What is NATGRID?

• It is the Integrated Intelligence Grid connecting the databases of core security agencies of government of India for the purpose of Counter Terrorism.
• It was proposed in the aftermath of 26/11 Mumbai terrorist attacks.

Reason for it's establishment?

The 26/11 attacks on mumbai exposed several weaknesses in India's intelligence gathering and action netwroks. Before Mumbai attacks, a Pakistani origin American Lashkare-e-Taiba (LeT) operative David Coleman Headly had visited India several times and done reconnaissance of places that came under attack 26/11. But, Indian agencies have failed to raise suspicion as they have lacked a system that could reveal a pattern in his unusual itineraries and trips to the country.It is argued that had a system like NATGRID in place, Headly would have been apprehended well before the attacks.

How it works?

• NATGRID collects and collates a host of information from various government agencies including tax and bank details, credit/debit card transactions, visa and immigration records and itineraries of rail and air travel.
• It will also have access to criminal information including FIRs across 14000 police stations in India.
• This combined data will be made available to 11 Central agencies which are: R&AW, NIA, IB, CBI, FIU, CBDT, DRI, ED, NCB, CBIC and Directorate of GST Intelligence.                   

Crticism over NATGRID:

NATGRID faced opposition over possible violation of privacy and leakage of confidential personal information.

Recent Pegasus Whatsapp leak issue:

Recently in October 2020, Whatsapp conversations of many indian journalists, lawyers and human right activists were hacked using a software called Pegasus developed by an Israeli cyber intelligence firm, NSO . Whatsapp filed a lawsuit on NSO in a California court regarding this leak.NSO claims that it only sells the software to governments. But, Indian government had denied purchasing it.

Is Surveillance of this kind legal in India ?

• Section 69 of the Information Technology Act, 2000 empowers the empowers the central government or a state government to intercept, monitor or decrypt any information in any computer source in the interest of sovereignity or integrity of india.
• Section 5 of the Indian Telegraph Act,1885 empowers lawful interception of messages on occurrence of public emergency or in the interest of public safety.

Do any Indian Intelligence agency have absolute powers in Surveillance?

• The central government  on 5th feb 2021 denied granting blanket permission to any agency for interception or monitoring of any messages or information under its surveillance programs such as NATGRID, Central Monitoring System etc.
• For such thing, Permission is required from the competent authority ( Union Home Secretary ) as per due process of law. 

                                                                            

                                                                                                                

Definition:

Divisible pool refers to the taxes of the central government that it should share with sub national or state governments in accordance with the recommendations of the Finance Commission.

What is the need of divisible pool?

• When it comes to distribution of tax revenues between centre and states, central government enjoys more share like corporate tax and personal income tax. This asymmetry in the distribution of tax revenue is called Vertical Fiscal Imbalances. But, states do have their own expenditure requirements.
• To solve this vertical imbalance, Constitution proposes for the creation of Finance Commission in every five years to recommend the transfer of resources from the centre to the states.(According to Article 280)
• Finance commission reviews the fiscal conditions of centre and states from time to time and suggests resource transfer from centre to states.
• Constitution itself points out which tax resources to be shared with states(in Article 270).These tax resources of the centre that are to be shared with states is called Divisible Pool of Taxes.

What all comes under divisible pool of taxes?

At present, all taxes of central government, except cess and surcharges are to be shared with the states.

A small case study

Recently in the Union Budget 2021-22, Government introduced an Agri Infra Cess on petrol and diesel -2.5 and 4 rupees respectively. But, this wont affect the price of these items, because government also decreased the excise duty by same amount.therefore no extra burden on consumers. Then, why government did this?

              Because, money raised from cess goes directly to the centre. But, excise duty is to be shared with the states( because excise duty is the divisible pool).So in a bid to rope in more money, the government introduced the cess, at the expense of states. Granted, the centre can only use this money towards agri-infra initiatives.