Current Affairs 24 May 2025

Content:

1. EC to provide mobile phone deposit facilities for voters outside polling stations
2. Creation of theatre commands will kick-start next generation of reforms’
3. Supreme Court says dual taxation on broadcasting services permissible in law
4. U.K.’s Chagos Islands deal with Mauritius risks entrenching exile of some islanders’
5. RBI to transfer ₹2.69 lakh crore to Govt. via dividend

EC to provide mobile phone deposit facilities for voters outside polling stations

Context : The Reserve Bank of India (RBI) has announced a₹2.69 lakh crore dividend transfer to the central government for FY 2024-25. This comes amid a revision in its risk buffer, exceeding budget estimates and impacting fiscal deficit calculations.

Relevance : GS 2(Elections and Reforms)

Mobile Phone Deposit Facility –Significance

• Rationale:
  • Acknowledges widespread mobile phone usage across urban and rural India.
  • Addresses practical challenges faced by voters, especially women, senior citizens, and persons with disabilities, in managing their phones at polling stations.

• Implementation:
  • Voters allowed to carry phones within 100 metres of polling stations in switched-off mode.
  • Deposit stations (pigeon-hole boxes/jute bags) to be placed outside the polling station entrance.
  • Phones strictly prohibited inside the polling booth, in line with Rule 49M of Conduct of Elections Rules, 1961 (ensures voting secrecy).

• Exemptions:
  • Returning Officers may exempt specific polling stations based on local security or administrative conditions

• Significance:
  • Enhances voter convenience and confidence.
  • Addresses security and privacy concerns within polling premises.
  • Promotes a balance between modern voter habits and the integrity of the voting process.

Rationalisation of Canvassing Norms – Key Takeaways

• Revised Canvassing Zone:
  • Prohibition of canvassing within 100 metres of polling stations now strictly enforced.
  • Candidate booths for unofficial voter slips must be located beyond 100 metres.

• Legal Backing:
  • In accordance with:
    • Representation of the People Act, 1951
    • Conduct of Elections Rules, 1961

• Purpose & Impact:
  • Ensures a neutral and intimidation-free atmosphere for voters.
  • Prevents last-minute political influence or coercion at the polling station.
  • Standardises practices across the country, improving uniformity in electoral conduct.

‘Creation of theatre commands will kick-start next generation of reforms’

Objective of Theatre Commands

• Dual-stream structure:
  • Separation of roles into:
    • Force Application: Managed by Theatre Commanders (operational aspects).
    • Force Generation: Managed by Service Chiefs under “Raise, Train, Sustain (RTS)” functions.
• Goal: Create a more efficient and integrated defence structure by delegating operational and administrative responsibilities separately but in coordination.

Relevance : GS 3(Defence)

Nature of the Transformation

• Described as “Revolutionary”:
  • One of the most significant structural changes in post-Independence Indian military history.
  • Aims for joint operational structures across multiple levels and commands.

• Facilitated by CDS:
  • One of the key mandates of the Chief of Defence Staff (CDS) is to implement jointness and restructure the forces.
  • General Chauhan has prioritized reorganising geography-centric Integrated Theatre Commands (ITCs).

Implementation Requirements

• Preconditions for Theatre Commands:
  • High jointness among the Army, Navy, and Air Force.
  • Physical and process integration of infrastructure, activities, and command systems.

• Expected cascading impact:
  • Reforms will reshape the organisation at all levels — not just the top, but also field and support structures.
  • Will trigger cultural and conceptual changes within the forces, demanding adaptability.

• Challenges:
  • Resistance and acceptability issues at various hierarchical levels.
  • Requires a strong push for awareness and training to facilitate a smooth transition.

Strategic Significance

• Better resource optimisation:
  • Theatre Commands will reduce redundancy and optimise combat readiness by eliminating duplication.
• Operational synergy:
  • Ensures that the three services operate as a cohesive joint force during war and peace.
• Global alignment:
  • Brings India’s military structure closer to that of advanced militaries like the U.S. and China, which operate unified theatre commands.

Conclusion

• The creation of Theatre Commands marks the initiation of next-generation reforms in India’s military doctrine and structure.
• The long-term vision focuses on transforming India’s armed forces into a leaner, more agile, and joint war-fighting machine for future warfare.

Supreme Court says dual taxation on broadcasting services permissible in law

Context : Dual taxation upheld:

• The Centre can imposeservicetax on broadcasting services.
  • The States can levy entertainment tax on entertainment provided to subscribers.

• No legal overlap:
  • Court ruled that service tax and entertainment tax pertain to distinct aspects of the broadcasting activity.
  • Therefore, both taxes can legally coexist without violating constitutional provisions.

Relevance :GS 3(Taxaion )

Legal Basis

• Broadcasting = Service:
  • Taxable under Finance Act, 1994, within Entry 97 of the Union List (residuary powers of Parliament).
• Entertainment = Luxury:
  • Taxable under Entry 62 of the State List (Seventh Schedule of the Constitution).
• Interpretation by Supreme Court:
  • The Court clarified that “entertainment” falls within the scope of “luxury” and can be broadly interpreted.
  • Taxation on “different aspects” by different legislatures is constitutionally valid.

