues from imports (up 17.2%) and improved domestic sales. Despite the overall increase, some major states like Tamil Nadu and Madhya Pradesh reported negative growth. The government recently rationalized GST rates, slashing them on 375 items and merging four tax slabs (5%, 12%, 18%, 28%) into two primary slabs of 5% and 18%, with a 40% slab for luxury and tobacco products.
Total gross GST collection for February 2026 stood at ₹1.83 lakh crore, compared to ₹1.69 lakh crore in February 2025.
Import revenue saw a significant jump of 17.2%, contributing heavily to the overall collection increase.
The GST council has simplified the tax structure by merging the 12% and 18% slabs into a single 18% slab.
Exam Points
GST collection in February 2026: ₹1.83 lakh crore.
Prime Minister Narendra Modi addressed the 'Hind-Di-Chadar' commemoration, marking the 350th martyrdom anniversary of Guru Tegh Bahadur. He emphasized the government's commitment to the Sikh community, citing the reopening of 1984 riot cases and providing additional compensation to affected families. Key achievements mentioned include the safe return of 'saroops' (Guru Granth Sahib) from Afghanistan and the use of the Citizenship (Amendment) Act (CAA) to offer relief to persecuted Sikhs and Hindus from neighboring countries. The PM also noted the removal of thousands of blacklisted names of Sikhs to facilitate their integration.
The government commemorated the 350th martyrdom anniversary of the ninth Sikh Guru, Guru Tegh Bahadur.
A Special Investigation Team (SIT) was formed to reopen and investigate closed cases related to the 1984 riots.
The Citizenship (Amendment) Act (CAA) is being used to provide citizenship to persecuted Sikhs from Afghanistan.
Exam Points
Guru Tegh Bahadur is the 9th Sikh Guru, known as 'Hind-Di-Chadar'.
The Citizenship (Amendment) Act (CAA) facilitates citizenship for persecuted minorities from Afghanistan, Pakistan, and Bangladesh.
The 350th martyrdom anniversary of Guru Tegh Bahadur was the occasion for the PM's address.
The 2026-27 Union Budget announced a 'Coconut Promotion Scheme' to rejuvenate old gardens and expand cultivation. However, experts argue that the focus must shift from mere productivity to climate-resilient sustainability. India is the world's largest producer and consumer of coconuts, but the industry faces threats from rising temperatures and diseases like root wilt. The article suggests that the Coconut Development Board (CDB) should prioritize developing drought-tolerant genotypes and fostering farmer producer organisations (FPOs) rather than just distributing seedlings. It also highlights the failure of previous cluster development programs due to high investment barriers and lack of institutional voice for farmers.
The 'Coconut Promotion Scheme' aims to rejuvenate non-productive gardens and establish new plantations.
Climate change poses a significant threat, with projections suggesting temperatures in coconut-growing regions could rise by 1.6-2.1°C by 2050.
Sustainability requires the development of climate-resilient, salt-tolerant, and disease-resistant coconut varieties.
Exam Points
India is the world's largest producer and consumer of coconuts.
The 'Coconut Promotion Scheme' was announced in the 2026-27 Union Budget.
The Coconut Development Board (CDB) is the primary body for coconut industry development in India.
Scientists are studying the Salar de Pajonales in Chile's Atacama Desert as a 'near-perfect analogue' for conditions on Mars. Located 3.5 km above sea level, it is extremely dry, freezing, and exposed to high ultraviolet radiation. Researchers found that microbes survive there by hiding beneath the surface of gypsum rocks. Gypsum is translucent, allowing sunlight for photosynthesis while blocking harmful radiation and trapping moisture. The discovery of fossils and chemical fingerprints of ancient life within these structures suggests that similar gypsum deposits on Mars could potentially harbor secrets of past Martian life, guiding future space exploration missions.
The Salar de Pajonales in the Atacama Desert mimics Martian conditions due to its extreme dryness and high UV radiation.
Microbes in this environment inhabit layered rock structures called stromatolites made of gypsum (CaSO4.2H2O).
Gypsum acts as a protective shield, filtering UV rays while allowing enough light for microbial survival.
Exam Points
Salar de Pajonales is located in the Atacama Desert, Chile.
Gypsum's chemical formula is CaSO4.2H2O.
Stromatolites are layered sedimentary formations created by the activity of microorganisms.
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