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Global Action Plan of the Decade of Family Farming | UPSC – IAS

Global Action Plan of the Decade of Family Farming UPSC - IAS

Global Action Plan of the Decade of Family Farming UPSC - IAS

Global Action Plan of the Decade of Family Farming | UPSC – IAS

United Nations Decade of Family Farming (2019-2028), was launched by the Food and Agriculture Organization (FAO) and the International Fund for Agricultural Development (IFAD). The UN Decade of Family Farming aims to shed new light on what it means to be a family farmer in a rapidly changing world, the important role they play in eradicating hunger and shaping our future of food. Family farming offers a unique opportunity to ensure (particularly in rural areas) :-

  • Food security,
  • Improve livelihoods,
  • Better manage natural resources,
  • Protect the environment and
  • Achieve sustainable development, 

The Decade of Family Farming provides an extraordinary opportunity for the United Nations to achieve its Sustainable Development Goals (SDGs) in an inclusive, collaborative and coherent way.

  • A Global Action Plan was also laid out to boost support for family farmers, which provides detailed guidance for the international community on collective and coherent actions that can be taken during 2019-2028.
    Family Farming: Concept and Significance
  • As per the FAO, “Family farming is a means of organizing agricultural, forestry, fisheries, pastoral and aquaculture production which is managed and operated by a family and predominantly reliant on family labour.”
  • Provide healthy, diversified and culturally appropriate foods. They represent over 90 per cent of all farms globally, and produce 80 percent of the world’s food in value terms.
  • Generate on and off-farm employment opportunities as they spend their incomes mostly within local and regional markets thus helping rural economies grow along with wider women’s participation.
  • Ensure the succession of knowledge and tradition from generation to generation, and promote social equity and community well-being.

Some Key Facts on family farming | UPSC – IAS

  • More than 80 percent of all farms globally are below two hectares.
  • Family farms occupy around 70-80 percent of farmland and produce more than 80 percent of the world’s food in value terms.
  • Women perform nearly 50 percent of farm labor but hold only 15 percent of farmland.
  • 90 percent of fishers are small-scale operators, which account for half of the capture fisheries production in developing countries.
  • Up to 500 million pastoralists rely on livestock rearing to make a living.
  • Mountain farming is largely family farming.
  • Family farmers include forest communities. Around 40 percent of the extreme rural poor live in forest and savannah areas.
  • Traditional indigenous territories encompass up to 22 percent of the world’s land surface and coincide with areas that hold 80 percent of the planet’s biodiversity.

Challenges to Family Farming in the developing countries | UPSC – IAS

  • Socio-economic challenges: Although family farmers produce most of food, they, paradoxically face poverty in developing countries with women farmers facing greater constraints. Rural youth are also highly vulnerable due to a lack of incentives for on-and off-farm employment opportunities.
  • Shrinking land holding, as more than 80 percent of all farms globally are below two hectares therefore unable to reach economy of scale.
  • Lack of access to resources, credit, infrastructure and technology to support the food production and marketing.
  • Climate change as the environmental conditions on which they rely are under threat which necessitates adoption of climate resilient agricultural practices.

Actions include | UPSC – IAS

  • Developing and implementing an enabling policy environment that support family farming at local, national and international levels;
  • Supporting rural youth and women by enabling them to access productive assets, natural resources, information etc.
  • Strengthening family farmers’ organizations and their capacities to generate knowledge and link traditional knowledge with new solutions;
  • Improving family farmers’ livelihoods and enhancing their resilience to multiple hazards though access to basic social and economic services.
  • Promoting sustainability of family farming for climate-resilient food systems

Conclusion | UPSC – IAS

Family and farm represent a unity that continuously co-evolves, fulfilling economic, environmental, social and cultural functions of the wider rural economy. Hence the Decade of Family Farming aims to create a conducive environment that strengthens their position, and maximizes their contributions to global food security and nutrition, and a healthy, resilient and sustainable future.

Effects of Liberalization on the Indian Economy | UPSC – IAS

Effects of Liberalization on the Economy UPSC - IAS

Effects of Liberalization on the Indian Economy UPSC - Vision IAS

Effects of Liberalization on the Indian Economy | UPSC – IAS

Liberalization is any process whereby a state lifts restrictions on some private individual activities. Liberalization occurs when something which used to be banned is no longer banned, or when government regulations are relaxed.

Economic liberalization refers to the reduction or elimination of government regulations or restrictions on private business and trade. It is usually promoted by advocates of free markets and free trade, whose ideology is also called economic liberalism. Economic liberalization also often involves reductions of taxes, social security, and unemployment benefits.

In India economic reforms initiated in 1991 | UPSC – IAS

On July 23, 1991, India launched a process of economic reforms in response to a fiscal and balance-of-payment (BoP) crisis. The reforms were historic and were going to change the very face and the nature of the economy in the coming times. The economic reform programme, that India launched, consisted of two categories of measures:-

Macroeconomic Stabilisation Measures

  • lt includes all those economic policies which intend to boost the aggregate demand in the economy-be it domestic or external.
  • For the enhanced domestic demand, the focus has to be on increasing the purchasing power of the masses which entails an emphasis on the creation of gainful and quality employment opportunities.

Structural Reform Measures

  • It includes all the policy reforms which have been initiated by the government to boost the aggregate supply of goods and services in the economy. It naturally entails unshackling the economy so that it may search for its own potential of enhanced productivity and production.

In short Economic reforms in India led to :-

  • Increased employment
  • Increased tax revenues and hence public spending
  • Larger industry
  • More foreign investments
  • Increased GDP per capita

 Process of liberalisation on Indian Economy | UPSC – IAS

The process of reforms in India has to be completed via three other processes namely, liberalisation, privatisation and globalisation, known popularly by their short-form-the LPG.

  • The term liberalisation has its origin in the political ideology ‘liberalism’ which took its form by early nineteenth century.  The term is sometimes portrayed as a meta-ideology capable of embracing a broad range of rival values and beliefs. The ideology was the product of the breakdown of feudalism and the growth of a market or capitalist society in its place which became popular in economics via the writings of Adam Smith (its founding father in the USA) and got identified as a principle of laissez-faire.
  • The term liberalisation will have the same connotation in economics as its root word liberalism has. Pro-market or pro-capitalistic inclination in the economic policies of an economy is the process of liberalisation. We see it taking place in the whole Euro-America in the 1970s and particularly in the 1980s.16 The most suitable example of this process could be China of the mid-1980s when it announced its ‘open door policy’. Though China lacks (even today) some trademark traits of liberalism, as for example individualism, liberty, democratic system, etc., still China was called a liberalising economy.

In India, regulatory mechanisms were enforced in various ways rules and laws which were aimed at regulating the economic activities became major hindrances in growth and development. Liberalisation was introduced to put an end to these restrictions and open up various sectors of the economy

  • Industrial licensing under which every entrepreneur had to get permission from government officials to start a firm, close a firm or to decide the amount of goods that could be produced
  • Private sector was not allowed in many industries
  • Some goods could be produced only in small scale industries and
  • Controls on price fixation and distribution of selected industrial products.

The reform policies introduced in and after 1991 removed many of these restrictions. Industrial licensing was abolished for almost all but product categories — alcohol, cigarettes, hazardous chemicals industrial explosives, electronics, aerospace and drugs and pharmaceuticals.

The only industries which are now reserved for the public sector are defence equipments, atomic energy generation and railway transport. Many goods produced by small scale industries have now been dereserved. In many industries, the market has been allowed to determine the prices.

Effects of Liberalization on the Indian Economy | UPSC- IAS

When a nation becomes liberalized, the economic effects can be profound for the country and for investors. Economic liberalization refers to a country “opening up” to the rest of the world with regards to trade, regulations, taxation and other areas that generally affect business in the country

Impact on Indian GDP growth rate 

  • India’s annual average growth rate from 1990 – 2010 has been 6.6 % which is almost double than pre reforms era.

Removing Barriers to International Investing

  • Investing in emerging market countries can sometimes be an impossible task if the country you’re investing in has several barriers to entry. These barriers can include tax laws, foreign investment restrictions, legal issues and accounting regulations, all of which make it difficult or impossible to gain access to the country.
  • The economic liberalization process begins by relaxing these barriers and relinquishing some control over the direction of the economy to the private sector. This often involves some form of deregulation and privatization of companies.

Industrial Growth Rate 

  • Foreign companies got free access to Indian markets and made domestic products un-competitive. They obviously had better access to technology and larger economies of scale.

Unrestricted Flow of Capital

  • The primary goals of economic liberalization are the free flow of capital between nations and the efficient allocation of resources and competitive advantages. This is usually done by reducing protectionist policies such as tariffs, trade laws and other trade barriers.
  • One of the main effects of this increased flow of capital into the country is it makes it cheaper for companies to access capital from investors. A lower cost of capital allows companies to undertake profitable projects they may not have been able to with a higher cost of capital pre-liberalization, leading to higher growth rates.

Impact on Small Scale in India

  • After independence, government attempted to revive small scale sector by reserving items exclusively for it to manufacture. With liberalization list of reserved items was substantially curtailed and many new sectors were thrown open to big players.
  • Small scale industry however exists and still remains backbone of Indian Economy. It contributes to major portion of exports and private sector employment. Results are mixed, many erstwhile Small scale industries got bigger and better. But overall value addition, product innovation and technology adoption remains dismal and they exist only on back of government support.

Impact on Agriculture

  • Share of agriculture in domestic economy has declined to about 15%. However, people dependent upon agriculture are still around 55%. Cropping patterns has undergone a huge change, but impact of liberalization can’t be properly assessed. We saw under series relating to agriculture that there are still all pervasive government controls and interventions starting from production to distribution.
  • Global agricultural economy is highly distorted. This is mainly because imbalance in economic and political power in hands of farmers of developed and developing countries. In developed countries, commercial and capitalistic agriculture is in place which is owned by influential Agri corporations. They easily influence policies of WTO and extract a better deal for themselves at cost of farmers of developing world.
  • Farming in developing world is subsistence and supports large number of poor people. With globalization there has been high fluctuation in commodity prices which put them in massive risk. This is particularly true for cash crops like Cotton and Sugarcane. Recent crises in both crops indicate towards this conclusively.

On the positive note, India’s largely self-sufficient and high value distinguished products like Basmati Rice are in high demand all over. Generally speaking, India is better placed to take up challenge of globalization in this case. If done in sustainable and inclusive manner, it will have a huge multiplier impact on whole economy. Worldwide implicit compulsion to develop Food processing Industry is another landmark effect of globalization.

  • Apart from these, Farm Mechanization i.e. use of electronic/solar pumps, Tractors, combines etc. all are fruits of globalization. Now moving a step further, Information technology is being incorporated into agriculture to facilitate farming.

Impact on Services Sector

  • In this case globalization has been boon for developing countries and bane for developed ones. Due to historic economic disparity between two groups, human resources have been much cheaper in developing economies.
  • This was further facilitated by IT revolution and this all culminated in exodus of numerous jobs from developed countries to developing countries. Here US have to jealously guard its jobs as we guard our agriculture.

Information Technology industry

  • Software, BPO, KPO, LPO industry boom in India has helped India to absorb a big chunk of demographic dividend, which otherwise would have wasted. Best part is that export of services result in export of high value. There is almost no material exported which consume some natural resource. Only thing exported is labor of Professionals, which doesn’t deplete, instead grows with time. Now India is better placed to become a truly Knowledge Economy.
  • Exports of these services constitute big part of India’s foreign Exchange earnings. In fact, the only three years India had Current Account surplus, I.e. 2000-2002, was on back of this export only.

Banking

  • Further, in banking too India has been a gainer. Since reforms, there have been three rounds of License Grants for private banks. Private Banks such as ICICI, HDFC, Yes Bank and also foreign banks, raised standards of Indian Banking Industry. Now there is cut through competition in the banking industry, and public sector banks are more responsive to customers.
  • Here too IT is on path of bringing banking revolution. New government schemes like Pradhan Mantri Jan dhan Yojana aims to achieve their targets by using Aadhaar Card. Having said this, Public Sector Banks still remain major lender in the country.
  • Similarly Insurance Industry now offers variety of products such as Unit Linked Insurance plans, Travel Insurance etc. But, in India life Insurance business is still decisively in hands of Life Insurance Corporation of India.

Stock Markets

  • Another major development is one of Stock Markets. Stock Markets are platforms on which Corporate Securities can be traded real time. It provides mechanisms for constant price discovery, options for investors to exit from or enter into investment any time. These are back bone of free markets these days and there is robust trade going all over the world on stock exchanges. Their Importance can be estimated from the fact that, behavior of stock markets of a country is strongest indicator of health and future prospects of an economy.
  • These markets has thrown open wide array of associated services such as Investment Banking, Asset Management, Underwriting services, Hedging advice etc. These collectively employ lakhs of people all over India.
  • Similarly there are commodities market which provides avenues for investment and sale of various eligible commodities.

Telecom Sector

  • Conventionally, Telecom sector was a government owned monopoly and consequently service was quite substandard. After reforms, private telecom sector reached pinnacle of success. And Indian telecom companies went global. However, corruption and rent seeking marred growth and outlook of this sector.
  • Entry of modern Direct to Home services saw improvements in quality of Television services on one hand and loss of livelihood for numerous local cable operators.

Education and Health Sector

  • It should be noted that food (Agriculture), Health and education (and to lesser extent banking) are among basic necessities, which every human being deserves and can’t do without. Unfortunately, in developing countries there is market failure in all these sectors and majority of people can’t afford beyond a certain limit (or can’t afford at all). Concept of free markets, globalization, liberalization etc. fails here miserably. Free markets provide goods and services to people who can afford paying for them, not to those who deserve and need these.
  • Now if we consider these sectors from angle of our inclination towards free markets, certainly there has been lot of progress. There has been world class education available in India and Deregulation has resulted in Mushrooming of private engineering and Medical Colleges. But in reality, this had far reaching devastating effect on society.
  • These new colleges accommodate only a miniscule proportion of aspirants at very high costs. Recently, an Independent organization ‘Transparency International’ came out with report claiming that India’s medical system is most corrupt in the world. This was no surprise, we all know from where it starts. High fees of education forces many aspirants to take educational loans from banks. After qualifying job market is unable to absorb majority of them. Practice turns out to be option of last resort. Now to make a decent living and to pay back the loans person is lured by corruption. Consequently, when many similar cases are put together, we get a corrupt system, economy and society.
  • Reality is that after deregulation and liberalization, government along with other sectors, pulled its hand from social sectors too. Now there is Mediocre to high quality options are available in private sector which can be availed as per one’s budget. In public Sector Less than Mediocre to Mediocre options are available. This leaves huge proportion of aspiring students and expecting patients.
  • On Social front India’s performance is deplored all over the world and it is probably behind all important developing economies. This lacuna has been recognized and government has taken the charge. In case of education almost universal enrollments has been achieved upto primary level and now impetus should be on improving quality, so that student of public schools comes at par with at least average private ones.

Conclusion | UPSC – IAS

It means, in the Indian case the term liberalisation is used to show the direction of the economic reforms-with decreasing influence of the state or the planned or the command economy and increasing influence of free market or the capitalistic economy. It is a move towards capitalism. India is attempting to strike its own balance of the ‘state-market mix’. It means, even if the economic reforms have the direction towards market economy it can never be branded a blind-run to capitalism. Since the economy was more like the state economy in the former years, it has to go for a greater degree of mix of the market. But in the long run, Liberalism curtails the powers of Parliaments.

Pradhan Mantri Fasal Bima Yojana (PMFBY) | UPSC – IAS

Pradhan Mantri Fasal Bima Yojana (PMFBY) UPSC - IAS

Pradhan Mantri Fasal Bima Yojana (PMFBY) UPSC - IAS

Pradhan Mantri Fasal BIma Yojana (PMFBY) | UPSC – IAS

The Pradhan Mantri Fasal Bima Yojana was launched on 18 February 2016 by Prime Minister Narendra Modi is an insurance service for farmers for their yields.

More about  PMFBY| UPSC – IAS

  • Out of Rs 1,400 crore earmarked annually for the north-eastern States under Pradhan Mantri Fasal Bima Yojana, only Rs 8 crore was actually spent in 2018. Arunachal Pradesh, Nagaland, Manipur and Mizoram are not covered under the scheme at all.
  • States in the Northeast, as well as the Union Territory of Daman and Diu, face challenges such as the lack of interest by insurance companies and the lack of state budgetary resources to pay their share of the premium.
  • Insurance companies have been reluctant to bid for these States, as the administrative costs are high. There are no proper land records. Historic yield data is not available for these States, particularly at the gram panchayat and block level.
  • Insurance companies are also not interested because the coverage is so limited. There are low number of loanee farmers in the Northeast, except in Assam.
  • Lack of forecasting infrastructure has also hampered the penetration of the weather-based insurance scheme in these states.
  • Some large States like Bihar and West Bengal have withdrawn from PMFBY to set up their own State-level schemes and Punjab has never participated in the scheme.

Objectives of the PMFBY | UPSC – IAS

  • To provide insurance coverage and financial support to the farmers in the event of natural calamities, pests & diseases.
  • To stabilise the income of farmers to ensure their continuance in farming.
  • To encourage farmers to adopt innovative and modern agricultural practices.
  • To ensure flow of credit to the agriculture sector.

Features of PMFBY | UPSC – IAS

  • It was launched in 2016 replacing the existing two schemes National Agricultural Insurance Scheme (NAIS) as well as Modified NAIS.
  • A uniform premium of only 2% to be paid by farmers for all Kharif crops and 1.5% for all Rabi crops & oilseeds and 5% for horticultural crops.
  • The balance premium was to be paid by state and central government in equal proportions.
  • There is no upper limit on Government subsidy so farmers will get claim against full sum insured without any reduction.
  • The PMFBY is compulsory for loanee farmers availing crop loans for notified crops in notified areas and voluntary for non-loanee farmers.
  • The PMFBY operates on an area approach. Thus, all farmers in a particular area must pay the same premium and have the same claim payments.
  • It encourages bidding amongst insurance companies before being allocated to a district to ensure fair competition.
  • Yield Losses – Natural Fire and Lightning, Storm, Hailstorm, Cyclone, Typhoon, Tempest, Hurricane, Tornado. Risks due to Flood, Inundation and Landslide, Drought, Dry spells, Pests/ Diseases. It also includes Post Harvest losses.
  • It also includes mandatory use of technology such as smartphones, drones etc. while assessing losses.
  • Public sector insurer (Agriculture Insurance Company of India, United India Insurance Company etc.) and private insurance companies are empanelled for implementation of the scheme.
  • Recently, states have been allowed to set up their own insurance companies for implementing the scheme.
  • Recently, Government has comprehensively revised the Operational Guidelines of the scheme.
    • The farmers will be paid 12% interest by insurance companies for the delay in settlement claims beyond two months of prescribed cut-off date.
    • State Governments will have to pay 12% interest for the delay in release of State share of subsidy beyond three months of prescribed cut-off date submission of requisition by insurance companies.
    • Inclusion of hailstorms in post-harvest losses, besides unseasonal and cyclonic rainfalls.
    • Separate Budget Allocation for Administrative expenses (at least 2% of budget of scheme).
    • Appointment of District Level Grievance Redressal Officer and creation of State and District Grievance Redressal Cells for fast redressal of grievances.