Changing Nature of Entertainment

• Technological evolution:
  • Entertainment today is accessed not only in public venues but also in private settings (e.g., homes, smartphones, smartwatches).
  • Hence, entertainment tax laws must evolve and be interpreted liberally and expansively.

• Scope of “entertainment”:
  • The Court emphasized a broad definition to include all forms of digital and broadcasted entertainment.

Constitutional and Federal Implications

• Reinforces federal taxation powers:
  • The judgment reaffirms the constitutional allocation of taxing powers between Union and States.

• Prevents tax disputes:
  • Clarifies and resolves confusion over overlapping tax jurisdictions, especially post-GST era where entertainment tax was subsumed (except for specific services).

Conclusion

• The Supreme Court validates the principle of dual taxation for services that can be legally and logically split into multiple components.
• Strengthens the doctrine of “aspect theory” in Indian taxation — i.e., the same transaction can be taxed differently under different heads, if viewed from different legal perspectives.

‘U.K.’s Chagos Islands deal with Mauritius risks entrenching exile of some islanders’

UK–Mauritius Chagos Deal Overview

• Agreement signed: UK agreed to hand over Chagos Archipelago to Mauritius, except for Diego Garcia.
• Diego Garcia remains under UK-U.S. control for military base operations via a 99-year lease.
• Financial terms: Mauritius to receive £101 million/year (~$136 million) for the lease.
• Trust fund created: £40 million (~$54 million) for the Chagossian diaspora (~10,000 people).

Relevance : GS 2(International Relations)

Human Rights Watch (HRW) Concerns

• Exile continues:
  • Deal excludes Diego Garcia from resettlement, entrenching exile of Chagossians originally from that island.
• Historical injustice:
  • HRW labels 1960s expulsion of Chagossians by UK for U.S. military base as an “ongoing colonial crime against humanity”.
• Partial return rights:
  • Resettlement is allowed only on smaller islands, not the main ancestral island (Diego Garcia).

Geopolitical Context

• Strategic location:
  • Diego Garcia is a critical Indo-Pacific base for U.S.-UK military operations, especially in Asia and the Middle East.
• Colonial legacy:
  • The Chagos dispute is a symbol of lingering colonialism, with Mauritius claiming rightful sovereignty.

Legal and Ethical Dimensions

• Violation of indigenous rights:
  • The forced displacement of Chagossians is widely condemned as ethnic cleansing and human rights abuse.
• International rulings:
  • The ICJ (International Court of Justice) and UN General Assembly have urged the UK to return the islands to Mauritius.
• Incomplete justice:
  • Despite returning control to Mauritius, the exclusion of Diego Garcia implies partial justice and selective reparations.

Conclusion

• The deal represents progress in decolonisation but falls short of full justice for the Chagossians.
• Military geopolitics still trumps humanitarian and historical redress, especially in strategically critical regions.

RBI to transfer ₹2.69 lakh crore to Govt. via dividend

Context : RBI Dividend Transfer

• Amount transferred: ₹2.69 lakh crore (₹2,68,590.07 crore) surplus as dividend for FY 2024-25.
• Comparison with previous year:
  • 27% higher than last year’s transfer of ₹2.11 lakh crore (FY 2023-24).
• Basis for surplus:
  • Derived using Revised Economic Capital Framework (ECF) approved on May 15, 2025.

Relevance : GS 3(RBI )

Contingent Risk Buffer (CRB)

• CRB increased to 7.5% of RBI’s balance sheet size.
• Past CRB trends:
  • 5.5% (2018-22) due to COVID & economic conditions.
  • 6% in FY 2022-23.
  • 6.5% in FY 2023-24.
• Implication: A higher CRB indicates greater prudence and financial resilience, even though it reduced the dividend payout potential.

Fiscal Implications

• Union Budget 2025-26 assumption: ₹2.56 lakh crore from RBI + PSBs as dividend.
• Actual RBI payout alone exceeds the Budget estimate → fiscal boost.
• Expected fiscal deficit reduction:
  • From 4.4% to ~4.2% of GDP (20 basis points drop).
• Key drivers of surplus:
  • Robust foreign exchange sales (RBI was top seller in Asia in Jan 2025).
  • Strong interest income.
  • Higher forex gains.

 Market Reaction

• Market expected₹3 lakh crore dividend – actual figure was below expectations.
• Reason: CRB hike to 7.5% curtailed payout.
• Investor sentiment:
  • Seen as slightly negative → potential profit booking after recent rallies.
  • Bond yields may react due to changing fiscal assumptions.

 Expert Commentary

• SBI’s Soumya Kanti Ghosh:
  • Calls it a prudent move to raise risk buffers.
  • Warns that dividend could have touched₹3.5 lakh crore without CRB hike.
• Tata AMC’s Murthy Nagarajan:
  • Points to market disappointment due to lower-than-expected payout.

Conclusion

• Positive for fiscal math: Exceeds Budget expectations → helps in deficit management.
• Shows RBI’s conservative stance: Enhances its financial strength in uncertain macro conditions.
• Mixed market reaction: Fiscal upside but short-term disappointment due to lower-than-hoped dividend.