Middle Income Trap and its Causes in India | UPSC – IAS

Middle Income Trap and its Causes in India UPSC - IAS

Middle Income Trap and its Causes in India UPSC - IAS

Middle Income Trap and its Causes in India | UPSC – IAS

The middle income trap is a theoretical economic development situation, in which a country that attains a certain income (due to given advantages) gets stuck at that level. The World Bank defines as the ‘middle-income range’ countries with gross national product per capita that has remained between $1,000 to $12,000 at constant (2011) prices.

What is middle income trap? | UPSC – IAS

  • According to the idea, a country in the middle income trap has lost its competitive edge in the export of manufactured goods because of rising wages. However, it is unable to keep up with more developed economies in the high-value-added market.
  • The countries caught in the Middle Income Trap are unable to compete with low-income, low-wage economies in manufactured exports and unable to compete with advanced economies in high-skill innovations.
  • MIT is associated with a relatively sustained growth slowdown with both direct effects (e.g. income losses) as well as indirect effects (e.g. social conflicts).
  • Fuelled by the global slowdown, many countries, particularly in South East Asia (e.g. Thailand, Vietnam, and Malaysia etc.), Africa (e.g. South Africa) and Latin America (e.g. Brazil) currently face the predicament of MIT, which has impeded their transition from middle income to high income.
  • One of the most standard examples of an MIT country is Brazil where annual income growth rate plummeted to an average rate of 0.58% between 1997 and 2011. It was accompanied by one of the highest income inequalities worldwide (World Development Indicators, World Bank, 2016), poor institutional quality in comparison to developed countries and a wave of protests against the corruption and mismanagement in the country.

Why Do Countries Fall into the Middle Income Trap? | UPSC – IAS

  • Inability to shift growth strategies: If a country cannot make a timely transition from resource-driven growth, with low-cost labor and capital, to productivity-driven growth, it might find itself trapped in the middle income zone.
    • Traditional exports cannot be as easily expanded as before because wages are higher and cost competitiveness declines.
    • Moreover, export growth depends on introducing new processes and finding new markets. To do this, exporters must understand the quality, price, and consumer preference points of the global economy, which is a demanding task.
  • Skewed income distribution & stagnation in middle class population: Wealth inequality and the hierarchical distribution of income in developing countries is a downward drag on domestic demand, which results in stagnation. It slows down the upward mobility of families that are at lower levels, into middle class that is prepared to pay more for quality and differentiated products.
  • Recurring boom-bust cycles & procyclical lending: Many middle-income countries in Latin America have been through cycles of growth based on credit extended during commodity booms, followed by crisis, and then recovery. This stop–go cycle has prevented them from becoming advanced economies despite enjoying many periods of fast growth. This is in sharp contrast with successful countries in East Asia—Japan, Hong Kong, Taiwan, Singapore, and South Korea that have been able to sustain high growth over some 50 years.

Why India might get caught into middle income trap? | UPSC – IAS

  • Backlash against globalization: Hyperglobalization (that benefited the early convergers like China, South Korea & Japan) led to a backlash in the advanced countries, as seen through increasing protectionism & lowering World Trade-GDP ratios since 2011. This means that similar trading opportunities may no longer be available for the new convergers.
  • Thwarted Structural Transformation: Successful development requires two kinds of structural transformations: 1) a shift of resources from low productivity to high productivity sectors; and 2) a larger share of resources devoted to sectors that have the potential for rapid productivity growth. However, in late convergers like India, ‘premature deindustrialization’ (tendency for manufacturing to peak at lower levels of activity and earlier in the development process) is a major cause of concern.
  • Human Capital Regression: Human capital frontier for the new structural transformation has shifted further away making the transformation costlier. This is because the new advances in technology not only require skilled human capital, but also demands them to learn continually. As opposed to these requirements, there is a wider educational attainment gap between lower income countries and advanced economies.
  • Climate change-induced Agricultural Stress: Agricultural productivity is crucial both for feeding people and for ensuring human capital moves from agriculture to modern sectors. With climate change, ambient temperature has increased and weather extremities have become a recurrent phenomenon. This is, in particular, a threat to India where agriculture is heavily dependent on precipitation.
  • Fall in private consumption, muted rise in fixed investment and sluggish exports have led to slowdown in the economy and increase India’s vulnerability to the middle income trap.

Avoiding the Middle Income Trap | UPSC – IAS

In 1960, India was a low-income country with per capita income around 6% of the US. However, India attained the status of lower middle income in 2008 with per capita income of about 12% of the US.
But, the growth has occurred with limited transfer of labour resources to high productivity and dynamic sectors, despite relatively modest agricultural growth. Thus, the risk of getting trapped in middle income zone remains.

To avoid becoming trapped without a viable high-growth strategy, India needs to:

  • Transitioning from diversification to specialization in production: Specialization allowed the middle-income Asian countries to reap economies of scale and offset the cost of disadvantages associated with higher wages (E.g. Electronics industry in South Korea).
    • High levels of investment in new technologies and innovation-conducive policies are 2 overarching requirements to ensure specialized production.
    • Developing good social-safety nets and skill-retraining programs can ease the restructuring process that accompanies specialization.
  • Shifting to productivity-led growth: Total factor-productivity growth in middle-income countries requires major changes in education, from primary & secondary schooling to tertiary education so that workers are adept in new skills as per the demands of the markets. Creating such knowledge economy requires long term planning and investment.
  • Opportunities for professional talent: To attract and retain a critical mass of professional talent that is becoming more internationally mobile, middle income countries like India must develop safe & livable cities that provide attractive lifestyles to professionals.
  • Addressing barriers to effective competition: There is a need to address rigidities that can arise from bankruptcy laws, stringent tax regulations, limited enforcement of IP regulations, imperfect information, discrimination etc.
  • Decentralized economic management: Greater powers should be vested in local governments to ensure speedier decision making
  • Sustaining macroeconomic stability through flexible fiscal framework that limited deficits and debt, and a flexible exchange rate mechanism backed up by a credible inflation-targeting monetary policy could help sustain long periods of growth. Effective restructuring, regulating, and supervising of the financial sector must be ensured so that the present NPA crisis can be effectively handled.
  • Changing orientation of social programmes that targets middle class besides poorer sections of the society which would propel the demand driven growth. E.g. low-cost housing for first-time home buyers in cities, programs to ensure that recent graduates get suitable employment opportunities, paying more attention to public goods like safety, urban transport, and green spaces etc.

World Population Projections 2019 Report | UPSC – IAS

World Population Projections 2019 Report UPSC - IAS

World Population Projections 2019 Report UPSC - IAS

World Population Projections 2019 Report published by UN | UPSC – IAS

World population – The report projects the world population to reach some 9.7 billion by 2050. However, it says that the overall growth rate will continue to fall. The next 30 years will see the population add 2 billion people to today’s 7.7 billion. The world population will reach 11 billion by the end of the century. Half of the projected increase in the global population up to 2050 will be concentrated in just 9 countries. This is led by India and followed by Nigeria, Pakistan, Democratic Republic of the Congo, Ethiopia, Tanzania, Indonesia, Egypt and the US. Many of the fastest growing populations are in the poorest countries. Here, population growth brings additional challenges in the form of poverty, equality, hunger and malnutrition, low education, etc.

Major highlights | UPSC – IAS

  • Fertility rates–The fertility rates are falling worldwide.
  • The average number of births per woman globally, from 3.2 in 1990, fell to 2.5 by 2019.
  • This is now projected to fall further to 2.2 births by 2050.
  • To avoid decline in a national population, a fertility level of 2.1 births per woman is necessary (in the absence of immigration).
  • Age composition – In 2018, for the first time, persons aged 65 years or over worldwide outnumbered children under age five.
  • Projections indicate that by 2050, there will be more than twice as many persons above 65 as children under five.
  • By 2050, one in six people in the world will be over age 65 (16%), up from one in 11 in 2019 (9%).
  • By 2050, the number of persons aged 65 or over will also surpass the number of adolescents and youth aged 15-24.
  • The number of persons aged 80 years or over is projected to triple, from 143 million in 2019 to 426 million in 2050.

united nations population projections UPSC IAS

  • Life expectancy – The overall life expectancy will increase from 64.2 years in 1990 to 77.1 years in 2050.
  • However, life expectancy in poorer countries is projected to continue to lag behind.
  • Today, the average lifespan of a baby born in one of the least developed countries will be some 7 years shorter than one born in a developed country.
  • The main reasons cited are high child and maternal mortality rates, conflict and insecurity, and the continuing impact of the HIV epidemic.
  • Dwindling populations – The populations of 55 countries are projected to decrease by 1% or more between 2019 and 2050.
  • The largest relative reductions in population size (loss of around 20% or more) over this period are expected in Bulgaria, Latvia, Lithuania, Ukraine, and the Wallis and Futuna Islands.
  • The key reasons are sustained low levels of fertility, and, in some places, high rates of emigration.
  • Migration – Migration flows have become a major reason for population change in certain regions.
  • Bangladesh, Nepal and the Philippines are seeing the largest migratory outflows resulting from the demand for migrant workers.
  • Myanmar, Syria and Venezuela are the countries where the largest numbers are leaving because of insecurity or conflict.
  • Sex ratio – Males are projected to continue to outnumber females until the end of the century, but the gap will close eventually.

India’s population | UPSC – IAS

  • China, with 1.43 billion people in 2019, and India, with 1.37 billion, have long been the two most populous countries of the world.
  • China and India comprise 19 and 18%, respectively, of the global total population in 2019. They are followed by the USA.
  • India is projected to surpass China as the world’s most populous country in the next 8 years i.e. by around 2027.
  • India is expected to add nearly 273 million people between 2019 and 2050.
  • It will remain the most populated country through the end of the current century.
  • Together, the population of India and Nigeria (projected to grow by 200 million) could account for 23% of the global population increase to 2050.
  • Over-65 population – In India, children under age five still outnumber the over-65 population.
  • But the over-65 population is projected to overtake the under-five group between 2025 and 2030.
  • By 2050, persons over age 65 will make up about one-seventh of India’s population.
  • By then, the 15-24 years age group in India (13.8%), too, will outnumber the over-65 group (13.6%).
  • So, children under age five are projected to constitute less than 6% of India’s population in 2050, as compared to 7% globally.

SDG Gender Index to measure global Gender Equality | UPSC – IAS

SDG Gender Index to measure global Gender Equality UPSC - IAS

SDG Gender Index to measure global Gender Equality UPSC - IAS

SDG Gender Index to measure global Gender Equality | UPSC – IAS

The 2019 SDG Gender Index enables us to tell a story of global progress, as well as being a tool that gender advocates can use to frame their influencing on the gender equality elements of the SDGs. The SDG Gender Index, a new index to measure global gender equality, was launched recently.

  • The index accounts for 14 out of 17 SDGs (sustainable development goals).
  • The goals cover aspects such as poverty, health, education, literacy, political representation and equality at the workplace.
  • A score of 100 reflects the achievement of gender equality in relation to the targets set for each indicator.
  • A score of 50 signifies that a country is about halfway to meeting a goal.

The SDG Gender Index has been developed by Equal Measures 2030, a joint effort of regional and global organisations including:-

  • African Women’s Development and Communication Network
  • Asian-Pacific Resource and Research Centre for Women
  • Bill and Melinda Gates Foundation
  • International Women’s Health Coalition

key findings of the SDG Gender Index | UPSC – IAS

  • The global average score of the 129 countries (with 95% of the world’s girls and women) is 65.7 out of 100 (“poor” in the index).
  • Nearly 1.4 billion girls and women are living in countries that get a “very poor” grade.
  • Altogether, 2.8 billion girls and women live in countries that get either a “very poor” (59 and below) or “poor” score (60-69).
  • Just 8% of the world’s population of girls and women live in countries that received a “good” gender equality score (80-89).
  • Notably, no country achieved an “excellent” overall score of 90 or above in gender equality.
  • Besides, not all countries’ scores on the index correlate with national income.
  • Some countries perform better than what would be expected based on their GDP per capita, and others underperform.
  • With all these, it was highlighted that the world was far from achieving gender equality.

 India and SDG Gender Index | UPSC – IAS

  • India was ranked at 95th among 129 countries.
  • India’s highest goal scores are on health (79.9), hunger & nutrition (76.2), and energy (71.8).
  • Its lowest goal scores are on partnerships (18.3, in the bottom 10 countries), industry, infrastructure and innovation (38.1), and climate (43.4).
  • On indicators that define the goals, India scored 95.3 on the percentage of female students enrolled in primary education who are overage.
  • In the proportion of seats held by women in national parliament, India scored 23.6; women made up 11.8% of Parliament in 2018.
  • On seats held by women in the Supreme Court (4%), India has a score of 18.2.

On gender-based violence, indicators include –

  • Proportion of women aged 20-24 years who were married or in a union before age 18 (27.3%)
  • Women who agreed that a husband/partner is justified in beating his wife/partner under certain circumstances (47.0%)
  • Women aged 15+ who reported that they feel safe walking alone at night in the city or area where they live (69.1%)

Small Finance Banks (SFBs) – RBI | UPSC – IAS

Small Finance Banks (SFBs) - RBI UPSC - IAS

Small Finance Banks (SFBs) - RBI UPSC - IAS

Small Finance Banks (SFBs) – RBI | UPSC – IAS

Small finance banks can provide basic banking service of acceptance of deposits and lending. Small finance banks can play an important role in the supply of credit to micro and small enterprises, agriculture and banking services in unbanked and underbanked regions in the country, the RBI has decided to licence new “small finance banks” in the private sector.

The aim behind these to provide financial inclusion to sections of the economy not being served by other banks, such as:-

  • Small business units,
  • Small and marginal farmers,
  • Micro and small industries and
  • Unorganised sector entities

Objective of Small finance banks | UPSC – IAS

The objectives of setting up of small finance banks will be for furthering financial inclusion by:-

  • Provision of savings vehicles primarily to unserved and underserved sections of the population, and  Supply of credit to small business units; small and marginal farmers; micro and small industries; and other unorganised sector entities, through high technology-low cost operations

They were proposed by the Nachiket Mor Committee of RBI, as one of the differentiated banking system for credit outreach and announced in the annual Budget of 2014. Currently, SFBs constitutes 0.2% of the total deposits of all scheduled commercial banks and makes up 0.6% of the total lending undertaken by the scheduled commercial banks in India.

Small finance banks are private financial institution for the objective of financial inclusion without any restriction in the area of operations, unlike the Regional Rural Banks or Local Area Banks. For example:- Some of the operational Small Finance Banks in India are:

    • Ujjivan Small Finance Bank.
    • Janalakshmi Small Finance Bank.
    • Equitas Small Finance Bank.
    • A U Small Finance Bank.
    • Capital Small Finance Bank.
    • ESAF Small Finance Bank.
    • Utkarsh Small Finance Bank.
    • Suryoday Small Finance Bank.
    • Fincare Small Finance Bank

Need for Small Finance Banks | UPSC – IAS

  • Differentiated banking to cater large population: India has second-largest unbanked population in the world where more than 200 million people do not have a bank account and many rely on cash or informal financing. Therefore, SFBs provide access to finance to a large unbanked population.
  • Priority sector lending: SFBs play a key role in the priority sector lending space as their main focus is the unserved and underserved segment.
  • Financial inclusion of women: Most of the Small Finance Banks were earlier microfinance companies – to provide loans to women. Now that these have become a bank, female customers can avail full banking solutions. Also, through different CSR initiatives, Small Finance Banks reach out to women customers and make them understand the need of financial planning and banking services.
  • Social Impact: The SFBs are now looking beyond the simple metric of “income improvement” to other indicators of positive social impact, like customer employment characteristics, customer distribution between urban and rural markets and women’s engagement. SFBs not only serve to provide banking solutions but empower the socio-economic progress of its consumers. RBI states that small banks will act as a savings vehicle to these segments of the population.

Guidelines for Licensing of Small Finance Banks in the Private Sector by RBI

Individuals/ professionals with 10 years experience in finance, NBFCs, microfinance cos, local area banks

  • Have a minimum capital of Rs.100 cr
  • Extend 75% of loans to priority sector
  • Have 25% of branches in unbanked areas
  • Maintain reserve requirements
  • Cap loans to individuals and groups at 10% and 15% of net worth
  • Have a business correspondent network
  • Sell FOREX to customers
  • Sell mutual funds, insurance, pensions
  • Can convert into a full-fledged bank
  • Expand across the country
  • Transform into a full fledged bank, but only after RBI’s approval.

Small Finance Banks can not do :-

  • Extend large loans
  • Float subsidiaries
  • Cannot deal in sophisticated financial products

Belt and Road Initiative (BRI) Project | UPSC – IAS

“Belt and Road Initiative (BRI) Project | UPSC – IAS” is locked Belt and Road Initiative (BRI) one belt one road essay for upsc ias initiative

“Belt and Road Initiative (BRI) Project | UPSC – IAS” is locked Belt and Road Initiative (BRI) one belt one road essay for upsc ias initiative

Belt and Road Initiative BRI Project | UPSC – IAS

The Belt and Road Initiative is a global development strategy adopted by the Chinese government involving infrastructure development and investments in 152 countries and international organizations in Asia, Europe, Africa, the Middle East, and the Americas.

  • “Belt” refers to the overland routes for road and rail transportation, called “the Silk Road Economic Belt“; whereas “road” refers to the sea routes, or the 21st Century Maritime Silk Road.The BRI announced in 2013, is made up of a “belt” of overland routes and a maritime “road”, which aims to connect Asia, Europe and Africa.
  • It was known as the One Belt One Road (OBOR) and the Silk Road Economic Belt and the 21st-century Maritime Silk Road until 2016 when the Chinese government considered the emphasis on the word “one” was prone to misinterpretation.
  • The 21st Century Maritime Silk Road designed to provide an impetus to trade from China to Europe through the South China Sea and the Indian Ocean, and from China through the South China Sea towards the South Pacific.

The Chinese government calls the initiative “a bid to enhance regional connectivity and embrace a brighter future”. Some observers see it as a push for Chinese dominance in global affairs with a China-centered trading network. The project has a targeted completion date of 2049, which coincides with the 100th anniversary of the People’s Republic of China.

one belt one road countries list and Participant | UPSC IAS
Belt and Road Initiative Participant Map

Significance of Belt and Road Initiative (BRI) Project | UPSC – IAS

  • In the wake of the global slowdown, BRI offers a new model of development to China to maintain its economic growth. OBOR envisions building networks of roadways, railways, maritime ports, power grids, oil and gas pipelines, associated infrastructure projects which helps Chinese economy.
  • BRI has domestic and international dimension: as it visualises a shift from developed markets in the west to developing economies in Asia, Africa And a shift in China’s development strategy concentrating on provinces in central and western China instead of the developed east coast region.
  • Strategically important as China utilizes its economic clout to build it soft power.

Criticism and Issues with Belt and Road Initiative (BRI) Project | UPSC – IAS

  • Debt-trap diplomacy of China where BRI projects are pushing recipient countries into indebtedness and do not transfer skills or technology. For instance, Hambantota port, where Sri Lanka was forced to lease the port to China for 99 years. Also, there has been rethinking of projects in Malaysia, Maldives, Ethiopia and even in Pakistan.
  • BRI represents political and economic ambitions of China making countries like the US, Japan, Germany, Russia, and Australia unhappy about the impact of Beijing’s moves on their own economic and political interests.
  • China-Pakistan Economic Corridor (CPEC), an important component of BRI, passes through Pakistan-Occupied Kashmir, is the main reason for India signaling its displeasure over BRI and not participating in both the BRFs.

Other concerns raised include:

  • operational problems
  • lack of information transparency
  • lack of evaluation on the impact of regional social culture
  • Over-expansion of the scope of the types of BRI projects,
  • Environmental concerns stemming from China’s infrastructure buildout

Why India should join Belt and Road Initiative (BRI) Project ? | UPSC – IAS

  • India as a participant of Asian era: Projected as Project of the century, BRI signals the political end of the old order where the G7 shaped the economic agenda. BRI involves 126 countries and 29 international organizations covering half of world’s population, and India may be isolated from this new economic order.
  • Shaping global economic rules: BRI is evolving standards of multilateralism, including linkages with the United Nations SDGs. The IMF described it as a “very important contribution” to the global economy and is collaborating with the Chinese authorities on sharing the best international practices, regarding fiscal sustainability and capacity building. Being part of it, India can also shape new economic global rules.
  • A platform for voicing Indian concerns: Italy, a member of the G7, also joined BRI, and Japan also sent special envoy, despite its reservations over project. India could also have raised concerns by joining the BRF.
  • India should provide alternatives and solutions– rather than merely criticizing the project. India should improve its implementation performance so as to provide a viable option to other countries.

Why India is boycotting Belt and Road Initiative (BRI) Project ? | UPSC – IAS

  • CPEC violates India’s sovereignty as it passes through the part of the Pakistan-occupied Kashmir that belongs to India and no country can accept a project that ignores its core concerns on sovereignty and territorial integrity.
  • India also raised concerns regarding unsustainable debt trap, environmental concerns, and transparency in assessment of project costs, and skill and technology transfer to help long term running and maintenance of the assets created by local communities.
  • India is too big to be isolated and India’s continued objection will make China to consider its core concerns.

A Way forward | UPSC – IAS

  • India should highlight its territorial concerns to China and seek appropriate response recognising India’s sovereignty.
  • India should give a South Asian character to the two BRI corridors on India’s western and eastern flanks, by linking them with plans for connectivity in the ASEAN and SAARC region.
  • India can cooperate with like-minded countries like Japan, US, Australia to provide alternatives to BRI, e.g. Asia-Africa Growth Corridor etc.

Food processing and related Industries in India | UPSC – IAS

Food processing and related Industries in India UPSC - IAS GS3 Economic Development

Food processing and related Industries in India GS3 Vision IAS Economic Development

Food processing and related Industries in India | UPSC – IAS

Food processing is the transformation of agricultural products into food, or of one form of food into other forms. Food processing includes many forms of processing foods, from grinding grain to make raw flour to home cooking to complex industrial methods used to make convenience foods.

Food processing is a large sector that covers activities such as:-

  • Agriculture,
  • Horticulture,
  • Plantation,
  • Animal husbandry and
  • Fisheries.

Food  processing also includes other industries that use agriculture inputs for manufacturing of edible products. Based on International Standard Industrial Classification, it has been assumed that the factories listed in the following groups can be summed up to constitute Food Processing industries.

Scope and Significance of the Food Processing Sector in India | UPSC – IAS

India is one of the world’s largest producers as well as consumer of food products, with the sector playing an important role in contributing to the development of the economy. It is the fifth largest industry in our country in terms of production, consumption, export and growth.

With a population of more than one billion individuals and food constituting a major part of the consumer’s budget, this sector has a prominence next to no other businesses in the country.

  • Moreover the importance of this sector to India’s economy becomes all the more relevant, considering the fact that this sector continued to perform well, despite fall in GDP number and poor performance by many other industries, during recession in 2008-09.

The industry encompasses a gamut of activities involved in reaching the final product to the consumer, starting with farming activity to produce inputs, processing of the inputs to create products and the associated supply chain involved in delivering the products. It has increasingly come to be seen as a potential source for driving the rural economy as it brings about synergy between the consumer, industry and agriculture. A well developed food processing industry is expected to increase:-

  • Farm gate prices,
  • Reduce wastages,
  • Ensure value addition,
  • Promote crop diversification,
  • Generate employment opportunities as well as export earnings.

This sector is also capable of addressing critical issues of food security and providing wholesome, nutritious food to our people.

  • While the industry is large in terms of size, it is still at a nascent stage in terms of development. Out of the country’s total agriculture and food produce, only 2 per cent is processed.  However, the contribution of food processing sector to GDP has been growing faster than that of the agriculture sector.
  • If the contribution to GDP of both agricultural sector and food processing sector were growing at the same rate, then it would mean that the growth in food processing sector is only due to increased agricultural raw material supply. However, more and more agricultural products are being converted (in value terms) to food products. This means that the level of processing in value terms has been increasing.
  • Primary food processing (packaged fruit and vegetables, milk, milled flour and rice, tea, spices, etc.) constitutes around 60 percent of processed foods. It has a highly fragmented structure that includes thousands of rice-mills and hullers, flour mills, pulse mills and oilseed mills, several thousands of bakeries, traditional food units and fruits, vegetable and spice processing units in unorganized sector.
  • In comparison, the organized sector that includes flour mills, fish processing units, fruit and vegetable processing units, meat processing units and numerous dairy processing units at state and district levels is relatively much smaller.

India’s strengths in the Food Processing Sector | UPSC – IAS

Favourable-Factor Conditions

  • India has access to several natural resources that provides it a competitive advantage in the food processing sector. Due to its diverse agro-climatic conditions, it has a wide-ranging and large raw material base suitable for food processing industries. Presently a very small percentage of these are processed into value added products. The semi processed and ready to eat packaged food segment is still evolving.
  • India’s comparatively cheaper workforce can be effectively utilized to set up large low cost production bases for domestic and export markets.
  • Cost of production in India is lower by about 40 per cent over a comparable location in EU and 10-15 per cent over a location in UK. Along with these factor conditions, India has access to significant investments to facilitate food processing industry. There have been increasing investments not only by domestic firms and Indian government, but also foreign direct investment.

Related and Supporting Industries

  • The Indian food processing industry has significant support from the well-developed R&D and technical capabilities of Indian firms. India has a large number of research institutions like Central Food Technological Research Institute, Central Institute of Fisheries Technology, National Dairy Research Institute, National Research and Development Centre etc. to support the technology and development in the food processing sector in India.

Government Regulations and Support

  • The Government of India has taken several initiatives to develop the food processing industry in India. The government has been developing agri-zones and mega food parks to promote food processing industry in India. In order to promote investment in the food processing sector, several policy initiatives have been taken during recent years

In Short the Strengths of Food processing Industries in India are:-

  • Round the year availability of raw materials.
  • Social acceptability of food-processing as an important area and support from the central government.
  • Vast network of manufacturing facilities all over the country.
  • Vast domestic market.

Success Factors of Food Processing Industries in India | UPSC – IAS

The Indian food processing industry growth potential cannot be disputed; however, it requires certain competencies and success factors to fructify this potential. These include addressing the current gaps in the value chain as well as leveraging on the various advantages the country provides. Investors in the sector need to be aware of these factors and build the required capabilities in their business to ensure success. Some of the key success factors are discussed below.

Integrated Supply Chain and Scale of Operations

  • While India ranks second in production of fruits & vegetables, nearly 20 to 25 percent of this production is lost in spoilage in various stages of harvesting. The key issues are poor quality of seeds, planting material and lack of technology in improving yield.
  • Ensuring good quality produce entails investments in technology and ability to sustain a long gestation period for the harvest.
  • Good quality production also results in better quality of processed fruits. Hence there is a need to establish backward linkages with the farmers with the help of arrangements such as contract farming to improve the quality of the produce.
  • Small or large Scale is a key factor in the processing industry. Nearly 90 per cent of the food processing units are small in scale and hence are unable to exploit the advantages of economies of scale. This is also true with land holdings.

Processing Technology

  • Most of the processing in India is currently manual. There is limited use of technology like pre-cooling facilities for vegetables, controlled atmospheric storage and irradiation facilities. This technology is important for extended storage of fruits and vegetables in making them conducive for further processing.
  • In the case of meat processing, despite the presence of over 3600 licensed slaughterhouses in India, the level of technology used in most of them is limited, resulting in low exploitation of animal population.
  • Bringing in modern technology is an area that existing as well as new investors in the sector can focus on, this will make a clear difference in both process efficiencies as well as quality of the end product.

Increasing Penetration in Domestic Markets

Most of the processing units are export oriented and hence their penetration levels in the domestic market are low. For example:-

  • Penetration of processed fruits and vegetables overall is at 10 percent
  • The relative share of branded milk products ,especially ghee is still low at 2 per cent
  • Penetration of culinary products is still 13.3 per cent and is largely tilted towards metros
  • Consumption of packaged biscuits for indian consumers is still low at 0.48 percent while that for Americans is 4 percent

However, there is increasing acceptance of these products amongst the urban population. India has a large untapped customer base and even a small footprint in the domestic market would enable the player to gain significant volumes. Acceptance in the domestic market and hence higher penetration is driven by the following factors:-

Competitive Pricing

  • Consumers of processed foods are extremely price sensitive even a small change in pricing can have significant impact on consumption. For instance, the launch of PET bottles, new price points and package sizes in non carbonated drinks (such as by Coca Cola) increased in-home consumption from 30 per cent in 2002 to 80 per cent in 2003. Competitive pricing: also enables penetration in the rural markets.

Brand Competitiveness

  • Share of branded products in purchases of Indian consumers has also increased substantially. This is especially true for urban consumers. Branded products like Basmati rice and KFC’s chicken have been very successful implying that there is a good demand for hygienic branded products at reasonable prices.

Product Innovation

  • Certain processed food categories such as snack foods are impulse purchase products where consumers look for novelty and new flavours and hence these categories lack brand loyalties. Visibility through attractive packaging boosts consumption.
  • Increasing time constraints amongst the working middle class has boosted consumption of products like instant soups, noodles and ready-to-make products.
  • Innovation in packaging and product usage is an important success factor for processed foods..

Challenges for the Food Processing Sector in India | UPSC – IAS

(Problems and prospects of Food Processing Industry in India | UPSC – IAS)

The challenges for the food processing sector are diverse and demanding, and need to be addressed on several fronts to derive maximum market benefits. A combination of uncontrollable and controllable factors has affected the growth of the sector and has acted as a hindrance in achieving its potential.

  • The uncontrollable factors include fragmentation of land holdings which has resulted in lack of scale and has made investments in automation unviable; regional climatic variations which impact the production; and the constraints in land availability due to competing pressure from urbanization, constructions and industrialization. These factors are difficult to address and hence have to be discounted for while accounting for the inadequate growth of the sector. It is the controllable factors which can be addressed by companies and the Government, which impact the production levels and hence need proper actions.
  • Even today India is grappling with issues of quality and quantity of raw produce, low labor productivity with slow adoption of technology. On the Infrastructure front, we have supply chain and wastage related problems and low levels of value addition etc.
  • The other issues of concern, holding this sector back are impaired access to credit; inconsistency in state and central policies, which requires both the Center and the State to work as one single cohesive unit.

There are a large number of players in the organized as well as unorganized sector. The organized sector is small but growing – for example, it forms less than 15 percent of the dairy sector and around 48 per cent of the fruits and vegetable processing. The sector offers potential for growth and a large number of Multinational Corporations have entered into India to leverage this opportunity.

Despite the above-mentioned strengths, the following areas have been identified by the Ministry of Food Processing Industries where investments are required:

  • Mega food parks
  • Agro-infrastructure and supply chain integration
  • Logistics and cold chain infrastructure
  • Fruit and vegetable products
  • Animal products, meat and dairy
  • Fisheries and seafood
  • Cereals, consumer foods and ready-to-eat foods
  • Wine and beer
  • Machinery and packaging

What are the Weaknesses of Food processing and related Industries in India ?

  • High requirement of working capital.
  • Low availability of new, reliable and better accuracy instruments and equipments
  • Inadequate automation w.r.t. information management.
  • Remuneration is less attractive for talent in comparison to contemporary disciplines.
  • Inadequately developed linkages between R&D I.abs and industry.

What are the Opportunities Food processing and related Industries in India ?

  • Large crop and material base in the country due to agro-ecological variability offers vast potential for food processing activities.
  • Integration of developments in contemporary technologies such as electronics, material science, computer, bio-technology etc. offer vast scope for rapid improvement and progress.
  • Opening of global markets may lead to export of our developed technologies and facilitate generation of additional income and employment opportunities.

What are the Threats Food processing and related Industries in India ?

  • Competition from global players
  • Loss of trained manpower to other industries and other professions due to better working conditions prevailing there may lead to further shortage of manpower.
  • Rapid developments in contemporary and requirements of the industry may lead to fast obsolescence.

Compensatory Afforestation Fund Act | UPSC – IAS

Compensatory Afforestation Fund Rules vision ias UPSC - IAS

Compensatory Afforestation Fund Rules vision ias UPSC - IAS

Compensatory Afforestation Fund Act | UPSC – IAS

Compensatory Afforestation (CA) refers to afforestation and regeneration activities carried out as a way of compensating for forest land diverted to non-forest purposes. Here “non-forest purpose” means the breaking up or clearing of any forest land or a portion thereof for-

  • The cultivation of tea, coffee, spices, rubber, palms, oil-bearing plants, horticultural crops or medicinal plants;
  • any purpose other than reafforestation;

But does not include any work relating or ancillary to – Conservation, Development and management of forests and wildlife, namely,

  • The establishment of check-posts,
  • Fire lines,
  • Wireless communications and construction of fencing,
  • Bridges and culverts,
  • Dams,
  • Waterholes,
  • Trench marks,
  • Boundary marks,
  • Pipelines or other like purposes.

Compensatory Afforestation (CA) is one of the most important conditions stipulated by the Central Government while approving proposals for de-reservation or diversion of forest land for non-forest use. The compensatory afforestation is an additional plantation activity and not a diversion of part of the annual plantation programme.

Elements of Schemes for Compensatory Afforestation | UPSC – IAS

The scheme for compensatory afforestation should contain the following details:-

  • Details of equivalent non-forest or degraded forest land identified for raising compensatory afforestation.
  • Delineation of proposed area on a suitable map.
  • Agency responsible for afforestation.
  • Details of work schedule proposed for compensatory afforestation.
  • Cost structure of plantation, provision of funds and the mechanism to ensure that the funds will be utilised for raising afforestation.
  • Details of proposed monitoring mechanism.

More about Compensatory afforestation Fund Act| UPSC – IAS

The government enacted Compensatory Afforestation Fund Act 2016 to provide a proper institutional mechanism for compensatory afforestation matters.

The salient features of the Act include:-

  • The Act established National Compensatory Afforestation Fund (NCAF) under the Public account of India and State Compensatory Afforestation Funds under public accounts of states.
  • The National Fund will receive 10% of these funds, and the State Funds will receive the remaining 90%.
  • The fund will be used for compensatory afforestation, additional compensatory afforestation, penal compensatory afforestation, net present value, catchment area treatment plan or any money for compliance of conditions stipulated by the Central Government while according approval under the provisions of the Forest (Conservation) Act, 1980.
  • Act provides statutory status for two ad-hoc institutions, namely
    • National Compensatory Afforestation Fund Management and Planning Authority (NCAFM-PA) for management and utilisation of NCAF.
    • State Compensatory Afforestation Fund Management and Planning Authority for utilisation of State Compensatory Afforestation Fund.
  • The act also seeks to provide for constitution of a multidisciplinary monitoring group to monitor activities undertaken from these funds.
  • The act also provides for annual audit of the accounts by the Comptroller and Auditor General.

Compensatory Afforestation Fund 2019 the Hindu UPSC - IAS

Issues with the Act | UPSC – IAS

  • Compromising community forest rights: The land identified for compensatory afforestation would be under forest department’s jurisdiction thus, having adverse consequences for the hard-won rights of tribals and forest dwellers.
  • Lack of monitoring mechanism for expenditure from funds despite findings of Comptroller and Auditor General in 2013 about massive misutilization of funds by the forest department.
  • Scarcity of land as land is a limited resource, and is required for multiple purposes, such as agriculture, industry, etc. The problem is compounded by unclear land titles.
  • Inadequate Capacity of state forest departments for planning and implementation. Still utilisation of 90% of funds depend on it.
  • Low quality forest cover: Compensatory afforestation cannot make up for the ecological value lost by cutting the existing forests. Also, computing the appropriate Net Present Value of a forest is a challenge.
  • Poor survival rate of plantations raised under compensatory afforestation also raises serious questions about their effectiveness.
  • Diversion as land banks: The creation of land banks for Compensatory afforestation from revenue forests and degraded forests (on which communities have got traditional rights) further allows for takeover of community land.

A Way forward | UPSC – IAS

  • Primacy of Gram sabha: The CAF Act needs to be integrated with the FRA and PESA by centring the role of gram sabhas and incorporating land and forest rights guarantees.
  • Management of Compensatory afforestation: Emphasis should not only be on plantation but also on the maintenance of Compensatory afforestation.

Unlocking National Energy Efficiency Potential (unnatee) launched | UPSC – IAS

Unlocking National Energy Efficiency Potential (unnatee) launched UPSC - IAS UPPCS PCS

Unlocking National Energy Efficiency Potential (unnatee) launched UPSC - IAS UPPCS PCS

Unlocking National Energy Efficiency Potential (unnatee) | UPSC – IAS

Bureau of Energy Efficiency (BEE) has developed a national strategy document titled UNNATEE (Unlocking NATional Energy Efficiency Potential) towards developing an energy efficient nation (2017-2031).

  • It describes a plain framework and implementation strategy to establish a clear linkage between energy supply-demand scenarios and energy efficiency opportunities. The document offers a comprehensive roadmap to address India’s environmental and climate change mitigation action through energy efficiency measures.
  • This exercise is first of its kind, clearly delineating the energy efficiency targets for the respective demand sectors upto the state levels. Developing India’s blueprint of effective energy efficiency strategy is a leap towards stimulating energy efficiency ecosystem and enabling reduction of the pressure on demand

Why India need UNNATEE ? | UPSC – IAS

  • In India, there is still an immense potential to be realized from large scale implementation of energy efficiency interventions in the various demand sectors like industry, agriculture, transport, municipal, domestic and commercial lighting and appliances and Micro, small and medium scale enterprises (MSME).
  • In this context, BEE, with support from PricewaterhouseCoopers Private Limited has developed the national strategic plan for energy efficiency, presented in the form of this report “Unlocking National Energy Efficiency Potential – UNNATEE, Strategy plan towards developing an energy efficient nation (2017-2031)”.

Unlocking National Energy Efficiency Potential (unnatee) launched UPSC - IAS

Background Knowledge

  • India is expected to grow at around 8% and almost every economic activity requires energy. If energy consumption (primary energy and electricity) in India were to continue along current lines, it could lead to a growing imbalance between supply and demand.
  • The gap between supply and demand can be fulfilled by either increasing generation or by enhancing the efficiency of energy usage.

Some key numbers can be seen as-

  • India’s energy demand in 2016-17= 790 Mtoe(million tonnes of oil equivalent)
  • Energy saving potential by 2031= 87 Mtoe
  • Total emission reduction= 858 MtCO2 in 2030
  • Total energy efficiency investment potential= Rs. 8.40 lakh crore by 2031

UNNATEE Implementation Strategy | UPSC – IAS

Favourable Regulations | UPSC – IAS

Through an overarching energy efficiency policy, which includes targets, incentives and penalties.

  • Agriculture- Inclusion of agro projects under the National Clean Energy Fund
  • Buildings- Introduction of incentives for purchasing energy efficient houses.
  • Industry- Increasing the scope of the PAT programme.
  • Transport- Roll out of the proposed FAME-II scheme.

Institutional Framework | UPSC – IAS

through strong enforcement mechanism at state levels, which would lend further strength to the national and local level program.

  • Agriculture– A single window system for export of products and services will improve the competitiveness of sector R&D.
  • Buildings- A reporting framework for where the states are required to update their progress in implementation of Energy Conservation Building Code in their state.
  • Industry- Creation of an energy management cell.

Availability of Finance | UPSC – IAS

In the form of a revolving fund, risk guarantee, On-bill financing, Energy Savings Insurance, Energy Conservation Bonds.

  • Agriculture- Reduce interests in priority sector lending.
  • Buildings- Targeting low LCOC rather than low initial building cost by building for affordable maintenance.
  • Industry- Creation of fund for R&D in industry with 1% of turnover.
  • Transport- Introduction of ToD tariff rates for EVs. E.g. Telangana State Electricity Regulatory Commission has fixed the tariff for charging stations at Rs. 6 per unit.

Use of technology | UPSC – IAS

  • Including Internet of Things and Blockchain have the ability to bring an energy revolution across sectors. Example in agriculture (smart control panels), municipal (CCMS), commercial (building management systems), domestic (electric cook stoves).

Stakeholder Engagement | UPSC – IAS

  • Would result in faster adoption and smoother implementation. E.g. for adoption of electric vehicles it is important to first have policies for promotion and adoption of EVs, institutional framework to train new breed of engineers to make the transition to EVs, ecosystem players to provide services like EV charging and consumers to buy the vehicles.
  • Data Collection- Setting up of a Nodal Agency that advocates data collection and dissemination, covering the entire energy value chain of the country.
  • Setting State wise targets- Mandatory reporting of sector wise energy consumption, status of all EE programmes and the target of the same and energy efficiency roadmap.
  • Center of Excellence for industries- to increase R&D in specific sectors.

Swap Facility in banking | RBI | UPSC – IAS

Swap Facility in banking RBI UPSC - IAS Gk today investopedia

Swap Facility in banking RBI UPSC - IAS Gk today investopedia

Swap Facility in banking | RBI | UPSC – IAS

A swap is a derivative contract through which two parties exchange the cash flows or liabilities from two different financial instruments. Most swaps involve cash flows based on a notional principal amount such as a loan or bond, although the instrument can be almost anything. Usually, the principal does not change hands. Each cash flow comprises one leg of the swap. One cash flow is generally fixed, while the other is variable and based on a benchmark interest rate, floating currency exchange rate or index price

  • Swaps were first introduced to the public in 1981 when IBM and the World Bank entered into a swap agreement. Today, swaps are among the most heavily traded financial contracts in the world: the total amount of interest rates and currency swaps outstanding was more than $348 trillion in 2010, according to Bank for International Settlements (BIS)
  • Swap Bank – A swap bank is a generic term to describe a financial institution that facilitates swaps between counterparties.
  • The two primary reasons for a counterparty to use a currency swap – are to obtain debt financing in the swapped currency at an interest cost reduction brought about through comparative advantages each counterparty has in its national capital market, and/or the benefit of hedging long-run exchange rate exposure. These reasons seem straightforward and difficult to argue with, especially to the extent that name recognition is truly important in raising funds in the international bond market.

Recently, Reserve Bank of India (RBI) has introduced a $5-billion dollar-rupee swap facility for the banks to facilitate permanent liquidity support.

Issue Background Knowledge

  • The Reserve Bank of India has various monetary tools to manage liquidity in the financial market.
  • Adjusting repo rates and purchasing bonds by conducting open market operations (OMO) are a couple of tools which the RBI uses regularly either to increase or decrease the currency supply in the market.
  • However, despite these efforts, there is a liquidity crunch in the market and as a result, this swap facility has been announced to increase the supply of rupees in the market.

Need for this Swap Facility | UPSC – IAS

  • Limitation of Open Market Operations- Banks may not have adequate collateral to pledge to borrow from the RBI because of high SLR (statutory liquidity ratio) and LCR (liquidity coverage ratio) requirement.
  • Thus, this liquidity support through dollar purchase would be needed to partially meet the durable liquidity needs of the system

Widened Liquidity Deficit

  • Indian financial markets have been undergoing liquidity problems since the IL&FS crisis emerged last year. The system liquidity is dry to the tune of little more than Rs 1 trillion.
  • This crunch will become more acute in the coming days due to advanced tax outflows (estimated at Rs 1.5 trillion) and the goods and services tax (estimated at Rs 1 trillion), which will suck out liquidity from the system.
  • This liquidity will return only in the next financial year as the government starts spending. Till then, rates may shoot up if adequate liquidity support is not given to banks.
  • In addition to this, the demand for rupees is expected to spike in the coming weeks as a result of a huge spending towards the upcoming general elections.

Significance of Swap Facility | UPSC – IAS

  • Overwhelming response received – Banks offered $16.31 billion for the proposed swaps of up to $5 billion. The RBI accepted $5.02 billion at a cut-off premium of Rs 7.76 for three-year dollars. This has established the instrument as a credible liquidity tool and paving the way for more such auctions in the coming months.
  • Development of new instruments– Even if the impact may be limited, this announcement has signaled the intent of the RBI to use and development other instruments to manage liquidity.
  • Overcome the challenges of monetary policy transmission- with the limitations of current instruments such as open market operations.

Salient Features of Swap Facility | UPSC – IAS

  • Process of Operation- Under the swap, a bank would sell US dollars to the RBI and simultaneously agree to buy the same amount of US dollars at the end of the swap period (March 26,2019 to March 28, 2022).
  • In the auction, the RBI will accept the spot dollars for a small fee (forwards premium), and will commit to provide the dollars three years down the line.
  • Maximum limit- The RBI will buy US dollars from banks totaling to $5 billion. Hence, at an average spot rate of 70 per dollar, the RBI will able to infuse about Rs. 35,000 crore into the system through this auction process.

Forward Premium-

  • The participating banks have to bid in the auction by quoting a forward premium in terms of paisa that they will pay to buy back the dollars.
  • A cut-off premium will be decided by the central bank, based on the bids.
  • For example, if the spot exchange rate is 70 to a dollar and Bank A quotes a premium of 150 paisa and bids for $25 million. So, the bank will get Rs.175 crore ($25 million multiplied by the exchange rate of 70). After three years, the bank has to pay back approximately Rs.179 crore ($25 million multiplied by the exchange rate of 71.5) to the RBI to buy back $25 million.

Concerns with the Swap Facility | UPSC – IAS

  • Limited Impact as only small portion addressed- 5bn$ is only about 0.3% of bank net demand and time liabilities
  • May be helpful more for foreign banks- as the public sector banks that need liquidity support the most, may not be in a comfortable position to take benefit of the scheme.

Benefits of the Swap Facility | UPSC – IAS

  • Reduce interest by banks- with improved liquidity condition with the banks, especially after constrained balance sheets due to double financial repression. This will help customers with cheap loans for homes, cars etc.
  • Increase RBI’s Foreign Exchange Reserves- the auction will help boost it by another $5 billion to the current $400bn corpus. This further improves India’s capacity in dealing with hot money outflow and balance of payment crisis.
  • Control appreciation of Rupee– as there will be increased supply of Rupee. This will help Indian exporters.
  • Reduce financial stress on NBFCs- Lending from the Non-Banking Financial Companies may also increase.
  • Lower hedge costs for importers- as increased rupee liquidity is likely to bring down the forward rates.
  • Rise in bond yields- as there may be fewer Open Market Operations.

Indian black money its Sources, Effects and Curb – Essay | UPSC – IAS

Indian black money its Sources, Effects and how to Curb it UPSC IAS UPPCS PCS Wikipedia gktoday list essay

Indian black money its Sources, Effects and how to Curb it UPSC IAS UPPCS PCS Wikipedia gktoday list essay

Indian black money its Sources, Effects and how to Curb it | UPSC – IAS

What is black Money and White money ?

Black money is a term used in common parlance to refer to money that is not fully legitimate in the hands of the owner or earned from illegal sources (according to the law specifies). And White money that is earned legally, or on which the necessary tax is paid. The total amount of black money deposited in foreign banks by Indians is unknown. Some reports claim a total of US$1.06 – $1.4 trillions is held illegally in Switzerland. This could be for two possible reasons.

  • First is that the money may have been generated through illegitimate activities not permissible under the law, like crime, drug trade, terrorism, and corruption, all of which are punishable under the legal framework of the state.
  • Second and perhaps more likely reason is that the wealth may have been generated and accumulated by failing to comply with the tax requirements.

There have been several estimates regarding the extent of black money economy also called as parallel economy. Some of the estimates suggest it to be as high as up to fifty to hundred percent.

Although black money in India is decades old problem, it has become real threat post liberalization. Illegal activities such as:-

  • Crime and corruption,
  • Non compliance with taxation requirements,
  • Complex procedural regulations,
  • Cultural and social practices,
  • Globalization along with weak institutional, policy, legal and implementation structures have further augmented the black money economy.

Sources of Indian black money | UPSC – IAS

The root cause for the increasing rate of black money in the country is the lack of strict punishments for the offenders. The criminals pay bribes to the tax authorities to hide their corrupt activities. Thus, they are rarely punished by the judge. The criminals who conceal their accounts from the government authorities include big politicians, film stars, cricketers, and businessmen.

Gold imports through official channel and smuggling is a major conduit to bring back the black money from abroad and convert into local black money as the gold commands high demand among the rural investors particularly.

In particular following are some of the mechanisms through which black money is circulated, utilized and the profits earned are further invested in other sectors to generate further money.

  • Real estate: Due to rising prices of real estate, the tax incidence applicable on real estate transactions in the form of stamp duty and capital gains tax can create incentives for tax evasion through under-reporting of transaction price.
  • Bullion and jewellery market: The purchase allows the buyer the option of converting black money into gold and bullion, while it gives the trader the option of keeping his unaccounted wealth in the form of stock, not disclosed in the books or valued at less than market price.
  • Financial markets transactions: IPO manipulations, Rigging of market such as use of shell companies.
  • Public procurement: Public procurement has grown phenomenally over the years – in volume, scale, and variety as well as complexity. The Competition Commission of India had estimated total public procurement figure for India at around 10 to 11 lakh crore per year and provides ample scope of corruption due to rigged procurement process.
  • Non-profit organizations: Taxation laws allow certain privileges and incentives for promoting charitable activities which are misused and manipulated. Highlighted by FATF as well. Used to park funds of corrupt politicians and businessmen.
  • Informal Sector and Cash Economy: Cash transactions, large unbanked and underbanked areas contribute to the large cash economy in India.
  • External trade and transfer pricing: Transfer profit/income to no tax or low tax jurisdictions by MNCs. Developing countries may be losing over US$160billion of tax revenues a year, primarily through transfer pricing strategies.
  • Trade-based Money Laundering (TBML): Disguising the proceeds of crime and moving value through the use of trade transactions in an attempt at legitimizing their illicit origins.
  • Tax Havens: Tax havens are typically small countries/ jurisdictions, with low or nil taxation for foreigners who decide to come and settle there. Strong confidentiality or secrecy regarding wealth and accounts, very liberal regulatory environment and allow opaque existence, where an entity can easily be set up without indulging in any meaningful commercial activity and yet claim to be a genuine business unit, merely by getting itself incorporated or registered in that jurisdiction. This makes them highly desirable locations for multinational entities wishing to reduce their global tax liabilities. Multinational entities consisting of a network of several corporate and non-corporate bodies set up conduit companies in tax havens and artificially transfer their income to such conduit companies in view of the low tax regime there.
  • Offshore Financial Centres: Describe themselves as financial centres specializing in non-residential financial transactions but are logical extensions of the traditional tax havens. They have following characteristics:
    • Jurisdictions that have financial institutions engaged primarily in business with non-residents.
    • Financial systems with external assets and liabilities out of proportion to domestic financial intermediation designed to finance domestic economic.
    • Centers which provide some or all of the following opportunities: low or zero taxation; moderate or light financial regulation; banking secrecy and anonymity.
  • Hawala: It is an informal and cheap method of transferring money from one place without using banks etc. It operates on codes and contacts and no paperwork and disclosure is required.
  • Investment through Innovative Derivative Instruments: Such as Participatory Notes.

Impact of Black money on Indian Economy | UPSC – IAS

(Black money Merits and Demerits; and its Effects)

The unlawfully acquired money kept abroad is routed back to India by the round tripping processes. Round tripping involves getting the money out of one country, sending it to a place like Mauritius and then, dressed up to look like foreign capital, sending it back home to earn tax-favoured profits

Political organizations, corrupt politicians and government officials take bribes from foreign companies then park or invest the money abroad in tax havens for transferring to India when needed. In addition, locally earned bribes, funds and collections are often routed abroad through hawala channels in order to evade Indian tax authorities and consequent legal implications

  • There is a distortion in investment in economy. With black money the investment is made in high end and luxury goods.
  • Huge loss of taxes amounting to billions.
  • Black money leads to further corruption by creating a vicious cycle.
  • Generating black money means that quality is compromised in public sector projects where black money is used to manipulate tenders and offer kickbacks.
  • Investments that must have been made in the country giving the necessary boost to economy are invested elsewhere.
  • Since, RBI cannot control the black money cash flow in economy, it dilutes its policies targeting inflation.
  • High prices of real estate especially in big cities are due to deep pockets filled with black money.
  • Forward trading of goods by cash rich speculators cause fluctuation in prices due to hoarding.
  • National security is threatened because black money is used to finance criminal activities.
  • Black money generated from drugs and smuggling is being used to operate terror networks.

Steps taken by government to curb Black Money generation and flow | UPSC – IAS

Tax Reforms

  • Rationalization of income tax with greater tax base and lower taxes.
  • Tax deduction at source in which the tax is deducted from the payment itself by the payee.

Voluntary Disclosure Schemes

  • The government allows reporting black money generated through tax evasion in a given time frame, as government has given in the Black Money Bill passed this year.

Demonetisation of 500 and 1000 rupee currency notes

  • As unaccounted money is often kept in notes of large denomination making it useless.

Removing currency after certain time

  • So that unaccounted wealth is either brought into economy or becomes useless.

Encouraging Cashless transactions

  • Government has recently announced tax benefits for making online payments for amount greater than twenty thousand rupees.

Legislative Framework

  • Prevention of Money Laundering Act, 2002
  • Benami Transactions Prohibition Act, 1988
  • Lokpal and Lokayukta Act
  • Prevention of Corruption Act, 1988
  • The Undisclosed Foreign Income and Assets (Imposition of Tax) Bill, 2015

Institutions to deal with black money

  • Central Board of Direct Taxes
  • Enforcement Directorate
  • Financial Intelligence Unit
  • Central Board of Excise and Customs and DRI
  • Central Economic Intelligence Bureau
  • Other Central Agencies such as NIA, CBI and Police Authorities

International Cooperation

  • Multilateral Convention on Mutual Administrative Assistance in Tax Matters
  • Financial Action Task Force
  • United Nations Convention against Corruption
  • United Nations Convention against Transnational Organized Crime
  • International Convention for the Suppression of the Financing of Terrorism
  • United Nations Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances
  • Egmont Group for international intelligence gathering regarding money landing and terrorism financing
  • Cooperation through G20, Bilateral agreements

Some Measures to Curb Black Money in India | UPSC – IAS

The black money menace is still untamed and lot more needs to be done to tackle it. Some of the strengthening steps that can be taken are:

Excessive tax rates increase black money and tax evasion. When tax rates approach 100 per cent, tax revenues approach zero, because higher is the incentive for tax evasion and greater the propensity to generate black money. The report finds that punitive taxes create an economic environment where economic agents are not left with any incentive to produce.

Another cause of black money, the report finds is the high transaction costs associated with compliance with the law. Opaque and complicated regulations are other major disincentive that hinders compliance and pushes people towards underground economy and creation of black money. Compliance burden includes excessive need for compliance time, as well as excessive resources to comply.

  • Appropriate legislative framework related to: Public Procurement, Prevention of Bribery of foreign officials, citizens grievance redressal, whistleblower protection, UID Adhar.
  • Setting up and strengthening institutions dealing with illicit money: Directorate of Criminal Investigation Cell for Exchange of Information, Income Tax Overseas Units- ITOUs at Mauritius and Singapore have been very useful, Strengthening the Foreign TAX, Tax Research and Investigation Division of the CBDT.
  • Creating effective credible deterrence: Effective and credible deterrence is necessary in combination with reforms, transparency, simple processes, elimination of bureaucracy and discretionary regulations. Credible deterrence needs to be cost effective, claims the report. Such deterrence to black money can be achieved by information technology (integration of databases), integration of systems and compliance departments of the Indian government, direct tax administration, adding data mining capabilities, and improving prosecution processes.
  • Developing systems for implementation: Integrated Taxpayer Data Management System (ITDMS) and 360- degree profiling, Setting up of Cyber Forensic Labs and Work Stations, implementation of Goods and Services Tax and Direct Tax Code.
  • Imparting skills to personnel for effective action: Both domestic and international training pertaining to the concerned area. For instance, the Financial Intelligence Unit-India makes proactive efforts to regularly upgrade the skills of its employees by providing them opportunities for training on anti-money laundering, terrorist financing, and related economic issues.
  • Electoral Reforms: Elections are one of the biggest channel to utilize the black money. Appropriate reforms to reduce money power in elections. Thus, a holistic and all round attack from within and outside the country is the need of the hour. India should quickly take up appropriate reforms at home that will aid in curbing the black money generation and circulation in the country along with the use of bilateral and multilateral mechanisms to deal with round tripping and stashing of money outside the country.

National Mineral Policy 2019 | UPSC – IAS

national mineral policy 2019 upsc IAS

national mineral policy 2019 upsc IAS

National Mineral Policy 2019 | UPSC – IAS

National Mineral Policy 2019 replaces the extant National Mineral Policy 2008 in compliance with the directions of the Supreme Court. The aim of National Mineral Policy 2019 is to have a:- More effective, Meaningful and implementable policy that brings in further transparency, better regulation and enforcement, balanced social and economic growth as well as sustainable mining practices. 

The 2019 policy proposes to grant status of industry to mining activity to boost financing of mining for private sector and for acquisitions of mineral assets in other countries by private sector,

Need of the review of Policy | UPSC – IAS

  • Low rate of growth of Indian Mining sector- with just 1-2 per cent contribution to GDP over the last decade (as opposed to 5 to 6 per cent in major mining economies).
  • Lack of focus on exploration- the production vs import of minerals is in the ratio of 1:10 in India. High import is mainly because of non-availability of raw material for industries. Hence, exploration must be treated as a business and treating it as a startup giving tax holidays, tax benefits etc. to encourage investments for exploration.
  • Lack of incentives with private sector to invest- Companies fear investing in exploring minerals owing to various risks.
  • Need to address illegality in mining- Apparently 102 mining leases in the state of Orissa did not have requisite environmental clearances, approvals under the Forest Act, 1980.
  • Need to address environmental concerns- e.g. in Bellary due to mining operation. Also there is need for reclamation and restoring the mined land.
  • Need to address concerns of intergenerational rights

Salient features of National Mineral Policy 2019 | UPSC – IAS

  • Introduction of Right of First Refusal for reconnaissance permit and prospecting license (RP/PL) holders for encouraging the private sector to take up exploration.
  • Encouragement of merger and acquisition of mining entities and transfer of mining leases
  • Creation of dedicated mineral corridors to boost private sector mining areas.
  • Granting status of industry to mining activity to boost financing of mining for private sector and for acquisitions of mineral assets in other countries by private sector.
  • Long-term import export policy for mineral will help private sector in better planning and stability in business.
  • Rationalize reserved areas given to PSUs which have not been used and to put these areas to auction, which will give more opportunity to private sector for participation.
  • Efforts to harmonize taxes, levies & royalty with world benchmarks to help private sector.
  • Introduces the concept of Intergenerational Equity that deals with the well-being not only of the present generation but also of the generations to come.
  • Constitutes an inter-ministerial body to institutionalize the mechanism for ensuring sustainable development in mining.
  • Incorporation of e-governance- IT enabled systems, awareness and Information campaigns have been incorporate.
  • Focus on using waterways- coastal waterways and inland shipping for evacuation and transportation of minerals.
  • Utilization of the district mineral fund for equitable development of project affected persons and areas.

Minimum Basic Income in India | UPSC IAS

Minimum Basic Income in India UPSC IAS The Hindu PCS

Minimum Basic Income in India UPSC IAS The Hindu PCS

Minimum Basic Income in India | UPSC IAS

Recently, there have been calls for introduction of Minimum Basic Income (MBI) in the India. The Minimum Basic Income is a social welfare system that guarantees a basic income to households, provided they meet certain conditions. This is different from Universal Basic Income (UBI) scheme, which is a periodic, unconditional cash transfer to all citizens on individual basis, without means-test or work requirement. To that extent, the Minimum Basic Income is a conditional UBI or a quasi UBI (targeted).

What are merits of the Minimum Basic Income (MBI) ? | UPSC IAS

  • Social Justice & Equity: There is a need for such ways to ensure a just society that needs to provide every individual a minimum income to provide for basic necessities.
  • Freedom of choice: The poor in India are treated as subjects of Government’s welfare policies, rather than economic decision makers. MBI treats them as agents and entrusts them with the responsibility of using welfare spending as they see best.
  • Poverty alleviation: According to Economic Survey (2016-17), income transfers can reduce poverty to 0.5% at a cost of about 4% to 5% of the GDP, if those in the top 25% income bracket are not included. Moreover, minimum income guarantee also covers urban poor.
  • MBI has potential to reduce rural distress for e.g. it can decrease long term rural indebtedness, as propensity to save increases.
  • Better social development: Pilot studies in Madhya Pradesh have shown that the income supplements can improve nutrient intake, school enrolment and attendance of female students, toilet building etc.
  • Financial Inclusion: by augmenting rural income & promoting usage of bank accounts, which further expands banking services.
  • Other advantages include administrative efficiency, gender equity (by taking individuals and not household as beneficiaries), insurance against shocks and flexibility in labor market.

What are the Challenges ? | UPSC IAS

  • Definition of basic income: It is difficult to reach on a consensus-based definition of ‘Basic Income’, which will be sufficient to meet basic needs. Tendulkar Committee poverty line of 33/- a day works out basic income of 12,000/- a year. It will cost 11-12% of GDP, in comparison to the existing subsidy burden of 4-4.5% of GDP.
  • Fiscal challenges: Total fiscal cost will depend on 2 factors: (i) Coverage of the scheme (ii) Extent of substitution with existing subsidies/schemes. Further there are various challenges like difficulty in exiting subsidies, hostility in extracting more tax revenue from wealthy, medium term fiscal risk, and rising consumption may stroke inflationary pressure.
  • Cash vs Kind Dilemma: While giving income support, it is assumed that the beneficiaries would be wise in their discretion. However, it suffers from challenges like misuse of cash (on demerit or sin goods), increasing vulnerability of women and child as finances of families are controlled by men, direct monetary benefits not
    being inflation proof, etc.
  • Targeted vs universal: Universalisation is the key to efficient delivery of services against targeting proposed by these cash transfer schemes. Strict targeting may have its own problems like issues related to identification of beneficiaries. This needs an easily identifiable objective criterion. Otherwise, it cannot be claimed to be superior in terms of the leakages.
  • Basic income is no substitute for state capacity: In developed countries, the cash transfers supplement existing social security provisions and are a top-up over and above universal
    provision of health & education. In the Indian context, most arguments in favour of MBI are premised on the inefficiencies of existing social security interventions and seek to replace them with direct cash transfers.

    • Cash transfers seek to create demand for services without supplying the services, which leaves the poor to depend on private service providers. The privatisation of basic services such as health and education may lead to the problem of accessibility (e.g. in remote areas) and large scale exclusion of the poor and marginalised.
  • Reduce worker productivity and reduce incentive for skill development and increasing employability through constant effort.
  • Implementation Challenges: The success of cash transfers depend upon the outreach of banking system & last mile connectivity.

Role of Space Technology in Border Management | UPSC

Role of Space Technology in Border Management UPSC IAS science and Technology UPPSC

Role of Space Technology in Border Management UPSC IAS science and Technology UPPCS

Role of Space Technology in Border Management | UPSC IAS

Sealing the entire border is a significant challenge mainly due to variations in the terrain and topography like mountain ranges, sea, tropical forest or climate factors, including desert or thinly populated regions. Space technology provides one of the more effective means to overcome it.

Significance of Space Technology

  • Timely Information: The information received through various satellites are used by various agencies including the security establishment. For instance, weather satellites can provide timely information about topographic features and weather conditions, which are critical to military and para-military operations.
  • Intelligence inputs and Surveillance: through Remote sensing satellites, radar satellites and satellites with synthetic aperture radar (SAR) sensors which are capable of providing day and night all-terrain and all-weather inputs.
  • Checking infiltration: by using low earth orbit surveillance satellites, which would in turn enable the blocking of infiltrators through suitable force deployment. In this regard, the active deployment of Medium Altitude Long Endurance (MALE) Unmanned Aerial Vehicles (UAVs) and High Altitude Long Endurance (HALE) UAVs will improve India’s surveillance and reconnaissance capabilities.
  • Defending the invisible: Earth observation satellites provide detailed images of hot spots where border crossings peak. India uses the RISAT and Cartosat spacecraft to capture still images as well as high-resolution video of the nation’s disputed borders.
  • Coordination between agencies: While defence forces already use space technology, border forces depend on intelligence shared by central agencies like IB, RAW and National Technical Research Organisation. They also face poor communication issues in areas like Ladakh, Sikkim, Arunachal Pradesh and Kashmir Valley. With satellite technology border security authorities can exchange information or access critical data from headquarters, border checkpoints or on the-move border patrol units.
  • Deployment of Central Armed Police Forces (CAPFs) in remote areas will be also coordinated through satellite communications. Indian Regional Navigation Satellite System (IRNSS)-based GPS will provide navigation facilities for operational parties in high altitude, remote and difficult borders, and Maoist-affected areas.

Military Satellites in India

  • GSAT 7 is the first dedicated military communication satellite built by ISRO that provide services to the Indian defence forces with the main user being the Indian Navy.
  • GSAT-7A is an advanced military communications satellite meant primarily for the Indian Air Force with Indian Army using 30% of capacity.
  • Other military satellites are -Microsat-R, Cartosat 1 and 2 series, Risat-1 and Risat 2.

Natural Gas Hydrates in India | UPSC – IAS

Natural Gas Hydrates in India UPSC - IAS Science and Tech Gk today

Natural Gas Hydrates in India UPSC - IAS Science and Tech Gk today

Natural Gas Hydrates in India | UPSC – IAS | Science and Tech

Researchers at Indian Institute of Technology (IIT) Madras have experimentally shown that methane and carbon dioxide (CO2) can exist as gas hydrates.

What are Gas hydrates? | UPSC – IAS | PCS

  • They are formed when a gas such as methane gets trapped in well-defined cages of water molecules forming crystalline solids. It is a solid ice-like form of water that contains gas molecules in its molecular cavities.
  • Natural gas hydrates occur on continental margins and shelves worldwide from Polar Regions to the tropics.
  • Gas hydrate reservoirs are generally associated with biologically rich cold seep ecosystems at the seafloor. Cold seeps are locations where hydrocarbon-rich fluid seeps up from below the seafloor, often as methane or hydrogen sulfide.
  • It is estimated that total amount of carbon in the form of methane hydrates, far exceeds the carbon content in all the fossil fuel reserves put together and hence these are supposed to be the future potential energy resource.
  • Combustion of methane, is more CO2 efficient than that of any other hydrocarbon. Hence, using methane from gas hydrate compared to other hydrocarbons is relatively climate friendly.
  • According to the latest estimates of the US Geological Survey, India has the second largest gas hydrate reserves after America. The Krishna-Godavari (KG), Cauvery and Kerala basins alone have 100-130 trillion cubic feet of estimated reserves.
  • The carbon dioxide hydrate produced in the lab by the IIT team raises the possibility of sequestering or storing carbon dioxide as hydrates under the sea bed.

Extraction of Gas Hydrates: The natural gas from gas hydrate can be produced via:-

  • Depressurization: Drilling of hole into the layer of hydrate and reducing the pressure beneath. This technique is implemented for hydrates only in polar regions beneath the permafrost.
  • Thermal stimulation: via steam injection, hot brine solution etc. that raises the temperature of the local reservoir outside the hydrate region to cause the dissociation of the hydrate, thus releasing free gas which can be collected.

However, no country in the world has so far developed the technology to produce gas hydrates commercially and economically.

Issues with Gas Hydrates Extraction | UPSC – IAS

Gas hydrates are also important for seafloor stability studies, because “melting” gas hydrate may cause seafloor “landslides”. Methane released from gas hydrate may therefore play a significant role in climate change.

Indian Initiative| UPSC – IAS | PCS

  • The National Gas Hydrate Programme (NGHP) is of national importance considering India’s phenomenal growing energy demand. The programme was initiated in 1997. It first conducted studies in 2006.
  • India has entered into an agreement with Canada to develop technology in this regard.
  • IIT Madras, in collaboration with GAIL, is working to recover methane from methane hydrate from the Krishna-Godavari Basin and sequester CO2 simultaneously.

Eklavya Model Residential Schools – Tribal Education | UPSC – IAS

Eklavya Model Residential Schools - Tribal Education UPSC - IAS PCS UPPCS UPPSC Gk today The hindu Pib

Eklavya Model Residential Schools - Tribal Education UPSC - IAS PCS UPPCS UPPSC Gk today The hindu Pib

Current Status of Tribal Education in India| UPSC – IAS | PCS

  • Low Literacy Level: According to census 2011 literacy rate for STs is 59% compared to national average of 73%.
  • Interstate disparity: Wide Interstate disparity exists across the states e.g. in Mizoram and Lakshadweep STs literacy is more than 91% whereas in Andhra Pradesh it is 49.2%. In fact, in most of the north eastern states like Meghalaya, Mizoram and Nagaland, STs are at par with the general population.
  • Gender disparity: Literacy level among STs men is at 68.5% but for women it is still below 50%

Constitutional provisions for Tribal education | UPSC – IAS | PCS

  • Article 46 of Indian constitution lays down that, the state shall promote, with special care, the educational and economic interests of weaker sections of the people, and in particular, of the scheduled caste and scheduled tribes.
  • Article 29(1) provides distinct languages script or culture. This article has special significance for scheduled tribes.
  • Article 154(4) empowers the state to make any special provision for the advancement of any socially and educationally backward classes of citizen or for SCs or STs.
  • Article 275(1) provides Grants in-Aids to states (having scheduled tribes) covered under fifth and six schedules of the constitution.
  • Article 350A states that state shall provide adequate facilities for instruction in mother-tongue at the primary stage of education.

About Eklavya Model Residential Schools (EMRS) | UPSC – IAS | PCS

  • Ministry of Tribal Affairs is implementing Eklavya Model Residential Schools (EMRS) in tribal areas for providing education on the pattern of Navodaya Vidyalaya, the Kasturba Gandhi Balika Vidyalayas and the Kendriya Vidyalayas.
  • The establishing of Eklavya Model Residential Schools (EMRS) is based on the demand of the concerned States/UTs with the availability of land as an essential attribute.
  • Eklavya Model Residential Schools (EMRS) are set up in States/UTs with grants under Article 275(1) of the Constitution of India.
  • Management of each Eklavya Model Residential Schools (EMRS) is under a committee which include, among others, reputed local NGOs involved with education.

Objectives of Eklavya Model Residential Schools (EMRS) | UPSC – IAS | PCS

  • Provide quality middle and high-level education to Scheduled Tribe (ST) students in remote areas.
  • Enable them to avail of reservation in high and professional educational courses and in jobs in government and public and private sectors.
  • Construction of infrastructure that provides education, physical, environmental and cultural needs of student life.

Coverage of Scheme | UPSC – IAS | PCS

  • As per existing guidelines at least one Eklavya Model Residential Schools (EMRS) is to be set up in each Integrated Tribal Development Agency (ITDA)/ Integrated Tribal Development Project (ITDP) having 50% ST population in the area.
  • As per the budget 2018-19, every block with more than 50% ST population and at least 20,000 tribal persons, will have an Eklavya Model Residential School  (EMRS) by the year 2022.

Challenges to tribal education | UPSC – IAS | PCS

  • Poor socio-economic condition
    • Most of the tribal community is economically backward and sending their children to school is like a luxury to them. They prefer their children to work to supplement the family income.
    • Illiteracy of parents and their attitude towards education is indifferent, as well as their community never encourages the education of children.
    • Parents are not willing to send their daughters to co-educational institutions due to safety concerns.

Lack of infrastructure:

  • Schools in tribal regions lacks in teaching learning materials, study materials, minimum sanitary provisions etc.

Linguistic barriers:

  • In most of the states, official/regional languages are used for classroom teaching and these are not understood by the tribal children at primary level. Lack of use of mother tongue cause hindrance in initial basic education and learning (despite article 350-A).

Teacher related challenges:

  • Inadequate number of trained teachers is a big problem in imparting education to tribal children. Also, Irregularity of the teachers in school and their different background lead to failure in establishing a communication bridge with tribal students.

Apathy of tribal leadership:

  • Tribal leadership generally remains under the outside influences and agencies such as the administration, political parties. Tribal leaders began to exploit their own people politically, socially and economically.
  • Village autonomy and local self-governance has still not properly established. Poor law and order situation and loss of respect for authority is also a hurdle.

High illiteracy rate among tribal women:

  • The disparity in educational levels is even worse as the Scheduled Tribe women have the lowest literacy rates in India.

How to Improve tribal education ? | UPSC – IAS | PCS

  • Infrastructural development: More Eklavya Model Residential Schools (EMRS) in remaining tribal regions as well as better infrastructure in other schools such as adequate class rooms, teaching aids, electricity, separate toilets etc. should be furnished.
  • Emphasis on career or job-oriented courses: E.g. Livelihood College (Dantewada, Bastar) offers nearly 20 courses, in soft and industrial skills, and has created many job opportunities for tribal youth.
  • Local recruitment of teachers: They understand and respect tribal culture and practices and most importantly are acquainted with the local language. TSR Subramanian committee suggested Bilingual System- combination of local language and mother tongue.
  • Teacher Training: New teacher training institutes should be opened in tribal sub plan areas to meet the requirement of trained teachers.
  • Student safety: There must be strong machinery to protect students from abuse, neglect, exploitation, and violence.
  • Establish separate school for girls: This would reduce hesitation of some parents to send their daughters to co-educational institution.
  • Enhance awareness: Government should take some specific initiative such as awareness camp, street drama, counseling etc. which can create awareness among the tribals about the importance of education.
  • Regular monitoring by high level officials: This is necessary for smooth functioning of school administration.

New E Commerce Rules, Regulation and Restriction in India 2019

Economic Concepts, Terms and Key Phrases | Glossary Investopedia

New E Commerce Rules, Regulation and Restriction in India 2019 The Hindu UPSC IAS PCS BPSC SSC Gk today

First Understanding the Models of E-Commerce – Marketplace Model

  • E-commerce Company provides an IT platform on a digital or electronic network to act as facilitator between buyers & sellers without warehousing the products.
  • It aggregates various retailers/brands and provide a sales channel (offers shipment, call centre, delivery and payment services) to them but cannot exercise ownership of the inventory.
  • It allows for a superior customer service experience, as many smaller brands have greater outreach now, with their fulfillment processes taken care of by online marketplaces. E.g. E-Bay/Shopclues etc
  • 100% FDI is allowed in marketplace model of e-commerce.

Inventory Model

  • Products are owned by the online shopping company. The whole process end-to-end, starting with product purchase, warehousing and ending with product dispatch, is taken care of by the company.
  • Allows speedier delivery, better quality control and improved customer experience and trust. But, it restricts cash flow and is difficult to scale
  • FDI in multi-brand retail is prohibited, including e-commerce retail (B2C); E.g. Jabong, YepMe etc.

Recently, government introduced changes in e-commerce norms which are said to be clarificatory in nature and are not new restrictions.

Changes introduced by the new rules

  • From February 1, 2019, e-commerce companies running marketplace platforms:-
    • Such as Amazon and Flipkart –  cannot sell products through companies, and of companies, in which they hold equity stake.
  • It put a cap of 25% on the inventory that a marketplace entity or its group companies can sell from a particular vendor. Inventory of a vendor will be deemed to be controlled by e-commerce marketplace entity if more than 25% its purchases are from the marketplace entity or its group companies.
  • No seller can be forced to sell its products exclusively on any marketplace platform, and that all vendors on the e-commerce platform should be provided services in a “fair and non-discriminatory manner”.
    • Services include fulfilment, logistics, warehousing, advertisement, cashbacks, payments, and financing among others.
  • The marketplaces will not be allowed to offer deep discounts through their in house companies listed as sellers (check price cartelization).
  • E-commerce marketplace entity will be required to furnish a certificate along with a report of statutory auditor to Reserve Bank of India, confirming compliance of the guidelines, by September 30 every year for the preceding financial year.
  • E-commerce entities will have to maintain a level playing field and ensure that they do not directly or indirectly influence the sale price of goods and services.

The above mentioned rules explain certain principles laid down in a 2017 circular on the operations of online marketplaces, wherein 100% foreign direct investment through automatic route is allowed. Some other discussion points in the circular were as follows:

  • Scope of Marketplace Model: E-Marketplace would include warehousing, logistics, order fulfillment, call
    centre, payment collection etc.

    • The move was aimed at bringing new entrants/smaller players in the e-commerce business.
    • It would also increase the need for office spaces, warehouses & logistics, providing a boost to the real estate business.
    • It would also check tax evasion through illegal warehousing.

Predatory Pricing

  • Predatory pricing (dominant player reducing prices to such an extent to edge out other players) is an anti-competition practice under Competition Act 2002. The government would appoint a regulator to check discounts offered by e-commerce players, so that they don’t sell below market prices & compliance with FDI norms.

Impact on E-commerce companies (UPSC IAS)

  • Most of e-commerce firms source goods from sellers who are related 3rd party entities. E.g. WS Retail contributes to 35-40% of Flipkart’s overall sales. Cloudtail India, the biggest retailer operating on Amazon, has its 49% equity held up by Amazon or its subsidiaries. Amazon also holds up 48% equity in another major retailer, Appario Retail. This will impact backend operations of e-commerce firms, as group entities would now have to be removed from the e-commerce value chain.
  • Also, players like Amazon and Flipkart, who have their private labels, will not be able to sell them on their platforms if they hold equity in the company manufacturing them.
  • Currently, most of the e-commerce are burning cash to attract consumer base and hence, are in deep losses. In the long run, this will help large companies build a viable business rather than just depend on discounts.

Retailers

  • The absence of large retailers will bring relief to small retailers selling on these platforms. Traditional brick-and-mortar stores, who now find it difficult to compete with the large e-commerce retailers with deep pockets, will become more competitive.
  • Marketplaces are meant for independent sellers, many of whom are MSMEs (Micro, Small & Medium Enterprises). These changes will enable a level playing field for all sellers, helping them leverage the reach of e-commerce.
  • But, it may also become difficult for small start-ups to raise funds from big e-retailer companies. Also, mandatory listing of inventory on different platforms may increase sales cost for MSMEs.
  • Consumers: Consumers may no longer enjoy the deep discounts offered by retailers that have a close association with marketplace entities.
  • Employment: The threat of job losses in the supply chain network has emerged as a major concern, as the number of e-commerce orders will go down, warehouse expansion plans may take a hit and the utilization of delivery executives will reduce, leading to significant job losses.
  • Growth of the sector: By 2022, the size of digital economy in India will be approximately $ 1 trillion and by 2030, it could constitute almost 50% of the entire economy. Licensing and price controls may depress a fast growing sector
  • International Trade Outlook: As 71 members led by countries like China, Japan and the US began exploring possible WTO framework on free cross-border e-commerce at Buenos Aires ministerial (2017), the new guidelines preempt any possible obligations on e-commerce imposed by WTO. It would enable Govt. to take a stand in international trade negotiations and discussions, which is fully cognizant of the need to preserve flexibility and create a level-playing field for domestic players.

A Way Forward (UPSC IAS)

  • E-Marketplaces should change their business model and begin to look at franchise channels, rather than equity investments channels, to do business in India.
  • The Government should come out with an E-Commerce policy which establishes a commonly accepted definition of e-commerce, provides a level playing field for domestic & foreign businesses. Draft E-Commerce Policy has already been submitted by the commerce ministry.
  • A single legislation should be enacted to address all aspects of e-commerce so that the legal fragmentation seen across the various laws is reduced, viz. the Information Technology Act, 2000, Consumer Protection Act 1986 etc.
  • Setting up an accreditation system for vetting e-commerce platforms which adhere to good business practices is the need of the hour.

Rat Hole Mining – Meghalaya East Jaintia Hills | UPSC – IAS | Pib

Rat Hole Mining - Meghalaya East Jaintia Hills UPSC - IAS cherrapunji UPPCS UPPSC PIB the Hindu

Rat Hole Mining - Meghalaya East Jaintia Hills UPSC - IAS cherrapunji UPPCS UPPSC PIB the Hindu

What is Rat Hole Mining ?

Recently, the collapse of a coal mine in Meghalaya or cherrapunji East Jaintia Hills in which 15 workers were trapped, has thrown the spotlight on a procedure known as “rat-hole mining”.

About Rat-hole mining | UPSC – IAS | Pib

  • It involves digging of very small tunnels, usually only 3-4 feet high, without any pillars to prevent collapse, in which workers (often children) enter and extract coal.
  • The National Green Tribunal (NGT) banned it in 2014 on grounds of it being unscientific and unsafe for workers. However, the state government appealed the order in the Supreme Court.
  • Even after ban, it remains the prevalent procedure for coal mining in Meghalaya as no other method would be economically viable in Meghalaya or cherrapunji, where the coal seam is extremely thin.

Negative impacts of Rat Hole Mining | UPSC – IAS | Pib

  • Environmental Degradation: It has caused the water in the Kopili river (flows through Meghalaya and Assam) to turn acidic.
  • Pollution: Roadsides used for piling of coal leads to air, water and soil pollution.
  • Exploitation of workers: Maximum mining in Meghalaya is from rat hole mining where workers put their lives in danger but benefits are cornered by few private individuals.
  • Risk to Lives: Rat-holes mines without adequate safety measures pose high risk to miner’s lives. According to one estimate, one miner dies in these rat-holes mines every 10 days.
  • Fueling illegal activities: Illegal money earned from these unlawful mines also end up fueling insurgency in the state.
  • Encouraging Child Labor: According to a Shillong based NGO, rat-hole mining employs 70,000 child laborers.

Advantages of Rat-hole mining | UPSC – IAS | Pib

  • Less Capital Intensive: This type of mining when done in a scientific way, with suitable equipment is less capital intensive.
  • Less Polluting: Unlike big mine fields which leave the nearby area nearly uninhabitable, rat-hole mines are less polluting to soil, air and water.
  • Easy self-employment: rat-hole mining provides easy self-employment to people.

Why does it continue ? | UPSC – IAS | Pib

Political Influence: Maximum politicians are either owners of mines or have stakes in the largely unregulated coal mining and transportation industry.

  • Populism: Directly and indirectly about 2.5 lakh people are dependent on rat-hole mining economy, having influence on 16 out of 60 assembly seats.
  • Lack of alternative Employment opportunities: It forces people to work in these dangerous mines.
  • Lack of Adequate Policy: The NGT finds The Meghalaya  or cherrapunji  Mines and Mineral Policy, 2012 inadequate. The policy does not address rat-hole mining and instead states: “Small and traditional system of mining by local people in their own land shall not be unnecessarily disturbed”.
  • Use of Violence by Mining Mafia: Anyone who reports on these illegal mining activities is met with violence.
  • Legal Framework: Mining activities are a state subject, but safety of mine workers is a central subject which creates problems in implementation of safety policies.
  • Misuse of Sixth Schedule Provisions: The 6th Schedule of the Constitution intends to protect the community’s ownership over its land and the community’s autonomy and consent over its nature of use. Coal mining currently underway in Meghalaya was a corruption of this Constitutional Provision wherein private individuals having private interests in earning monetary benefits from minerals vested under the land are engaging in coal mining.
  • Lack of Monitoring: Mining activities are spread across too vast an area spreading over four districts.

Coastal Regulation Zone (CRZ), 2018 – An Analysis | UPSC – IAS

Coastal Regulation Zone (CRZ), 2018 - An Analysis UPSC - IAS

 

Coastal Regulation Zone (CRZ), 2018 - An Analysis UPSC - IAS

Coastal Regulation Zone (CRZ), 2018 – An Analysis | UPSC – IAS

To conserve and protect the coastal environment, and to promote sustainable development based on scientific principles Ministry of Environment and Forest and Climate Change (MoEFCC), under the Environment (Protection) Act, 1986, notified the CRZ Notification in 1991, subsequently revised in 2011. CRZ helps in reducing the ecological vulnerability through regulated activities in ecologically most sensitive areas (CRZ-I A):-

  • Regulate activities such as Eco-tourism subject to approved Coastal Zone Management Plans(CZMPs), exceptional construction of public utilities in the mangrove buffer etc.
  • Construction of roads and roads on stilts, by way of reclamation shall be permitted only in exceptional cases for defence, strategic purposes and public utilities, subject to a detailed marine/terrestrial environment impact assessment, to be recommended by the Coastal Zone Management Authority and approved by the MoEFCC.
  • Compensatory plantation of mangroves (Minimum three times the mangrove area affected/destroyed/ cut).

Areas requiring special consideration in the CRZ

  • Critically Vulnerable Coastal Areas (CVCA): Sunderban region of West Bengal and other ecologically sensitive areas identified as under Environment (Protection) Act, 1986 such as Gulf of Khambat and Gulf of Kutchchh in Gujarat, Malvan, Achra-Ratnagiri in Maharashtra, Karwar and Coondapur in Karnataka, Vembanad in Kerala, Gulf of Mannar in Tamil Nadu, Bhaitarkanika in Odisha, Coringa, East Godavari and Krishna in Andhra Pradesh shall be treated as CVCA and managed with the involvement of coastal communities including fisher folk who depend on coastal resources for their sustainable livelihood.
  • CRZ for inland Backwater islands and islands along the mainland coast.
  • CRZ falling within municipal limits of Greater Mumbai.

Salient Features of Coastal Regulation Zone (CRZ), 2018 Notification

  • Easing FSI norms: This notification de-freezes the restrictions imposed on Floor Space Index (FSI) or the Floor Area Ratio (FAR) under CRZ, 2011 in accordance to 1991 Development Control Regulation (DCR) levels.
  • No development zone (NDZ) reduced for densely populated areas: For CRZ-III areas
    • CRZ-III A areas shall have a NDZ of 50 meters from the HTL on the landward side as against 200 meters from the HTL stipulated in the CRZ Notification, 2011.
    • CRZ-III B areas shall continue to have an NDZ of 200 meters from the HTL.
  • Tourism infrastructure for basic amenities to be promoted: The notification allows for temporary tourism facilities such as shacks, toilet blocks, change rooms, drinking water facilities etc on beaches at a minimum distance of 10 metres from HTL. Such temporary tourism facilities are also now permissible in the NDZ of the CRZ-III areas.
  • CRZ Clearances streamlined:
    • CRZ clearances are needed only for projects located in CRZ-I and CRZ IV.
    • States to have the powers for clearances w.r.t CRZ-II and III with necessary guidance
  • No development zone (NDZ of 20 meters has been stipulated for all Islands: in the wake of space limitations and unique geography and to bring uniformity in treatment of such regions.
  • All Ecologically Sensitive Areas have been accorded special importance: Through Specific guidelines related to their conservation and management plans.
  • Pollution abatement has been accorded special focus: By permitting construction of treatment facilities in CRZ-I B area subject to necessary safeguards.
  • Defence and strategic projects have been accorded necessary dispensation.

Benefits of Coastal Regulation Zone | UPSC – IAS

  • Enhanced activities in the coastal regions thereby promoting economic growth while also respecting the conservation principles of coastal regions.
    • o Boost tourism in terms of more activities, more infrastructure and more opportunities in creating employment opportunities.
    • o greater opportunities for development of densely populated rural areas in the CRZs.
  • CRZ, 2018 is also in sync with the thrust being given to port-led industrialisation and the Coastal Economic Zones projects.
  • Additional opportunities for affordable housing which will benefit not only the housing sector but the people at large looking for shelter.
  • It is expected to rejuvenate the coastal areas while reducing their vulnerabilities.

Concerns Over Coastal Regulation Zone | UPSC – IAS 

The new notification has done away with or diluted many stringent restrictions in place at coastal areas. The emphasis of the new CRZ norms is on promotion of tourism facilities, quicker dispensation of defence and strategic projects and liberal licensing for the installation of treatment plants.

  • Eco–sensitive regions could see flurry of construction activity thereby hampering the coastal ecosystem and biodiversity.
  • The notification violates the balance between ecosystem and development. The mandatory 50 m buffer zone for mangrove forest in private land with an expanse of more than 1,000 sq m has been done away with.
  • The fishermen are worried that the entry of the tourism sector will attract the real estate lobbies, who will eventually displace the coastal community and deny them the access to the seas.
  • Further, the reduction of NDZ is done without taking consideration of sea level rise. The coastline is already vulnerable due to erosion, fresh water crisis and loss of livelihoods. The new changes will only increase this vulnerability and promote commercialisation of the coast.
  • The Hazard Line, mapped by the Survey of India has, however, been de-linked from the CRZ regulatory regime and will be used only as a tool for disaster management and planning of adaptive and mitigation measures.
  • The treatment facilities, allowed in CRZ-I to reduce coastal pollution, means several ecologically fragile areas will have sewage treatment plants transferring pollution from land to sea.

The notification permits activities like reclamation of land for commercial activities, interference with sand dunes, large scale recreation and drawing of groundwater within the 200-500 metres from the HTL, which is
detrimental to the coastal ecology and that will displace the local communities and affect the biodiversity.

Conclusion | UPSC – IAS

The sustainable management depends on the nature of the social system, comprising political, economic and industrial infrastructure and its linkages, with the knowledge about coastal systems as well as local communities. India need to move from a purely regulatory approach towards an Integrated Coastal Zone Management (ICZM).

Key terms Explanation – ICZM

Integrated Coastal Zone Management (ICZM): This concept was born in 1992 during the Earth Summit of Rio de Janeiro. This was a World Bank assisted project with the objective of building national capacity for implementation of comprehensive coastal management approach in the country, and piloting the integrated coastal zone management approach in states of Gujarat, Orissa and West Bengal.

  • The project’s multi-sectoral and integrated approach represents a paradigm shift from the traditional sector-wise management of coastal resources where numerous institutional, legal, economic and planning frameworks worked in isolation, at times with conflicting aims and outputs.
  • The project puts equal emphasis on conservation of coastal and marine resources, pollution management, and improving livelihood

Reservation in India and its constitutional Provisions | UPSC IAS | PCS

Reservation in India and its constitutional Provisions UPSC IAS PCS Gk today the hindu

Reservation in India and its constitutional Provisions UPSC IAS PCS Gk today the hindu

Reservation in India and its constitutional Provisions | UPSC IAS | PCS

Reservation in Indian | Introduction

Reservation in Indian law is a form of affirmative action whereby a percentage of seats are reserved in the public sector units, union and state civil services, union and state government departments and in all public and private educational institutions, except in the religious/ linguistic minority educational institutions, for the socially and educationally backward communities and the Scheduled Castes and Tribes who are inadequately represented in these services and institutions.

  • The reservation policy is also extended for the Scheduled Castes and Scheduled Tribes for representation in the Parliament of India.

Reservation in India & its Constitutional Provisions | UPSC IAS | PCS

The exact necessities for the reservation in services in favour of the members of the SC/STs have been made in the Constitution of India. They are as follows:

  • Article 15(4) and 16(4) of the Constitution enabled both the state and Central Governments to reserve seats in public services for the members of the SC and ST, thereby, enshrining impartiality of opportunity in matters of civic service.
  • Article 16(4 A): it makes provisions for reservation in the matter of promotion to any class or classes of posts in the services under the State in favour of SCs and STs (Constitutional 77th Amendment, – Act, 1995).
  • Article 16 (4 B): It enables the state to fill the unfilled vacancies of a year which are reserved for SCs/STs in the succeeding year, thereby nullifying the ceiling of fifty percent reservation on total number of vacancies of that year (Constitutional 81st Amendment, – Act, 2000).
  • Article 330 and 332: It provides for specific representation through reservation of seats for the SCs and the STs in the Parliament (Article 330) and in the State Legislative Assemblies (Article 332), as well as, in Government and public sector jobs, in both the federal and state Governments (Articles 16(4), 330(4) and 335).

Rationale Behind giving reservation  | UPSC IAS | PCS

  • The underlying theory for the provision of reservation by the state is the under-representation of the identifiable groups as a legacy of the Indian caste system. After India gained independence, the Constitution of India listed some erstwhile groups as Scheduled Castes (SC) and Scheduled Tribes (ST).
  • The framers of the Constitution believed that, due to the caste system, SCs and the STs were historically
    oppressed and denied respect and equal opportunity in Indian society and were thus under-represented in nation-building activities.

Present Status of reservation policy in India and facts about reservation system in india

After introducing the provision for reservation once, it got related to vote bank politics and the following governments and the Indian Parliament routinely extended this period, without any free and fair revisions. Later, reservations were introduced for other sections as well.

  • The Supreme Court ruling that reservations cannot exceed 50% (which it judged would violate equal access guaranteed by the Constitution) has put a cap on reservations. The central government of India reserves 27% of higher education for Other Backward Castes, and individual states may legislate further reservations.
  • Reservation in most states is at 50%, but certain Indian states like Rajasthan have proposed a 68% reservation that includes a 14% reservation for forward castes in services and education.
  • However, there are states laws that exceed this 50% limit and these are under litigation in the Supreme Court.For example, the caste-based reservation fraction stands at 69% and is applicable to about 87% of the population in the state of Tamil Nadu.

Conclusion and Suggestion and A way Forward  | UPSC IAS | PCS

  • De-reservation Policy: While caste may continue to be the mainstay of reservation policies, the benefits should flow to the vast majority of underprivileged children from deprived castes; not to a few privileged children with a caste tag. Families of public officials of a certain rank certain high income professionals and others above a certain income should be de-reserved. In other words, once they have received a significant advantage of reservations, they should be able to ensure opportunities for their children and vacate the space for the truly disadvantaged children in their own caste groups.
  • Affirmative steps: We have to address the anger and aspirations of poor families among unreserved communities. With the Supreme Court ruling of 50 per cent ceiling on reservation quotas, no further reservation is possible. But intelligent, creative, fair and practical ways of giving the poorer children among OBCs a helping hand are possible and necessary. For instance, parental education and the school the child attended, are two sure indicators of poverty and the backwardness of a family. If parents have not had education beyond school, and if the child goes to a government school or a low-end, ramshackle private school, it is a sure sign of a lack of adequate opportunity.
  • Make education mandatory and free for all till age of 17
  • Instead of introducing reservations for these backward classes what is required is to bring about revolutionary changes in our education system at the grass-root level. When proper education is not provided to children belonging to such categories during the primary stage itself then on what basis are the reservations provided at a subsequent stage.
  • Reservations on the basis of caste and not on the basis of other conditions are unacceptable. Fair and just reservations to uplift the people with poor conditions of life, those who don’t have meals to eat, clothes to wear and no home to live in. They shall be made on the basis of factors such as gender as women are more disadvantaged than men since primitive times, domicile, family education, family employment, family property, family income and if any disabilities and traumas. The process of reservation should be such that it filters the truly economically deprived individuals and bring them all to justice

Higher Education in India & UGC | Everything You Need to Know UPSC IAS

Higher Education in India & UGC Everything You Need to Know UPSC IAS

Higher Education in India & UGC Everything You Need to Know UPSC IAS

Higher Education in India & UGC | UPSC – IAS

University Grants Commission (UGC) was established in 1946 regulate Central Universities of Aligarh, Banaras and, Delhi. However, post-independence, the University Education Commission was set up in 1948 under the Chairmanship of S. Radhakrishnan and it recommended that the UGC be reconstituted on the general model of the UGC of UK. It was given a statutory status by UGC Act, 1956 and has the unique distinction of being the only grant-giving agency in the country which has been vested with two responsibilities:-

  • That of providing funds and that of coordination,
  • Determination and maintenance of standards in institutions of higher education.

What is UGC’s mandate ? | UPSC – IAS

  • Promoting and coordinating university education both public and private universities  including deemed universities and affiliated colleges.
  • Determining and maintaining standards of teaching, examination and research in universities.
  • Framing regulations on minimum standards of education.
  • Monitoring developments in the field of collegiate and university education;  disbursing grants to the universities and colleges.
  • Serving as a vital link between the Union and State governments and institutions of higher  learning.
  • Advising the Central and State governments on the measures necessary for  improvement of university education.
  • Enforcing regulations and punishing for violations.
  • Accreditation for higher learning is overseen by autonomous institutions established  by the UGC. These institutions include: AICTE (All India Council for Technical  Education), NAAC (National Assessment and Accreditation Council), MCI (Medical Council of  India) etc.

Evaluation of UGC’s performance | UPSC – IAS

General Performance of Higher Education Institutes:

  • Some institutions of India, such as the IITs, IIMs, NIITs, University of Mumbai  and Jawaharlal Nehru University have been globally acclaimed for their standard of education.
  • The IITs enroll about 10000 students annually and the alumni have contributed to both the  growth of the private sector and the public sectors of India.
  • Several other institutes of fundamental research such as IACS, IISc, TIFR, are acclaimed for  their standard of research in basic sciences and mathematics.
  • Mumbai University was ranked 41 among the Top 50 Engineering Schools of the world 2012. ISB,  Hyderabad was ranked number 12 in global MBA rankings in 2010 while the AIIMS, Delhi  has been recognized as a global leader in medical research and treatment.
  • Government universities through affirmative action like reservations has been able  to cater to the most backward and deprived sections of the population.
  • Foreign universities actively seek Indian students.

However, our higher education suffers from many limitations some of which owe their  origin to the limited effectiveness of UGC. Therefore, before discussing the problems of higher  education it is better to discuss the problems of UGC itself.

Problems of higher education in india | UPSC – IAS

  • Politicization of education with UGC becoming an arm of the HRD ministry, lacking autonomy  and freedom.
  • It is an overburdened body which regulates and oversees all the universities of the country  including private and deemed, which is practically impossible for a single body  considering the number of universities and affiliated colleges in the country.
  • Policy fluctuation and arbitrariness.
  • All the rules made by UGC need parliamentary approval but these are not always taken and  hence they can be cancelled by the court, jeopardizing the future of thousands.

All this factors combined with government apathy and interference and status-quoist attitude of  policymakers, has resulted in considerable malice in our higher education. In specific terms they  are as follows:

  • We have only 722 universities, as against the National Knowledge Commission (NKC)  recommendation of 1,500.
  • Not even one Indian higher education institution made it to the top 200 club in the Times  Higher Education (THE) rankings for 2014-15.
  • Disparity in access to education, especially in terms of economic class, gender,  caste and ethnic and religious belonging.
  • Expansion of the private, self-financing education sector, with commercial intent, has been  another reason for the propagation of disparities. There has been a decline in the government  institutes and increase in the private institutes. For 2013 the share of private undergraduate  colleges and students is at 59 per cent and 37 per cent respectively. Out of the 712 universities,  about 360 are of private, state and of deemed status. The high cost of private education has  affected access by the poor to education.
  • Lack of autonomy and independence, universally accepted as fundamental in higher education.
  • Narrow view of education with education limited to attendance, exam, marks and  degree. This results in poorly skilled students. As per a survey only 19% of engineering and 5%  of non-engineering graduates are employable.
  • Unscientific, partisan and non-merit based appointment of the faculty/vice-chancellor.
  • Outdated Curriculum susceptible to tampering based on ideology of the government. It curbs  creativity and critical thinking with skills set out of sync with modern times.
  • Faculty accountability is missing in India. Worldwide, teachers are assessed by the students  but the practice is yet to be followed in India in spite of rising salaries especially in the  government universities and colleges.
  • Poor quality of Research and Development in the universities, with the link to the  industries missing and declining government support to R&D.
  • Lack of access to global courses and knowledge.

Way Forward and Suggestions for Improvement | UPSC – IAS

Suggestions for Higher Education:

  • The National Policy on Education (NPE) that was adopted by Parliament in May 1986  and Programme of Action (POA), 1986, and updated in 1992. Last review done in 1965  by Kothari Commission. Like in west regular review of education policy including higher  education. For example UK has an institute for education statistics, as policy making with reliable  data on a regular basis to assist policymaking.
  • Emphasis should be on better teachers with quality training modules for them.  Given the low rate of enrolment, we need more quality teaching institutions at the  undergraduate level.
  • Massive expansion of government universities and colleges providing quality  education at low cost is the need of time. Expansion of self-financing private  institutions be restricted to a reasonable level or compensate low income strata  students with scholarship to enable them to study in private colleges. The present  method, of extending educational loans from banks with interest subsidy by the MHRD,  does not help the poor. Else, education rather than being a socio-economic leveler will become a  source of disparity.
  • Infrastructure can be improved with an increase in financial allocation. Academic reforms should be after deliberations with all the stakeholders and consistent to avoid unnecessary controversies like FYUP or CBCS. In the case of faculty, enforce the University Grant Commission’s (UGC) teacher-student ratio for each State, and ensure that the financial requirement of additional faculty is shared by the Centre and States.
  • English textbooks of concerned subjects should be translated to the hindi/regional languages. The three- language formula needs to be adhered to. Teaching in the regional languages would make understanding relatively easy while minimal language competence in English should facilitate student access to English books. This method has been successful in Japan.
  • Allow foreign educational institutions to enter into collaborations with Indian institutions  on a large scale. Use of Massive Online Open Courses be encouraged.
  • Autonomy as far as academic and administrative aspects are involved is a must. It includes  the appointment of heads of institutional and executive bodies. A UGC committee had  suggested the independence of institutions from the government as the bottom line for autonomy.
  • Efficient use of skill development program of the government and improving the apprenticeship  scheme.
  • Identifying and empowering 50 top universities in every possible manner to seek global  excellence as done by Russia.
  • Increasing funding, including corporate funding for Indian universities.
  • Incentivising research and publications among faculty members.
  • In Korea, the best students enter the teaching profession because the social status of a  teacher is very high. We need such a system in India.

Reforms Specific to University Grants Commission | UPSC – IAS

Higher education remains over-regulated and badly governed with far too many regulatory agencies in the picture. For such reasons, the NKC recommended the setting up of an Independent Regulatory Authority for Higher Education which would take on most of the roles of the UGC, the All India Council for Technical Education (AICTE), the Medical Council of India (MCI) and the Bar Council of India, all of which would either be abolished or assigned more limited roles. A government-appointed committee has already recommended abolishing UGC and replacing it with Independent Regulatory Authority for Higher Education.

Hence, it is important that structural and functional reform be introduced for UGC to make it relevant in contemporary times rather than an obstruction to the development of a world class higher education system. It should be provided autonomy so as to remain independent of changing ideologies of successive governments. Its regulatory and overseeing role needs to be relooked at to make them conducive rather than interfering. It should also be provided with representation from states for more holistic and grounded policymaking.

Intensified Mission Indradhanush 2019 | UPSC – IAS

Intensified Mission Indradhanush 2019 UPSC - IAS

 

Intensified Mission Indradhanush 2019 UPSC - IAS

Intensified Mission Indradhanush 2019 | UPSC – IAS

Intensified Mission Indradhanush (IMI), is one of 12 best practices from around the world to be featured in a special issue of the British Medical Journal.

Background Knowledge about Mission Indradhanush | UPSC – IAS

  • In India, five lakh children die every year due to vaccine-preventable diseases; 95 lakh are at risk because they are unimmunised or partially immunised. But immunization coverage had slowed down and it increased at the rate of 1% per year between 2009 and 2013.
  • To accelerate this coverage Mission Indradhanush was envisaged and implemented since 2015 to rapidly increase the full immunization coverage to 90%.

About Intensified Mission Indradhanush (IMI) | UPSC – IAS

  • It has been launched by the Government of India to reach each and every child under two years of age and all those pregnant women who have been left uncovered under the routine immunisation programme.
  • The special drive will focus on improving immunization coverage in select districts and cities to ensure full immunization to more than 90% by December 2018.

It will have inter-ministerial and inter-departmental coordination, action-based review mechanism and intensified monitoring and accountability framework for effective implementation of targeted rapid interventions to improve the routine immunization coverage.

  • It would be closely monitored at the district, state and central level at regular intervals. Further, it would be reviewed by the Cabinet Secretary at the National level and will continue to be monitored at the highest level under a special initiative ‘Proactive Governance and Timely Implementation (PRAGATI)’.
  • The first two phases of Mission Indradhanush contributed to an increase in Full Immunization Coverage by 6.7%. This increase, however, would not be sufficient to achieve full Immunization Coverage of more than 90% of newborns by 2020 as aimed under Mission Indradhanush which would need a supplemental aggressive action plan to cover all left outs and drop outs in select districts and urban cities with low routine immunization coverage in a specific time-frame.

Challenges to immunization (Vaccination) | UPSC – IAS

  • It targets to immunize all children against seven vaccine preventable diseases namely –
    • Diphtheria,
    • Pertussis,
    • Tetanus,
    • Childhood Tuberculosis,
    • Polio,
    • Hepatitis B and Measles.
  • In addition to this, vaccines for Japanese Encephalitis, Haemophilus influenzae type B, inactivated polio vaccine, Rotavirus vaccine and Measles Rubella vaccine are also being provided in selected states.
  • Limited capacities of staff (vacant positions and lack of training), particularly in poor-performing states and at the field level, and gaps in key areas such as predicting demand, logistics and cold chain management, which result in high wastage rates.
  • India lacks a robust system to track vaccine-preventable diseases. Vaccination coverage varies considerably from state to state, with the lowest rates in India’s large central states.

Other challenges includes-

  • Lack of adequate health infrastructure and insufficient government investment;
  • Low demand caused by poor education of the population and presence of anti-vaccine advocates.
  • Parents’ lack of awareness of the immunisation benefits, schedules and locations.
  • Inconvenient timings of vaccination for many people (during working hours).
  • Poor community participation.

A Way forward | UPSC – IAS

  • Strengthening of health management information systems, including data recording and registration systems, called Mother and Child Tracking System (MCTS).
  • The linking of already available systems with the unique identification like Aadhaar can facilitate tracking of the beneficiaries.
  • Furthermore, development of universal health cards and electronic record maintenance for maternal and child health care is highly desirable. This can facilitate care seeking by the migrant population in urban areas and can be used to decide resource allocations.
  • Devoting greater financial resources towards immunisation coverage with concerted efforts to improve social mobilisation for immunisation is warranted.
  • Strengthening a network of community health workers in urban and peri-urban areas to contribute towards progress in immunisation coverage by reaching out to both slum as well as non-slum populations is of utmost priority.
  • Facilitating improvement in knowledge and awareness regarding child immunisation can be intensified with the use of mass media, interpersonal communication, school and youth networks.
  • Reaching out to communities and areas with poor immunisation coverage with well-articulated strategies for community awareness will be key to success.

Effects of globalization on Indian Society | UPSC – IAS

Online education

What is Globalization and its Significance, Causes and Effects ? | UPSC - IAS

What is Globalization and its Significance, Causes and Effects ? | UPSC – IAS

(Brief Overview)

Globalization thrives on the world’s new, inexpensive transportation and communication facilities. It requires freedom of movement across borders of goods, services, capital, knowledge, and people. It also requires new institutions for negotiating rules and regulations across international borders.

  • With globalization, and the internet, billions of dollars of investment capital can move around the globe at the stroke of a key.
  • Globalization means increased trade among nations, as well as increased travel, world art, music, and literature, and new dimensions of economic investment.
  • New and different social and cultural forms have arisen. However, globalization has also led to increasing disparities of wealth between the rich and the poor, and this disparity has fostered movements opposing further globalization.
  • Globalization means integration of economies and societies through cross country flows of information, ideas, technologies, goods, services, capital, finance and people.
  • Globalization has made countries to realize that nations can no longer be cocooned in their own cultural or economic nests but invariably be part of the larger picture which takes into account the competencies, interests and the dependencies of economies world -wide.

Information Technology and Globalisation | UPSC – IAS

  • Globally use of the Internet increased phenomenally in the 1990s. In 1998 there were 70 million Internet users world-wide. Of these USA and Canada accounted for 62% while Asia had 12%. By 2000 the number of Internet users had risen to 325 million. India had 3 million Internet subscribers and 15 million users by 2000, thanks to the proliferation of cyber cafes all over the country.
  • The spread of multinational companies and the opportunities opened up by the information technology revolution has created in the metropolitan cities in India class of upwardly mobile professionals working in software firms, multinational banks, chartered accountancy firms, stock markets, travel, fashion designing, entertainment, media and other allied fields. These high-flying professionals have highly stressful work schedules, get exorbitant salaries and are the main clientele of the booming consumer industry.
  • It should also be noted that for the first time, mainly due to the information technology revolution, there has been a globalisation of finance. Globally integrated financial markets undertake billions of dollars worth transactions within seconds in the electronic circuits. There is a 24-hour trading in capital and security markets. Cities such as New York, Tokyo and London are the key centers for financial trading. Within India, Mumbai is known as the financial capital of the country.
  • With the advent of globalization, a nation’s economy became more connected with and dependent on those in other countries around the world. For example, when several Asian countries faced economic turmoil in the late 1990s, the economic impact was felt in Western nations at the corporate and individual levels.

Positive and Negative effects of Globalisation | UPSC – IAS

Negative effects of Globalization

  • Digital divide
  • Natural manure is replaced by synthetic fertilizers.
  • Greater threat of spread of communicable diseases
  • Global recession impact on Indian economy
  • Jobless growth
  • Westernization: valentine day, clothes (low-waist jeans) (can be – or +) no culture is bad
  • Threat to traditional knowledge system: Rudraksha and Basmati rice has highlighted the need for protecting the base of its indigenous knowledge system
  • Urbanization migration (rural to urban)
  • Rise of materialism leads to → Consumerism

Positive effects of Globalization

  • Cultural interaction has helped to overcome cultural barriers.
  • Tourism
  • Removal of orthodox obstacles → women empowerment
  • MNC’s BPO KPO → job creation
  • Human rights issues highlighted
  • Woman empowerment / issues highlighted
  • Gender equality
  • Increase competition → good product with cheaper rates
  • Economic development & economic independence of women → increase in self confidence

Debatable question – Different views on Globalization

  • In Economics we have views on pro-globalization by Jagdish Bhagwati etc. who build on the economic notion that free trade helps everybody and lift the poor out of poverty,
  • While we have the anti-globalization views -by the likes of Vandana Shiva, Arundhati Roy, etc.,who see globalization as a way for multinational corporations and multilateral institutions (World Bank, IMF) to change the rules all over the world to ensure better markets for the rich countries.

Conclusion  | UPSC – IAS

Process of globalization is not new. The globalization of the economic, social and cultural structures happened in all ages. Earlier the pace of such a process was so slow that we hardly noticed.

Economic Impact of British Rule in India | NCERT – UPSC – IAS

Economic Impact of British Rule in India NCERT - UPSC IAS gk today

Economic Impact of British Rule in India NCERT - UPSC IAS gk today

Economic Impact of British Rule in India | NCERT – UPSC | IAS | PCS

(In Points )

The British conquest had a pronounced (noticeable) and profound (extremely felt) economic impact on India. The economic policies followed by the British led to the rapid transformation of India’s economy into a colonial economy whose nature and structure were determined by the needs of the British economy.

  • The Indian economy under the British Raj describes the economy of India during the years of the British Raj, from 1858 to 1947. During this period, according to British economist Angus Maddison, India’s share of the world economy collapsed from 24.4% in 1700 to 4.2% in 1950. India experienced deindustrialization. Compared to the Mughal Era, India during the British colonial era had a lower per-capita income, a large decline in the secondary sector, and lower levels of urbanisation.
  • In this respect the British conquest differed from all previous foreign conquests. The previous conquerors had overthrown Indian political powers but had made no basic changes in the country’s economic structure; they had gradually become a part of Indian life, political as well as economic
  • British totally disrupted the traditional structure of the Indian economy, Moreover they never became an integral part of Indian life. They always remained foreigners in the land, exploiting Indian resources and carrying away India’s wealth as tribute.
  • India’s GDP (PPP) per capita was stagnant during the Mughal Empire and began to decline prior to the onset of British rule. India’s share of global industrial output also declined from 25% in 1750 down to 2% in 1900.  At the same time, the United Kingdom’s share of the world economy rose from 2.9% in 1700 up to 9% in 1870.
Year PPP GDP per Capita of India (as % of UK)
1820 31.25
1870 16.72
1913 13.68

Economic Impact of British Rule in India | In – Short

Petroleum, chemicals and Petrochemicals investment regions | UPSC

Why in news ?
Recently Minister of State for Chemicals & Fertilizers informed that Petroleum, Chemicals and Petrochemical Investment Regions (PCPIRs) in India has registered good progress in attracting Investments for Industrial Development and generating employment

petroleum chemicals and petrochemicals investment region UPSC IAS PCS UPPCS UPPSC

What is PCPIR ? (UPSC – IAS)

  • Petroleum, chemicals and Petrochemicals investment regions (PCPIR) is based on cluster-based development model for setting up manufacturing facilities for both domestic consumption and exports in Petroleum, Chemicals and Petrochemicals.
  • The cluster is combination of production units, logistics handling, environmental protection mechanism and
    social infrastructure.
  • It includes Special Economic Zones, Free Trade Zones Warehousing Zones etc.
  • Connectivity to the region is provided by state and central governments through Rail, Road, Ports, Airports and Telecom. The state government will also be responsible for providing facilities of water, road connectivity (state roads), Waste Treatments linkages etc
  • PCPIRs will ensure developing economy of scale in petrochemical sector due to the use of common infrastructure, support services and R&D facilities.
  • Chemical and Petrochemical industries generate concerns over environmental degradation. However, PCPIRs follow a robust Environmental Impact Assessment (EIA) mechanism.

Blue Economy its Significance and Challenges | UPSC – IAS

Blue Economy upsc

Blue Economy upsc

Blue Economy and its Components | UPSC – IAS

As per the World Bank, Blue Economy is the sustainable use of ocean resources for economic growth, improved livelihoods, and jobs while preserving the health of ocean ecosystem. It covers several sectors linked directly or indirectly to the oceans such as –

  • Fishing, minerals, shipping and port infrastructure,
  • Marine biotechnology,
  • Marine renewable energy,
  • Marine tourism,
  • Ocean governance and education.

Blue Economy its Significance and Challenges | UPSC - IAS

Significance of Blue economy | UPSC – IAS

Economic Benefits:

  • Oceans provide 30 percent of oil and gas resources.
  • 90% of goods trade takes place through Oceans Sea of Line Communication.
  • Ocean contributes $2.5 trillion to world economy with around 60 million people are employed in fisheries and aquaculture.
  • Seabed Mining of polymetallic nodules and polymetallic sulphides to extract nickel, cobalt, manganese and rare earth metals.

Environmental Benefits:

  • Mangroves and other vegetated ocean habitats sequester 25 percent of the extra CO2 from fossil fuels, i.e., Blue Carbon.
  • Protection of coastal communities from disasters like floods and storms.
  • A Sustainable Blue Economy can help to achieve commitments under UN’s Sustainable Development Goals 2030, Paris climate agreement 2015 and the UN Ocean Conference 2017.

Challenges to Blue Economy | UPSC – IAS

  • Unsustainable development near marine areas: Physical alterations and destruction of marine and coastal habitats & landscapes largely due to coastal development, deforestation, & mining.
  • FAO estimates that approximately 57 percent of fish stocks are fully exploited and another 30 percent are over-exploited, depleted, or recovering.
  • Marine pollution: It is in the form of excess nutrients from untreated sewerage, agricultural
    runoff, and marine debris such as plastics. Deep sea mining can cause long term irreversible ecological damage to marine ecosystem.
  • Impacts of climate change: Threats of both slow-onset events like sea-level rise and more intense and frequent weather events like cyclones. Long-term climate change impacts on ocean systems like changes in sea temperature, acidity, and major oceanic currents.
  • Geopolitical issues: Geopolitical tussle between in various regions like South China Sea, Indian Ocean Region etc. and undermining International Laws like UNCLOS limits the countries from achieving the full potential of Blue Economy.
  • Unfair trade practices: Many times fishing agreements allow access to an EEZ of country to foreign operators. These operators restrict transfer of specific fishing knowledge to national stakeholders leading to low appropriation of fisheries export revenues by national operators. So the potential for national exploitation of those resources is reduced in the long run.
  • Other non-conventional threats: Defense and security related threats like piracy and terrorism combined with natural disasters (Small Island Developing States are particularly vulnerable).

Blue economy and India  | UPSC – IAS

India is trying to achieve the potential of Blue Economy by promoting the spirit of ‘SAGAR-Security and Growth for All in the Region’ in Indian Ocean Region. Some initiatives by India are:  (important for UPSC)

Sagarmala Project: Sagarmala initiative focus on three pillars of development

  • Supporting and enabling Port-led Development through appropriate policy and institutional interventions.
    • Port Infrastructure Enhancement, including modernization and setting up of new ports.
    • Efficient Evacuation to and from hinterland by developing new lines/linkages for transport (including roads, rail, inland waterways and coastal routes).
  • Coastal Economic Zones: 14 CEZs are being developed under Sagarmala initiative covering all the Maritime States.
    • CEZs are spatial economic regions comprising of a group of coastal districts or districts with a strong linkage to the ports in that region.
    • CEZ will help to tap synergies of planned economic corridors.
  • Resource exploration: India in recent times has shifted its focus towards Indian Ocean resource exploration. E.g. India has explored 75000 sq km of Indian Ocean Seabed and is developing technologies (like remotely operated vehicles) for mining the resources
  • International relations and security: India is cooperating with Indian Ocean littoral countries and projecting itself as ‘net security provider’ to ensure a safe, secure and stable Indian Ocean Region (IOR). India is also cooperating with extra regional powers like US, Japan in IOR. E.g. Asia-Africa growth corridor, QUAD etc.

Sustainable Blue Economy Conference

  • It’s the first global conference on the sustainable blue economy.
  •  It was convened by Kenya and co-hosted Canada and Japan.

Credit Rating Agencies in India Problems & Solutions | UPSC IAS

Credit Rating Agencies in India Conflicts & Solutions UPSC IAS PCS UPPCS UPPSC

Credit rating agencies in India

  • The Securities and Exchange Board of India (Credit Rating Agencies) Regulations, 1999 empower SEBI to regulate CRAs operating in India.
  • All the credit agencies need to be registered with SEBI in order to operate in India.
  • There are seven Credit Rating Agencies registered with SEBI, viz. CRISIL, ICRA, CARE, India Ratings and Research, SMERA, Infomerics and Brickworks.

Significance of Credit rating agencies (UPSC IAS)

  • They provide retail and institutional investors with information that assists them in determining if debtor will be able to meet their obligations.
  • They help investors, customers etc. to get an overall idea of the strength and stability of an organization and enable them to make informed decisions.
  • These agencies also help build trust between the investors and the governments by quantifying the level of risk associated with investing in a particular country. For example-Sovereign credit ratings are given to the national governments which highlight a country’s economic and political environment.
  • CRAs help strengthening of secondary market by increasing borrower pool.
  • Credit ratings ensure a discipline amongst corporate borrowers due to because of this desire to have a good image.

Issues or Problems related with Credit Rating Agencies (UPSC IAS)

  • Conflict of interest: The CRA Regulations in India currently recognise only the issuer-pays model, under which, the rating agencies charge issuers of bond and debt instruments a fee for providing a ratings opinion. Thus, this model has an inbuilt conflict of interest.
  • Another example of conflict of interest is non-rating services such as risk consulting, funds research and advisory services given to issuers for which ratings have been provided.
  • Rating shopping: It is the practice of an issuer choosing the rating agency that will either assign the highest rating or that has the most lax criteria for achieving a desired rating. Hence, the system does not permit publishing a rating without the issuer’s consent.
  • Less competition: Credit-rating market in India is oligopolistic, with high barriers to entry. Lack of competition in the market enables CRAs to have longer, well- established relationships with the issuers which can hamper their independence.
  • Poor Rating Quality: Often ratings are provided on limited information. For e.g. If the issuer decides not to answer some determinant questions, the rating may be principally based on public information. Many rating agencies don’t have enough manpower which often leads to poor quality.
  • Independence of the ratings committee: Over the years, the membership of the ratings committee has shifted from external experts to employees of the ratings agency which has raised concerns about their independence.

Suggestions or Solutions for addressing these challenges  (UPSC IAS)

  • Removal of conflict of Interest: Moving back to the earlier “subscriber pays” model in which investors pay for the ratings can be a possible approach.
  • More Players: Rules should be made easier for new players to enter the credit rating space and compete against them.
  • Improve Quality of Ratings:
    • SEBI must also assess the predictive ability of the current rating models followed by the agencies. There is a need to invest in high-tech predictive modelling techniques.
    • Increased remuneration for manpower to attract the best talent must be ensured.
  • Cursory disclosure of all ratings: CRAs can be asked to provide briefly in their press release to the ratings given by other CRAs to the same borrower. This can help in discouraging “rating shopping”.
  • Legal protection for CRAs: There are instances of Indian CRAs being sued by the company it rates, in a bid to prevent the rating downgrade. The regulator should consider framing laws that allow CARs to express their rating opinion without fear of being sued.
  • Awareness among Investors: Investors should be made aware about the rating process and be asked to conduct a review by themselves too and stop relying solely on the ratings.
  • Rotation of rating agencies: SEBI can also explore the possibility of a mandatory rotation of rating agencies by the debt issuers (like corporations are required to change their auditors periodically under the Companies Act, 2013).

keywords: Problems & Solutions with credit rating agencies in india, UPSC IAS PCS.

Basel norms & Capital Adequacy Ratio | UPSC – IAS

Basel norms & Capital Adequacy Ratio | UPSC - IAS

Basel norms & Capital Adequacy Ratio | UPSC - IAS

Basel norms & Capital Adequacy Ratio | UPSC – IAS

Capital Adequacy Ratio is also known as Capital to Risk Assets Ratio, is the ratio of a bank’s capital to its risk. National regulators track a bank’s CAR to ensure that it can absorb a reasonable amount of loss and complies with statutory Capital requirements. It is a measure of a bank’s capital

Capital Adequacy Ratio (CAR)

Capital adequacy ratio is the ratio which determines the bank’s capacity to meet the time liabilities and other risks such as credit risk, operational risk etc. In the most simple formulation, a bank’s capital is the “cushion” for potential losses, and protects the bank’s depositors and other lenders.

  • CAR = (Tier I + Tier II Capital)/Risk Weighted Assets
  • Expressed as a percentage of a bank’s risk weighted credit exposures.
  • Measure of bank’s financial strength to ensure that banks have enough cushions to absorb losses before becoming insolvent and losing depositors’ funds.
  • CAR is required to be 9% by RBI (based on BASEL III norms), where 7% has to be met by Tier 1 capital while the remaining 2% by Tier 2 capital.

Provisioning requirement

  • Setting aside a portion of profits, in proportion of risk weighted loans given, to compensate a probable loss due to incomplete loan recovery is called provisioning.
  • Like CCB & CAR requirements, provisioning is one of the contingency measures to contain risk.
  • Different types of assets have different risk profiles e.g. Government debt has 0% risk weight
  • A high-risk weight discourages lending by increasing the capital requirement for lenders.

Criticism of BASEL norms

  • Reserve bank of India, already has sufficient “backup” mechanisms to prevent banking crisis in India- such as Cash reserve ratio (CRR), Statutory liquidity ratio (SLR), all banks are required to make fortnightly reporting to RBI about their finance and operations and so on.

Capital Conservation Buffer & Basel 3 | RBI | UPSC – IAS

Capital Conservation Buffer & Basel 3 RBI UPSC - IAS

Capital Conservation Buffer & Basel 3 RBI UPSC - IAS

Capital Conservation Buffer & Basel 3 | RBI | UPSC – IAS

The capital conservation buffer (CCoB) is a capital buffer of 2.5% of a bank’s total exposures that needs to be met with an additional amount of Common Equity Tier 1 capital. The buffer sits on top of the 4.5% minimum requirement for Common Equity Tier 1 capital. Its objective is to conserve a bank’s capital. It is the mandatory capital that financial institutions are required to hold above minimum regulatory requirement.

  • According to Capital Conservation Buffer (CCB) norms, banks will be required to hold a buffer of 2.5% Risk Weighted Assets (RWAs) in the form of Common Equity, over and above Capital Adequacy Ratio of 9%.
  • Capital Conservation Buffer currently stands at 1.875% and remaining 0.625% was to be met by March 2019.

Significance of Capital Conservation Buffer | UPSC – IAS

  • It is designed to ensure that banks build up capital buffers outside periods of stress which can be drawn down, as losses are incurred.
  • Regulations targeting the creation of adequate capital buffers are designed to reduce the procyclical nature of lending by promoting the creation of countercyclical buffers as suggested Basel 3 norms. During credit expansion, banks have to set aside additional capital, while during the credit contraction, capital requirements can be loosened. Systemically important banks are subject to higher capital requirements.
  • The capital buffers increase the resilience of banks to losses, reduce excessive or underestimated exposures and restrict the distribution of capital. These macroprudential instruments limit systemic risks in the financial system.

Why banks are unable to adhere to Capital Conservation Buffer norms? | UPSC – IAS

  • Mounting pile of stressed assets has resulted into low credit growth, deterioration in asset quality, low profitability of Indian banks & over-reliance on capital infusion from the Government. In order to protect their margins & first meet the basic capital ratios i.e. CRAR of 9%, banks have slowed down the adoption of Capital Conservation Buffer (CCB) Basel 3 norms

A Way Forward | UPSC – IAS

While relaxation of the buffer norms and capital infusion by the government are welcome steps in the time of exigency, it must be ensured that good money is not thrown after bad money. Improving credit discipline and risk management systems are the need of the hour for public sector banks. The governance issues of the banks and their over-enthusiastic lending in the past needs to be addressed.
The government should initiate long-pending reforms recommended by the P.J. Nayak Committee:-

  • Cede control of nationalized banks and cut its stake below 51%.
  • Form an independent Banking Investment Company (BIC) for corporatized governance of PSBs.
  • Performance related pay structure and incentives for upper management functionaries.

Types of Bank Capital

  • Tier I capital (Core Capital): It consists of money kept as Statutory Liquidity Ratio (SLR), in physical cash form & as share capital and secured loans. At least 6% of CAR must come from Tier 1 capital. This capital can absorb losses without bank ceasing its trading operations.
  • Tier II capital (supplementary capital): It includes after tax income, retail earnings of the bank, capital in the form of bonds/hybrid instruments & unsecured loans (getting serviced).
  • Tier III capital: Includes Non-Performing Assets (NPAs), subordinated loans (not getting serviced) & undisclosed reserves from the balance sheet.

Keywords: RBI, UPSC, PCS, IAS, Capital Conservation Buffer rbi, basel 3 norms

Partial Credit Enhancement – NBFCs Bonds | UPSC – IAS

Partial Credit Enhancement – NBFCs Bonds | UPSC – IAS

The RBI recently allowed banks to provide partial credit enhancement (PCE) to bonds issued by systemically important non-deposit taking NBFCs registered with the RBI and Housing Finance Companies (HFCs) registered with the National Housing Bank.

  • Provide partial credit enhancement or Credit enhancement means improving the credit rating of a corporate bond. For example, if a bond is rated BBB, credit enhancement, which is basically an assurance of repayment by another entity, can improve the rating to AA. This is done to provide an additional source of assurance or guarantee to service the bond.

The move comes at a time when NBFCs and HFCs have requested the government and regulators to ensure that confidence returns to the market.

  • FACT: Provide partial credit enhancement (PCE), which was introduced in 2015, is expected to help NBFCs and HFCs raise money from insurance and provident or pension funds who invest only in highly-rated instruments.

Current problems with NBFCs | UPSC – IAS

  • Multiple regulatory bodies: RBI doesn’t regulate all the NBFC. Other institutions such as NHB (National Housing Bank), SEBI, Insurance Regulatory and Development Authority (IRDAI), etc. are also involved depending on the type of NBFC.

Difficulties in access to credit

  • There is a reversal of interest rate cycle as interest rates are now going up both domestically and also in the
    international market. The RBI has steadily hiked interest rates in the recent months.
  • Another fundamental issue is the asset-liability mismatch in the operations of NBFCs as these firms borrow funds from the market — say for 3 or 5 years — and lend for longer tenures — 10 to 15 years. It has led to a situation where the NBFCs are facing a severe liquidity crunch in the short term.
  • The mutual fund is among the biggest fund provider to NBFCs via commercial papers and debentures. These investors are getting reluctant to lend post the IL&FS crisis.

Significance of NBFC DIGITALLY LEARN IAS UPSC PCS UPPCS UPPSC.

(UPSC IAS)

Riskier Lending Pattern:

  • Unlike banks, NBFCs are less cautious while lending. For example NBFCs have grown their portfolio of small and micro loans in a big way where there are risks of lack of credit history, scale and historically high NPAs.
  • The unsecured loan segment is also on the rise in the NBFC segment.
  • Cascading effect of Infrastructure Leasing and Financial Services (IL&FS) default: Default followed by downgrade of IL&FS recently has created a liquidity squeeze for the entire non-banking financial company (NBFC) sector.
  • Delayed Projects: Many infrastructure projects financed by NBFCs are stalled due to various reasons like delayed statutory approvals, problems of land acquisition, environmental clearance, etc. which has impacted their financial health.

Suggestions and Solutions | UPSC – IAS

  • RBI must encourage non-banking financial companies to securitise their assets that can be purchased by banks.
  • RBI must revisit lending restrictions placed on banks under Prompt Corrective Action and consider allowing them lending to NHB.
  • RBI may also open special window for mutual funds to get refinance against collateral.
  • A coordinated and consultative approach at this point of time to address the various problems of the sector is critical to national economic health and stability.

Keywords: Provide partial credit enhancement (PCE), NBFCs, RBI, UPSC IAS

First Human Capital Index – 2018 Released by World Bank | UPSC

First Human Capital Index - 2018 Released by World Bank | UPSC IAS UPPCS UPPSC SSC CGL RAILWAY
The Human Capital Index measures the amount of human capital that a child born today can expect to attain by age 18. It conveys the productivity of the next generation of workers compared to a benchmark of complete education and full health.
  • HCI is part of the World Development Report (WDR).
  • As part of this report, the World Bank has launched a Human Capital Project (HCP).
Human Capital Project (HCP): A program of advocacy, measurement, and analytical work to raise awareness and increase demand for interventions to build human capital. The Human Capital Index has three components:
  • Cross-country metric—the Human Capital Index (HCI).
  • Program of measurement and research to inform policy action.
  • Program of support for country strategies to accelerate investment in human capital.

What are the Findings ?

  • Global Performance: Singapore topped the list while, India was placed at 115th position out of 157 countries, lower than neighboring Nepal, Sri Lanka, Myanmar and Bangladesh.
First Human Capital Index - 2018 Released by World Bank UPSC IAS UPPCS UPPSC BPSC

State Of Human Capital In India (UPSC IAS)

  • Human Capital Index: A child born in India today will be 44 % as productive when she grows up as she could be if she enjoyed complete education and full health.
  • Probability of Survival to Age 5: 96 out of 100 children born in India survive to age 5.
  • Expected Years of School: In India, a child who starts school at age 4 can expect to complete 10.2 years of school by her 18th birthday.
  • Harmonized Test Scores: Students in India score 355 on a scale where 625 represents advanced attainment and 300 represents minimum attainment.
  • Learning-adjusted Years of School: Factoring in what children actually learn, expected years of school is only 5.8 years.
  • Adult Survival Rate: Across India, 83 % of 15-year olds will survive until age 60. This statistic is a proxy for the range of fatal and non-fatal health outcomes that a child born today would experience as an adult under current conditions.
  • Healthy Growth (Not Stunted Rate): 62 out of 100 children are not stunted. 38 out of 100 children are stunted, and so at risk of cognitive and physical limitations that can last a lifetime.